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WEEKLY NEWS - SEPTEMBER 03, 2008

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This article is part of MIP Week, a weekly email newsletter written by the editors of Managing IP magazine. Take a one week trial to Managing IP and find many more related articles.

Mattel to seek injunction after $100 million award

Erin Kelechava, New York

MGA Entertainment, the company that makes the popular Bratz line of dolls, has been ordered to pay $100 million in damages to Mattel, the makers of Barbie

Damages resulting from three successful breach of contract claims totalled $90 million, with the remaining $10 million awarded on the copyright infringement claim.

The award did not include punitive damages, as the jury did not find that MGA and its chief executive, Issac Larian, acted wilfully when the company used the drawings.

In order to obtain the judgement, Mattel proved that the creator of the Bratz doll sketches, Carter Bryant, developed the concept for the doll during the course of his employment at Mattel and consequently that the rights to the intellectual property belong to Mattel.

The case has been winding its way through the federal courts since 2004, with numerous counterclaims and motions filed over to the past few years.

The most recent and contentious of these was Mattel’s motion to declare a mistrial in early August after one of the jurors made inflammatory statements regarding the ethnicity of MGA’s chief executive.

Questions still remain as to whether MGA will be forced to pay royalties to Mattel in order to manufacture its doll, or whether it will no longer be allowed to continue selling the popular and highly profitable Bratz doll at all.

Mattel will reportedly seek an injunction to prevent MGA from producing more of the dolls.

Since the jury did not specify which of the doll’s many versions was infringing Mattel’s copyright, it would be difficult to draft appropriate injunctive relief.

The judge will have discretion to infer from the jury’s verdict which of the designs violated Mattel’s copyright, and consequently, whether to grant the injunction.

Although Mattel did not recover the almost $2 billion in damages that it asked for at closing arguments, MGA is likely to appeal any award as excessive.

In fact, Tom Nolan, attorney for MGA, stated that he would seek to have the award reduced significantly, claiming it includes duplicate damages for the same offence.

Nolan said that he plans to ask the Judge to cap the total damages at no more than $40 million.



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