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LOS ANGELES (Reuters) - MGA Entertainment Inc asked a U.S. appeals court on Tuesday to stop the transfer of its Bratz franchise to rival toymaker Mattel Inc MAT.N and to overturn a 2008 jury verdict MGA contends was tainted by racial discrimination against its Iranian-born chief executive.
In an emergency appeal filed late on Tuesday, MGA asks the Ninth U.S. Circuit Court of Appeals to nullify a wide-ranging injunction by U.S. District Judge Stephen Larson that orders it to stop selling its top-selling brand at the end of the year.
Larson also has ordered MGA to transfer to Mattel the Bratz trademark as well as all related products, designs, customer information and "know-how" for a planned 2010 Bratz line.
MGA said the imminent transfer of its assets and trade secrets to its rival will have "devastating and irreversible" consequences if the appeals court does not intervene.
The petition contends that Larson went beyond the jury's intent in granting Mattel's last-minute demand that Bratz be removed from store shelves, and in the scope of that recall.
"The court also ordered perhaps the largest toy recall in U.S. history," the petition said. "Come New Year's, MGA must impound and/or destroy all MGA Bratz products that remain on retailers' shelves."
The petition contends that Larson made "multiple stark errors of law," including an overbroad interpretation of a jury award of $10 million in damages related to the copyright infringement despite Mattel's demand for $1.4 billion.
The verdicts also were "tainted" by a juror who said during deliberations that her attorney husband had told her Iranians clients were "stubborn, rude ... and have stolen other person's (sic) ideas," the petition said.
The juror was removed but Larson rejected MGA's petition for a mistrial, and "mistakenly held that the constitution protects only criminal, and not civil, defendants from racially and ethnically biased jurors," the petition said.
Jurors were told during the jury selection process that MGA CEO Isaac Larian immigrated to the United States at 17 from Iran and asked whether they would be able to be fair to someone of Middle Eastern descent.
MGA effectively lost rights to the Bratz franchise last summer when the federal jury in Riverside, California ruled that Barbie designer Carter Bryant was still under contract to Mattel when he sold MGA some of the drawings upon which the immensely popular multi-ethnic doll line was based.
The jurors found, however, that the infringement was not willful.
The case is MGA Entertainment Inc vs. Mattel Inc, 09-55673, U.S. Court of Appeals for the Ninth Circuit.
Reporting by Gina Keating; Editing by Gary Hill, Richard Chang