Bratz Trade Secret Litigation $309 million



Bratz Dolls



As an update to the Bratz litigation, the Court has ordered Mattel, Inc. to pay MGA Entertainment $309 million.  In one of our prior posts which can be read here, Mattel initially sued MGA for trade secret and copyright infringement over the popular Bratz dolls, and received a judgment against MGA in 2008.  However, in a reversal, the Court then issued a judgment against Mattel finding them liable for trade secret misappropriation.  Now, the Court has finalized its judgment as follows: $85 million, plus another $85 million in punitive damages for trade secrets misappropriation.   Plus another whopping $137 million was awarded for legal fees, totaling close to $309 million against Mattel.  Ouch!  However, no word yet as to Mattel's appeal.

Bratz's Copyright Infringement Trial Comes to an End...For Now

After more than seven years, 70 witnesses, and thousands of exhibits, a verdict has been reached in the roller-coaster “Bratz” dolls trial. The trial (Bryant v. Mattel, 04-09049, U.S. District Court, Central District of California) pitted toy making giants Mattell, Inc. against Van Nuys based MGA Entertainment, Inc. over the rights to the wildly popular line of Bratz dolls. Mattell originally filed its lawsuit accusing MGA of stealing trade secrets and copyright infringement seeking. MGA began manufacturing the dolls after toy designer and former Mattell employee Carter Bryant sold them the idea in 2000. Mattell claimed that Bryant thought of the idea for Bratz during his employment with Mattell, therefore claiming that Mattell owned the intellectual property rights to the doll.

The verdict has gone back and forth – a 2008 Jury awarded Mattell $100 million. But that verdict was overturned later in a federal appeals court. The current decision, reached in Santa Ana Thursday, instead awarded MGA $88.4 million dollars, and found Mattell guilty of stealing MGA’s trade secrets. According to the verdict, Mattell employees used fake IDs to gain entrance to MGA showrooms. Although this verdict is taken as a victory for MGA, it is likely that Mattell will appeal the court’s decision. Issac Larian, MGA's CEO estimates they spent nearly $170 million on legal fees, while Mattel's legal expenses where closer to $400 million.

Tommy Burger Trademark Infringement Family Affair

Trademarks are valuable property. Business partners, friends, and even family members can be split over trademark rights. Take the case of Original Tommy’s World Famous Hamburgers here in L.A. When the original Tommy Koulax died in 1992, he left the franchise in the hands of some of his children and relatives. According to an article in today’s Los Angeles Business Journal, one of his children is trying to start up a Tommy’s-inspired company, and apparently breaking some family ties doing it.

What made Tommy’s world famous was arguably its chili, not hamburgers. In fact, Tommy’s chili recipe is protected by a trade secret. In 2008, Tommy’s son, Tommy Koulax Jr., started an online business selling chili. “Tommy’s Original Chili Factory” received a cease and desist letter from Original Tommy’s (jointly owned by other siblings and relatives). Since then, the name has been changed to “Tommy Jr’s Chili Factory,” but the Tommy Jr. crew is still under attack. They have been sued in California Central District Court for trademark infringement and unfair competition, Tomdan Enterprises, Inc. v. Tommy’s Original Chili Factory, Inc. et al., CV 09-3960 JSL (C.D. Cal. 2009).


It may be a tough case for Tommy Jr. to win. His logo is very similar in style and color to the Original Tommy’s logo, and on his products he claims to be the “son of the originator and founder of Tommy’s World Famous Hamburgers.”