This is a case series from the mid to late 1990s involving Fasa’s Battletech characters and toy products based on those characters made by toy company Playmates, as relates to other toy products based they made for the ExoSquad characters.
FASA CORPORATION and VIRTUAL WORLD ENTERTAINMENT, Plaintiffs, v. PLAYMATES TOYS, INC., Defendant.
No. 93 C 2445
UNITED STATES DISTRICT COURT FOR THE NORTHERN DISTRICT OF ILLINOIS, EASTERN DIVISION
892 F. Supp. 1061; 1995 U.S. Dist. LEXIS 8741; 35 U.S.P.Q.2D (BNA) 1766
Decided – June 19, 1995
Beginning on June 19, 1995, the Court began the first phase of a potential four phase bench trial in this matter which involves an intellectual property dispute involving futuristic robot-like battle toys
Previously an opinion of the Court in FASA Corp. v. Playmates Toys, Inc., 869 F. Supp. 1334 (N.D. Ill. 1994), explained:
The present lawsuit centers on Playmates’ alleged infringement of FASA’s intellectual property and proprietary rights in BATTLETECH by designing and marketing the EXOSQUAD toy line
And explaining (footnotes omitted):
BATTLETECH – created by FASA in 1984 and originally sold as a role-playing game – is a fictional universe set in the 31st century. The BATTLETECH universe is comprised of empires such as the Star League, an empire consisting of five cosmic houses each of which encompasses hundreds of interstellar worlds. Each house seeks control of the galaxy. The battles between worlds are dominated by BattleMechs (also called Mechs), massive man-shaped, robot-like tanks of various shapes and designs which are piloted by human soldiers called MechWarriors. Pls.’ Admis. P 2. Among the MechWarriors’ adversaries are the Clan Elementals, “men and women bred to be foot soldiers.” FASA CORP., BATTLETECH THE RETURN OF KERENSKY TECHNICAL READOUT: 3050 (1990) at 8.
The EXOSQUAD story line is set in the 22nd Century and involves confrontations between the conquering, genetically engineered, Neosapien race and an enslaved human race living on Earth, Venus and Mars. The Neosapiens and humans battle each other, encased in large robotic fighting machines known as “ExoFrames” or “E-Frames.” Segal Decl. P 5 Playmates markets a toy line – consisting of six toys – featuring characters and vehicles from the EXOSQUAD cartoon series. Pls.’ Facts PP 7, 9.
There were complicated issues about licensing agreements and waivers, but in terms of intellectual property and analysis of substantial similarity:
Even the most cursory visual comparison of the EXOSQUAD and BATTLETECH materials reveals that there are marked similarities between the two. In particular, we note that the EXOSQUAD Heavy Attack E-Frame appears to be a virtual replica of the BATTLETECH MAD CAT. Because the court cannot conclude that no reasonable trier of fact could find substantial similarity, Playmates’ motion for summary judgment on this basis must be denied.
And so with summary judgment granted in part but denied in part, the case went forward.
Among the findings of fact listed in the 1995 opinion:
Playmates is a distributor of toys supplied by a related company, Playmates Toys (Hong Kong) Ltd. (“Playmates HK”), including TEENAGE MUTANT NINJA TURTLES, * TREK, ADDAMS FAMILY and various Disney characters, and also participates in the development of toys pursuant to an agreement with Playmates HK.
And so again, as we’ve already seen already in many NinjaLaw posts, the Federal Courts mentions TMNT for no particularly necessary reason.
The 1995 opinion concludes:
For all of the reasons set forth herein the Court finds that Playmates’ New Product Form is legally unenforceable under the facts and circumstances of this case. The Court therefore finds that defendant Playmates has not met its burden of establishing its affirmative defense of waiver. The trial will therefore proceed to Phase II on June 20, 1995 at 9:45 a.m.
And so the case continued again. In fact there are seven Federal Court opinions decided between 1994 and 1998 in relation to these parties’ dispute. The first two are those opinions mentioned above. The third was in the same court (US District Court for Northern District of Illinois, Eastern Division) and by the same Judge Ruben Castillo, 912 F. Supp. 1124 decided January 22, 1996.
Judge Castillo concludes (despite what he wrote above) that the two character sets are not substantially similar, and/or independently created, and/or there are “Specific, Non-Trivial Design Features Distinguish EXO-SQUAD From BATTLETECH” and the Judge also cites a study introduced to evidence by Playmates:
The study found no probative evidence of any consumer confusion–98.6% of the persons interviewed after seeing display packages of both products, did not confuse the trade dress of EXO-SQUAD with that of BATTLETECH.
Therefore, Castillo writes:
The bottom line in this case is that Playmates made a conscious business decision that it could proceed with the development of its EXO-SQUAD toy line after it had been given access to the BATTLETECH designs without the necessity or cost of obtaining a license from FASA. After extensive and undoubtedly costly litigation this business decision has been found by this Court not to violate FASA’s legal rights. Nevertheless, this Court believes that the facts of this case do not warrant the imposition of any costs upon FASA for seeking to vindicate its legally protectible rights. This case is dismissed with prejudice with both sides to bear their own costs.
