Broad Injunction Issued in Toy Infringement Case

Back in August, when Mattel Inc. won $100 million in damages from the federal jury that decided Mattel's highly publicized copyright infringement case against MGA Entertainment Inc., the verdict was widely regarded as a disappointment for Mattel, which had requested more than $1 billion in damages following the jury's finding that MGA's hugely successful Bratz dolls were based on designs by a Mattel employee.

At the time, Mattel lead counsel, John Quinn of Quinn Emanuel Urquhart Oliver & Hedges, said that the jury's most important finding was that MGA had infringed Mattel's copyright. Quinn promised to use the jury's infringement verdict to seek an injunction against MGA's Bratz dolls ' the toys that had sent sales of Mattel's Barbie into decline.

In December, U.S. District Judge Stephen Larson of the Central District of California granted Mattel a sweeping injunction that essentially shuts down MGA's Bratz operation. Larson ordered MGA to cease manufacturing, marketing and selling almost every doll in the Bratz line, as well as any ancillary product that makes use
of images of those dolls. He also ordered MGA, at its own expense, to deliver all infringing dolls and products to Mattel for impoundment. In a separate order, Judge Larson granted Mattel's motion for a constructive trust on the Bratz name, which means that MGA can no longer even use the Bratz name.

“[The ruling] is a vindication of the principles Mattel has been pursuing all along,” said Quinn Emanuel partner Michael Zeller, who is co-lead counsel with Quinn. “We had an employee who was getting paid by Mattel, who received the benefits of working for Mattel, who secretly sold his designs to a competitor.”

MGA, which is represented by Thomas Nolan at Skadden, Arps, Slate, Meagher & Flom, told The Wall Street Journal that it planned to appeal Larson's ruling. The judge stayed enforcement of the injunction until February.

Judge Larson addressed MGA's central argument in a ruling explaining his reasoning. Skadden's Nolan had argued that any injunction should be limited to the first generation of Bratz dolls, which he claimed were the only dolls that made use of designs created when the Bratz designer was on Mattel's payroll. Nolan argued that the $100 million jury verdict reflected the jury's belief that only the early dolls infringed Mattel's copyright.

Judge Larson rejected that reasoning. The jury sent a note asking whether it could limit its infringement finding, but its final verdict did not. “The jury made no express finding on this issue,” Larson wrote.

Back in August, when Mattel Inc. won $100 million in damages from the federal jury that decided Mattel's highly publicized copyright infringement case against MGA Entertainment Inc., the verdict was widely regarded as a disappointment for Mattel, which had requested more than $1 billion in damages following the jury's finding that MGA's hugely successful Bratz dolls were based on designs by a Mattel employee.

At the time, Mattel lead counsel, John Quinn of Quinn Emanuel Urquhart Oliver & Hedges, said that the jury's most important finding was that MGA had infringed Mattel's copyright. Quinn promised to use the jury's infringement verdict to seek an injunction against MGA's Bratz dolls ' the toys that had sent sales of Mattel's Barbie into decline.

In December, U.S. District Judge Stephen Larson of the Central District of California granted Mattel a sweeping injunction that essentially shuts down MGA's Bratz operation. Larson ordered MGA to cease manufacturing, marketing and selling almost every doll in the Bratz line, as well as any ancillary product that makes use
of images of those dolls. He also ordered MGA, at its own expense, to deliver all infringing dolls and products to Mattel for impoundment. In a separate order, Judge Larson granted Mattel's motion for a constructive trust on the Bratz name, which means that MGA can no longer even use the Bratz name.

“[The ruling] is a vindication of the principles Mattel has been pursuing all along,” said Quinn Emanuel partner Michael Zeller, who is co-lead counsel with Quinn. “We had an employee who was getting paid by Mattel, who received the benefits of working for Mattel, who secretly sold his designs to a competitor.”

MGA, which is represented by Thomas Nolan at Skadden, Arps, Slate, Meagher & Flom, told The Wall Street Journal that it planned to appeal Larson's ruling. The judge stayed enforcement of the injunction until February.

Judge Larson addressed MGA's central argument in a ruling explaining his reasoning. Skadden's Nolan had argued that any injunction should be limited to the first generation of Bratz dolls, which he claimed were the only dolls that made use of designs created when the Bratz designer was on Mattel's payroll. Nolan argued that the $100 million jury verdict reflected the jury's belief that only the early dolls infringed Mattel's copyright.

Judge Larson rejected that reasoning. The jury sent a note asking whether it could limit its infringement finding, but its final verdict did not. “The jury made no express finding on this issue,” Larson wrote.