Mattel loses Bratz battle, must pay millions
The Bratz line, which has deeply hurt Barbie sales, does not belong to Mattel, a jury decides.
Barbie maker Mattel (MAT) got smacked down by a federal jury today, and was ordered to pay $88.5 million to rival MGA Entertainment in a dispute over the Bratz line.
In what's being called a stunning decision, the jury told Mattel that it does not own the Bratz dolls. The legal battle has been going since 2004, and one analyst said today that Mattel's failure to settle was a "tremendously bad decision" by management.
Post continues after this news report about the jury's decision:
"It means they wasted $400 million or so of shareholder money to get zero return," the analyst told Reuters. Mattel shares dropped nearly 3% after the verdict, but later recovered to $26.68, down less than 1%.
The verdict was a momentous victory for MGA after a prolonged legal scuffle that turned ugly. Mattel executives had described a "rival-led Barbie genocide" in one internal memo, according to The Associated Press. "This is war and sides must be taken: Barbie stands for good. All others stand for evil," the memo read.
MGA's chief executive, Isaac Larian, wept as the verdict was read while Mattel's chief executive leaned back in his chair and rubbed his forehead with his hand, The Los Angeles Times reports. "It very well shows that in America, even huge corporations are not above the law," Larian told Reuters.
The whole thing may sound a little silly, but there are billions at stake. MGA has sold more than $3.3 billion in Bratz products since the dolls debuted, reaping nearly $300 million in profits, the AP reported. Barbie profits sank by nearly $400 million in that period.
The jury's decision was a complete turnaround from the first trial between the companies, in 2008. At that time, a jury awarded Mattel $100 million in damages and told MGA to hand the Bratz line over to Mattel. But that jury verdict was overturned last year, and the issue went to federal court.
Now, the question is whether the Bratz dolls have survived all the years of turmoil. The legal issue made some retailers uneasy about committing to sell Bratz, and the fashion-doll category has changed over the years, the Los Angeles Times reports.
"Mattel killed the Bratz brand," MGA's Larian said. "It will never be the same level it was before."
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I can't imagine why they would even want to claim ownership of that line of dolls. (I thake that back, it's obvious...$$)
They are nothing but trash and encourage our baby girls to dress like sluts. I don't understand what is wrong with people these days! Why do we insist on allowing our children to skip their childhood and move straight to teenagers or adults?! I have never allowed these doll in my house and never will. They should all be in the garbage. Oh and if Matel has any sense they will stop turning Barbie into a tramp in order to compete. It's near impossible to find Barbie clothes that aren't mini-skirts or mid-drifts.
I remember when they first had commercials for the those large Bratz Babies and right off the bat there was one in fishnets. What kind of adult comes up with that, and what kind actually sit in that meeting and agree that it's a great idea.
Yeah, Barbie isn't innocent either, but I question the mind of anyone who thinks adult suggestions on children is cute, including the fishnets on a doll depicting an infant.
I had to read the comments on here because I knew there would be controversy. I am a mom of two girls, and a college student studying sociology. I have always been uneasy about bratz dolls. I guess mostly because the very first time I saw them it was at target, I was about 13, and two boys about 7-10 picked up the doll and said, "I wonder what kind of panties she wears." After hearing that I went and looked at them and thought that they were pretty trashy. I understand completely that it is a parents role to teach a little girl self image and have a healthy sense of worth. And hats off to you that have successfully done that. But, what we have to recognize is the unhealthy image these dolls set for young boys and girls that maybe don't have such strong parents. You can argue that maybe they shouldn't have had kids, or whatever, but you have realize that is naive. The representation of a girl should be far from what barbie, bratz, Maybelline, victorias secret or what ever else feeds a childs brain. It is just scary to me that some people don't recognize the danger in having a doll that has a head to big for its body (which is a typical look for someone with an eating disorder), platform heels, skin tight or too short of dresses, and loads of make up. Sure not everyone has been affected by it, but by gloating that you haven't, you're technically a third party narcissist. Now with that please parent your children as you will, so long as you're not abusive its not for me to say whether it is wrong or right. But please with everything you do just try to think of the message it is sending, if you're doing it for yourself or for an image that has been media fed to you, and what people are capitalizing off of your money.
@ wow681 - This story was actually very easy to read, because it was written with proper English.
You must be used to reading the crap that's come along during the past 5-10 years - ie: techno-lingo.
It seems most people don't even understand how to form a sentence these days...all they know is u b noin bout nutin cuz da pc speek me dat chuiz so smat ya not noin nuttin
Aren't they drag queens? Come on, have you ever seen the feet on those things?
When Bratz dolls first came out, some relative (on the OTHER side of the family) gave my daughter one for her birthday. I took one look at it and threw it in the trash.
Barbie was a big part of my childhood...thank God I have a son who could care less about dolls because they have grown to be pretty tasteless. I can't help but find it a little comical that some of the posts on here are so angry, but it's difficult to tell because most of the people ranting seem to have the education of a 3rd grader.
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