Mattel's Lawsuit To Claim Ownership Of Bratz Comes Back To Bite Big Time: Told To Pay $309 Million

from the damn dept

Fri, Aug 5th 2011 5:30pm — Mike Masnick

As Stephan Kinsella notes, "live by IP, die by IP." You may recall the infamous legal fight over who owns the Bratz dolls. I won't go through the full history, but basically Mattel claimed that it owned the rights to Bratz dolls, because the creator of those dolls worked at Mattel (though not in a doll designing job) at the time he developed the dolls (not during work time). That guy eventually went to competitor MGA who produced the Bratz line of dolls. Mattel racked up an early series of wins in the case. Those wins seemed far overreaching. Not only did they give Mattel the rights to the original Bratz dolls, but all future plans as well, despite none of that having anything to do with Mattel.

Thankfully, sanity was regained at the appelate level, and eventually things turned around to bite Mattel for bringing the lawsuit in the first place. That's because the lawsuit allowed MGA to countersue over trade secrets violations. In April, we noted that this might end up costing Mattel $88.5 million, as the court rejected all of Mattel's claims and sided with MGA on the trade secret claim.

Turns out the result was even more damaging for Mattel. The court didn't just stick with the $88.5 million award the jury gave. Instead, while he "reduced" the jury award to $85 million, he then tacked on another $85 million in punitive damages and told Mattel to pay $137 million in legal fees to MGA. Total bill? Mattel has to fork over $309.8 million. All for a lawsuit Mattel brought in the first place. And that doesn't count the estimated $400 million that Mattel spent in legal fees during this fight. Add it all up and Mattel's decision to sue appears to have cost the company upwards of $700 million dollars.

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Filed Under: barbie, bratz, intellectual property
Companies: mattel, mga

53 Comments

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Anonymous Poster, 5 Aug 2011 @ 5:49pm

Now watch them act like Bratz and appeal this somewhere.
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Anonymous Coward, 5 Aug 2011 @ 5:53pm

Nicely Done
Of course, the shareholders will be outraged that so much of their money has been thrown down the drain by the company's foolish lawyers and managers. Naturally, there will be a terrible retribution against the perps. Any lawyer who was even peripherally involved can expect to get sacked. Likewise for any manager or executive. There is no way the CEO can survive.

Or maybe not. Meanwhile, in the world of the corporate psychopath and narcissist, all these legal losses are definitely somebody else's fault. Who could have ever predicted what those mean old judges might do? The executives and lawyers feel terrible about what has happened. Further punishing them would be dreadful. Sacking them would be out of the question, they are highly skilled and important corporate officers. Indeed they might need to be given a luxury holiday at company expense plus a nice bonus, to make them feel better.
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Anonymous Coward, 5 Aug 2011 @ 5:53pm

Haha. Pwned.
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Jeffrey Nonken (profile), 5 Aug 2011 @ 5:54pm

Good.
I'll leave it to others to decide whether the amount is excessive, but from what I've heard Mattel has been overreaching on its IP for a number of years now. I'm glad to see somebody has slapped them down.
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Anonymous Coward, 5 Aug 2011 @ 6:04pm

The question is: Will Mattel know when to cut it's losses? Or will it continue to throw good money after bad? Also, will they try something similar in the future, or have they learned from their mistake?
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SUNWARD (profile), 5 Aug 2011 @ 6:13pm

400 million in legal fees?
sounds very high!
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someone (profile), 5 Aug 2011 @ 6:35pm

Mattel paid $400mil to lawyers, Bratz lawyers got $137mil so $537mil to lawyers.

Seems the only people who won were the lawyers......
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Anonymous Coward, 5 Aug 2011 @ 6:37pm

Re:
From Yahoo finance:

Mattel, Inc.(NasdaqGS: MAT )
Market Cap: 8.40B
Total Assets (from balance sheet): 5.42B

Letmesee, according to Mike, this lawsuit cost $0.7B. So if they pursue the all litigation all the time route, I figure their assets can support at least seven such lawsuits.

After that, there's an extra $3B in the market cap. Dunno if that can be tapped to fund further lawsuits...
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Atkray (profile), 5 Aug 2011 @ 6:51pm

Re:
No in this case MGA actually won as well because now they can go back to making money by producing dolls instead of lawsuits.
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out_of_the_blue, 5 Aug 2011 @ 6:53pm

Just two words: IM POSSIBLE.
That they could have spent $400M on lawyers. No matter how complex the case, staff lawyers just aren't that expensive. (I assume they went outside to spend that much.) -- YET I suspect a rake-off / kickback scheme from lawyers to executives; plus tax advantages by a padded expense account. Yes, just a guess on my part, but $400 MILLION! Nobody would be THAT crazy! -- If anyone can say it's genuine, please don't: leave me my illusions.

In any event, it's another story where chasing money leads to stupid excesses.
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Perry K (profile), 5 Aug 2011 @ 7:23pm

unbelievable
So, how many lawyers at what rate for how long add up to $537 million?

