Mattel sued MGA over Bratz and won $100M — then lost and paid $310M back

In 2001, MGA Entertainment launched Bratz — four dolls with oversized heads and sassy streetwear that immediately took on Barbie. Within a few years, Bratz had captured 40% of the fashion doll market, threatening Mattel's $1.5 billion Barbie franchise. The dolls were created by Carter Bryant, a toy designer who had worked for Mattel before joining MGA. Mattel sued MGA in 2004, claiming Bryant had conceived Bratz while on Mattel's payroll and that the franchise belonged to them.

The first trial ended in July 2008 with a jury awarding Mattel $100 million — far less than the $1 billion they had sought — and a judge banning MGA from selling Bratz entirely. MGA was ordered to recall every Bratz doll from store shelves at its own expense. But the Ninth Circuit Court of Appeals intervened in December 2009, calling the recall order 'draconian' and granting an immediate stay, describing damages as more appropriate than destruction.

The retrial in April 2011 completely reversed the outcome. A federal jury ruled that MGA, not Mattel, owned the Bratz copyright and trademark. More damaging for Mattel, the jury found that Mattel had stolen trade secrets from MGA — sending spies to MGA's showrooms and copying their confidential product development plans. The court ordered Mattel to pay MGA $310 million for trade secret theft and attorney fees. Mattel's lawsuit, which aimed to destroy MGA's most valuable product, had backfired spectacularly.