LOS ANGELES — Barbie and Bratz dolls are sisters, a jury has decided in a major victory to Mattel Inc., the world's largest toymaker, in its copyright infringement lawsuit against rival MGA Entertainment Inc.

The federal jury in Calfornia decided late Thursday that the designer of MGA's Bratz characters conceived the idea for the dolls while working for Mattel, a ruling that could mean millions of dollars for the Barbie maker when the jury considers possible damages.

Mattel filed the lawsuit in U.S. District Court in Riverside against MGA, which began marketing the hugely popular Bratz line of sassy urban dolls in 2001. Mattel has claimed it owned the rights to the Bratz line because its creator, Carter Bryant, came up with the concept while working for Mattel.

Analysts estimate that Bratz has made MGA more than $500 million a year.

The jury also ruled that MGA and its CEO Isaac Larian were liable for converting Mattel property for their own use and intentionally interfering with the contractual duties owed by Bryant to Mattel.

"MGA and Isaac Larian took what did not belong to them," John Quinn, a lawyer for Mattel, said after the verdict.

Larian said in a prepared statement that MGA will prevail in the upcoming damages phase of the case, or possibly in the 9th U.S. Circuit Court of Appeals.

"This is because it is undisputed that MGA, not Carter Bryant, independently created the Bratz dolls," Larian said. "Carter Bryant did not have anything to do with the many Bratz-related products we created, such as Bratz Babyz, Lil' Bratz and Bratz Kidz."

The statement pointed out that jurors still must decide if Mattel owns any copyrights involving Bryant's drawings. If so, the jury must rule on whether the dolls infringe on those copyrights.

Bryant reached a confidential settlement with Mattel before the trial, and the company dropped its suit against him.

The timing of Bryant's creation was key in Mattel's suit.

Mattel attorneys argued that Bryant worked for the company between September 1995 and April 1998, then returned for a second stint at Mattel between January 1999 and October 2000.

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He signed an agreement that gave Mattel the right to anything he designed while employed there, the lawyers argued.

In a summary of the case, Mattel said MGA began showing Bratz prototypes a month after Bryant left Mattel and began selling the hugely popular dolls in toy stores five months later.

Bryant testified during the six-week trial that the sketches he showed MGA in 2000 were transferred from originals he made in the summer of 1998, between his two employment stints with Mattel.

He testified that the sketches were inspired as he watched children walking from school, Steve Madden shoe ads in Seventeen magazine and the cover of the Dixie Chicks album "Chicks With Attitude."

Sales of Barbie dolls, once a near rite-of-passage of American girlhood, have slid since Bratz came on the scene. Domestic Barbie sales were down 15 percent in 2007 and 12 percent in the first quarter of 2008, while international sales increased 6 percent in 2008 as opposed to 12 percent the previous year.