I can't wrap my head around that number.
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Anonymous Coward, 5 Aug 2011 @ 7:32pm

Re: Re:
Assets aren't "liquid assets". That's not the cash they have on hand.
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mrtraver (profile), 5 Aug 2011 @ 7:50pm

Re:
Of course. Lawyers write and pass the laws, to enable them to keep raping in benefits like this.
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mrtraver (profile), 5 Aug 2011 @ 7:51pm

Re: Re:
edit: reaping
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Anonymous Coward, 5 Aug 2011 @ 7:57pm

Re: Re: Re:
Well they better get to selling some of that other junk while the wait for their new Bratz production equipment to arrive and take its place
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Anonymous Coward, 5 Aug 2011 @ 7:58pm

Re: 400 million in legal fees?
That's what hit me too - I had to go collect my head from under the desk 'cuz it fell off and rolled away when I read that.

Them's some bigass billables, man.
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Anonymous Coward, 5 Aug 2011 @ 8:15pm

.7 billion dollars over a F^cknig doll, amazing just F^cking amazing.
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Anonymous Coward, 5 Aug 2011 @ 8:15pm

That's expensive even for hooker dolls.
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Anonymous Coward, 5 Aug 2011 @ 8:17pm

Re: Re: Re:
No, the original works too.
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Anonymous Coward, 5 Aug 2011 @ 8:29pm

Re: Re: Re:
I think I liked it more when it was raping that sounds more like what a lawyer does.
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Anonymous Coward, 5 Aug 2011 @ 9:00pm

$400 million in legal fees?
If the fight lasted 4 years, and they paid an average of a $1,000,000 yearly salary for their lawyers, that would mean Mattel had 100 lawyers working full time on just this case.

I'm trying to figure out exactly what that many lawyers could have been doing for that length of time on ONE case.
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Hephaestus (profile), 5 Aug 2011 @ 9:06pm

Re: unbelievable
It's Washington math ... it doesn't make sense.
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Rekrul, 5 Aug 2011 @ 9:08pm

Re:
The question is: Will Mattel know when to cut it's losses?

Of course not.

Or will it continue to throw good money after bad?

Of course they will.
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Anonymous Coward, 5 Aug 2011 @ 9:12pm

It's funny seeing how many comments are racking up on how much lawyers get out of this.

The legal system desperately needs some revamping.
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Hephaestus (profile), 5 Aug 2011 @ 9:20pm

Re: $400 million in legal fees?
The billable hours at large law firms are done in some fraction of an hour, just like consultants for the government. You bill the minimum of 1/4 hour and you get a half hour billed, even if you only spent 20 seconds answering an e-mail. That is why the costs are so high.
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kentiler (profile), 5 Aug 2011 @ 10:45pm

Re: Re: $400 million in legal fees?
That's still 400 attorneys working full time for a year at a rediculously high billing rate of $500/hour!

Or it could be 200 attorneys working for 4 years solid at a $250/hour billing rate.

I guess there are court costs, etc. to figure in, but that amount still seems really high.
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The eejit (profile), 6 Aug 2011 @ 12:02am

Re: Just two words: IM POSSIBLE.
Never underestimate a silver tongued lawyer....who can't win a case properly.
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The eejit (profile), 6 Aug 2011 @ 12:03am

Re:
I was thinking more, "Take it out the back and shoot it," as it's currently unfit for purpose.
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Lawrence D'Oliveiro, 6 Aug 2011 @ 1:30am

Re: The legal system desperately needs some revamping.
You mean, to cut out abuses? Make sure only the �good� ones get in, and keep out the riff-raff?

Have Bar Associations regulating everything, and deciding who gets to practise and who doesn�t?

Why do you think the costs are so high?
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Ed C., 6 Aug 2011 @ 2:29am

Re: Re: The legal system desperately needs some revamping.
No kidding. I heard of a case awhile back when a guy was actually sued by the local bar association because he was helping seniors fill out the proper paperwork for their wills. I don't think it was so much that he didn't have a license to practice law that pissed them off. It's more likely that they weren't getting their full fees for giving cookie cutter consolations for information that could be found in a $5 book, or free online, and the fees from lawsuits that sometimes arise from badly managed, or missing, wills. The fees from a case such as "Jarndyce and Jarndyce" would make them as giddy as schoolgirls!
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Anonymous Coward, 6 Aug 2011 @ 3:33am

Truth?
I heard they are referred to internally as the Shitz
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The Devil's Coachman (profile), 6 Aug 2011 @ 4:13am

Re: Nicely Done
Or maybe they could all be thrown feet first into a slow-running wood chipper, while on fire. Now that would be appropriate.
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The Devil's Coachman (profile), 6 Aug 2011 @ 4:14am

Re: 400 million in legal fees?
Sounds very right!
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The Devil's Coachman (profile), 6 Aug 2011 @ 4:16am

Re:
Was that a turnip truck that just drove by? Did you injure yourself when you fell off?
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Anonymous Coward, 6 Aug 2011 @ 6:28am

I bet you the CEO of Mattel still gets a bonus. Harrr, Harr Harr.
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Will Sizemore (profile), 6 Aug 2011 @ 9:07am

$400M...
That amount probably doesn't include ONLY salaries. They probably included fees for each filing, rent or lease on facilities so the lawyers had offices to work from, signing bonuses to get more lawyers, new computers, monitors, fax machines, etc., and IT staff to maintain that equipment, office staff to bring in coffee and food while the lawyers 'slaved' over every bit of legal jargon, applicable or not, and perhaps THAT could add up to the $400M.

