Toymaker sues Marvel for $100 Million; 'harassment,' 'extortion' alleged

« Revisiting that Supreme Court copyright case | Main | Bruce Willis fires a fraud claim back at litigious producers »

Toymaker sues Marvel for $100 Million; 'harassment,' 'extortion' alleged

Thu Mar 05, 2009 @ 02:12PM PST

By Eriq Gardner

Ironman The maker of the Bratz dolls is sparring with an unlikely foe: superhero powerhouse Marvel Entertainment.

MGA has filed a $100 million lawsuit against the owner of Spider-Man and Iron Man for a "campaign of harassment."

The lawsuit is in response to a series of events that the plaintiffs claim "were driven by a personal animosity for MGA and CEO Isaac Lirian."

Here's the context:

For the last three years, MGA has been embroiled in a truly vicious legal fight with Mattel over who owns rights to the popular Bratz dolls. Mattel sued MGA, claiming that the upstart had stolen trademark and trade secrets on Mattel's less hip "Barbie" line. Last July, Mattel scored a big win in a California federal trial in the case. The jury handed down a $100 million verdict, and Mattel followed it up by seeking an injunction to stop the Bratz line altogether.

That's where Spider-Man and Marvel's roster of super-heroes come into play.

As this case was going on, MGA continued to develop new toy products. One of the biggest cash cows for the company came from a licensing agreement signed with Marvel for rights for licensed toys.

Marvel thought it was getting shortchanged on the deal and ordered an audit. Gingold & Co., the firm that conducted the audit, found more than $1.1 million in owed royalties. According to the latest lawsuit by MGA, Marvel "threatened to commence legal action if payment was not made within ten days."

The complaint adds that Marvel CEO Isaac Perlmutter and MGA CEO Isaac Larian communicated with each other over the issue, with Perlmutter telling Larian that he should pay up with "Mattel hanging in the news" or else he'd bring a lawsuit that would embarass MGA with retailers, the public, and "harm MGA's legal position vis-a-vis the Mattel lawsuit."

Perlmutter seems to have lived up to his word. In January, Marvel sued MGA for owed royalties.

Now, MGA has fired back with a complaint filed in New York Supreme Court. The lawsuit says the actions by Marvel and Perlmutter amount to "intentional and malicious actions to extort monies from Larian and MGAE." The official claims are wrongful termination, malicious prosecution, abuse of process, and intentional infliction of economic harm.

MGA is seeking "no less than $100 million" in damages. 

TrackBack URL for this entry:

Listed below are links to weblogs that reference Toymaker sues Marvel for $100 Million; 'harassment,' 'extortion' alleged:

The Hollywood Reporter
The Hollywood Reporter, Esq. blog focuses on how the entertainment and media industries are impacted and influenced by the law. It is edited by Matthew Belloni with contributions from veteran legal reporter Eriq Gardner and others. Before joining The Hollywood Reporter, Belloni was a lawyer at an entertainment litigation firm in Los Angeles. He writes a column for THR devoted to entertainment law. Gardner is a New York-based writer and legal journalist. Send tips or comments to [email protected]

The Hollywood Reporter
Contact: Patrice Atiee at 323.525.2014 or [email protected]

The Hollywood Reporter is Your Complete Film Resource

The columnists and bloggers who write for The Hollywood Reporter have their collective finger on the pulse of the boxoffice. Martin Grove and the other THR columnists deliver their thoughts on the film industry in an uncompromised style. Subscribe to THR today and get the latest views from these film experts and get the latest movie reviews as well.