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Mattel surrenders Bratz dolls claim

After a seven-year legal battle, giant American toy manufacturer Mattel suffered a surprise defeat when a jury decided that the tiny Californian company MGA is the rightful owner of the once-billion dollar line of Bratz dolls.

Mattel had argued that MGA stole its designs when it poached a key employee.

Mattel CEO Robert Eckert sat stoney-faced as the verdict was read in a federal courtroom in Santa Ana, California.

The defeat for the world's largest toymaker is the latest development in a case that began in 2004, when MGA's line of dolls was all the rage among little girls.

MGA Chief Executive Isaac Larian said: "It very well shows that in America, even huge corporations are not above the law.