Judge rejects Mattel’s claim to Bratz

SANTA ANA, Calif. — A federal court jury on Thursday rejected Mattel Inc.’s claims that it owns the copyright to the blockbuster, billion-dollar Bratz dolls and instead awarded upstart rival MGA Entertainment Inc. more than $88 million in damages for misappropriation of trade secrets.

The verdict came as a staggering blow to the toy giant, which has long claimed the smaller company stole the idea for the provocative, pouty-lipped toys.

The jury, which deliberated for nearly two weeks after a three-month trial, also found that Mattel acted willfully and maliciously in misappropriating MGA’s trade secrets. MGA lawyers said that raised the possibility the judge could increase the damages by up to three times the jury’s award.

The verdict will allow MGA to regain control of its flagship fashion doll that debuted in 2001 and to once again try to compete with Mattel’s iconic Barbie doll to dominate the market.

Bratz are now a shadow of the former brand, said BMO Capital Markets analyst Gerrick Johnson, who estimated that wholesale sales are now under $50 million, down from $800 million at their peak five years ago.