A settlement now appears likely in the legal dispute between rivals Mattel Inc. and MGA Entertainment Inc. over the Bratz fashion doll line.

An order issued Tuesday by federal court judge Stephen Larson referred to a settlement conference that was held in Los Angeles on Monday. The order stated that ?rogress was made at the settlement conference.?The order also states that both sides are expected to provide a good-faith and comprehensive response to a settlement officer? resolution proposal on or before June 10. Larson had ordered a hearing on that date and indicated he would preside over the settlement. Tuesday? order cancels that hearing.

?attel continues to engage in the process in the hopes of reaching a resolution to the litigation,?said Mike Zeller, a partner at Quinn Emanuel Urquhart Oliver & Hedges LLP who is representing Mattel in the case. An MGA spokeswoman declined to comment.

A federal jury decided last year that a former Mattel doll designer created the Bratz name and characters for MGA while still working for Mattel. As a result of the litigation, control of the Bratz line was awarded to Mattel.

Larson last month denied MGA? request to reduce the $100 million award the jury granted to Mattel.

Legal observers have said that a settlement would likely involve a licensing deal allowing Mattel to own and profit from the Bratz intellectual property. The arrangement could allow MGA to continue to sell the Bratz products.

This week? settlement conference follows MGA? emergency appeal, filed on May 26, asking a U.S. appeals court to halt the transfer of its Bratz line to Mattel. A court-appointed monitor is currently in control of an account designated for all net profits from the sale of any existing inventory of Bratz dolls and any new dolls made through this year.

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