Photo: Penny via flickr
10 years ago a California startup released a big-headed doll with pouty lips.Since then Mattel, maker of the iconic Barbie Doll, has been losing market share and embarassing itself with a legal battle that resulted today in a $310 million settlement against Mattel.
It’s clear now they should have responded to MGA’s Bratz by revamping Barbie or introducing a new line. Instead they pursued a tenuous legal challenge, while Bratz took over the fashion doll market, selling 125 million dolls in its first five years.
Mattel’s lawsuit claims that Bratz creator Carter Bryant made the doll while working for them and broke the terms of his “invention agreement” by taking it to MGA. At first, a Riverside, Calif., jury agreed with Mattel, awarding it $100 million in 2008. Despite this brief victory, Barbie’s US sales were down 21% that year.
MGA fought back, and in a retrial, a jury decided “Mattel had not proved its claims of copyright infringement and instead found that the company had stolen trade secrets from MGA and owed it $88.5 million,” reports the LA Times. Legal bills and the original punitive damages nearly put MGA out of business, so the company asked for more money after the April jury verdict. Yesterday, U.S. District Judge David O. Carter awarded that and then some, which amounted to a total of $310 million.
Now, after a fierce legal battle that has cost both sides hundreds of millions in legal dollars, Mattel is paying MGA $310 million.
And it could get worse for Mattel. MGA’s CEO Isaac Larian said that this battle has cost “damaged the Bratz brand by an estimated $1 billion, and that MGA intended to recoup those losses in a separate and pending antitrust lawsuit against Mattel,” reports the LA Times.
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