Bratz Maker MGA Accuses Mattel GC and Quinn Emanuel in Alleged RICO Toy-Spying Conspiracy
Toy maker MGA Entertainment, accused of stealing the idea for the Bratz doll by hiring Mattel workers, has turned the tables on its rival with a counterclaim that alleges a Racketeer Influenced and Corrupt Organizations Act conspiracy to glean secret toy information by Mattel lawyers and other top executives.
In a counterclaim filed late Monday, MGA claims Mattel general counsel Robert Normile and its outside lawyers at Quinn, Emanuel, Urquhart & Sullivan participated in a RICO conspiracy to spy on competitors, Corporate Counsel reports. MGA alleges Mattel printed fake business cards to gain access to competitors’ private showrooms where retailers and distributors were given an advance look at new toys.
MGA claims Normile had learned about the corporate espionage no later than 2005, but the practice was allowed to continue. According to MGA, a Mattel employee participating in the spy operation quit in 2005 because he feared criminal liability. At that time, an in-house lawyer worked with Quinn Emanuel lawyers to pay the employee “hush money in the form of a lucrative severance package,” the legal document (PDF filed by the Am Law Daily) says.
The Wall Street Journal (sub. req.) calls the latest allegations “part of the dirty doll laundry that will be aired in the retrial of the Bratz doll copyright infringement case.” In July, a federal appeals court vacated an injunction that had barred MGA from selling Bratz dolls, saying MGA was entitled to “sweat equity” for its work producing the dolls. A jury in the original case had awarded Mattel $100 million after finding that a Mattel employee had thought of the Bratz doll concept before moving to MGA.
A Mattel spokeswoman told the Wall Street Journal that the new allegations are baseless and “a cynical attempt to deflect attention from MGA’s own wrongdoing.”
Quinn Emanuel partner Michael Zeller told the Am Law Litigation Daily (sub. req.) that the allegations are “second-rate tactics by desperate lawyers” that “won’t survive the pleading stage.”
