Barbie-maker to soar as Bratz crash

There is fantastic news this morning for owner's of Barbie-maker, Mattel Inc. (NYSE: MAT). The Barbie-killer, Bratz line of dolls, is being pulled off the shelves by the end of the year. And Bratz-maker, MGA Entertainment has to pay Mattel $10 million for copyright infringement and $90 million for breach of contract after a trial starting with Mattel's 2004 lawsuit ended this August.

For those who are not familiar with Bratz, here's a brief tutorial. Bratz is a line of dolls -- with "huge lips, pug noses, almond-shaped eyes and coquettish figures," according to AP. Young girls loved them and in 2001 MGA took Bryant's original four dolls and created 40 characters, complete with accessories and related toys such as Bratz Boyz, Bratz Petz and Baby Bratz. Bratz generated as much as $778 million in profits and took market share from Barbie whose sales fell 15% in 2007.

Why are the Bratz dolls taking a walk down Dodo Lane? A jury found that Bratz designer Carter Bryant developed the concept for the dolls while working for Mattel. The jury ruled that MGA infringed on Mattel's copyright. The judge's injunction named all 40 Bratz dolls, including the four originals -- Yasmine, Chloe, Sasha and Jade. The judge also ordered MGA to reimburse its vendors and distributors for the cost of the dolls and shipping charges for sending them back.

Mattel stock is up 2% in pre-market.

Peter Cohan is President of Peter S. Cohan & Associates. He also teaches management at Babson College and edits The Cohan Letter. He has no financial interest in the securities mentioned.