Bratz dolls maker wins appeal against Mattel; Los Angeles Times, 7/22/10

Carol Williams and Andrea Chang, Los Angeles Times; Bratz dolls maker wins appeal against Mattel: MGA Entertainment violated Mattel's copyrights to some degree but is entitled to 'sweat equity' because it developed the dolls into a successful brand, court says:

"Toy giant Mattel Inc. can't claim a monopoly over dolls with a bratty attitude, and the rival company that developed the Bratz line deserves its fair share of the dolls' success, a federal appeals court ruled Thursday.

The decision reversed the copyright victory scored two years ago in the battle over who owns the billion-dollar Bratz — Mattel, which employed the inventor while he did early development of the pouty plastic figures, or MGA Entertainment Inc., which later hired him and went on to produce the brand.

Mattel, whose Barbie dolls ruled the world's toy chests and play houses for half a century, had been awarded $100 million in damages ($10 million of it for copyright infringement) and ownership of the trademark rights to all Bratz dolls after a 2008 jury trial. The lower court had found that the inventor, Carter Bryant, had violated his contract with Mattel by taking the idea with him when he left the company.

MGA, based in Van Nuys, was ordered by a federal judge to transfer all products, proceeds and other assets to a trust created for Mattel. MGA appealed, leading to Thursday's decision by a three-judge panel of the U.S. 9th Circuit Court of Appeals.

While an employee of El Segundo-based Mattel, Barbie designer Bryant developed the Bratz dolls, worked up sketches and made at least one mockup of four flirty girls with hot clothes and heavy makeup. Bryant had called his line Bratz and named one of the first four dolls Jade — names that eventually made it to market on MGA products.

Although MGA violated Mattel's copyrights to some degree, MGA developed the dolls into a phenomenal success and is entitled to its "sweat equity," the appeals panel said.

"Mattel can't claim a monopoly over fashion dolls with a bratty look or attitude, or dolls sporting trendy clothing — these were all unprotectable ideas," the panel headed by 9th Circuit Chief Judge Alex Kozinski ruled.

The judges also sent the case back to federal district court to determine a more fair disposition of the Bratz property, saying "it was not equitable to transfer this billion-dollar brand — the value of which was overwhelmingly the result of MGA's legitimate efforts — because it might have started with two misappropriated names."

Each dollmaker said it expected to ultimately prevail in the ownership battle."

http://articles.latimes.com/2010/jul/22/business/la-fi-0723-bratz-court-20100722