Intellectual Property

Sep 1, 2022

Texas Judge Issues Scathing Order in Toys R Us Complaint Against Independent Toy Store

Geoffrey the Giraffe is casting an ominous shadow over one Texas family.

Last summer, almost immediately following the news that Toys “R” Us and Macy’s were teaming up to relaunch the iconic toy store in the U.S., The Toy Book reported on a detour from that forward movement as Tru Kids Brands Inc. — the WHP Global-owned parent of the Toys “R” Us and Babies “R” Us brands — took a step backward and filed a lawsuit against an independent toy store in New Jersey.

At the time, Tru Kids alleged “trademark infringement” as the store, Toys & Beyond, had moved into the space that was previously occupied by one of the two, short-lived Toys “R” Us concept stores that opened in partnership with b8ta in 2019. At the center of the complaint were issues regarding the colorful logo of Toys & Beyond and the reuse of fixtures and signage, including Geoffrey’s Treehouse, Geoffrey’s Magical Mirror, and the Play Around Theater, that were left behind when Toys “R” Us abandoned the space at the Westfield Garden State Plaza in January 2021.

On Oct. 25, 2021, The Toy Book was first alerted to a nearly identical lawsuit filed in Texas against TOYZ, a family-owned toy store that opened nearly 20 years ago. Farida Afzal immigrated to Houston from Pakistan and built a business that eventually grew to include a distribution arm and several retail stores, including a small location on the lower level of Simon Property Group’s Galleria Mall.

In its response to the complaint filed by attorneys at Baker Botts on behalf of Tru Kids Brands, Afzal Ali Enterprises, Inc. dba TOYZ noted that its store peacefully co-existed with Toys “R” Us during the time that both stores were open in the Galleria. According to the response, the scuffle began months after Toys “R” Us closed, when the Galleria landlord offered TOYZ the opportunity to expand into the former Toys “R” Us store.

Nearly a year later, the legal battle continues and it’s begun making headlines as The Houston Chronicle, alongside ABC and CBS affiliates have reported on the story. Meanwhile, a Change.org petition is calling upon WHP Global and Tru Kids Brands to drop the lawsuit, while members of the U.S. and global toy communities, including Richard Derr of Learning Express, MGA Entertainment Founder and CEO Isaac Larian, Toy World Publisher John Baulch, World Alive Founder Amy Holden, and Michael Olafsson of Monkey Fish Toys have taken to LinkedIn to express support for the owners of TOYZ and call for an end to what appears to be legal bullying in a “bleed them dry” campaign.

In Texas, it appears that Judge Charles Eskridge might agree.

On August 23, Judge Eskridge issued a scathing order against Tru Kids Brands and Toys “R” Us.

In the filing, Judge Eskridge denies a motion by Tru Kids to amend its complaint against TOYZ, stating that “the motion itself evinces undue delay and dilatory motive,” and that “the motion could also be considered abusive.”

“Toys ‘R’ Us is trying to shutter a family-owned toy store in an attempt to set a precedent for shutting down any toy store in the country that has a multi-colored logo,” Lema Barazi, lead attorney representing TOYZ for Lloyd & Mousilli tells The Toy Book. “We must — and I am confident that we will — prevail against Toys ‘R’ Us in its malicious tactics of burying small businesses in protracted litigation based on frivolous and overreaching trademark claims.”

And the tactics being used by Tru Kids brands are under scrutiny by the court itself.

Judge Eskridge says in his order that “substantial question exists regarding whether Tru Kids has initiated this action primarily for the purpose of harassing or maliciously injuring a competitor, and whether it is using the law’s procedures only for legitimate purposes.”

Tru Kids Brands was ordered “to provide by Sept. 13, 2022, an iteration of all actions it has initiated against any defendant worldwide since acquiring its interest in the Toys ‘R’ Us brand in January 2019, wherein it has alleged claims, as here, of trademark and trade-dress infringement, trademark dilution, unfair competition, or unjust enrichment relating to Toys ‘R’ Us intellectual property,” Judge Eskridge declared.

