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A federal judge has tentatively dismissed an antitrust suit filed by MGA Entertainment Inc. against Mattel Inc., ruling that the maker of the Bratz doll was barred from asserting claims that it should have brought in a previously filed copyright infringement case.

U.S. District Judge David Carter ruled tentatively on Oct. 11 that the antitrust case, brought under Section 2 of the U.S. Sherman Act and California’s unfair competition laws, failed to provide specific instances of alleged antitrust violations that occurred after Aug. 16, 2010, the date of the last motion that MGA filed in the copyright case.

In that action, a federal jury awarded MGA $88.5 million in damages after finding that Mattel stole trade secrets by planting spies at industry trade shows. The jury found no copyright infringement but awarded Mattel $10,000 after finding that MGA and its chief executive officer, Isaac Larian, intentionally interfered with the contract between Mattel and the designer of the Bratz doll.

On Aug. 4, Carter issued a $310 million final judgment that included the verdict, which he lowered to $85 million to correct a mathematical error, exemplary damages and attorney fees and costs. Mattel has indicated it plans to appeal the judgment.

During an Oct. 11 hearing, Carter told MGA’s lawyer, Maxwell Blecher, founding partner of Blecher & Collins in Los Angeles, that final judgment in the copyright case meant that MGA was barred from bringing the antitrust allegations.

Later, MGA spokeswoman Susan Hale said in a prepared statement: "We shall await the court’s final ruling. If the ruling remains the same we shall amend the antitrust lawsuit. We may also consider other options."

Mattel spokeswoman Heather Wilson declined to comment.

MGA brought the antitrust case on Feb. 2, 2011, asserting that Mattel and its chief executive officer, Robert Eckert, engaged in a "kill Bratz" strategy by rearranging doll displays at retailers, pricing products below cost and threatening retailers and suppliers. "MGA will establish that Mattel, under the direction and authorization of Mr. Eckert, specifically intended to eliminate MGA as a competitor in the fashion doll market, long dominated and controlled by Mattel’s Barbie, so that Mattel could reacquire and maintain a monopoly in the fashion doll market in the United States," the suit alleged.

Eckert and Larian both attended the hearing.

Blecher argued that he was allowed to bring antitrust allegations after the date of the original complaint in the copyright case, which was filed in 2004. The antitrust complaint, he maintained, came about only after the U.S. Court of Appeals for the 9th Circuit on July 22, 2010, reversed a $100 million verdict for Mattel that had been awarded in the first trial of the copyright case. In its decision, the 9th Circuit panel wrote: "Mattel can’t claim a monopoly over fashion dolls with a bratty look or attitude, or dolls sporting trendy clothing — these are all unprotectable ideas."

Mattel’s alleged antitrust violations have continued since the date of the filing, particularly since the litigation itself was part of Mattel’s monopolization effort, Blecher argued. He continued to maintain that the facts in the antitrust suit were "new and different." In the antitrust case, the damages are tied to MGA’s loss of value — some $1.1 billion.

"This is a completely separate act causing completely separate damages," he said.

Mattel’s attorney, Michael Zeller, a partner at Quinn Emanuel Urquhart & Sullivan, immediately challenged that assertion.

"There is no new conduct that is being alleged," he said.

Carter, in his tentative order, allowed MGA an opportunity to amend its complaint, which seeks treble damages. But he noted that the antitrust allegations were substantially similar to MGA’s counterclaims in the copyright case asserting violations of the U.S. Racketeer Influenced and Corrupt Organizations Act. Carter dismissed most of those counterclaims on Jan. 5.

Contact Amanda Bronstad at [email protected].

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