Mattel 2007 Annual Report Download - page 109

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intervened as a party-defendant in Mattel’s action against Bryant, asserting that its rights to the “Bratz” property
are at stake in the litigation. Mattel’s suit was removed to the United States District Court for the Central District
of California.
Separately, in November 2004, Bryant filed an action against Mattel in the United States District Court for
the Central District of California. The action sought a judicial declaration that Bryant’s purported conveyance of
rights in “Bratz” was proper and that he did not misappropriate Mattel property in creating “Bratz.”
In April 2005, MGA filed suit against Mattel in the United States District Court for the Central District of
California. MGA’s action alleges claims of trade dress infringement, trade dress dilution, false designation of
origin, unfair competition and unjust enrichment. The suit alleges, among other things, that certain products,
themes, packaging and/or television commercials in various Mattel product lines have infringed upon products,
themes, packaging and/or television commercials for various MGA product lines, including “Bratz.” The
complaint also asserts that various alleged Mattel acts with respect to unidentified retailers, distributors and
licensees have damaged MGA and that various alleged acts by industry organizations, purportedly induced by
Mattel, have damaged MGA. MGA’s suit alleges that MGA has been damaged in an amount “believed to reach
or exceed tens of millions of dollars” and further seeks punitive damages, disgorgement of Mattel’s profits and
injunctive relief.
In June 2006, the three cases were consolidated in the United States District Court for the Central District of
California. On July 17, 2006, the Court issued an order dismissing all claims that Bryant had asserted against
Mattel, including Bryant’s purported counterclaims to invalidate Mattel’s Confidential Information and
Proprietary Inventions Agreements with its employees, and Bryant’s claims for declaratory relief. Mattel believes
the claims against it are without merit and intends to continue to vigorously defend against them.
In November 2006, Mattel asked the Court for leave to file an Amended Complaint that included not only
additional claims against Bryant, but also included claims for copyright infringement, RICO violations,
misappropriation of trade secrets, intentional interference with contract, aiding and abetting breach of fiduciary
duty and breach of duty of loyalty, and unfair competition, among others, against MGA Entertainment, Inc.,
Isaac Larian, certain MGA affiliates and an MGA employee. The basis for the Amended Complaint was the
MGA defendants’ infringement of Mattel’s copyrights and their pattern of misappropriation of trade secrets and
unfair competition in violation of the applicable statutes. On January 12, 2007, the Court granted Mattel leave to
file these claims as counterclaims in the consolidated cases, which Mattel did that same day.
Litigation Related to Product Recalls and Withdrawals
Product Liability Litigation in the United States
Twenty-two lawsuits have been filed in the United States asserting claims allegedly arising out of the
August 2, August 14, September 4, and/or October 25, 2007 voluntary product recalls by Mattel and Fisher-Price,
as well as the withdrawal of red and green toy blood pressure cuffs from retail stores or their replacement at the
request of consumers.
Eighteen of those cases were commenced in the following United States District Courts: ten in the Central
District of California (Mayhew v. Mattel, filed August 7, 2007; White v. Mattel, filed August 16, 2007;
Luttenberger v. Mattel, filed August 23, 2007; Puerzer v. Mattel, filed August 29, 2007; Shah v. Fisher-Price,
filed September 13, 2007; Rusterholtz v. Mattel, filed September 27, 2007; Jimenez v. Mattel, filed
October 12, 2007; Probst v. Mattel, filed November 5, 2007; Entsminger v. Mattel, filed November 9, 2007; and
White v. Mattel, filed November 26, 2007, hereinafter, “White II”); three in the Southern District of New York
(Shoukry v. Fisher-Price, filed August 10, 2007; Goldman v. Fisher-Price, filed August 31, 2007; and Allen v.
Fisher-Price, filed November 16, 2007), two in the Eastern District of Pennsylvania (Monroe v. Mattel, filed
August 17, 2007, and Chow v. Mattel, filed September 7, 2007), one in the Southern District of Indiana
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