Damages

Jury considers damages in Mattel's Bratz trial

Toymakers Mattel Inc and MGA Entertainment Inc closed the damages phase of a federal trial over ownership of the Bratz doll line on Wednesday, with Mattel demanding that MGA forfeit nearly $2 billion in profits, plus damages, from the franchise.

Closing arguments took place in a packed courtroom in Riverside, California, with Mattel contending that MGA had unfairly schemed to build its Bratz empire using drawings and models made by Mattel employees.

Jury deliberations were scheduled to start on Thursday.

"If you compete the right way you get to keep the profits; if you compete the wrong way, you have to give up your profits,"

Mattel lawyer John Quinn said. Mattel, maker of the Barbie doll, argued that MGA should surrender Bratz profits of more than $1 billion plus Chief Executive Isaac Larian's profit of $789.5 million. The giant toymaker also asked the jury to award unspecified punitive damages against MGA.

MGA said it has taken in revenues of $3.1 billion on Bratz merchandise since the brand was launched in 2001.

MGA attorney Raul Kennedy told the panel that Mattel's sole aim in seeking the huge damages award against the family-owned company was "wiping a competitor off the face of the Earth."

In an Aug. 7 court filing, MGA said its business would be "ruined immediately" if the jury awards damages "anywhere approaching the amounts sought by Mattel."

Last month, a 10-member jury decided that former Barbie designer Carter Bryant had designed the best-selling Bratz dolls with distinctive oversized head, eyes, lips and shoes while still employed by Mattel, and awarded the toy giant rights to all but four of Bryant's drawings and models.

The same jury -- minus one member who was dismissed for making ethnic slurs about Larian's Iranian-Jewish heritage during deliberations -- will decide whether Bratz dolls infringe on those drawings, and if MGA should pay damages.

MGA attorneys argued on Wednesday that MGA doll designers had changed Bryant's "edgier and more sexualized" drawings substantially to make the dolls appropriate for young girls, to the point that they do not infringe on Mattel's drawings.

MGA also said Mattel had not recognized the potential of Bryant's drawings until Bratz started cutting into Barbie's market share, and was trying to take through a lawsuit what it could not create. "Mattel says this is a map to the Holy Grail but Mattel has never put forward any evidence that says this was a Mattel project," MGA attorney Thomas Nolan told the panel.

The lawsuit has been monitored by fashion doll industry as it is expected to determine which of the toymakers will continue to reap the rewards of the award-winning fashion doll franchise.

With the launch of Bratz in 2001, MGA ended Barbie's four-decade reign over the lucrative fashion doll industry.

(Published by Reuters - august 21, 2008)