Mattel Likely To Win Copyright Suit Versus MGA Entertainment

El Segundo, CA (AHN) - Mattel, the world's largest toy manufacturer and birth place of the popular Barbie doll, has high chances of winning a copyright lawsuit it filed against MGA Entertainment.

MGA churned out Bratz, an urban facsimile of Barbie. Mattel contends that when the Bratz doll was designed by Carter Bryant, he was still a Mattel employee, therefore income from the sale of the doll including direct sales and licensing fees must accrue to Bryant's former employer.

Potential damage fee to be awarded Mattel, in the event a California court rules in its favor, range from $360 million to $500 million.

Sean McGowan, an analyst at Needham and Company, quoted by Bloomberg, forecasts a status quo or better terms for Mattel. Court victory would spell higher value of Mattel stocks, McGowan added.

Barbie has been on toy store shelves since 1959 and always enjoyed good sales. When MGA marketed Bratz in 2001, sales of Barbie dolls in the U.S. dipped by 12 percent in the first quarter of that year. In contrast, sale of Bratz dolls went up the past seven years and has transformed the toy into a $2 billion franchise.

Bratz stole the doll market share from older girls between the ages 5 to 9, while Barbie remained popular with pre-school girls.

Bryant designed Bratz while still a Mattel employee and surreptitiously sent his drawings to MGA. However, his 1999 employment contract with Mattel specifically spelled out that the toymaker could claim rights to his designs which he made while still employed with Mattel.