Archives for posts with tag: trade

This opinion is about discovery in an infringement case involving POWERWHEELS, Dora the Explorer, Spider-Man, Strawberry Shortcake and Ninja – under the ‘Lil Quad and PowerQuad marks.

dora explorer powerquad spider man powerquad

and FISHER-PRICE, INC., Plaintiffs,

2008 U.S. Dist. LEXIS 89439

Decided November 4, 2008, Opinion by: Honorable Hugh B. Scott, United States Magistrate Judge:

This is a trademark and copyright infringement and common law unfair competition action regarding toy ride-on quad vehicles. The plaintiffs claim trade dress infringement and copyright infringement of their “‘LIL QUAD” battery powered ride-on quad vehicles under their POWERWHEELS(R) brand, bearing the Nickelodeon channel characters Dora the Explorer and Diego. Plaintiffs allege that defendant’s “POWER QUAD” bearing the indicia of Marvel Comics’ Spider-Man infringes on their ‘LIL QUAD design and claims that defendant has been selling these infringing ‘LIL QUAD toys since 2006. (See Docket No. 29, Pls. Memo. at 2; see generally Docket No. 1, Compl.)

On October 30, 2007, plaintiffs served their Interrogatories and requests for production (id. at 3; Docket No. 29, Kane Decl. P 2, Exs. A (Interrogatories), B (requests for production)). After over three months (including repeated requests for a response), defendant served plaintiff with its discovery responses (Docket No. 29, Pls. Memo. at 3; Docket No. 29, Kane Decl. PP 3-4, 5, Exs. C, D, E (Interrogatory responses), F (document production responses)). On February 15, 2008, plaintiffs wrote to defendant about the deficiencies in defendant’s production, outlining several non-responsive Interrogatory responses and categories of documents not produced (id.; Docket No. 29, Kane Decl. P 6, Ex. G).

Defendant basically responded with information about the Spider-Man POWER QUAD. Plaintiffs allege that defendant infringes on their LIL QUAD mark with other toys (for example POWER QUAD toys with Strawberry Shortcake, Ninja, and Marvel Heroes trade dress) and defendant thus needs to supplement its production as to these other toys (see Docket No. 29, Kane Decl., Ex. G, at 1-3). Interrogatory Number 8 sought defendant to identify which part of the LIL QUAD design was functional or otherwise not protectable by copyrights, but defendant objected that it was premature since it had not examined plaintiffs’ products (Docket No. 29, Kane Decl., Ex. A, Interrog. No. 8; Docket No. 29, Kane Decl., Ex. G at 3-4). Plaintiffs sought documents regarding defendant’s distribution of the POWER QUAD toys, the costs to produce, documents regarding adverting and marketing of these toys, and communications with retailers about advertising and about this action (Docket No. 29, Kane Decl., Ex. G, at 4-5).

Plaintiff’s motions are granted in part and denied in part. The granted motions are about packaging materials and access to employees responsible for packaging materials.

There are 103 case opinions in Federal Courts with the word “ninja” according to a Lexis search. The first is actually a typo (explained below). So the true first is the 1988 decision in Hasbro Indus. v. United States, Court No. 84-1-00087, UNITED STATES COURT OF INTERNATIONAL TRADE, 12 C.I.T. 983; 703 F. Supp. 941, Decided, October 25, 1988

This case involves the import taxes (harmonized tariff) on G.I. Joe action figures and determines that they should be taxed at a higher rate because they are human dolls. This distinction between human and nonhuman figures has recently been reported in a variety of blogs because of a decision regarding X-men merchandise. (See Toy Biz v. US). For similar tax reasons as will be discussed below for Hasbro, Marvel lawyers argued in 2003 that certain X-men figures were nonhuman. This created hullabaloo amongst comic fans because a major plot line of the X-men comic is that these characters are humans who are persecuted for being mutant humans. Arguing that mutants are not human is good for taxes but goes counter to what the X-men fight for.

