Mattel 2010 Annual Report Download - page 105

All of the proposed class actions are at a preliminary stage.
Litigation Related to Gunther-Wahl Productions, Inc.
In April 1998, Mattel was sued in the Los Angeles County Superior Court by Gunther-Wahl Productions,
Inc. (“Gunther-Wahl”), a producer of animated television shows, and Candy Wahl, the wife of the principal of
Gunther-Wahl (“Gunther-Wahl I”). The lawsuit alleges that Mattel breached an implied contract with Gunther-
Wahl arising from a pitch of an animated television show, in that Mattel allegedly used plaintiffs’ ideas without
compensating plaintiffs for the use of the ideas. Mattel denies that it used any of plaintiffs’ ideas in any Mattel
product. A jury trial was held in early 2000, which resulted in a judgment in favor of Mattel on every claim. On
December 5, 2002, the California Court of Appeal reversed the judgment in favor of Mattel, and remanded the
matter for a new trial. During the pendency of the Gunther-Wahl I appeal, plaintiffs filed an additional lawsuit
against Mattel alleging Mattel further breached the implied contract by using plaintiffs’ ideas in products
released subsequent to the trial without compensating plaintiffs (“Gunther-Wahl II”). Between September 2004
and March 2008 and between December 2008 and March 2010, both Gunther-Wahl I and II were stayed as a
result of a bankruptcy proceeding filed by one of the principals of Gunther-Wahl. In November 2008, while the
stay was lifted, Mattel filed potentially case dispositive motions in both lawsuits. In the fourth quarter of 2010,
the Court denied Mattel’s motions. During that quarter, plaintiffs also expanded the list of Mattel products which
they contend wrongfully use their ideas and form the basis for their alleged damages. Plaintiffs are seeking
royalty-based damages. However, because the royalty rate and the products against which the royalties would be
calculated are not yet known, Mattel cannot estimate the amount of plaintiff’s claimed damages at this time. Trial
of the two lawsuits is scheduled to take place in the first quarter of 2011.
Note 15—Segment Information
Description of Segments
Mattel’s operating segments are separately managed business units and are divided on a geographic basis
between domestic and international. Mattel’s domestic operating segments include:
Mattel Girls & Boys Brands—including Barbie®fashion dolls and accessories (“Barbie®”), Polly
Pocket®, Little Mommy®, Disney Classics®, and Monster High®(collectively “Other Girls Brands”),
Hot Wheels®, Matchbox®, Battle Force 5®, and Tyco R/C®vehicles and play sets (collectively
“Wheels”), and CARS™, Radica®, Toy Story®, Max Steel®, WWE®Wrestling, and Batman®
products, and games and puzzles (collectively “Entertainment”).
Fisher-Price Brands—including Fisher-Price®, Little People®, BabyGear™, and View-Master®
(collectively “Core Fisher-Price®”), Dora the Explorer®, Go Diego Go!®, Thomas and Friends®,
Sing-a-ma-jigsTM, and See ‘N Say®(collectively “Fisher-Price®Friends”), and Power Wheels®.
American Girl Brands—including My American Girl®, the historical collection, and Bitty Baby®.
American Girl Brands products are sold directly to consumers via its catalogue, website, and
proprietary retail stores. Its children’s publications are also sold to certain retailers.
Additionally, the International segment sells products in all toy categories, except American Girl Brands.
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