LONDON, June 16 (Reuters) - U.S. toy supplier MGA

Entertainment abused its dominant position to try to block a new

market rival by threatening to withdraw its own popular L.O.L.

Surprise! dolls from British retailers, London's High Court

found on Monday after a bitter legal battle.

California-based MGA - which is a major supplier of toys to

U.S. firms Walmart ( WMT ) and Target ( TGT ) and also owns the

Bratz dolls brand - was sued in 2020 by startup Cabo Concepts.

Cabo alleged MGA stifled the launch of Cabo's Worldeez range

by asserting that the toys' globe packaging was an imitation of

MGA's L.O.L. Surprise! and threatening to withhold supplies of

L.O.L. Surprise! to retailers that stocked the Worldeez globe.

The Worldeez toy ultimately failed and was discontinued in

2018, prompting Cabo to sue MGA, seeking up to 90 million pounds

($122 million) in damages for lost profits.

Judge Kelyn Bacon on Monday rejected Cabo's argument that it

would have traded profitably but for MGA's conduct, saying in a

written ruling that "Cabo's claim for damages therefore fails".

The judge did, however, find that MGA had abused its

dominant position by making threats to withdraw the supply of

L.O.L. Surprise! dolls, "reinforced by threats of litigation and

disparaging claims that Worldeez was a 'knock off'".

Bacon also said that MGA made "unjustified threats of patent

infringement proceedings" to major retailers Toys 'R' Us, The

Entertainer and Smyths.

MGA took "retaliatory anti-competitive action" against Cabo

in an attempt to "stifle legitimate competition by exercising

its market power to cut off the main retail outlets", she added.

MGA did not immediately respond to a request for comment

outside U.S. office hours. Cabo could not be reached for

comment.