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US court throws out award in Bratz doll row

An employee off Japanese toy maker Takara's Girl's Marketing division shows off 'Bratz' in Tokyo on January 20, 2003
An employee off Japanese toy maker Takara's Girl's Marketing division shows off "Bratz" during a press preview in Tokyo on January 20, 2003. A US appeals court threw out Thursday a multi-million dollar award against toymaker Matell in a long-running dispu

A US appeals court on Thursday threw out a multi-million dollar award against toy maker Mattel in a long-running dispute with rival MGA Entertainment over Bratz children's dolls.

Mattel was ordered in 2011 to pay MGA $310 million in damages and legal fees, in the dispute over ownership claims for the lucrative doll line aimed at pre-teen girls.

But the Ninth Circuit Court of Appeals ruled that the claim was improperly litigated, quashing the $170 million damages part of the award and urging both sides to end the years-long dispute amicably.

"While this may not be the last word on the subject, perhaps Mattel and MGA can take a lesson from their target demographic: Play nice," said the appellate panel ruling.

MGA launched Bratz dolls in June 2001 and they quickly became the top competitor to Mattel's world-famous Barbie, racking up more than $1 billion in annual sales and cutting into Mattel's market dominance.

In 2008 a jury awarded $100 million in damages to Mattel. MGA was ordered to turn over the franchise to Mattel and stop making and selling Bratz products, but the order was overturned on appeal and sent back for a retrial.

Mattel argued that Carter Bryant, Bratz's creator and a former Barbie designer, invented the dolls in 1999 during his second stint with the company and that he violated the terms of his employment by taking his ideas to MGA.

MGA, meanwhile, accused Mattel of spying on its rivals, including using false identification cards to enter the MGA premises to photograph its products without authorization.

Last year a jury rejected copyright infringement claims by Mattel against MGA Entertainment and awarded MGA $88.4 million in damages.

Mattel welcomed Thursday's decision while noting that it is still liable for legal fees.

"We are pleased that the (court agreed) that the verdict and damages on MGA's toy fair claims must be reversed," it said, adding that it had taken a reserve of $137.8 million in the fourth quarter of 2012 to cover the fees.

It voiced hope that the row would soon be resolved for good, saying: "While MGA can in theory bring a new lawsuit based on its toy fair claims, we are confident that such a lawsuit will be barred by the statute of limitations.

"We look forward to the speedy and final resolution of this dispute, and will continue to focus our efforts on successfully competing in the marketplace," it said.

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