MGA Entertainment, the company that manufactured Bratz, scored a legal victory over Barbie creator Mattel Inc. after a US District Court slapped the latter with $88 million worth of damages after rejecting its claims that the former stole its idea for the Bratz doll.

After deliberating for a couple of weeks, the jury based in Santa Ana, California also charged Mattel for misappropriating trade secrets, a major ethical blow to the company which could open up the possibility of more damages being given to MGA. Already the longest court battle in the history of the toy industry, there still seems to be no signs that the legal battle between the two giants would end. Mattel similarly had a victory against Bratz when the court sided with its $500 million claim in 2008.

The legal battle started in 2005 when MGA sued Mattel for allegedly copying Bratz’s distinct eye feature in its new line of Barbies. Later that year, Mattel filed a $500 million countersuit on grounds that designer Carter Bryant, who was responsible for manufacturing the trendier Bratz dolls of MGA, had the idea when he was still working for Mattel to design the more demure Barbies. Bryant was employed by MGA in 2000 and it launched Bratz a year later.

Mattel claims that it is entitled to stakes in Bryant’s original designs because of an intellectual property provision stipulated in his contract. However, MGA claimed that Bryant was no longer an employee of Mattel during the creation of sketches. Records show that Bryant was employed with Mattel from September 1995 to April 1998 and returned January 1999 before leaving again in October 2000 before joining MGA.

In July 2008, a Federal judge issued a ruling that MGA would pay only $100 million to Mattel as only the first generation of Bratz was affected by Bryant’s breach of contract. Five months later, Mattel was given a permanent injunction against MGA requiring the latter to cease production and sales of certain lines of Bratz. A year later, the ruling was overturned when another judge allowed the production and selling of the dolls until a final verdict was reached.

In the midst of the legal battle, sales of both Barbie and Bratz have improved since then. In 2005, Bratz reached the peak of its popularity hitting $1 billion dollars a year, according to estimates (MGA is privately owned and cannot disclose its profits). That same year, Barbie’s sales dropped 30% from the previous years, perhaps affected by the more hip competitor. The following year, Bratz had already captured 40% of the market and became the biggest threat to Barbie since debuting in 1959.

However, strategic errors made by MGA founder Isaac Larian caused the sales of Bratz to drop from its 2006 highs. According to estimates, Barbie has now dominated 90% of the fashion doll market, an increase from a low 60% in 2006.

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