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Lawsuit alleges trade secret espionage by doll maker

When a California company is researching, developing and manufacturing a product, there are a number of aspects of that process that are and should remain confidential. These are known as trade secrets, and can encompass everything from the physical appearance of a product to the manufacturing processes involved in creating the final product. A trade secret is also defined by the fact that a company chooses to hide that information from the public or other parties, and by the ability of a competitor to profit from the discovery of said secrets.

A recent example of trade secret litigation is found in a lawsuit filed by MGA Entertainment against Mattel. The lawsuit focuses on MGA's Bratz doll line. Mattel is the manufacturer that produces the similar Barbie line of toys. Within the lawsuit, MGA alleges that Mattel engaged in multiple attempts to unlawfully gain access to trade secrets surrounding the Bratz line of dolls during visits to private showrooms and industry trade shows.

MGA asserts that Mattel has engaged in long-running and concerted efforts to steal these secrets, including the publication of an 11-page employee manual outlining ways to gain access to this protected information. The suit claims that Mattel purchased small video recorders and cameras for the purposes of recording images of the Bratz product line. Mattel employees are also said to have used fake business cards and invoices to gain access to private showrooms featuring the product line.

This suit is just the latest in a years-long legal battle between the toymaking giants. It is unclear how the court will handle this matter. In previous litigation, MGA was successful in gaining nearly $200 million in damages, but that judgement was dismissed without prejudice, due to technical procedural issues. The new suit is the result of that dismissal, and the matter will now play out in Superior Court. For business owners in California and across the nation, the result of this trade secret case may be of great interest.

Source:, MGA Entertainment Sues Mattel Over Trade Secret Espionage, Tina Benitez-Eves, Jan. 16, 2014

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