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Aug 04 2010

Bring Me the Head of Winnie The Pooh!

I don’t usually write about pending cases, but I had to just tell everyone about my latest clients.  They are two Midwestern school teachers, husband and wife, who decided to supplement their income by running a kids’ party company in the summer.  They bought all of the old inflatable items of a defunct party company a few years ago and are trying to develop the business by word of mouth since there is no money in the budget for advertising. It’s been a slow process and they had to take a second mortgage out on their home to finance the operation.

One of their more popular attractions is a large Moonwalk Inflatable Bouncing Room, a large air filled structure that a bunch of kids can get inside and jump their little heads off. The front of it is decorated with a large head of Winnie The Pooh.  For an extra ten bucks, they will decorate it with two large banners that attach to the sides of the structure that feature pictures of several other Disney characters -Goofy, Mickey, the Dwarves- you get  the picture.

Problem is that Disney, Inc. is ferocious about enforcing their trademarks.  They just won a lengthy battle with the prior owners of the trademark for Winnie, so they are not going to let just anyone use Winnie without their permission.  I guess they found a picture of this structure on my clients’ website and they have hired an Orlando-based lawyer to write my clients a cease-and-desist letter.  Only he does not just want them to cease and desist – he also wants them to pay an exorbitant amount of money for their horrible infringement of their trademarks.

My clients have been trying to negotiate reasonably with him, but they have been unsuccessful.They have acquiesced to all of his demands but Disney still wants to get cash from these folks.  The last demand that my clients complied with is incredible – they were instructed to cut off the Winnie head from the Moonwalk and mail it to the lawyer as proof they had complied.This sounds like Disney is using the Pirates of the Caribbean to do their negotiating!

Frustrated and frightened that the Moonwalk decapitation was still not enough, they decided to get a lawyer -me- involved.  I hope to be able to try and talk some sense into Disney and their lawyer to just let it go already.  But this case represents another example in a growing trend.  Large companies that hold intellectual property rights are exerting their muscle against small mom-and-pop businesses for minor infringements.  They demand sums of money that are equal to years of income for their targets in order to try and induce a quick settlement that is still excessive.  It matters not to them that these and other folks had no idea that items were not properly licensed.  Disney has even pursued businesses who throw Disney Princess-themed birthday parties. Major League Baseball has pursued Little Leagues that use their teams’ names and unlicensed versions of their uniforms. Now it seems to me that, in the long run,  both my clients’ business and the others promote Disney characters and encourages them to purchase Disney-related products.  For example, they will buy paper plates, noisemakers, party hats, etc that are sold in stores through proper licensing to complete the Disney theme.  I suspect it will take one case to grab media attention and cause an embarrassment to Disney to get them to turn the volume down a bit.

In the meantime, businesses need to be certain that they are only using officially licensed products to avoid this situation.  As for my clients, I will keep you posted on the progress of the case but if Disney won’t be reasonable, then its HiHo HiHo its off to court we go!

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