Its still too much money to be thrown away. I wonder how much of the court fees and penalties are counted as actual revenue for our government.
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Nicedoggy, 6 Aug 2011 @ 12:22pm

Re: $400 million in legal fees?
Playing Angry Birds.
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Nicedoggy, 6 Aug 2011 @ 12:23pm

Re: $400 million in legal fees?
Ok, ok I got it, they were playing Angry-Lawyers :)
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The eejit (profile), 6 Aug 2011 @ 1:49pm

Re: Re: unbelievable
It's less Washington math and more Crazy moon folk math.

Oh wait...
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Anonymous Coward, 6 Aug 2011 @ 4:39pm

Too Big To Fail
I don't know what this might do to Mattel's bottom line, but I'm sure they're too big to be allowed to fail. Maybe the taxpayers will get to pickup the tab for this.
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Anonymous Coward, 6 Aug 2011 @ 4:43pm

Re: Re:
The question is: Will Mattel know when to cut it's losses?
Of course not.
Or will it continue to throw good money after bad?
Of course they will.

Especially since they can count of the gov't bailing them out.
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Anonymous Coward, 6 Aug 2011 @ 4:45pm

Re: Re:
No in this case MGA actually won as well because now they can go back to making money by producing dolls instead of lawsuits.

Markets are time sensitive. They may have lost the opportunity.
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SKIBOY352001, 7 Aug 2011 @ 9:51am

Re: Re: Re:
Actually, I believe your first post stated it more accurately.
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hugh williams, 7 Aug 2011 @ 11:17am

this will be in courts for years as there will be appeal after appeal
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Shaun, 7 Aug 2011 @ 3:57pm

L. O. L.

Way to go Mattel.

Unfortunately I don't see them changing their ways. They're probably bitching about how 'bad' the judge was. Trolls gotta troll.
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jd2112 (profile), 7 Aug 2011 @ 7:42pm

Re: Nicely Done
Or maybe not. Meanwhile, in the world of the corporate psychopath and narcissist, all these legal losses are definitely somebody else's fault. Who could have ever predicted what those mean old judges might do? The executives and lawyers feel terrible about what has happened. Further punishing them would be dreadful. Sacking them would be out of the question, they are highly skilled and important corporate officers. Indeed they might need to be given a luxury holiday at company expense plus a nice bonus, to make them feel better.

Or even worse, they could go to a competitor and start a new toy line that Matell would have to sue over.
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BuzzCoastin (profile), 7 Aug 2011 @ 10:32pm

the lawyers won
It pretty obvious that the lawyers won; even the losing lawyers got paid, as does the judge and his staff. It was a fine piece of lawyer wrangling and good time was had by all.
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Eldakka (profile), 8 Aug 2011 @ 12:28am

Re: Re: Re: $400 million in legal fees?
$500/hour is not a particularly high rate for a lawyer. Probably an experienced (but not senior) associate.

Partners at big firms bill $1000+ hour.
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Schmoo, 8 Aug 2011 @ 2:53am

Re: Re: Re:
$700m may not be the final bill after all...
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Anonymous Coward, 8 Aug 2011 @ 9:32am

Re: Re: Re:
I think raping is correct... just ask the shareholders.
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Anonymous Coward, 8 Aug 2011 @ 2:40pm

Re: $400 million in legal fees?
First they had to make 'life size' replicas of all the dolls so that they could have the lawyers show each other where the 'bad doll' touched them.... Oh wait, the life size dolls were only for the lawyers recreational activities... but they still had to have them so that they could see and probe the similarities and differences between Barbie and the Brazt dolls.

The other $350 million went to the hookers and blow that supported the life size doll comparison party that went on for 6 months while they tried to figure out who was best at 'pinning the tale' on the dolls....
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katrina, 8 Sep 2012 @ 4:35am

Firstly stolen from Europe
Mattel firstly copied the (Barbie) Doll from Bild Lilli a German doll so they don't have the right to any copy rights on barbie!!!!!
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katrina, 8 Sep 2012 @ 4:35am

Firstly stolen from Europe
Mattel firstly copied the (Barbie) Doll from Bild Lilli a German doll so they don't have the right to any copy rights on barbie!!!!!
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