How Plush Toy Creators Used Intellectual Property to Protect and Further Monetize the Brand
This article uses the Beanie Baby® craze to analyze the following questions:
- What is the extent of copyright protection for consumer products?
- Can you obtain copyrights for toys?
- How do you enforce your intellectual property rights?
- What is the value in seeking federal protection for your trademarks and copyrights?
In the 90s, Beanie Babies®, a product of Ty, Inc., were one of the most popular toys on the market. However, by the early 2000s, the popularity of these collectible toys plummeted drastically, and parents everywhere started trying to offload their hoards of discarded Beanie Babies® at garage sales and online auction sites. Years later, those same forgotten Beanie Babies® are now worth thousands of dollars each (Princess the Bear is apparently worth a whopping $500,000). Given their market values of old and new, one of the obvious brand protection concerns was with knockoff products. But due to some crafty lawyering in the height of the Beanie Baby® craze, Ty, Inc. not only holds trademarks for the brand names, but also owns copyrights for each plush toy. The company understood the value of investing in its intellectual property ownership rights then, and it has been known to protect those rights to the highest degree since.
Beanie Babies® Rise to Fame
Ty Warner, founder of Ty Inc., created Beanie Babies® in 1993. Though they were originally intended to be plush stuffed animals for children, Beanie Babies® soon caught on with adults. As collectors began purchasing them, their value soared. One divorcing couple even sorted out their Beanie Baby® collection in a Las Vegas courtroom under judicial supervision. To some, they even became an investment option. And then they crashed down to earth, quite quickly after their meteoric rise. Many older collectors saw their collections fall significantly in value—even to levels below what they’d paid for them at purchase. So how did it happen? While details of the demise can be found here, the simple answer is that there became way too much supply and way too little demand.
As we know, trademark laws were created to protect businesses and consumers. A brand name, slogan, or logo used by a business becomes their trademark and can receive federal trademark protection once registered with the U.S. Patent and Trademark Office (USPTO). Being the creator and producer of a full-fledged toy fad, Ty, Inc. quickly sought out federal protection for its intellectual property. Of the nearly 50 trademarks registered to the company, Ty, Inc. is the owner of four federal trademarks linked exclusively to these plush toys: BEANIE BABY®, BEANIE BABIES®, TEENIE BEANIE BABIES®, and THE BEANIE BABIES COLLECTION®. These marks are only part of the intellectual property profile that Ty, Inc. amassed for its collection of tiny toys over time.
The US Copyright Office explains the advantages of owning a federal copyright, “Many choose to register their works because they wish to have the facts of their copyright on the public record and have a certificate of registration.” It continues, “Registered works may be eligible for statutory damages and attorney’s fees in successful litigation.” The eight categories of works that can be copyrighted include:
- Literary, musical and dramatic works.
- Pantomimes and choreographic works.
- Pictorial, graphic and sculptural works.
- Sound recordings.
- Motion pictures and other AV works.
- Computer programs.
- Compilations of works and derivative works.
- Architectural works.
So the question then becomes, where did Beanie Babies® fit in this list? As the title suggests, Ty, Inc. successfully went the route of copyrighting each of their tiny plush toys as sculptural works in order to be granted federal copyright protection. Not only could US retailers not copy the name or style of the bears, but international toy producers also could not import counterfeit Beanie Babies® because US Customs cannot accept items that infringe upon federal trademarks and copyrights.
A decision from the US Customs and Border Protection’s Intellectual Property Rights Branch from 1999 cited the copyrights owned by Ty, Inc. at the time, “Ty, Inc., owns numerous registered copyrights in respect of beanbag stuffed teddy bears, including, inter alia, the following copyrights recorded with Customs: COP 97-00201; COP 97-00202; COP 97-00273; COP 97-00274; COP 97-00292; COP 98-00079; COP 98-00080; and COP 99-00030.” Since the first soft sculpture copyright was granted to Ty, Inc. in 1993, the company has since registered 2,006 other federal copyrights for its collection of toys.
Scorched Earth Litigation
Yet, relying on customs alone to protect Ty, Inc.’s intellectual property rights was not good enough for the litigious company. On its website, Ty, Inc. states, “Ty has taken and will continue to take vigorous legal action against those who have participated directly or indirectly in intellectual property infringement.” The harshness of that language is fully substantiated by its track record. The definition of ‘scorched earth’ accurately depicts Ty, Inc.’s philosophy for asserting its intellectual property rights: “relating to or being a military policy involving deliberate and usually widespread destruction of property and resources…so that an invading enemy cannot use them.”
A company like Ty, Inc. does not spend the money to own upwards of fifty trademarks and more than 2,000 copyrights to simply sit by the wayside as counterfeiters try to cash in on their craze. Ty, Inc. wasn’t going down without a fight…or multiple fights. One site has a list of over 140 Ty, Inc. lawsuits from 1995-2000. The two most notable being for copyright infringement: TY, INC. v. PUBLICATIONS INTERNATIONAL, No. 99 C 5565 (N.D. Ill. Oct. 6, 2000) & Ty, Inc. v. GMA Accessories, Inc., 132 F.3d 1167 (7th Cir. 1997).
Lessons from Ty, Inc.
Stated simply: ownership allows the assertion of rights. In anything in life. Creators, athletes, authors, brands, etc. all have assets that are worthy of and worth protecting. If a small plush toy and 2,000+ of its closest friends can land a willful infringer in a courtroom facing upwards of $30,000 (copyright) and/or $2,000,000 (trademark) in statutory damages per infringement , then there is obviously something of significant value here. Attorneys at Rockridge® are as committed as Ty, Inc. to protecting the brands that our clients have worked so hard to create because we are in the business of prosecuting and protecting intellectual property rights.
About Torrey Feldman
Torrey M. Feldman, Esq. attended American University Washington College of Law for her Juris Doctorate in Washington, DC. Prior to law school, she received a Master’s of Science in Communication and Information with a concentration in Sports Journalism from The University of Tennessee, Knoxville. Her legal practice includes amateur and professional sports, entertainment contracts and representation, emerging financial technologies, copyright, trademarks, alternative dispute resolution, and litigation. Read more about Torrey, Connect with her, and Calendly her.
Rockridge Venture Law® is a certified B Corp law firm embracing the mantra of technology lawyers for good. Rockridge® services include corporate, intellectual property, litigation, M&A, privacy, technology, and venture capital law. Rockridge has been recognized as a B Corp Best for the World and Real Leaders Top 150 Impact Company, and has been featured by Conscious Company Magazine, Forbes, and other top media focused on industry leaders in impact and innovation.
The Rockridge team has worked with Grammy winners, Nobel Prize winners, and world champion athletes to create and monetize distinctive intellectual property assets. Rockridge clients include founders, investors, and multinationals scaling disruptive technologies and iconic brands. Rockridge is headquartered in Tennessee, with satellite offices in Durham, New Haven, and New York.
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