If you’re in the toy industry and you’re on LinkedIn, you’ve probably seen the recent back and forth between MGA Entertainment and ZURU over copyright infringement and counterfeiting.
ZURU, along with its wholly owned subsidiaries Creative Impact, has now filed a complaint against MGA Entertainment. The complaint was filed in the U.S. District Court in the Central District of California. The lawsuit challenges MGA’s efforts to eliminate healthy competition in the toy industry by wrongly asserting nonexistent copyright, trademark, and trade dress intellectual property rights against ZURU’s successful 5 Surprise product line and other unlawful business practices.
This is not ZURU’s first legal battle dealing with copyright infringement. In April, a Texas court upheld its ruling on Bunch O Balloons patent infringement against Telebrands and subsidiary Bulbhead.com LLC, and more than doubled the damage award to $24.5 million. Additionally, last December, the LEGO Group was granted a temporary restraining order against ZURU’s competitor and comparable bricks line, Max Build. Issued by the District of Connecticut, the order required the product be removed from all stores and websites until further notice.
In both online postings and a California state court proceeding, MGA has alleged that ZURU’s 5 Surprise product and related packaging infringes MGA’s purported intellectual property rights in L.O.L. Surprise! According to ZURU, MGA’s allegations are based on nonexistent or overly broad interpretations of alleged trade dress and other intellectual property rights. To the extent there are any valid intellectual property rights, those rights are not infringed at all by ZURU. ZURU’s lawsuit alleges that MGA is engaged in unfair competition through online bullying designed to unfairly maintain market share, stifle legitimate competition and monopolize the unwrapping surprise toy segment.
ZURU seeks (i) a declaration that ZURU’s use, sale, marketing and other exploitation of 5 Surprise does not infringe MGA’s alleged trade dress rights in L.O.L. Surprise! and does not cause a likelihood that consumers will be confused as to the source or sponsorship of 5 Surprise; (ii) that the Court order MGA’s California Registration for trade dress related to its L.O.L. Surprise product be canceled; (iii) that the Court enjoin MGA from further assertion of any alleged rights based on the California Registration or the alleged trade dress rights against ZURU; (iv) that the Court order MGA to permanently cease its unfair and illegal business practices related to ZURU and its 5 Surprise and other products; (v) restitution and disgorgement of all MGA’s profits associated with its unfair business practices; and (vi) damages and costs of suit, including reasonable attorneys’ fees, along with any other relief or damages deemed appropriate by the Court.
“We are passionate at ZURU about innovation and making high quality toys and play experiences,” said Anna Mowbray, COO of ZURU. “ZURU’s fresh and novel approach has made us one of the fastest-growing toymakers in the world. Unfortunately, it’s also made us a target of bigger and outworn competitors who would seek to bully disruptors from the market. Our commitment is to innovation and fair play—for children and the market — and that is what this lawsuit is about.”