Mad at Mattel – Followup

When I wrote to Mattel about their “victory” over Super Duper Inc , the company making games for special-needs kids, Mattel did indeed send me their canned response. And since it’s a canned response, it’s been pre-responded to on the Speak Up for SAY website.  I’m reproducing that here. (Mattel’s email to me was identical to the one that’s being answered below. Super Duper’s answers are in italics.)

What Mattel Says and Super Duper’s Response

Mattel is sending misinformation to people who are writing them in response to this website.

Here is the Mattel statement and Super Duper’s response.

Mattel: We’d like to clarify a few important points with you to help you better understand the situation.

1. Mattel: First, we want to clarify that Mattel did not sue Super Duper Publications.

Super Duper Answer: This is FALSE. Super Duper filed suit against Mattel to protect its right to use the words SAY and AND SAY in its product title trademarks. Super Duper asked the court to rule that it could use its marks without interference from the toy company. Super Duper did not seek any money from Mattel or ask that Mattel stop using any of its trademarks.

Mattel then sued Super Duper for $10 million and asked the court to permanently prevent Super Duper from publishing any of its special needs products that had its 15 SAY marks in the product titles.

It is an absolute lie for Mattel to claim it did not sue Super Duper.

2. Mattel: The case began when Super Duper Publications tried to register trademarks in the toy category.  These trademarks are very similar to the famous Mattel SEE ‘N SAY and THE FARMER SAYS registered trademarks that Mattel has used for over 40 years.

SD Answer: Super Duper makes educational special needs materials for children with autism and other communication disorders. Mattel makes toys.

Until 2004, Mattel had never even heard of Super Duper. By that time, Super Duper had a number of registered products with SAY trade names which had been approved by the U.S. Patent and Trademark Office. Mattel had a full and fair opportunity to object to ANY of Super Duper’s trademark applications prior to 2004.

As Mattel is well aware, ALL games that are registered with the Trademark Office, including special needs educational games, MUST be filed in trademark Category 28, the games and toys category. Super Duper had no choice but to file in this category. It is grossly misleading for Mattel to suggest otherwise.

Further, there is nothing similar between the therapy books, games, and card decks made by Super Duper for trained professionals and parents of children with autism and other communication disorders, and Mattel’s pull toy made for children to play with.

3. Mattel:As just mentioned, Mattel did not sue Super Duper Publications. Super Duper filed suit against Mattel in South Carolina and requested a jury trial to resolve the issue.  We had no choice but to protect the continued use of our famous trademarks.

SD Answer: Mattel DID SUE Super Duper. See SD Answer #1 above.

As for Mattel having no choice but to protect its trademarks, at the time Super Duper filed and received its first trademark registration on a SAY product, there were over 200 other registered SAY marks from companies all over America. None of these other companies have ever had a problem with Super Duper using the word SAY, and we have not had any problem with them using the word SAY.

Mattel did NOT have to try and take the word SAY away from Super Duper:

  • Mattel did NOT have to claim without any basis that Super Duper SAY marks would likely cause confusion among consumers between Super Duper special needs products and Mattel toys.
  • Mattel did NOT have to accuse Super Duper of intentionally “riding on the coattails” of the Mattel toy by using SAY in its educational products.
  • Mattel did NOT have to seek to have Super Duper pay $10 million of its profits to Mattel.
  • Mattel did NOT have to ask the court to have Super Duper stop selling products that had 15 SAY names on them.
  • Mattel did NOT have to ask the court to make Super Duper pay $2.6 million of its attorney’s fees.

Mattel could have, and should have, done nothing when Super Duper applied to register its SORT AND SAY educational magnetic games with the Trademark Office because there is no basis to claim that any Super Duper SAY product infringes on the trademark of any Mattel toy or dilutes that toy’s mark.

Mattel, the $5.4 billion toy company which was recently given the largest fine in U.S. history for intentionally importing toys tainted with toxic lead, did NOT have to sue Super Duper for $10 million just because Super Duper had some special needs products with SAY in the titles. Mattel is NOT the victim in this case.

4.  Mattel: During the course of the trial, Mattel offered resolution options outside of the courtroom to Super Duper for consideration, including the opportunity for Super Duper to continue using all of their marks without registering them.  Super Duper did not accept any of the options presented to them and chose to proceed with the trial.

SD Answer: Correct, Mattel made this offer. Super Duper did not accept it because Super Duper already had registered trademarks for many of its SAY products. None of these products had ever been confused with any other SAY products, including Mattel’s toy. Why should Mattel own the word SAY? Mattel had no basis to ask Super Duper to change the names of its products, so Super Duper rejected the Mattel settlement offer. Super Duper also made settlement offers to Mattel, which Mattel rejected.

5.  Mattel: The jury in South Carolina found that several of Super Duper’s trademarks did, in fact, infringe and dilute Mattel’s trademarks.  While the jury’s verdict protects Mattel’s long-standing rights with its famous See ‘N Say trademark, it does not jeopardize Super Duper’s business in any way.

SD Answer: Mattel’s actions have absolutely hurt Super Duper’s business.

Super Duper:

  • has spent thousands of hours over seven years fighting Mattel—this time should have gone into developing special needs materials.
  • had to throw out $280,000 worth of catalogs in order to stop advertising seven SAY products.
  • had to re-label and reprint thousands of SAY educational books and games, some of which had already been registered and approved by the U.S. Patent and Trademark Office.
  • had to throw out inventory that had these seven SAY names on them which could not be re-labeled.
  • had to pay its own attorneys to fight Mattel’s Trademark Office actions and this lawsuit.
  • is under an order to pay $1 million of our profits, plus interest.
  • is under an order to pay $2.6 million in attorney’s fees, plus interest.
  • had to pledge $4 million of its assets (including the personal assets of Super Duper’s owners Thomas and Sharon Webber) in order to get the appeal bond in this case.

