On July 22, 2010, in MGA Entertainment, Inc. v. Mattel, Inc., No. 09-55673, the Ninth Circuit Court of Appeals reversed a 2008 lower court order which awarded Mattel, Inc. ownership rights to Bratz dolls. The appellate opinion, written by Chief Judge Alex Kozinski, reasoned that Bryant had not designed Bratz dolls at Mattel, but had come up with some sketches and ideas. Bryant's employment agreement with Mattel "could be interpreted to cover ideas, but the text doesn't compel that reading. The district court thus erred in holding that the agreement, by its terms, clearly covered ideas." The court further reasoned that even if MGA miappropriated the names "Bratz" and "Jade", the trademark owed much of its value to "MGA's own development efforts, marketing and investment." The court also vacated the copyright injunction based on a holding that the employment agreement assigned works created outside Bryant's scope of employment. In doing so, the Ninth Circuit stated "the entire case will probably need to be retried."
Having prevailed on their appeal to the Ninth Circuit Court of Appeal, the "MGA parties" have now filed counterclaims against Mattel including trade secret misappropriation, Civil RICO, and wrongful injunction. Legal commentators are fascinated by this move, and wonder how the counterclaims will stack up against Mattel's causes of action.
MGA Entertainment (Micro-Games America Entertainment) is a privately-held "consumer entertainment products company". The company's founder and CEO, Isaac Larian, controls more than 80% of the company. MGA employs 1,500 employees and had revenues of $2 Billion in 2006. The company is headquartered at 16300 Roscoe Boulevard, in Lake Balboa area of Los Angeles, California. In the past, MGA contemplated an initial public offering of its shares, but did not go through with it due to the pending litigation with Mattel, Inc.
The materials for this blog were gathered from various sources including WSJ, Bloomberg articles, JOLT Digest, Law.com article, Wikipedia, MGA's web site, and Mattel's web site. For further information, run a search on Google.
Robin Mashal is a Los Angeles business attorney, and a partner at the law firm of Hong & Mashal LLP. Mr. Mashal has been admitted to the State Bar of California and the Bar of the United States Supreme Court. He can be reached by phone at (310) 286-2000.