Coloring Inside Trademark Lines
Crayola Properties, Inc., a subsidiary of Hallmark Cards has filed suit against Alex Toys, LLC a New Jersey based company. Crayola argues that Alex Toys’ engaged in unauthorized use of the Crayola mark in its complaint, which was filed on November 4, 2014 in the United States District Court for the Western District of Missouri.
The Crayola mark has been used since 1905 on crayons, markers and other art supplies. Hallmark Cards owns more than 20 trademark registrations for Crayola and has sold over 200 billion crayons. It has spent significant effort and resources in building its brand into a household name that has stood the test of time. Crayola crayons not only have their own exhibit at the Smithsonian, but also were also included in the United States Postal Services’ series of stamps that recognizing among other things, influential items in the 20th century.
Alex Toys sells crayons to various retail outlets throughout the United States and on its website: www.alextoys.com. The company packages its crayons in a variety of ways including a colossal art set and a 100-piece bucket. Each crayon has a black label featuring its name ALEX and underneath it in small font “crayon crayon crayola”.
A review of these facts begs the question: why is Crayola, an immensely popular and nationally recognized brand concerned about a company most Americans have never heard of?
Alex Toys recently hired Crayola’s former General Manager of Sales Darren Silverman as its Executive Vice President of Sales. Crayola argues that during Silverman’s 20 years of employment with the company, he gained extensive insight and knowledge of Crayola’s marks. The complaint states that Alex Toys intentionally and willfully used this information to counterfeit goods for its own private financial gain.
According to KNIJFF, Crayola also seeks to protect its mark from genericide and ensure that its mark is used only to distinguish its own goods from other companies. A famous, well-recognized mark risks losing its legal protection if it is no longer used to represent a distinct product, but rather a whole class of similar products. Crayola boasts the success of its products in its complaint to demonstrate the famousness of its mark. It then argues that the defendant uses the mark as a synonym for crayon. This generic use puts Crayola’s mark at risk of losing its legally protected rights and dilutes its distinctiveness.
Crayola also asserts claims for trademark infringement as well as unfair competition. The company argues that defendant’s use of the mark may misrepresent an affiliation between Crayola and Alex Toys. This is especially true after reviewing the Alex Toy’s label. Because Crayola has no control over the nature and quality of defendant’s products, any assumed affiliation may negatively affect Crayola’s reputation. Additionally, customers may confuse or mistake the origin of Alex Toys’ products as ones connected to Crayola, which could result in unfair competition.
Crayola has asked the court to enjoin Alex Toys from further infringement and counterfeit and to order the destruction of all of the allegedly infringing products. It also asks the court to award damages, including statutory damages of $2 million for each counterfeit mark as well as attorney fees and litigation costs. Alex Toys has not yet commented and it will be interesting to learn why it believed it could legally use “crayon crayon crayola”. Nevertheless, it is likely Crayola will prevail based on the strength of the mark and the company’s dedicated effort to protect it.
Photo Credit: “Crayola 1st No48 open” by Kurt Baty – Own work. Licensed under CC BY-SA 3.0 via Wikimedia Commons – http://commons.wikimedia.org/wiki/File:Crayola_1st_No48_open.jpg#mediaviewer/File:Crayola_1st_No48_open.jpg