Business - Money 101

  Toymaker Mattel was awarded roughly $99 million today in the Riverside trial of a federal copyright infringement lawsuit against rival MGA Entertainment Inc. stemming from the original design of the hot- selling Bratz dolls.

After two and a half days of deliberations, the three-man, six-woman
jury determined that Mattel was owed $90 million for losses resulting from a doll designer's breach of contract when he took sketches for the now-popular Bratz dolls to MGA.

The jury also awarded Mattel $9 million in damages for MGA's unauthorized use of copyrighted material -- the original Bratz design. Mattel had wanted MGA to surrender roughly $2 billion in profits generated by the Bratz products and was also seeking unspecified punitive damages.

"Clearly the message is the parties need to compete in the marketplace
rather than the courtroom," said Thomas Nolan, lead attorney for MGA.
"We're disappointed that they awarded any damages," Nolan said, but
"we think the jury's finding is a significant rebuke to Mattel's aggressive
and overreaching tactics," he added.

On July 17, in the first phase of trial, the jury unanimously decided that a majority of the original sketches of Bratz dolls, licensed under MGA, were made by a doll designer, Carter Bryant, while he was still employed at
Mattel.

The panel also found that MGA Entertainment CEO Isaac Larian had interfered with Bryant's contractual obligations to Mattel and had abetted
Bryant's breach of duty to the toymaker.

Less than a week after the verdict, U.S. District Court Judge Stephen G.
Larson dismissed a female juror for ethnic slurs that she allegedly uttered
in front of several fellow jurors in reference to Larian, an Iranian of Jewish
descent. "(She) indicated that her husband, an attorney, has told her ...
clients who are Iranian ... are stubborn, rude, stingy, are thieves, and have
stolen other persons' ideas," Larson said in a court order formally excusing the juror. Larson said he discussed the matter with the juror's fellow panelists, most of whom, he said, felt uncomfortable continuing to serve with her and emphasized that her "remarks would have no affect on any deliberations or decision" in the damages phase of the lawsuit, which began July 23.

MGA petitioned the court for a mistrial, declaring the dismissed juror's
thoughts likely crept into deliberations, tainting the other jurors. But the judge determined "that the other jurors gave no weight to her (the suspect juror's) statements and, beginning with the foreperson ... strongly rebuked" the woman.

Larson denied the motion for mistrial, saying the other nine jurors had
"reacted to extraneous, potentially prejudicial information exactly as society would have them react."

MGA's Bratz dolls, favored by tween girls, first appeared at the 2001 Hong Kong Toy Fair. In the years following, Mattel's Barbie line saw sales unwind as the Bratz girls caught on.

Bryant testified that he sketched and sculpted models for the Bratz dolls during a break in his employment from Mattel in the late 1990s. But the
jury found most of the sketches were drafted just before the designer left
Mattel for MGA in 2000.

Mattel originally included Bryant in its lawsuit against MGA but reached
an undisclosed settlement with the designer shortly before the trial got
under way. In notes to Judge Larson Friday, jurors indicated they were uncertain of a "starting point" for a damage award. Lawyers for MGA say the amounts sought by Mattel would effectively sink the smaller toy manufacturer.