*Mattel wins Bratz case

A federal jury in Riverside has found that a designer came up with the idea for Bratz dolls while he worked at Mattel. He went on to Valley-based MGA Entertainment, which made a fortune on the dolls. The next phase of the closely watched case will determine damages - and it could be a very costly proposition for Van Nuys-based MGA. Any potential profits that Mattel lost by not owning Bratz might be considered – and that could easily run into the hundreds of millions of dollars (never mind whether the toy company would have actually made the dolls). Worse still is the possibility that MGA would be forced to give up the right to make Bratz dolls altogether. MGA almost certainly will appeal, so this could take a while to sort out. One obvious winner: the L.A.-based the law firm of Quinn Emanuel Urquhart Oliver and Hedges, which represented Mattel (lead partner John Quinn delivered opening and closing arguments). On the losing side was the L.A. office of Skadden, Arps, Slate, Meagher. & Flom (Tom Nolan did the honors). The WSJ's Nicholas Casey has the backstory.

Mattel's blonde stalwart Barbie for decades was the undisputed ruler of the doll world, with a clean-cut image and a seemingly unshakeable place in the life of young girls. But in 2001, upstart MGA Entertainment stormed into the market with a new line of dolls called Bratz with a saucier look that included pouty lips and provocative clothing. Bratz soon became the hottest doll in the toy industry, and today racks up estimated world-wide sales of $1.25 billion. Mattel, on the other hand, has struggled with declining Barbie sales, a problem it has told investors it is working to fix. In the case, Mattel alleged that MGA essentially stole the idea for Bratz from Mattel during a secret collaboration with a designer named Carter Bryant, who Mattel said invented the doll while on Mattel's payroll. Mr. Bryant, who Mattel had also sued, settled with the company in May under undisclosed terms. At trial, he said that he had designed the doll while living with his parents between two stints at Mattel.