SANTA ANA, Calif.–MGA Entertainment is seeking $440 million in attorneys’ fees and damages from Mattel as a result of a federal jury’s finding that MGA owns the rights to the Bratz doll line, the founder and head of the company stated.

The amount MGA was seeking had been sealed in court documents, but MGA Chief Executive Officer Isaac Larian confirmed the $440 million figure while talking to reporters about the case during a break in a daylong hearing on damages and Mattel’s motion for a new trial.

Even if U.S. District Judge David O. Carter awarded MGA the full amount sought, “it will not compensate us for the full damage,” Larian said.

According to Larian, Hasbro offered to buy the Bratz line for $1.1 billion in 2006, but MGA had to pass up the deal because of the pending litigation with Mattel.

The El Segundo-based toy giant’s expert determined in 2008 that the Bratz brand was worth $948 million, and Mattel CEO Robert Eckert said in a deposition for the most recent round of legal battles that the brand was worth $100 million to $150 million, Larian said.

MGA scored a significant legal victory on April 21 when a jury awarded the company $88.4 million in compensatory damages and rejected Mattel’s claim that MGA stole its rival’s secrets and that it owned the idea for the trendy line of multi-ethnic dolls with oversized heads and feet.

Carter can triple the compensatory damages, which would give MGA $265.2 million total. With attorneys’ fees, that would add up to $440 million, according to Larian.

MGA attorney Jennifer Keller said she could not comment on the amount of the attorneys’ fees.

Mattel’s attorneys argued this morning that the company should not owe MGA any attorneys’ fees because its litigation did not reach the legal standard for “bad faith.”

Larian said his company has had to lay off about 300 employees because of the years of litigation and a Riverside federal jury’s August 2008 ruling in favor of Mattel in its civil suit alleging MGA had committed copyright infringement and conspired to breach Bratz creator Carter Bryant’s contract with Mattel before he went to work for rival MGA.

The $100 million award to Mattel was overturned by the U.S. 9th Circuit Court of Appeals last year, leading to the Santa Ana retrial.

The big difference in the 2008 trial and the most recent one was MGA’s claim that Mattel engaged in corporate espionage, Keller said.

Mattel had about 10 spies who snuck into private MGA showings at toy fairs with fake IDs over the years, Keller maintained.

Evidence to buttress MGA’s claim of corporate espionage was not uncovered until July of last year, MGA attorney Annette Hurst said. Keller and Hurst claimed Mattel attempted to bury the information.

Mattel’s representatives, masquerading as retailers, would get information on pricing and upcoming toy releases at the toy shows, according to Keller, who claimed the company even developed a “How-to-Steal” manual.

“We still can’t get a line of credit,” Larian said outside the courtroom. “The damage is horrible. But this is Mattel’s strategy. Anyone who gets in the fashion doll line has a target on their back. I hope this judge will punish them to deter them from doing it to another entrepreneur.”

To rebuild the Bratz line “is going to take a lot of money invested and new innovation … It will take many, many years to bring it back,” Larian said.

The April verdict, though, boosted the morale of MGA’s employees, he said.

“They’re all pumped up to fight where it counts–in the marketplace,” Larian said.

Carter is expected to rule later on the motions for a new trial, damages and attorneys’ fees.

By Paul Anderson | City News Service