A dispute has been raging for years between Mattel and MGA Entertainment over who owns the rights to the highly successful Bratz line of dolls. Knowing that few of our faithful readers are preteen girls, I’ll provide some background. For decades, when it’s come to dolls, Barbie was the queen. But over 10 years ago, Barbie got some serious competition from some less demure, less conservative, multi-ethnic upstarts – the Bratz.
A fight broke out over who owned the rights to the Bratz line. At the center of the fight was Carter Bryant. Bryant worked on Barbie at Mattel, then left for MGA in 1998. Mattel said he and MGA misappropriated trade secrets. MGA countered that Mattel misappropriated its intellectual property.
The case went to trial in 2008 and Mattel won a resounding victory — $100 million in damages and equitable relief that effectively gave them all rights to the line going forward. MGA appealed and the Ninth Circuit reversed. The opinion (pdf), written by the always entertaining Chief Judge Alex Kozinski, concluded that the judgment went too far and failed to recognize the value MGA added in developing the brand. So the court ordered a new trial.
This new trial ended this week with a very different outcome. Instead of Mattel being awarded $100 million, the second jury awarded MGA $88 million. I’m sure that there were any number of factors that distinguish the second trial from the first. But still, that’s quite a swing.
Another thing noteworthy about this dispute is the level of nastiness. As reported in the New Yorker, a memo introduced at trial accused MGA of attempting a “Barbie genocide” and characterized Barbie vs. Bratz as equivalent to “good vs. evil.” After the trial, Mattel complained that MGA prejudiced jurors against it. Among other things, Mattel said MGA improperly accused Mattel of causing MGA’s founder to suffer a stroke and of hiring people to follow and intimidate his teenage son. Mattel further complained that MGA and its attorneys accused Mattel of having magnets in its toys that killed children.
So what can we conclude from this? That prolonged litigation causes some people to behave poorly? That the outcome of jury trials is inherently uncertain? I’ll admit that neither of those statements is particularly newsworthy. But they bear repeating. There’s a reason why alternative dispute resolution is so often a more attractive option. And after seven years of litigation and two trials, no one thinks that this particular dispute is over.