MGA faces 3rd trial to defend doll against NIL claims

MGA Entertainment Inc. is headed to trial Tuesday for the third time, fighting against multimillion-dollar claims that the toymaker stole the likenesses of the members of a pop group to create its popular "L.O.L. Surprise! O.M.G." dolls. 

Despite securing a win last year in federal court in Santa Ana, MGA Entertainment failed to convince U.S. District Judge James V. Selna that the jury verdict should be upheld. Attorneys for the OMG Girlz successfully argued that a U.S. Supreme Court decision clarifying First Amendment defenses to trademark infringement claims warranted a new trial. 

"College and professional athletes are finally getting their just due and compensation they are entitled to when someone uses their NIL [name, image likeness]. Entertainers and celebrities are entitled to the same protection. MGA used and profited off the OMG Girlz' image and likeness. We believe a Santa Ana federal jury will hold MGA accountable," Sheppard Mullin Richter & Hampton LLP partner John R. Keville wrote in an email Friday. 

MGA Entertainment is represented by Umberg Zipser LLP, Willenken LLP, and Wilmer Cutler Pickering Hale & Dorr LLP partner Thomas G. Sprankling. The firms did not respond to a request for comment. MGA Entertainment was defended at trial last year by Keller Anderle LLP, which no longer represents the company. MGA Entertainment Inc. v. Clifford T.I. Harris et al., 2:20-cv-11548-JVS-AGR (C.D. Cal., filed Dec. 22, 2020). 

Last summer, the Supreme Court reversed the 9th U.S. Circuit Court of Appeal's ruling in a case involving whiskey brand Jack Daniel's. The high court held that some infringement claims may be viable if the alleged infringer misleads consumers about the source of a product or service. Jack Daniel's Properties Inc. v. VIP Products LLC, 22-148 (Supr. Ct., filed Jun. 8, 2023). 

In light of the Supreme Court's decision, the jury was erroneously instructed on how to evaluate the claims, Keville wrote in his motion for a new trial. He said the change in law meant that the Rogers test should not have been applied to the OMG Girlz' trade dress claims. The Rogers test is derived from a 1988 lawsuit by actress Ginger Rogers against film production company Metro-Goldwyn-Mayer Studios and is often used by courts when weighing free speech protections against trademark rights. 

Selna agreed with Keville that the case warranted a new trial, writing in his order that MGA Entertainment "posited a somewhat tortured path" in its argument that the jury verdict was unaffected by the Rogers test. Selna denied the toy company's bid to certify the new trial order for interlocutory appeal despite its contention that the judge was the first to interpret the scope of the Jack Daniel's ruling in any meaningful way. 

The first trial between MGA Entertainment and the OMG Girlz ended in a mistrial in January 2023. Winston & Strawn LLP partner Erin R. Ranahan played a video deposition for the jury that discussed cultural appropriation, previously ruled inadmissible by the court. However, Ranahan maintained in later filings that racism and cultural appropriation of Black communities were pressing issues that permeated the lawsuit. 

Ranahan also accused Keller Anderle partner Jennifer L. Keller of racism for using the n-word more than a dozen times when cross-examining a witness who used the word frequently.

Vehemently repudiating the allegations, Keller pushed for a $75,000 sanction against Ranahan and her firm. Selna denied the motion, saying the parties would be held to "the highest ethical and professional standards" throughout the proceedings.