Attorneys for Tru Kids Brands did file documents to meet the Sept. 13 deadline but they did so in a sealed filing. Ahead of the deadline, The Toy Book reached out to WHP Global/Tru Kids Brands on Sept. 12, but the company did not respond to a request for comment.

While the legal dance continues to play out in court, Toys “R” Us is continuing to open its new store-within-a-store concepts in every Macy’s store ahead of an Oct. 15 completion date. Both the Galleria in Houston and the Westfield Garden State Plaza in New Jersey have Macy’s stores that are set to include Toys “R” Us departments.

Although Toys & Beyond closed its store in New Jersey, the space is currently occupied by yet another toy store: CAMP.

Sep 1, 2022

Stock Photos vs Royalty Free Photos

Is this photo really free?

School children, college students, and professionals alike have all turned to the internet to find “just the right image” for a project or presentation at one time or another. With tens of thousands of options to choose from, it can be tempting to simply screenshot the one that stands out the most and be on our way…however as one of our recent clients discovered – that can have pretty stressful consequences.

Legitimate Claims

A recent client of Lloyd & Mousilli’s contacted our firm after receiving what at first, she thought was scam correspondence from a copyright enforcement company. The correspondence related to her use of a “stock” image as part of a senior project from her university days…it appeared the owner of the photography she captured from an internet search had hired an enforcement agency to make demand and collect for the unlicensed use of his work. After receiving multiple communications from them, she sought out our counsel for peace of mind that “this was really nothing to worry about.”

Unfortunately for her, after a review, we determined that these were valid infringement claims on behalf of the original photographer. The images had been taken from an internet search and were clearly marked as registered copyrights. Just because an image can be found, does not mean it should be reproduced, even for non-commercial use, such as a school project.

What is a stock photo?

Stock photos, while generally available on the internet, are still pay to use creative works. The fees are typically determined based on type and duration of the intended use. For example, you might wish to run an artist’s photo as the heading on a particular issue of your newsletter and that would come with a fixed cost. If you then decided you also wanted to use the image on your website, it would require another negotiation and payment. All use is considered different and must be contemplated for and agreed to avoid infringement allegations.

What is a royalty free photo?

Royalty free photos typically come from a specific database where a one-time price is paid, and the image is then yours to use however you would like for as long as you would like. When using a royalty free image, there is no residual cost if you decide to increase or vary the way you are utilizing the photo in your projects or presentations.

Exclusivity

The upside to using stock photography lies in the restrictions on their use. If you are planning a marketing campaign and wish to use a specific image – you can negotiate different rates to exclusive use of that image within your geographic area or industry. Before purchasing, you can often ask the agency who else is using the image and for what duration and purpose. This can help avoid duplicative branding, which can hurt the campaign due to confusion even if it’s lawful.

Understanding Photograph Ownership

Before clicking, screenshotting, editing, copying or in any way using a photograph on the internet it is a worthwhile endeavor to figure out who it belongs to. The internet and social media have made circulation and virality of creative work easier than ever before – but with that comes risk. Creators want to maintain control of the work and often may not seek enforcement until much later when potential infringement comes to their attention. This means that just because you may have escaped detection for now, doesn’t mean their may not be artists out their with legitimate claims against you, such as our recent client described above.

Intellectual Property as a Strategy

No matter which side of a copyright controversy you may find yourself, Lloyd & Mousilli prides itself in finding the best resolution possible. It is much easier to proactively make sound decisions such as verifying the owners of creative work before putting it into use or procuring the proper licenses to images.

Already accused of infringement?

If you have already received a cease and desist and demand for damages related to improper use of images– do not delay in reaching out to an intellectual property attorney. The potential damages continue to increase in connection with the length of improper use. In the event you have been wrongfully accused, you will need representation to defend the claims as well. As stated above, these are often legitimate claims and they will not go away on their own.

