Ninth Circuit Overturns $172 Million Trade Secrets Award in Rival Toy Makers’ Epic Dispute

After more than eight years of litigation and two jury trials over the Bratz doll line, rival toy makers Mattel, Inc. and MGA Entertainment, Inc. may be headed for a rubber match – a third jury trial. Yesterday, a Ninth Circuit panel consisting of Chief Judge Alex Kozinski, Judge Kim Wardlaw, and Judge Stephen Trott, overturned an award of $172 million in damages (including attorneys’ fees) to MGA for alleged trade secret misappropriation, holding that MGA’s respective counterclaim-in-reply was not compulsory and should not have reached the jury. Mattel, Inc. v. MGA Entertainment, Inc., Case No. 11-56357 (9th Cir. Jan. 24, 2013).

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