(CN) - The 9th Circuit on Thursday denied Mattel's bid for a rehearing of its infringement claims against the maker of Bratz dolls in a multimillion-dollar case that has stung both sides. Though there won't be a full panel hearing, Chief Judge Alex Kozinski has said "the entire case will probably need to be retried."
In July, a three-judge panel of the 9th Circuit ruled that Mattel does not own the rights to the entire line of Bratz dolls, because even if the Barbie creator owns some rights to the big-headed dolls, it can't reap the benefits of work it did not do.
Carter Bryant, a former Mattel employee who worked in the company's Barbie collectibles department, took his idea for Bratz dolls to MGA Entertainment while still employed by Mattel. Together Bryant and MGA turned Bratz into an overnight success. Bryant quit his job at Mattel as soon as MGA agreed to embrace the new doll.
When Mattel caught wind, the company filed a $1 billion lawsuit against Bryant and MGA, claiming that because Bryant worked for Mattel when he invented Bratz, Mattel owned all rights to the dolls.
A jury awarded Mattel $10 million, and U.S. District Judge Stephen Larson ordered MGA and Bryant to turn over the entire Bratz trademark portfolio to Mattel.
On appeal, the 9th Circuit panel in Pasadena ruled that Larson had abused his discretion with his sweeping ruling for Mattel. The panel concluded that Bryant's employment agreement could have, but did not necessarily, cover ideas as it did designs, processes, computer programs and formulae, which are all more concrete.
The federal appeals court on Thursday declined to rehear the case, either before a partial or full panel of judges. "No further petitions for rehearing or rehearing en banc may be filed," the court wrote.
In the panel wrote, Kozinski concluded: "Because several of the errors we have identified appeared in the jury instructions, it's likely that a significant portion -- if not all -- of the jury verdict and damage award should be vacated, and the entire case will probably need to be retried."
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