A federal appeals court panel today tossed a Santa Ana jury’s multimillion-dollar award to toy company MGA Entertainment in its trade-secrets dispute against Mattel over rights to the Bratz line of dolls.
After a three-month trial and eight days of deliberations, jurors in April 2011 found that MGA, based in Van Nuys, did not steal any secrets from El Segundo-based Mattel and that Mattel did not own the idea for the Bratz dolls.
Jurors awarded MGA $85 million in damages, which U.S. District Judge David O. Carter doubled to $170 million.
Carter also awarded $309 million in attorneys’ fees and damages.
The U.S. 9th Circuit Court of Appeals upheld that ruling despite vacating the jury’s verdict.
The dispute stems from Bratz doll designer Carter Bryant’s defection from Mattel to MGA.
Bryant worked for MGA after giving Mattel two weeks notice of his intent to quit, triggering claims from Mattel that MGA stole its trademark secrets.
Jurors in April 2011, though, found against Mattel because of evidence indicating the toy giant engaged in corporate espionage. MGA also claimed that Mattel bullied retailers to not carry the Bratz dolls.
The 2011 verdict was a reversal from August 2008, when a federal jury in Riverside ruled for Mattel in its civil suit alleging MGA committed copyright infringement and conspired to breach Bryant’s contract with Mattel.
The evidence of the corporate espionage surfaced just days before the 2011 trial, MGA’s attorneys said.
The $100 million award to Mattel in 2008 was overturned by the U.S. 9th Circuit Court of Appeals in 2010, leading to the retrial in Santa Ana.
Today’s ruling will likely trigger another trial.
“While this may not be the last word on the subject, perhaps Mattel and MGA can take a lesson from their target demographic: Play nice,” the federal appellate panel said in today’s ruling.