Bratz Copyright Lawsuit – Mattel Loses after Winning

On April 21, 2011 a federal jury in the central district of California found that Mattel failed to prove any of its claims related to the popular Bratz line of dolls against MGA Entertainment, Inc. (“MGA”).   In fact, in reading through the copyright jury verdict, it was not even close.  The jury completely sided with MGA and found that Mattel owes MGA $88 Million for violating MGA’s trade secrets.  This is a complete reversal of the first jury verdict in this case in 2008 where Mattel was awarded millions of dollars in damages against MGA.

This case has been ongoing since 2004 .  Mattel claimed that the inventor of the Bratz line, Carter Bryant, violated his contract with Mattel by taking the idea for a bratty line of dolls with him when he left Mattel and went to work for MGA.  When the case got to trial in 2008, a federal jury agreed and awarded Mattel millions of dollars in damages.

MGA appealed and the Ninth Circuit Court of Appeals which in mid-2010 reversed.  The Ninth Circuit concluded that while Mattel may have some claim to some early Bratz sketches, Mattel cannot claim complete ownership of the idea of a bratty line of dolls such that no competitors can come up with their own.  The Ninth Circuit held,

Assuming that Mattel owns Bryant’s preliminarydrawings and sculpt, its copyrights in the works would coveronly its particular expression of the bratty-doll idea, not theidea itself. See Herbert Rosenthal Jewelry Corp. v. Kalpakian,446 F.2d 738, 742 (9th Cir. 1971). Otherwise, the firstperson to express any idea would have a monopoly over it. Degas can’t prohibit other artists from painting ballerinas, andCharlaine Harris can’t stop Stephenie Meyer from publishing Twilight just because Sookie came first. Similarly, MGA wasfree to look at Bryant’s sketches and say, “Good idea! Wewant to create bratty dolls too.”

The Ninth Circuit vacated the lower court’s order holding that,

a finding of substantial similarity between two works can’t be based on similarities in unprotectable elements. See Data East, 862 F.2d at 209 (clear error for district court to determine substantial similarity existed based on unprotectable elements). When works of art share an idea, they’ll often be “similar” in the layman’s sense of the term. For example, the stuffed, cuddly dinosaurs atissue in Aliotti, 831 F.2d at 901, were similar in that they were all stuffed, cuddly dinosaurs—but that’s not the sort of similarity we look for in copyright law. “Substantial similarity”for copyright infringement requires a similarity of expression,not ideas. See id. The key question always is: Are the works substantially similar beyond the fact that they depict the same idea?

The lower court subsequently vacated the first jury verdict and the case was re-tried this year.  On re-trial, Mattel lost on all of its claims.  The District Court Judge has invited the parties to resubmit their motions for judgment as a matter of law in early May.  After which Mattel will almost certainly appeal unless a settlement can be reached in the case.

Meanwhile, on February 3, 2011, MGA filed a new lawsuit, also in the Central District of California claiming that Mattel’s litigation strategy amounted to anti-competitive behavior and was an attempt to “litigate MGA to death.”  MGA alleges in the complaint:

11.  This collective “Kill Bratz” strategy, ordered and authorized by [Mattel CEO Robert Eckert], consisted, in part, of anticompetitive practices such as: (a) infiltrating confidential competitor showrooms, accessing industry events with false identification and representing sham toy retailers made up by Mattel in order to get an illicit preview of new Bratz products before they hit the market so that Mattel could imitate or copy them; (b) rearranging Barbie/Bratz displays at key retailers such as Wal-Mart to disadvantage Bratz; (c) pricing products below cost to block Bratz’s access to the market; (d) intimidating and threatening licensees, retailers and suppliers with loss of Mattel business if they dealt with MGA; and (e) paying retailers around the globe not to buy Bratz or MGA products.  To implement “Operation Cast Doubt on Bratz on a global basis, all in an effort to cause retailers to lose confidence in MGA’s product.

Wow.  That’s quite a few allegations.  Stay tuned, this one is not over by a long shot.