– Law and Multiverse – “Are the X-Men Human? A Federal Court Says No”
– RadioLab – “X-men vs Tariff Law”
– The Cardozo Jurist – “Courts Rules Marvel Action Figures Are Not Dolls”
– Escapist – “Federal Court Rules that the X-Men are Not Human”

But first the typo – In Office of Supply Govt. of the Republic of Korea v. M. V. Naftoporos, No. 81 Civ. 4507, UNITED STATES DISTRICT COURT FOR THE SOUTHERN DISTRICT OF NEW YORK, 1985 U.S. Dist. LEXIS 15671, September 24, 1985, Decided – the Court cites a quotation to “M. Golodetz Export Corp. v. S/S Lake Ninja, 751 F.2d 1103, 1110 (2d Cir. 1985)” — except that is scrivener’s error – the correct party name of the defendant in that case was “S/S Lake Anja” = the name of a cargo vessel. So that is the first use of “ninja” in the Federal Court but it’s a typo. That said, even if it is complete error, it is somewhat ironic or coincidental that the first case with “ninja” has “the Republic of Korea” as the named plaintiff.

So, now back to the GI Joes case, Hasbro v US, Judge Watson for the Court writes:

This action involves the proper classification of plastic figures described as “G.I. Joe Action Figures” and imported from Hong Kong during 1982 and 1983. The merchandise was classified as “other dolls” under Item 737.24 of the Tariff Schedules of the United States (“TSUS”), at various duty rates, depending upon the date of entry. Plaintiff claims that the importations are properly classifiable as “toy figures of animate objects” under Item A737.40 of the TSUS, which, having met the requirements for duty free treatment under the Generalized System of Preferences, (“GSP”), should be free of duty pursuant to General Headnote 3(c) of the TSUS.

The Court then goes on to give thoroughly enjoyable descriptions of many action figures, particularly:

The third figure selected for description is designed “Counter Intelligence.” This is a white female with red hair, wearing what appears to be a beige, one-piece bathing suit, together with beige boots and gloves over black tights. Molded on the figure is a knife on the left thigh, what is possibly a small explosive device on the right thigh, a grenade on the left shoulder, a small pistol on the inside of the right forearm, and what appear to be two “throwing stars” (a type of weapon associated with Japanese “ninja“) on the exterior of the left glove. The figure comes with a “XK-1 Power Crossbow” accessory.

GI Joe fans will recognize this as a description of Counter Intelligence, Scarlett O’Hara.

The Court quotes the entirety of the back filecards for each character, as in the image above, quoting:

“Scarlett is confident and resilient * * * it’s remarkable that a person so deadly can still retain a sense of humor.”

The Court profiles the action figures and characters of Duke, Roadblock, Doc, Scarlett, Cobra Commander, and Baroness.

Hasbro’s arguments are GI Joe are “action figures” not “dolls” but the Court disagrees concluding:

The testimony offered at trial could not overcome the fundamental definition established by lexicographic common meaning and prior case law. Although it is clear that plaintiff does not use the word “doll” in the marketing of these figures, none of the plaintiff’s witnesses could persuade the Court that this was a matter of basic definition. On the contrary, the evidence as a whole supports the conclusion that the emphasis on the term “action figure” is a conscious avoidance of the definitionally correct term “doll” and that when these articles are described in general publications in this society such as newspapers or magazines, or in specialized publications devoted to collectors of dolls, they are frequently referred to as “dolls.”

In sum, the Court is of the opinion that these figures have been properly classified as “dolls” under Item 737.24 of the TSUS. Further, for what it is worth, the Court notes that this classification does not in any way detract from the respect which these figures deserve as representations of the human participants in the never-ending struggle between good and evil. Henceforth, each and every one of these figures must accept the fact that, for tariff purposes and by judicial decision, they must face the world as “real American dolls.” Hopefully, they will meet this decision as to their tariff classification with courage and pride.

It is my suspicion that this tariff classification for action figure toys is a major reason that Michael Bay’s TMNT will change the narrative to make the Teenage Mutant Ninja Turtle be aliens. Aliens are nonhuman and so they should be taxed at the lower rate. Bay has been quoted today by CNN saying in response to fan reaction about the alien-origin plot: “Relax .. We are just building a richer world”.

Yes, Richer because of tax savings.

Ok that’s enough for my first NinjaLaw post. There are more Teenage Mutant Ninja Turtles in other cases and we’ll get to them later – and you may also Shepardize this Hasbro case too, there is a follow-up case about other Joes in 1989 and the 1988 case is also cited in the Toy Biz opinions about X-Men in both 2001 and 2003 . This is just a first post – there will be more NinjaLaw.