Progress in dispute over Lady Gaga dolls

New York --

MGA Entertainment Inc. withdrew a request for a court order forcing pop star Lady Gaga to approve a line of dolls in her image, saying progress has been made toward settling a dispute with the singer.

MGA sued Stefani Germanotta, whose stage name is Lady Gaga; her management company, Culver City's Atom Factory; and Los Angeles' Bravado International Group, a merchandising company that works with musicians, in New York State Supreme Court in Manhattan last month, seeking more than $10 million in damages.

MGA Entertainment said in the complaint that it agreed to produce dolls in the singer's image in December 2011 at Bravado's "request and insistence" and paid the company a $1 million fee in anticipation of shipping the products to retailers this summer in time for the holiday selling season.

MGA had sought a preliminary injunction ordering Bravado, Atom Factory and Lady Gaga to immediately provide final written approval of samples of the dolls, and the two sides were scheduled to argue the matter in court next week.

MGA said in a court document filed Wednesday that it was withdrawing its motion "in view of the progress which the parties have made towards settlement, and in order to afford the parties the opportunity to focus their efforts on further pursuit of settlement in the upcoming days."

In April, Bravado CEO Tom Bennett told MGA's chief executive officer, Isaac Larian, that Germanotta wanted to delay production and shipping of the dolls until her new albu! m is released in 2013, according to the complaint.

MGA said in the complaint that the defendants have continued to withhold final approval to delay marketing the dolls until next year and instead sell a licensed Lady Gaga perfume called Fame.