Mattel is arguing that when the Bratz doll was designed by Carter Bryant, he was still a Mattel employee, therefore income from the sale of the doll including direct sales and licensing fees must accrue to Bryant's former employer.
Potential damage fees to be awarded Mattel, in the event a California court rules in its favour, could range from $360 million to $500 million.
Sean McGowan, an analyst at Needham and Company, quoted by Bloomberg, forecasts a status quo or better terms for Mattel. Court victory would spell higher value of Mattel stocks, he believes.
Mattel's case rests on its contention that Bryant designed Bratz while still a Mattel employee and surreptitiously sent his drawings to MGA. However, the firm says his 1999 employment contract with Mattel specifically spelled out that the toymaker could claim rights to his designs which he made while still employed by them.