Managers and the Legal Environment 7th Edition by David Madsen, Constance Bagley

Exercise 11

Toy company Mattel sued MGA Entertainment for misappropriation of trade secrets, including the concept for the popular Bratz fashion doll. MGA counterclaimed that Mattel had misappropriated its trade secrets in violation of California's Uniform Trade Secrets Act, which defines "trade secret" as information that (1) "derives independent economic value... from not being generally known" and (2) "is the subject of efforts that are reasonable under the circumstances to maintain its secrecy." One of the issues was whether Mattel, and later MGA, took "reasonable efforts" to protect the alleged "trade secrets." MGA permitted retailers and the press to access its toy showrooms and product information displayed in "planogram" rooms operated by retailers, but it disallowed other toy vendors. Should MGA have required members of the press to sign nondisclosure agreements before viewing its products? How else might MGA have protected its proprietary information? [Mattel, Inc. v. MGA Entertainment, Inc., 782 F. Supp. 2d 911 (C.D. Cal. 2011).]