Mattel 2009 Annual Report Download - page 101

confirming, among other things, Mattel’s rights in the Bratz works found by the jury to have been created by
Bryant during his Mattel employment. MGA filed motions as well, including a motion that asserted the Court
should rule for MGA on equitable affirmative defenses such as laches, waiver and estoppel against Mattel’s
claims. On December 3, 2008, the Court issued a series of orders rejecting MGA’s equitable defenses and
granting Mattel’s motions, including an order enjoining the MGA party defendants from manufacturing,
marketing, or selling certain Bratz fashion dolls or from using the “Bratz” name. The Court stayed the effect of
the December 3, 2008 injunctive orders until further order of the Court and entered a further specified stay of the
injunctive orders on January 7, 2009.
The parties filed and argued additional motions for post-trial relief, including a request by MGA to enter
judgment as a matter of law on Mattel’s claims in MGA’s favor and to reduce the jury’s damages award to
Mattel. Mattel additionally moved for the appointment of a receiver. On April 27, 2009, the Court entered an
order confirming that Bratz works found by the jury to have been created by Bryant during his Mattel
employment are and were Mattel’s property and that hundreds of Bratz female fashion dolls infringe Mattel’s
copyrights. The Court also upheld the jury’s award of damages in the amount of $100 million and ordered an
accounting of post-trial Bratz sales. The Court further vacated the stay of the December 3, 2008 orders, except to
the extent specified by the Court’s January 7, 2009 modification. Finally, the Court appointed a temporary
receiver with powers to manage, supervise and oversee the Bratz brand and assets of the MGA entities. The
temporary receivership was subsequently terminated, and the Court appointed a monitor in lieu of a receiver to
facilitate implementation and enforcement of the injunctive orders.
MGA appealed the Court’s equitable orders to the Court of Appeals for the Ninth Circuit. In May 2009,
MGA also sought an immediate stay of the equitable orders from the Ninth Circuit pending appeal. The Ninth
Circuit denied that stay request. On December 9, 2009, the Ninth Circuit heard oral argument on MGA’s appeal
and issued an order staying the District Court’s equitable orders pending a further order to be issued by the Ninth
Circuit. The Ninth Circuit has not yet issued an order on the merits of the appeal. On December 14, 2009, the
District Court stayed the appointment of the monitor charged with facilitating implementation and enforcement
of the injunctive orders.
Product Liability Litigation Related to Product Recalls and Withdrawals
Litigation Related to Product Recalls and Withdrawals in the United States
Twenty-two lawsuits have been filed in the United States asserting claims 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
(Sarjent v. Fisher-Price, filed August 16, 2007); one in the District of South Carolina (Hughey v. Fisher-Price,
filed August 24, 2007); and one in the Eastern District of Louisiana (Sanders v. Mattel, filed November 14,
2007). Two other actions originally filed in Los Angeles County Superior Court were removed to federal court in
the Central District of California (Healy v. Mattel, filed August 21, 2007, and Powell v. Mattel, filed August 20,
2007). Another lawsuit commenced in San Francisco County Superior Court was removed to the federal court in
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