July 17, 2008

Mattel Prevails over MGA in Ownership of Bratz Drawings

RIVERSIDE, Calif., Jul 17, 2008 (BUSINESS WIRE) -- Today in Federal Court, a 10-person jury has rendered a unanimous decision that the majority of Bratz design drawings, prototypes and sculpts were created by doll designer Carter Bryant while he was employed by Mattel. The jury has also determined that MGA and its CEO, Isaac Larian:

-- intentionally interfered with the contractual duties owed by Bryant to Mattel;

-- aided and abetted Bryant's breach of his duty of loyalty;

-- aided and abetted Bryant's breach of the fiduciary duties he owed to Mattel; and

-- converted Mattel property for their own use.

"This is a victory for all the hard-working people at Mattel who come together to create many of the most beloved toys for children. It is also a victory for all those who believe in fair play," said Robert A. Eckert, chairman and chief executive officer of Mattel, Inc.

He went on to say that "Mattel is home to many of the world's most talented toy designers - they are the creative engine of the company. We want to ensure that Mattel's Design Center is a place where concepts are built upon and enhanced by the entire team - not stolen for personal gain and to assist a competitor."

Under an Inventions Agreement with Mattel, Bryant assigned to Mattel all ownership rights of anything he created during his Mattel employment. Judge Stephen Larson, the Federal judge presiding over the case, previously had ruled that the Inventions Agreement is enforceable, and it applies to any Bratz-related "inventions" (including any designs, improvements, ideas, concepts, and copyrightable subject matter) that Bryant created during the period of his employment with Mattel. In addition, the Court ruled, as a matter of law, that Bryant breached his duty of loyalty to Mattel by "entering into a contract with Mattel's competitor, while still employed by Mattel, to produce a line of fashion dolls to be marketed in direct competition with Mattel's products."

In the next phase of the trial, due to begin shortly, the same jury will be asked to determine if Bratz dolls or related products infringe on the Bratz drawings and sculpts now owned by Mattel and whether certain procedural defenses asserted by MGA have merit. If the jury finds that the drawings do infringe, it will be asked to determine the amount of damages to be awarded to Mattel. On May 19, 2008, Bryant reached a confidential settlement with Mattel and is no longer a defendant in the litigation.

Mattel was represented by Quinn Emanuel Urquhart Oliver & Hedges, LLP, a 400-strong lawyer business litigation firm - the largest in the United States devoted solely to business litigation. The litigation team was lead by John Quinn, founder and managing partner at the firm, and partners Bill Price and Mike Zeller.

The trial of Mattel, Inc. v MGA Entertainment, Inc. began on May 27th, 2008 in United States District Court for the Central District of California in Riverside, Calif., and is being presided over by the Honorable Stephen G. Larson, United States District Judge.

About Mattel

Mattel, Inc., (NYSE:MAT) (www.mattel.com) is the worldwide leader in the design, manufacture and marketing of toys and family products. The Mattel family is comprised of such best-selling brands as Barbie(R), the most popular fashion doll ever introduced, Hot Wheels(R), Matchbox(R), American Girl(R), Radica(R) and Tyco(R) R/C, as well as Fisher-Price(R) brands, including Little People(R), Power Wheels(R) and a wide array of entertainment-inspired toy lines. Mattel is recognized as one of 2008's "100 Best Companies to Work For" by FORTUNE Magazine. With worldwide headquarters in El Segundo, Calif., Mattel employs more than 30,000 people in 43 countries and territories and sells products in more than 150 nations. Mattel's vision is to be the world's premier toy brands -- today and tomorrow.


SOURCE: Mattel, Inc.

Mattel, Inc.
Lisa Marie Bongiovanni, 310-252-3524

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