Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

MARUZEN INT'L v. BRIDGEPORT MERCHANDISE

July 15, 1991

MARUZEN INTERNATIONAL, CO., LTD., PLAINTIFF,
v.
BRIDGEPORT MERCHANDISE, INC., HYMAN PRODUCTS, INC.; CAL STERNBERG & ASSOCIATES; CREST INDUSTRIES CORP.; MORT KAPP D/B/A J & K DISTRIBUTORS AND M.R. GOODLITE; FASCINATIONS TOYS & GIFTS INC.; LEGO IMPORTS; MIN LURNG ENTERPRISES CO., U.S.A.; HOUSE OF ZOG, INC.; CROWN IMPORT/UNIVERSAL SPECIALTIES; FREUND-MAYER & CO.; CROWN CRAFT PRODUCTS; BIG APPLE ENTERPRISES; AND LI'L MORT SALES, INC., DEFENDANTS.



The opinion of the court was delivered by: Kevin Thomas Duffy, District Judge:

MEMORANDUM & ORDER

Plaintiff Maruzen International Co., Ltd. ("Maruzen") brings this action against, inter alia, defendants Hyman Products, Inc. ("Hyman"), Fascinations Toys Gifts Inc. ("Fascinations"), and Kay-Bee Toy Hobby Shops, Inc. ("Kay-Bee") for violations of copyright, trademark, trade dress, unfair competition, and other rights in connection with a product known as the "Art Bank."*fn1 The Art Bank was apparently created by a Japanese company, Tenyo Co., Ltd. ("Tenyo"), that purportedly assigned its rights to Maruzen's Japanese parent company ("Maruzen Japan"). Maruzen was eventually assigned rights in the product for the United States market. On October 10, 1990, I enjoined Hyman from the "sale or distribution or attempted sale or distribution of its Bank product or any version thereof. . . ." Its Bank was called "the Magic Bank." Soon thereafter, Hyman apparently made certain shipments of its Magic Bank and Maruzen moved by Order to Show Cause to hold Hyman in contempt of court. After a hearing conducted on January 25, 1991, I ordered that Hyman be fined $100,000.00 for its contempt in shipping the Magic Bank after Hyman had previously been preliminarily enjoined.

A Patent ("953 Patent") was obtained for the Art Bank on November 6, 1990 in Tenyo's name. Shigeru Sugawara, a Tenyo employee, designed and created the first version of the Art Bank. Maruzen then moved to amend its complaint, adding a patent infringement claim.*fn2 On February 14, 1991, I granted Maruzen's motion for leave to amend, but denied any motion for a preliminary injunction as against Fascinations and held in abeyance its cross-motion to dismiss. Hyman cross-moves pursuant to Fed.R.Civ.P. 12(b)(5) and 12(b)(2) to dismiss the complaint for insufficiency of service of process and lack of personal jurisdiction. In addition, Hyman moves for reconsideration of the contempt order, seeking a stay of execution pending reconsideration or appeal of the contempt order. Fascinations withdraws its original motion to dismiss and by a substituted motion, Fascinations and Kay-Bee now jointly move pursuant to Fed.R.Civ.P. 12(b)(7) and 19 for an order dismissing the amended complaint because of failure to join an indispensable party.

STATEMENTS OF FACT

Maruzen is the United States subsidiary of Maruzen Co, Ltd. ("Maruzen Japan") a Japanese publisher and retailer of stationary products and gift items. As part of its retail activities, Maruzen Japan searches for novel stationary and gift products. In October 1989, it entered into an agreement with Tenyo, which had designed the Art Bank, and was prepared to manufacture the Art Bank for distribution by Maruzen in the United States. Mizutani Declaration ("Decl.") ¶ 4. Maruzen Japan thereupon sublicensed its United States rights in the Art Bank to its subsidiary Maruzen to sell and protect the product in the United States.

Since entering the United States market with the Art Bank, Maruzen has undertaken to register its intellectual property rights in all of its versions of and improvements in the Art Bank. All of Tenyo's rights in the copyright and trademark in the United States market were assigned exclusively to Maruzen. Even though Tenyo had already applied for patent and trademark protection, Maruzen independently applied for registration for the illustrations and sculptures in the interior of the Art Bank ("the designs").

