Mattel's Bratz Takeover Put On Hold

Federal appeals court panel suspended order that MGA Entertainment stop selling Bratz products, recall remaining toys and give ownership of the brand to rival Mattel.

PASADENA, Calif. (AP) -- The pouty-lipped Bratz dolls can strut their stuff a little longer with MGA Entertainment.

A federal appeals court panel in Pasadena on Wednesday suspended an order that MGA stop selling Bratz products this year. MGA was to recall remaining Bratz toys and give ownership of the brand to rival Mattel Inc. by 2010.

Mattel won the order and $100 million last year in a lawsuit that claimed MGA had infringed its copyright and breached a contract because the dolls' designer was still under contract to Mattel when he developed the Bratz concept for MGA.

Mattel has not indicated whether it plans to keep making Bratz dolls or suspend the line if MGA's appeal is denied.

The 9th U.S. Circuit Court of Appeals stayed the order until it can rule on MGA's appeal, and it ordered the two companies to try mediation.

"We are gratified by the court's decision and look forward to receiving the court's decision on our appeal," MGA Chief Executive Isaac Larian said in a statement.

Mattel spokeswoman Lisa Marie Bongiovanni noted that the court did not comment on the substance of the case.

U.S. doll sales fell about 10 percent in 2008 to $2.68 billion, and competition has heated up this year: MGA introduced its Moxie Girlz line, doe-eyed teens with accessories like guitars and cars; Spin Master launched Liv Dolls with interchangeable wigs and Mattel is offering the new Barbie Fashionistas with movable joints.

BMO Capital Markets analyst Gerrick Johnson said Mattel may plan to relaunch the Bratz line in the spring.

"People we have spoken with who have seen the line have said they thought it looked good," Johnson wrote.

Bongiovanni said Mattel would not comment further while the appeal is pending.

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