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New Jersey toy business sues Disney for unfair competition

If you have watched Toy Story 3, then you are familiar with “Lots-O’-Huggin,” or “Lotso,” the cuddly yet disturbed stuffed bear who served as the main villain in the film. Just when you thought you had seen the last of him, he comes back again, this time to disturb Disney Enterprises in the form of a lawsuit over an intellectual property dispute and alleged unfair competition.

A toy company from New Jersey has pursued business litigation against Disney in Texas federal court for illegally misappropriating its trademarked “Lots of Hugs” bears in the image of the antagonistic “Lots-O’-Huggin” bear. The toy store implied that Disney knew about the company’s intellectual property rights because of a previous licensing transaction with a company closely connected with Disney. Furthermore, the “Lots of Hugs” patent was used in a promotional campaign for the 2008 Beijing Olympics.

Aside from trademark infringement, the toy company also filed for unfair competition, stating that it was forced to change the name of its “Lots of Hugs” bears to “hugalots” for fear of being confused with the Disney character. The lawsuit demanded an undisclosed share of Toy Story 3’s profits, as well as an order against using the character in the future. Disney has not yet issued any comments regarding the allegations.

Whether you own a large international business like Disney or just a small toy factory in New Jersey, you are not immune to complex corporate disputes and litigation. As shown in this case, even a seemingly innocent toy bear can become the cause of your company’s problem. Familiarity with intellectual property rights and rules regarding unfair competition could help you confront these issues knowledgeably.

Source: The Hollywood Reporter, “Disney Sued Over ‘Toy Story 3’ Evil Stuffed Bear Character,” Eriq Gardner, Feb. 11, 2014

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