A doll designer conceived and began developing the popular, multi-billion dollar Bratz doll line while working for toy giant Mattel Inc. before taking the idea to a relatively new company that went on to build a thriving, competitive business with the dolls, an attorney for Mattel told jurors Friday.
The allegation came during closing arguments in the three-month federal copyright infringement and trade secrets trial pitting Mattel against Los Angeles-based MGA Entertainment Inc., which exploded onto the toy scene in 2001 with the hip hop-inspired dolls marketed to the "tween" generation.
The jury got the case late Friday and will begin deliberations on Monday.
Hundreds of millions of dollars and the rights to a blockbuster toy are at stake in the complex case that has dragged on for six years.
Mattel claims in its lawsuit that MGA conspired with designer Carter Bryant to steal the idea for the dolls while Bryant worked for Mattel.
Mattel attorney Bill Price told jurors the company that makes the iconic Barbie doll was "burned by an opportunist with no fashion doll designers" of its own.
"The case really is about transforming a company and building a brand by using another company's confidential information and ideas, and that's wrong," Price said. "If you can use another company's confidential designs and innovation, competition will die."
MGA's attorney, however, told jurors Mattel's allegations were untrue and painted Mattel as a ruthless corporation bent on destroying anyone who threatened the dominance of its Barbie brand.
MGA has countersued Mattel, claiming the El Segundo-based company engaged in unfair business practices and sent gumshoes to spy on MGA at toy fairs after realizing Bratz dolls were siphoning sales from Barbie. MGA is asking jurors to award it damages for that alleged offense.
"This case is about how the world's biggest toy company tried to crush the only competitor against Barbie in the marketplace," MGA attorney Jennifer Keller said. "MGA invested millions of dollars and thousands of hours of labor ... and made Bratz into a brand, the successful brand it became.
"What happened here is Barbie lost the race," she said. "I'm sorry, but Barbie is at the 50-year mark and little Bratz was sprinting right past her."
A jury awarded Mattel $100 million in 2008 and found that Bryant had developed the Bratz concept while with Mattel. But the verdict was overturned and the case sent back for retrial.
On Friday, Price told jurors that Bryant developed the idea for the sexy, urban dolls while working for Mattel in 1999 then continued to work on a doll body sculpt, fashions and other features before he left Mattel _ all while working four hours a day for MGA in secret.
Bryant also asked two Mattel employees to help him with the doll's face paint and hair as a personal favor, Price said.
Keller, however, said Bryant first sketched the dolls in 1998, when he was living in Missouri and working at a clothing store, and then further developed the sketches on his own time and using his own materials.
"He is exhausted emotionally, he's exhausted mentally and he's exhausted physically, but there's one thing he has never, ever waivered on: He created these drawings in 1998, back in Missouri," she said.
Key to the case is how jurors interpret the scope of an invention agreement that Bryant signed with Mattel.
The company believes the contract gives it ownership of all products invented during Bryant's employment at Mattel and that it also pertains to an employee's ideas. MGA attorneys say the contract doesn't refer to ideas and doesn't include work Bryant did at night or on weekends.
"He thought what he did on his own time, on his nights and weekends, was his and he owned it. That contract does not tell you any different," Keller said. "The 1999 inventions agreement makes no reference to ideas and that's not an accident."
Both toymakers have a lot on the line in the spat over Bratz.
MGA's CEO Isaac Larian said his company has spent $150 million on legal fees and been forced to lay off 300 employees as a result of the litigation. If jurors decide Mattel owns Bratz, it could create critical problems for MGA, which built its fortune on the line targeting 9- to 11-year-old girls.
Price said in his closing argument that Mattel lost $323.7 million in profits because of Bratz, while MGA has reaped $734.9 million in profits from the doll line.
In her statement, however, Keller told jurors even if they found that Bryant's drawings of the Bratz dolls belonged to Mattel, the most they could award was $2 million for copyright infringement and $7 million for trade secrets because MGA did the hard work to develop a "3-D doll from a 2-D drawing" and refreshed and expanded the doll line each year.
Mattel first sued Bryant in 2004 then settled with him on the eve of the first trial for $2 million while continuing to pursue its case against MGA.
In its countersuit, MGA accuses Mattel of using fake identification to spy on MGA at trade shows and threatening retailers and distributors who did business with MGA.
Keller said she believed Mattel owed MGA $149 million to $202 million in damages for "infiltration of MGA at the New York toy fair for seven straight years."
In closing arguments, Mattel attorney John Quinn said those allegations were false. Trade shows are mostly open affairs, he said, and many of the 114 trade secrets MGA accuses Mattel of stealing through spying were already public through news articles or press releases, he said.
"Their burden is to prove this, and what they've done is simply throw 114 things up against the wall," Quinn said.