In February 1990, Maruzen discovered that defendant Hyman was soliciting orders for a coin box similar to the Art Bank, which was called the "Magic Bank." Apparently, Hyman was attending various gift conventions in the United States and soliciting orders for its Magic Bank. Using the Art Bank as a sample, Hyman has sold its Magic Bank claiming origination of the Art Bank. On March 6, 1990, Maruzen obtained a copyright registration VA 388421. Maruzen has since registered other copyrights and trademarks for the Art Bank. Sometime later, Maruzen discovered that Fascinations created a toy bank known as the "Mystery Bank." The Mystery Bank was modelled after Hyman's Magic Bank, resembling Maruzen's Art Bank design.

DISCUSSION

Status as an assignee or patentee is a crucial prerequisite to bringing suit on infringement grounds. "In order to sue for infringement under 35 U.S.C. § 281, the plaintiff must be the owner of the patents, i.e., the patentee or assignee of the patent." Afros S.p.A. v. Krauss-Maffei Corp., 671 F. Supp. 1402, 1444 (D.Del. 1987), aff'd without opinion, 848 F.2d 1244 (Fed. Cir. 1988). Annexed to Maruzen's reply papers, are certain letters apparently originating from Tenyo and Maruzen Japan and purporting to transfer rights in the Art Bank to Maruzen. Maruzen's Reply Declarations and Exhibits in Support of Maruzen's Motion for a Preliminary Injunction and to Amend the Complaint ("Maruzen's Reply"), Exh. B. Specifically, the Tenyo letter states:

  Tenyo Co., Ltd. is the owner worldwide of all of
  the interectual (sic) property rights, including
  copyrights associated with the Art Bank product,
  which was first made on April 1, 1989. In return
  for valuable consideration, receipt of which is
  hereby acknowledged, Tenyo Co., Ltd. hereby
  assigns and transfers to Maruzen Co., Ltd.
  [Maruzen Japan], all of Tenyo Co., Ltd.'s
  intellectual property interests for the Art Bank
  product in the United States of America, including
  any patent, trademark. . . . This assignment is
  effective as of October 1, 1989.

In Addition, Maruzen Japan, by letter substantially tracking the above letter's language, assigned all of its rights in the Art Bank to Maruzen with regard to the United States market.*fn3

"Agreements transferring patent rights must be either assignments or licenses. Whether an agreement be one or the other is governed by its substance, not its label." CMS Industries, Inc. v. L.P.S. International, Ltd., 643 F.2d 289, 294 (5th Cir. 1981) (citing Waterman v. Mackenzie, 138 U.S. 252, 255, 11 S.Ct. 334, 335, 34 L.Ed. 923 (1891)). "Where an agreement effectively transfers the entire bundle of rights residing in a patent, that agreement is an assignment." CMS Industries, Inc. v. L.P.S. International, Ltd., 643 F.2d at 294 (citing Etherington v. Hardee, 290 F.2d 28, 29 (5th Cir. 1961)). Even Fascinations and Kay-Bee admit that an assignee of a patent is considered to be a successor in title to ownership of the patent, and may sue independently without being required to join his assignor as an indispensable party under Fed.R.Civ.P. 19.

Maruzen is the exclusive licensee of the Tenyo novelty bank product. Although Tenyo is the originator, creator, developer, and manufacturer of the Art Bank, it has assigned to Maruzen all United States intellectual property rights in the Art Bank. Amended Complaint ΒΆ 6. The letters annexed to Maruzen's reply papers are indicative of an effective assignment of patent, trademark, and copyrights in the Art Bank which were ultimately assigned from Tenyo to Maruzen Japan, and then from Maruzen Japan to its domestic subsidiary Maruzen for the United States market. See Koyanagi Decl.; Maruzen's Reply, Exh. B. Because the United States market is the only market relevant to this action, there is no need to join Tenyo or Maruzen Japan. Neither party appears necessary to the ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.