Mistrial Declared in LeapFrog Lawsuit Against Fisher-Price

A federal judge declared a mistrial Friday in LeapFrog Enterprises Inc.’s lawsuit seeking $58 million from Mattel Inc.’s Fisher-Price unit over a patent for interactive books that help children learn to read.

U.S. District Judge Gregory M. Sleet in Wilmington, Del., issued the ruling after jurors reported that they were deadlocked. Lawyers for both companies told Sleet that they agreed he should decide the case on his own. The judge did not say when he would rule.

LeapFrog, based in Emeryville, Calif., makes LeapPad electronic books. The firm claimed that Fisher-Price copied its technology for the books, with which children can push letters in a word to hear how they sound.

El Segundo-based Mattel said its PowerTouch books used different technology and that the LeapFrog patent was invalid.

The eight jurors were in their third day of deliberations when they notified the judge that they were at an impasse.

Fisher-Price introduced its PowerTouch books in 2003. LeapFrog introduced the LeapPad books in 1999 and has sold 20 million copies, company attorney Ron Shulman said.

LeapFrog blamed Mattel for a drop in LeapPad sales. LeapFrog reported a 21% decline in revenue in 2004 in its U.S. consumer division, and the company’s shares have lost almost half their value in the last year.

Shulman told the jury that LeapFrog founder Michael Wood developed the interactive books to help children learn phonetics. When the “c” in “cat” is pushed, it connects to a switch and the LeapPad book pronounces it like “k.” When the “c” in “race” is pushed, the book pronounces it like an “s.”

Shulman said that LeapFrog’s future was at stake and that it should be compensated for lost royalties and profit.

Fisher-Price attorney Richard DeLucia argued that the PowerTouch is different because when a reader pushes one letter in a word, the book sounds out all the letters in that word.

DeLucia also said LeapFrog’s patent was invalid because it did not contain a new invention. Texas Instruments Inc. introduced the Super Speak & Read in the 1980s, and other such electronic books have been around for years, he said.

Mattel shares fell 7 cents Friday to $18.28. LeapFrog shares, which are down nearly 47% in the last year, fell 6 cents to $11.19.