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MGA Entertainment Incorporation was founded in the year 1979 and is globally recognized for its unique and attractive children’s toys and entertainment products. One such product that helped MGA gain a worldwide reputation and customer loyalty is the renowned BRATZ Fashion Doll. Not only the Bratz doll became every pre-teen’s favourite but gave a titanic competition to the rival brand Mattel Incorporation.
This competition became a cornerstone of the long-running legal-battle between MGA Entertainment Incorporation and Mattel Incorporation. The legal tussle started in the year 2004 when Barbie manufacturer Mattel sued his former employee and Bratz Dolls developer, Carter Bryant, claiming that he maliciously took the idea and concept of Bratz Dolls, before jumping to MGA, eventually resulting in a turnover of more than $1 billion in an account of MGA. Even after the settlement of the Carter Bryant issue, Mattel did not knuckle down, rather instituted another suit against MGA, claiming $1 billion in the form of damages, keeping in question, the exclusive rights over the entire Bratz dolls brand.
Mattel contended that, with the intent to steal confidential business ideas and information, known as Trade Secrets, for unreleased products and trading plans, many rival competitors trained their employees to enter private showrooms and distribution places by forging their identities, MGA was one such rival competitor. In the year 2011, the jury concluded that Mattel failed to provide adequate evidence against MGA in respect of Trade Secret misappropriation claim and directed to pay a whopping amount of $309 million as damages to MGA. However, the Federal District Court dismissed MGA’s Trade Secret claim.
As a matter of fact, MGA approached Mattel with an offer to merge both the incorporations for the greater good, in 2015, 2017 and 2018, to which Mattel refused.
In the year 2017, Mattel moved forward for summary judgment which was agreed and granted by the Court in 2018. However, this decision did not last for long, as MGA filed a Notice of Appeal, requesting the court to revive the case while contending that Mattel “fraudulently concealed critical, smoking-gun evidence that it improperly accessed MGA’s showrooms”.
A recent decision was laid down by the California State Appeals Court in October 2019, refusing to revive the case on the ground that, the Trade Secret contentions given by MGA is prohibited under California’s three-year statute of limitation.