A three-month trial that pitted Mattel Inc. against Bratz-maker MGA Entertainment Inc. brought a $100 million jury award for the house of Barbie, but the legal battle is far from over.
Still at question is whether MGA can continue to make and market its saucy, urban-influenced dolls — and if it can, whether it will have to pay Mattel royalties for those rights.
Mattel attorneys said after Tuesday's verdict that they intend to seek an injunction as soon as next month to stop MGA from making more Bratz dolls.
"The jury found that at some point the dolls infringed, but the question is, was it the earlier dolls or the later dolls or all of them?" said Oren Warshavsky, an intellectual property attorney who has followed the case closely. "Without a special verdict form, it's difficult to see how an injunction would be styled."
The federal panel found MGA, Chief Executive Isaac Larian and subsidiary MGA Hong Kong liable for copyright infringement and awarded a total of $10 million in damages in that category. They also awarded about $90 million for three causes of action related to breach of contract.
However, the panel was not asked to specify which Bratz dolls they found were in violation of Mattel's copyright. If Mattel moves for an injunction, U.S. District Court Judge Stephen Larson would have to discern the jury's intent on that question.
At the heart of the issue are the initial sketches done by designer Carter Bryant while conceiving the Bratz concept. In an earlier phase of the trial, the same jury found that Bryant worked at Mattel under an exclusivity deal when the drawings were made and all but four belonged to Mattel.
Larian, however, said the jury's relatively small award for copyright infringement — roughly 10 percent of the total — showed the panel felt only the earliest dolls were based on Bryant's initial sketches and that later dolls belonged to MGA.
His attorneys will argue against the injunction for all but the first dolls, Larian said.
"The main Bratz brand will always remain with MGA and we are going full blast forward and nothing will stop us," Larian said.
Mattel attorney Michael Zeller said the toy giant will likely argue for a blanket ban on the MGA dolls when court resumes in September because it's impossible to tell where the jury saw copyright infringement.
A ruling like that could devastate MGA, said Jack Lerner, an intellectual property professor at the University of Southern California.
"The jury made a determination about damages, but it didn't make a determination about the connection between the drawings and the damages," he said. "The stakes still remain very, very high for MGA. They're not out of the woods yet at all."
Larson could also allow MGA to continue marketing at least some of the dolls but require the company to pay royalties to Mattel. That, however, would be unusual and would be something that both companies are likely to resist, said Aaron Moss, an attorney who's represented Mattel in several other copyright infringement cases.
"The real prize is going to be, can Mattel convince the judge to grant an injunction that would prevent MGA from ever producing another Bratz product?" he said.
During the trial, Mattel attorneys said MGA made nearly $779 million on the Bratz line since it was introduced in 2001. The company has since expanded Bratz with lucrative additions such as Bratz Boyz, Bratz Petz and Bratz Babyz and introduced new, edgy dolls each year.
The highly stylized fashion dolls have oversized feet, heads and hands, curling lashes and huge, almond-shaped eyes daubed with exotic-colored eyeshadow.
Meanwhile, sales of Barbie — a near rite-of-passage in American girlhood — have slid since Bratz's Yasmin, Cloe, Jade and Sasha came on the scene.
Analysts said Tuesday's jury award was neutral or slightly disappointing for Mattel, which had asked for nearly $2 billion in damages based on MGA and Larian's profits from the Bratz sales.
Shares of Mattel fell 59 cents, or 2.9 percent, to $19.65 in trading Wednesday. The stock has traded between $16.42 and $24.50 during the past 52 weeks.
Meanwhile, litigation continues between the two companies.
MGA has said it will file paperwork with the court arguing that Tuesday's awards for contract-related damages are overlapping, and the total verdict amount should be reduced to as little as $20 million.
Mattel also has a trade secrets lawsuit pending against MGA, and MGA has a lawsuit pending against Mattel over the toy giant's My Scene dolls, alleging unfair competition, among other things.