Barbie v. Bratz: MGA Sues Mattel for Trade-Secret Theft, Seeks $1 Billion

January 17, 2014
at 3:52 pm

(Businessweek) MGA Entertainment Inc. sued Mattel Inc. for trade-secret theft in California state court, seeking $1 billion in damages after a federal appeals court threw out a $172.5 million verdict over the claims.

“This has been one of the most heavily contested trade secret cases in American legal history,” closely held MGA said in a complaint filed today in Los Angeles County Superior Court.

“What began as a copyright ownership dispute in 2004, morphed over the years into massive litigation involving numerous claims between fierce competitors.”

MGA prevailed at a 2011 jury trial on its claims that Mattel employees used fake identities to gain access to MGA’s showrooms at toy fairs to steal proprietary information about its products.

The jury awarded $85 million in damages to which U.S. District Judge David Carter in Santa Ana, California, added $85 million in punitive damages and $2.5 million in legal costs.

The trade-secret claims were added in the legal fight between Mattel, the maker of the Barbie doll, and MGA, the maker of the rival Bratz doll.

Mattel accused MGA of having stolen the idea of Bratz, claiming the designer originally developed it while working at Mattel before he took it to MGA. . . . (read more)

MGA Entertainment Sues Mattel Over Trade Secret Espionage (Gifts)

. . . .The Bratz doll makers claim that for a number of years, Mattel employees used a “Market Intelligence Department” to steal MGA’s trade secrets under the auspices of an 11-page “How-to-Steal” manual.

Mattel also reportedly set up “spies,” who created false identities by printing fake business cards and used Mattel’s accounting department to create mocked-up invoices to back up their fictional businesses in to better gain access to MGA’s private showrooms.

MGA also claims that Mattel employees purchased small video recorders (paid for by Mattel) and cameras to photograph and videotape what they saw in private showrooms and industry trade shows.

As a result, Mattel obtained highly confidential information about MGA’s designs, price lists and marketing plans for unannounced future products in the highly popular Bratz line, according to MGA.

“Rather than competing fairly in the marketplace, Mattel’s executives chose to engage in thievery, industrial espionage and fraud,” said Isaac Larian, CEO of MGA Entertainment, in a company statement. “It’s time Mattel pays for this reprehensible behavior and the damage it caused.” . . . (read more)

Bratz maker MGA sues Barbie maker Mattel. Again. (Los Angeles Times)

The feud between fashion doll giants MGA Entertainment Inc. and Mattel Inc. got another infusion of legal juice on Monday, when Bratz maker MGA sued Mattel over allegations that the Barbie maker filched trade secrets at toy industry conventions.

Van Nuys-based MGA accuses Mattel of sending corporate spies armed with fake business cards and a “how to steal” manual into private MGA showrooms from 1992 through at least 2009.

There, the agents pilfered MGA price lists, advertising plans and covert product attributes, giving El Segundo-based Mattel “an unfair and illegal advantage in the market” and costing MGA “tens of millions of dollars in damages,” according to MGA’s complaint.

In the suit, which was filed in state superior court in Los Angeles, MGA asks for up to $1 billion in damages and fees.

If there’s a sense of déjà vu, it’s because MGA made the same claims against Mattel in an earlier federal case. In 2011, Mattel was ordered to pay $172.5 million to MGA over allegations that its rival’s employees used cover identities to infiltrate MGA strongholds at toy fairs. That year, Mattel’s claims that MGA stole the idea for the Bratz line of dolls were rejected. . . . (read more)

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Ray Semko

Ray Semko, the D*I*C*E Man, is a professional public speaker, motivator, and national security educator who is the creator of Defensive Information to Counter Everything (D*I*C*E) security awareness briefings.