Mattel suffers setback in Bratz doll case

Toy company Mattel was dealt a setback today in the battle for control of the Bratz doll franchise, which began with a legal contest decided by a Riverside jury and judge more than two years ago.

A three-judge panel of the U.S. 9th Circuit Court of Appeals refused Mattel's request for a hearing before a larger number of jurists in the toymaker's bid to overturn a July 22 decision by another three-judge panel to
allow the Bratz line to remain under the ownership of MGA Entertainment Inc.

Calls and emails to Mattel and Van Nuys-based MGA for comment on the latest development were not immediately returned.

In August 2008, following a three-month trial in Riverside, Mattel won its civil suit alleging MGA had committed copyright infringement and conspired to cause a breach of contract with doll creator Carter Bryant, who was still employed by Mattel when he developed the Bratz concept in 1999.

Last year, before leaving the bench to go into private practice, U.S. District Judge Stephen G. Larson, who presided over the 2008 trial, upheld the $100 million jury verdict against MGA and issued an injunction halting the family-owned firm from making or marketing the doe-eyed, pouty-lipped Bratz dolls.

MGA was faced with the prospect of recalling its thousands of Bratz-related products from store shelves and ending all sales of the line.

MGA's founder and CEO, Isaac Larian, said the losses threatened to wipe out his company.

The appellate panel threw out Larson's injunction, concluding that the judge had overstepped. The judges, in their July decision, said Mattel was blindsided by the "overnight success'' of Bratz and the negative impact on
sales of Mattel's iconic Barbie line, prompting the toy maker to go on the attack.

"(Mattel) was particularly unhappy when it learned that the man behind Bratz was its own former employee, Carter Bryant,'' Chief Judge Alex Kozinski wrote.

Bryant and Mattel reached an out-of-court settlement in 2008.