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MGA Entertainment Loses Big Bucks Suit

Source: Iran Times


MGA Entertainment, a toy firm owned by Iranian-American Isaac Larian, has lost a copyright infringement case against its huge rival, Mattel-maker of Barbie-over which firm owns the original drawings for the Bratz fashion doll franchise.


The loss threatens to put Larian out of business.  But in a stunning development, a female juror was removed last Friday for making racist remarks about Iranians, and MGA then asked the court to declare a mistrial.  


A 10-person jury rendered a unanimous decision that the majority of Bratz design drawings, prototypes and sculpts were created by doll designer Carter Bryant while he was employed by Mattel and before he jumped ship to MGA.


After reaching that decision, the jurors were to return to the courtroom next week for the damage phase. Mattel is seeking an undisclosed sun that could theoretically impoverish Larian and kill MGA.


Mattel's Barbie has been at the top of toy market for a half-century.  In the last few years, however, the Bratz dolls have made ,major inroads into Barbie sales, which have declined.


After a seven-week trial in the United States District Court for the Central District of California in Riverside, the federal jury found that Carter Bryant had created the multi-ethnic, big-headed Bratz dolls while he was under contract to Mattel. The contract gave Mattel the rights to anything the designer created during his employment with Mattel.


But while Bryant was still at Mattel, he entered into a contract with Larian, licensing Bratz to them in September 2000; Bryant left Mattel one month later.  MGA began producing the Bratz line in 2001 and turned it into a product with revenues topping $1 billion in annual sales and licensing fees.


The jury also ruled that MGA and its CEO, Larian, were liable for converting Mattel property for their own use and intentionally interfering with Bryant's contractual duties to Mattel; Bryant himself had settled with Mattel for undisclosed terms before the trial began.


"MGA and Isaac Larian took what did not belong to them," John Quinn, a lawyer for Mattel, said during a conference call detailing the verdict.


But while Larian, the Jewish Iranian entrepreneur who is the majority owner of MGA, admitted the work Bryant did on the dolls while at Mattel violated the reported contract, he said MGA had nothing to do with it.  "There's no question he did not have good judgment," Larian said.  "But we didn't know about that.  Why punish MGA?"


In a prepared statement, Larian said MGA will prevail in the upcoming damages phase or on appeals  "This is because it is undisputed that MGA-not Carter Bryant-independently created the Bratz dolls.  Carter Bryant did not have anything to do with the many Bratz-related products we created, such as Bratz Babyz, Lil' Bratz and Bratz Kidz."


Reuters reported that other than four drawings, which Bryant testified that he made in a notebook while on an eight-month hiatus from Mattel in 1998, MGA lost the rights to all drawings and "sculpts" of the Bratz dolls.


While the verdict is a blow of MGA, it can claim in the damages phases that Mattel has no rights to the dolls themselves because they are different from the drawings and were made by MGA designers. 


On the other hand, the verdict could bring Mattel hundreds of millions of dollars in back royalties-or even outright ownership of the Bratz line.


But all that may change after a female juror was dumped Friday for reportedly characterizing Iranians as "stubborn, rude" and "thieves" who have "stolen other person's ideas."


MGA has now asked that the court rule a mistrial; Judge Larson has set an August 4 hearing to determine whether the case should continue or end in a mistrial.


The racist remarks-reportedly made by Juror No. 8-were revealed to the judge in private by another juror.  According to the court order, Juror No. 8 reportedly said her husband had characterized Iranians in that way.


After privately interviewing other members of the jury, Judge Larson determined the remarks had been made near the end of deliberations, after the jury had already come to unanimous agreement on key issues and thus "did not affect or influence the decision made by the jury."


That would appear to make it unlikely a mistrial would be declared.


Larian disagreed.  "The verdict that was put against us was only based on racism.  I am saddened that today, in this day and age when for the first time in the history of America an African-American is running for president, that there is still racism in this country."


Mattel lawyer John Quinn agreed with Judge Larson and said, "Several of the nine jurors rebuked Juror No. 8, and were justifiably appalled by her remarks.  Some claimed that, if anything, the remark made them wonder if they should exercise bias in favor of MGA in response."


It is unclear whether the trial-if Larson determines it should continue-will proceed with only nine jurors, or whether an alternate must be called in to replace Juror No. 8.  Another possibility is the empanelling of an entirely new jury for the damages phase.


Mattel was founded in 1945 and manufactures and markets toys, games, dolls and other consumer product.  Barbie is its most famous brand.


MGA Entertainment is also a toy manufacture.  It has been around since 1979, and its best-known line in Bratz-which is believed to bring in around $500 million a year.


Sales of Barbie dolls slid after Bratz came on the scene.  Domestic Barbie sales were down 15 percent in 2007 and 12 percent in the first quarter of 2008, while international sales increased 6 percent in 2008 as opposed to 12 percent the previous year.


About Iran Times: The Iran Times is an independent newspaper with no affiliation with any political party or faction The Iran Times corporation was founded in Washington D.C. in 1970, in accordance with U.S. federal and local regulations:

... Payvand News - 08/04/08 ... --

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