Judge Castillo also found the opportunity to again mention the Teenage Mutant Ninja Turtles and in the findings of fact writes:
On May 11, 1992, Sallis called Allen to discuss whether there was a possibility of putting together an animated cartoon show about BATTLETECH because Playmates’ preference was to produce its new robotic action figure toy line with a corresponding television series. (Sallis Tr. 1592-93). Many successful toy lines, such as the Ninja Turtles and Power Rangers have been promoted in this fashion. (Johnson Tr. 2219). Sallis also discussed potential royalties and budgets with Allen.
On appeal at the Seventh Circuit, Judge Diane Wood summarized the above three cases:
The underlying dispute between FASA and Playmates dealt with the question whether Playmates had impermissibly copied FASA’s Battletech line of toys, violating both its copyright and trademark rights (among others) in the process. In a thorough opinion issued after a bench trial (and an opinion of exceptional interest for science fiction aficionados), Judge Castillo ruled that, while the original features of FASA’s robots were entitled to copyright protection, and FASA had protectable trade dress rights in its robot designs, Playmates’ Exo-Squad line of toys were not substantially similar to FASA’s toys based on the Battletech universe, the evidence did not show a likelihood of confusion between the two for purposes of the trade dress complaint, and Playmates had not engaged in unfair competition. FASA Corp. v. Playmates Toys, Inc., 912 F. Supp. 1124 (N.D. Ill. 1996) (FASA III). Earlier, he had granted Playmates’ motion for partial summary judgment on FASA’s claims of common law unfair competition, dilution, and tortious interference with prospective business advantage. FASA Corp. v. Playmates Toys, Inc., 869 F. Supp. 1334 (N.D. Ill. 1994) (FASA I), and somewhat later, he had denied Playmates’ affirmative defense of waiver. FASA Corp. v. Playmates Toys, Inc., 892 F. Supp. 1061 (N.D. Ill. 1995) (FASA II).
Judge Wood then continues:
Playmates, which reports to this court that it spent in excess of $ 2.5 million defending itself against FASA’s accusations, argues that the district court’s remarks explaining why he was denying attorneys’ fees reveal a mistake of law on the standard to be applied.
In its briefs, FASA has made a Herculean effort to parse the judge’s comments, … Rather than attempting further to read between the lines of the judge’s oral remarks, we prefer to send the fee question back to him to rule again on the petition under the applicable legal standards. We emphasize in this connection that Fogerty says that “attorney’s fees are to be awarded to prevailing parties only as a matter of the court’s discretion.” 510 U.S. at 534.
And so vacated and remanded, the case again falls before Judge Castillo, who again decides (with a bit of a benchslap to Playmates attorneys) not to award any attorney’s fees. So concluding April 1, 1998:
The proper exercise of this Court’s discretion herein requires the Court to once again reject an award of fees. It is unfortunate that this litigation was prolonged by this attorneys’ fees dispute. The Court recognizes that it bears great responsibility by not clearly enunciating the specific basis of its prior denial of attorneys’ fees. Perhaps the Court mistakenly sought to avoid writing a fourth opinion in this hotly disputed litigation. Yet, the Court expressly notes that, rather than seek easy clarification from this Court, Playmates’ counsel merely thanked the Court at the conclusion of the February 13, 1996 proceeding and proceeded to the appellate court.
Today, almost two years later, this Court corrects its prior mistake and issues its fourth opinion which, in no uncertain terms, indicates that an evaluation of all the legal and equitable factors at the Court’s disposal pursuant to its post-Fogerty discretion compels this Court to deny Playmates any attorneys’ fees in this matter. Playmates pushed the extreme outer limits of non-liability in this case to reap great economic benefits. Simply put, an award of attorneys’ fees to Playmates would not advance any creative purpose sought to be advanced in the Copyright Act. Now Playmates wants to have its close legal victory as its cake and its attorneys’ fees as its icing. Playmates instead should be satisfied with the economic profits it reaped from its EXO-SQUAD toys and the fact that its vast attorneys’ fees are still currently tax deductible as reasonable corporate business expenses without any clear limitation. This Court cannot and will not give Playmates its cake and icing too because Playmates has simply not convinced this Court that a fee award would equitably advance any creative purpose protected by the Copyright Act.
Meanwhile, if it weren’t already confusing enough, in two other opinions decided in the same district court around the same time, but by different judges, Playmates is a co-plaintiff against FASA, where the other co-plaintiff is Harmony Gold USA Inc., owners of the Macross and RoboTech character licenses. See Harmony Gold U.S.A. v. FASA Corp., 169 F.R.D. 113 (November 6, 1996, Decided) and 40 U.S.P.Q.2D (BNA) 1057 (June 12, 1996, Decided) and eventually settled out of court.
This is a complicated set of similar characters with crossed licensing agreements and arguable but specific differences. Judge Castillo considers it all part of the cost of doing business – the merchandise driven TV cartoon business. The Ninja Turtles serve to explain similar contemporary cartoon-toy businesses. There is no clear reason for the Court to have focused on that particularly comparison.
A Robotech fansite, terrania.us, has a great organized list of all seven Fasa v Playmates cases with link to the full opinions.