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May 24, 2008
Fashion Dolls in the News
Jury selection starts in Mattel lawsuit over Bratz
By GREG RISLING 05.20.08, 3:29 PM ET
LOS ANGELES -
Marketed as a group of girls with a passion for fashion, Bratz dolls have been nothing but a financial headache for Barbie-maker Mattel Inc. Barbie sales have slumped since the pouty-lipped Bratz line hit shelves in 2001 and girls were drawn to their edgy, urban design themes.
A legal cat fight followed, with Mattel (nyse: MAT - news - people ) seeking a piece of Yasmin, Jade and friends in a lawsuit against rival MGA Entertainment Inc. Mattel has alleged that it's entitled to some of the profits from the Bratz dolls because MGA stole the concept and other trade secrets by luring away a Mattel employee.
If jurors find that Mattel's rights were infringed, the world's biggest toy maker could collect hundreds of millions of dollars in licensing fees from MGA. "The stakes really couldn't be higher for this kind of case," said Jack Lerner, a law professor at the University of Southern California. "The future of this brand is in the balance."
El Segundo-based Mattel filed the original lawsuit in 2004 against Carter Bryant, one of its former doll designers, accusing him of wrongfully selling his Bratz ideas to privately held MGA while he was under contract to Mattel. In a ruling last month, U.S. District Judge Stephen Larson said Mattel could claim rights to work done by Bryant. "It comes down to what Bryant did in the time he was with Mattel," Lerner said.
The lawsuit is going to trial during a difficult time for both companies. Mattel recalled millions of Chinese-made toys last year that were found to be tainted with lead. Last month, the company reported a $46.6 million loss in the first quarter with Barbie sales flat and a 13 percent drop in worldwide sales for its Fisher-Price brand.
Isaac Larian, MGA's chief executive officer, has pegged the value of the Bratz franchise at $2 billion, but industry analysts believe its market share has slipped in the past few years because new products such as Webkinz and the Hanna Montana craze have captured kids' attention.
"Unfortunately for Mattel and MGA, fashion dolls have fallen out of favor," said Gerrick Johnson, a toy industry analyst at BMO Capital Markets in New York. "The trend has been toward mini-dolls or animals. Bratz is actually struggling more than Barbie right now."
Posted by fashiondoll at May 24, 2008 09:28 PM