Property, intangible

a blog about ownership of intellectual property rights and its licensing

Mattel $100 Million Richer, For Now

Yesterday the Bratz court dealt with a boatload of motions, most importantly MGA Entertainment’s motion for remittitur of the $100 million verdict. MGA Entertainment claimed that the $100 verdict was duplicative, and that the jury really meant that the verdict should be $20 million.

The MGA parties argue that Mattel had a singular theory of recovery – disgorgement of profits – and the amounts set forth by the jury as to each of the three state-law claims are duplicative. This is not a completely unappealing argument. For each of three state law claims – intentional interference with contractual relations, aiding and abetting breach of fiduciary duty, and aiding and abetting the duty of loyalty – the jury indicated that Mattel should be awarded $20 million as to MGAE and $10 million as to Isaac Larian. Totaled, this award is $90 million. Viewed pursuant to the MGA parties’ theory, it would be the same $30 million awarded three times. Relatedly, the MGA parties contend that the copyright damages of $10 million (allocated among three defendants) are also duplicative of this $30 million, even though the number is not exactly the same.

But the court had to defer to the jury: “The fact is the evidence not only supported a verdict of $100 million, this Court could have, under the remittitur standard, easily sustained a verdict many times this amount.” Luckily for MGA though, the $31,500 portion of the verdict for conversion of drawings was remitted because the court ordered the drawings returned to Mattel.

The court addressed 11 other motions in the same minutes order. The BRATZ name belongs to Mattel, “even if it was not a proper trademark at the time it was conveyed and even though it is not subject to being copyrighted.” Non-party Omni 808 Investors LLC was allowed to intervene for the limited purpose of protecting its assets in the receivership; the court will later consider whether

Omni’s purchase of the Senior Bank Credit Facility from Wachovia was a straightforward, arms-length business deal between non-parties to this action, or whether, as counsel for Mattel contends, the purchase was by entities formed for the improper purpose of attempting to leapfrog over Mattel’s claims and shield their assets from creditors and other rights-holders such as Mattel.

The court also, as requested by Mattel, appointed a temporary receiver. Lucky for us, though, the order

permit[s] retailers who receive Bratz products pursuant to the authority of the Temporary Receiver, and who pay the Temporary Receiver monies due and owing for such Bratz products, to not remove such products from the shelves until January 10, 2010.

The court seems to be growing a bit weary of the case. One later docket entry sniped:

Finally, the Court must take issue with counsel for the MGA parties assertion that it is highly unlikely that either the Court or its staff will review Mattels reply papers between May 22 and May 26, 2009, which is the Memorial Day weekend. Regrettably, counsels perception that this Court will not be consumed by reviewing and considering papers during the Memorial Day weekend as it is on just about every other weekend of the year on numerous and various cases is mistaken.

The Trademark Blog post here. Minute Order available here.

© 2009 Pamela Chestek

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