As of Friday afternoon, there were 10,843 docket entries in
Mattel's epic copyright litigation against MGA, which Mattel
accused of stealing designs for Bratz dolls. Granted, Mattel's
lawyers at Quinn Emanuel Urquhart & Sullivan first filed this
case way back in 2004, and it's since seen sweeping
counterclaims by MGA, two trials, two contradictory jury
verdicts and two decisions by the 9th Circuit Court of Appeals
that erased nine-figure judgments. But still, almost 11,000
docket entries!
Those have not come cheap. As of now, the only money damages
in the case are $137.8 million in legal fees, which the 9th Circuit said Mattel owes MGA (even though the appeals court also
ruled last month that a jury verdict on MGA's trade secrets
counterclaims cannot stand). Those fees, in turn, have spawned
their own fast-growing offshoot of the main trunk of Bratz
litigation. As I told you a couple weeks ago, former MGA lawyers
at Orrick, Herrington & Sutcliffewon a $23 million prejudgment
lien against the fee award in their arbitration with their
onetime client; MGA, in turn, has sued Orrick in state court in
California, seeking a declaration that the lien is invalid. The
Bratz maker has found an unlikely ally in its fight with Orrick:
MGA's insurers, who have for years been battling the company
over their duty to pay its legal fees in the Mattel litigation,
filed briefs this week asking U.S. District Judge David Carter
of Los Angeles to decline to consider Orrick's notice of its
lien.
The insurers say that they've already paid out more than
$130 million to MGA and its lawyers, so they're first in line
for the fees MGA receives from Mattel. Meanwhile, the insurers
are continuing to squabble in the 9th Circuit with MGA and each
other over which of them bears responsibility for what portion
of MGA's ongoing litigation expenses.
But a filing this week by Mattel suggests that it's just
about ready to walk away from the copyright litigation with MGA.
In a motion and brief entered in the voluminous docket on
Wednesday, Mattel asked Judge Carter to enjoin competitors for
the $138 million legal-fee award from initiating proceedings to
execute on the judgment. The problem, Mattel said, isn't its
willingness to put up the $138 million but rather its fear that
MGA, Orrick and the insurers will assert duplicate claims for
fees. Mattel had posted a $315 million appeal bond while its
case was at the 9th Circuit, and it wants to be sure that it
isn't hit with "unwarranted costs for the excess amounts" of the
bond money, beyond the $138 million it owes.
Mattel's brief indicates that it wants simply to post a new
$138 million bond and be done with the case. "Once Mattel bonds
the proceeds of the copyright fees judgment," the brief said,
"Mattel's obligation to the claimants will be satisfied."
The motion makes no mention of an additional appeal of the
9th Circuit's ruling on MGA's right to legal fees, and the
deadline for Mattel to seek reconsideration or en banc review of
the decision has passed. So it looks like Mattel is ready to
close this docket out before it hits 11,000.
Of course, ending the copyright case may not end the
litigation between Mattel and MGA, since MGA can still file
trade secrets claims against Mattel. Those allegations had
reaped MGA a judgment of $172 million, which the 9th Circuit
vacated because it found they were improperly asserted as
counterclaims in the copyright case. A trade secrets complaint
by MGA would, however, start with a docket No. 1 in a new
proceeding.
I called Mattel counsel at Quinn and MGA lawyers at Skadden,
Arps, Slate, Meagher & Flom and Keller Rackauckas. None got back
to me.
Follow us on Twitter: @AlisonFrankel, @ReutersLegal | Like us on Facebook