In our opinion, trial Judge Henry Floyd issued jury charges which were in error. The Fourth Circuit agreed with us. We also believe he let this case go to the jury without having sufficient evidence to do so. We believe the jury did the best it could, but in our opinion the jury members were confused by the incorrect jury instructions. (See 7 below).

6.  Mattel: Following the jury trial, the United States District Court entered a permanent injunction to stop Super Duper’s use of several names that infringed upon Mattel’s See ‘N Say trademark and ordered the United States Patent and Trademark Office to cancel certain marks that Super Duper had registered or had filed to register.

SD Answer: That is correct. See SD Answer to #5 above.

7.   Mattel: Super Duper appealed the rulings of the District Court to the Fourth Circuit Court of Appeals in Richmond, Virginia.  On June 10, 2010, the Fourth Circuit Court affirmed the District Court’s judgment in its entirety.

SD Answer: That is correct. The Fourth Circuit Court of Appeals Judges Dennis Shedd, G. Stephen Agee, and Clyde Hamilton issued an unpublished opinion which allowed them to summarily approve Judge Floyd’s order with applying traditional trademark law. We disagree with this decision. We believe if the court had issued a published opinion, it would have had to properly apply trademark law to the facts of this case.

We are not alone in our views. Here is what the independent legal review service, LexisNexis’s Mealey’sTM Legal News and Litigation Report had to say about the Super Duper appeal in 2009, prior to the Fourth Circuit opinion.

Arguments: Mattel cannot reconcile its speculation that confusion is “likely” to occur in the future with the fact that no one has been confused in the past by any of the marks, despite millions of dollars of sales since 1987. Mattel ignores the many reasons why confusion has not occurred, including fundamental differences in the ways the marks appear in the market, the products the marks identify and the parties’ distribution channels. Mattel overlooks the sophistication of Super Duper’s target speech therapists, who have never been confused, nor would be merely because the marks contain the word “say.” Faced with this lack of evidence, Mattel relies on misstatements of the record and law and irrelevant material that does not concern the products or marks at issue, much of which never even came into evidence.

The jury charges were incorrect, prejudicial and improperly relaxed Mattel’s burden of proof. The circumstances of this case compelled the charge that “the absence of any evidence of actual confusion over a substantial period of time” creates “a strong inference that there is no likelihood of confusion” and “weigh[s] heavily” against a finding of trademark infringement, according to CareFirst of Maryland, Inc. v. First Care, P.C. (434 F.3d 263 [4th Cir. 2006]; See 1/23/06, Page 21). Further, the charge that similarity of marks alone was “sufficient” to establish likely confusion was prejudicial. Mattel inverts the charge and claims that it means that “the parties’ marks need not be identical in order to find a likelihood of confusion.” But the actual charge states, incorrectly, that a “finding of similarity in the marks’ appearance, sound, or meaning is sufficient to support a finding of likelihood of confusion.”

Mattel presented insufficient evidence on the dilution claim. Mattel’s brief fails to discuss the elements required to prove a claim of dilution by blurring, and, therefore, how the “evidence” supports them. The definition of “dilution by blurring” and its required elements are nowhere in Mattel’s brief. As a result, Mattel does not identify any evidence on the element of “‘similarity between the defendant’s mark and the famous mark giv[ing] rise to an association between the marks'” or on the separate element of whether such association, if shown, is “‘likely to impair the distinctiveness'” of the mark. Mattel only discusses nonexclusive factors courts “may consider,” which, by definition, are not elements. If an element is not proven, the claim fails as a matter of law.

Mattel fails to persuasively respond to Super Duper’s arguments that the award of profits was inequitable, unreasonably limited in time and barred by the Trademark Dilution Revision Act, nor does it explain how the award is “compensation” to Mattel, as opposed to a “penalty” for speculative conduct toward “others” not involved in the litigation. Under 15 U.S. Code Section 1117(a), awards should be “compensation and not a penalty.” Also, Mattel’s response cannot explain how Super Duper’s conduct as to Mattel is “exceptional” under Section 1117(a). If the award stands, businesses will be unable to predict with any level of certainty how to select marks without risking millions of dollars in attorney fees, invariably chilling efforts to seek assistance of counsel, the PTO and the courts to determine whether product names will avoid consumer confusion. Further, awarding fees to Mattel contradicts the goals of the Lanham Act. (Emphasis added)

8.  Mattel: Shortly thereafter, Super Duper filed a petition requesting that all of the judges on the Fourth Circuit Court of Appeals review the Court’s earlier decision.  The Court of Appeals denied this request on July 7, 2010.

SD Answer: That is correct. Once again, for reasons unknown to Super Duper, the judges refused to apply basic and long-standing standard trademark law to this case. We hope the U.S. Supreme Court will do so.

Mattel: We want to again emphasize that Mattel neither wanted nor sought a trial against Super Duper.  Super Duper can continue to sell products using names that do not infringe or dilute Mattel’s trademarks

SD Answer: Super Duper has never done ANYTHING to infringe on ANY Mattel SAY trademarks or to dilute them.

*************************************

Meanwhile, I found yet another brand-new (Aug 13 2010) article protesting Mattel’s action, this time on About.com

[ETA: And yet another at a schools blog.]

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About webmaster

I'm an international Business Consultant; author of a book called India Business Checklists, and working on a book on doing business in Burma.
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