The recent order by a federal judge that stripped MGA Entertainment Inc. of rights to the Bratz doll franchise could have ramifications for another L.A.-area company: THQ Inc.
The Agoura Hills-based video game publisher inked a deal with MGA in 2004 that made it the exclusive producer of Bratz video games. THQ has since put out seven Bratz titles and they’ve been perennial performers for the beleaguered video game company. This fall, THQ released “Bratz Girlz Really Rock” for the Wii, PlayStation 2 and Nintendo DS.
But what happens to THQ’s license now that a judge has given the Bratz rights to Mattel Inc., effective in February and pending appeal?
A spokeswoman for the company said THQ is “continuing to develop and publish Bratz games under our valid and binding license agreement” with MGA.
But it may not be that simple. While MGA fights the judge’s order, THQ and any and all other licensees that signed deals with MGA may find themselves in an awkward position, said Michelle Cooke, an intellectual property lawyer in the Los Angeles office of Steptoe & Johnson LLP who is not involved in the case.
Licensees that honor their existing agreements with MGA and keep making Bratz-related products could run the risk of a lawsuit from Mattel, Cooke said. Or, they could break their agreement with MGA and try to sign new deals with Mattel and risk an attack by MGA in the case of a successful appeal.
There’s a third alternative: Put all Bratz projects on hold and pull product from store shelves pending the outcome of the case. But that could cost licensees valuable revenue, especially as the holiday shopping season is in full swing.
“It’s a real balancing act the licensees have to perform here,” Cooke said.
If MGA doesn’t win its appeal, the company could open itself up to lawsuits from licensees. It’s also possible that Mattel could sue licensees like THQ for selling Bratz-related products under an agreement with a company that has been found to infringe on Mattel’s copyright. But Cooke said doing that could jeopardize Mattel’s relationship with licensees like THQ that have built successful Bratz product lines relationships Mattel would likely want to continue.
More Pink Slips
Not even the big Internet names have been safe from layoffs.
Yahoo Inc., the Internet company based in Sunnyvale with offices in Santa Monica and Burbank, two weeks ago began to lay off 2,000 of its 14,000-plus employees. A company spokeswoman declined to say how many employees in Los Angeles were affected or even how many staffers the company has in those offices.
But a source close to the company said about 100 of roughly 500 Yahoo employees in Santa Monica were let go. Another source close to the company told the Business Journal that the marketing and product management departments in Santa Monica were hit the hardest.
No word yet on how the layoffs played out at the company’s office in Burbank.
It’s been a rough ride for Yahoo, the one-time search engine leader. The company has since lost market share and relevance to Google Inc., and its stock price and revenues have tumbled.
The most recent and some might say devastating blow to Yahoo came in the summer when co-founder and Chief Executive Jerry Yang turned down a $46 billion acquisition offer from Microsoft Corp. That decision proved unpopular, and Yang soon announced he was stepping down.
Bigger Stage
Big Stage Entertainment Inc. has been busy.
Since the Pasadena startup went live with its Web site Nov. 5, it sold use of its 3-D modeling technology to several entertainment companies. Visitors to the companies’ Web sites can create realistic three-dimensional models of their faces from digital photos, then insert their likenesses into photos, film clips and video games.
Since Nov. 17, Big Stage has signed deals with Vidigreet, an e-card company; GGL Global Gaming; Splash News, a celebrity news site; and the movie studio Lions Gate.
The deals allow users to, among other things, insert themselves into a celebrity photo at Splash News, or into promo photos for Lions Gate’s new film “The Spirit.”
Phil Ressler, Big Stage’s chief executive, said he was pleased with the flow of deals and noted that Big Stage had roughly 60 more under negotiation.
Staff reporter Charles Proctor can be reached at [email protected] or (323) 549-5225, ext. 230.
