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High Court dismisses competition law claims against MGA

16/06/25

In May 2017, Cabo Concepts Ltd (“Cabo”), a start-up toy company, launched a new toy called Worldeez. Worldeez was launched shortly after MGA Entertainment (UK) Ltd, and its United States parent company, MGA Entertainment, Inc. (“MGA”), had launched the very popular L.O.L. Surprise! toy. MGA stated to Cabo and certain toy retailers that the Worldeez globe was a “knock off” of L.O.L. Surprise!, and indicated to those retailers that if they stocked the Worldeez globe, MGA would cease to supply them with L.O.L. Surprise!. The Worldeez toy went on to fail, and was discontinued in 2018.

In proceedings in the Patents Court issued in May 2020, Cabo claimed that MGA had stifled the launch of Worldeez. It claimed damages against MGA for allegedly (i) abusing a dominant position; (ii) entering into unlawful and anti-competitive agreements with toy retailers; and (iii) making actionable threats of patent infringement proceedings. Cabo claimed that, but for MGA’s conduct, Worldeez would have been a successful product and Cabo would have gone on to become a successful toy business. Its claim for damages was initially in excess of £170 million, but was reduced to £53-£90 million by the conclusion of proceedings.

Following a six-week trial heard in October-November 2024 and January 2025, Bacon J today handed-down judgment. She held that, although MGA had abused a dominant position and had made actionable threats of patent infringement proceedings, Cabo would not have traded profitably but for MGA’s actions and it had therefore suffered no loss. In addition, of the four agreements between MGA and toy retailers which she found had been entered into, three benefited from the Vertical Block Exemption (2010/330/EU) and a fourth was not restrictive of competition. She therefore dismissed Cabo’s claim for damages in its entirety, but held it was appropriate to make a declaration that MGA had made actionable threats of patent infringement proceedings.

The judgment of the Court ([2025] EWHC 1451 (Ch)) can be read here.

Victoria Wakefield KC, Jennifer MacLeod and Richard Howell appeared for MGA (instructed by Fieldfisher LLP)

All members of Brick Court Chambers are self employed barristers. Any views expressed are those of the individual barristers and not of Brick Court Chambers as a whole.