San Fernando Valley Business Journal

MGA Again Sues Mattel, Claiming $1 Billion in Damages

By Business Journal Staff Monday, January 13, 2014

MGA Entertainment Inc. on Monday said that it has again sued rival toymaker Mattel Inc. for trade-secret theft related to the two companies’ longstanding battle over MGA’s popular Bratz doll line.

The Van Nuys company is seeking $1 billion in damages over its claims that Mattel employees used fake identities to gain access to MGA’s showrooms at toy fairs to steal competitive information.

MGA in 2011 won a jury trial in U.S. District Court against Mattel for unfair competition. In 2004, Mattel had sued MGA, contending that MGA had stolen the Bratz concept since the designer had worked for Mattel before coming MGA.

But a U.S. Appeals Court last year overturned without prejudice the full $310 million verdict against Mattel, saying that judge in the case had wrongly allowed the trade secret claims to be added to a copyright infringement lawsuit. Mattel was directed to pay nearly $138 million of MGA’s legal fees, though.

MGA Chief Executive Isaac Larian claims the years of litigation "destroyed" the Bratz brand, which the company estimated was worth $2 billion in 2006. “Rather than competing fairly in the marketplace, Mattel’s executives chose to engage in thievery, industrial espionage and fraud,” Larian said in a statement. “It’s time Mattel pays for this reprehensible behavior and the damage it caused.”

In its own statement Mattel said that MGA’s latest claims were nothing new. “We are confident that the same stale claims brought in MGA’s lawsuit today are barred by the statute of limitations, and we look forward to the speedy and final resolution of this dispute,” spokesman Alan Hilowitz said in a statement.