Sep 1, 2022

Apple, Dell Lawyer, Feras Mousilli Awarded Fulbright in Intellectual Property

Former Apple lawyer and Dell counsel, Feras Mousilli, was awarded a Fulbright award and grant to teach intellectual property and technology law as a visiting professor in Europe.

Sponsored by the U.S. Department of State, the Fulbright Program is considered one of the most prestigious and widely recognized scholarships in the world. The program was founded in 1946 by Senator J. William Fulbright to improve US intercultural relations through the exchange of persons, knowledge, and skills.

With his experience counseling technology companies in product development and IP law (patents, trademarks, copyrights, and trade secrets), Dr. Feras Mousilli has begun teaching intellectual property and technology commercialization courses at Taras Shevchenko National University of Kyiv, The National Technical University of Ukraine Igor Sikorsky Kyiv Polytechnic Institute (KPI), and the National University of Kyiv-Mohyla Academy as a member of the faculty of law. The courses will focus on developing intellectual property strategies for patents and trademarks, building patent portfolios, software licensing, and commercialization of inventions and business ideas.

How do technology patents work?

Additionally, Dr. Mousilli has signed a contract with KPI as a visiting professor with the objective of helping establish and optimize an intellectual property commercialization system – a process of taking patentable inventions (both digital and physical) from academic research labs into the marketplace for commercial use.

A review of the university patent disclosure system with a focus on the research and development in the engineering and science departments will lead to a more efficient capture of potential inventions. These courses are designed for university faculty and university administration. KPI Rector Michael Zgurovsky stated, “As the Distinguished Visiting Professor, Dr. Mousilli will draw upon his combined experience in both private law firm practice and in-house counsel to the biggest technology companies to illuminate matters across the spectrum of intellectual property.”

Where do patent lawyers work?

Dr. Mousilli has lectured internationally at law conferences, investor summits, and in corporate legal departments. Additionally, Dr. Mousilli served as a Guest Lecturer at the University of Texas School of Law, as well as the University of California, Berkeley School of Law. He had previously served as the Apple lawyer responsible for the original Apple Watch, as well as Supply Chain, and Made for iOS (MFI) ecosystems as Senior Counsel. Dr. Mousilli was also Global Software and Procurement counsel for Dell, overseeing legal for a $10B business internationally.

While serving the USA abroad on Fulbright, Dr. Mousilli will continue to manage the Lloyd & Mousilli law firm remotely and dedicate time to serving and developing clients internationally.

About Dr. Feras Mousilli

Feras Mousilli is the founder and managing partner of the Lloyd & Mousilli law firm. Dr. Mousilli served as Senior Corporate Counsel for both Apple and Dell, where he counseled clients on product development and intellectual property matters, including advertising & marketing, copyright, and trademark strategies and risks. Prior to serving as corporate counsel, Dr. Mousilli practiced with DLA Piper in the intellectual property group, specializing in patent litigation as a registered U.S. Patent Attorney. See one of the presentations conducted by Dr. Mousilli called “Intellectual Property Presentation By Dr. Mousilli in Ukraine”.

Dr. Mousilli served as on the board of the Association of Corporate Counsel and was President-Elect of the Austin Chapter. He currently holds the role of Chairman of the Board of Directors of the Arab Film and Media Institute. He is the proud recipient of the Judge Suzanne Covington Pro Bono Award from Volunteer Legal Services and served on boards of national civil rights organizations. He was named a Texas Rising Star among Texas Super Lawyers in Texas Monthly Magazine and one of the top patent attorneys in San Francisco.

Dr. Mousilli holds bachelor degrees in Biomedical Engineering and Computer Science, and a Masters in Computer Science Engineering from Johns Hopkins University. He earned his Juris Doctor from the University of Texas School of Law.

About Lloyd & Mousilli

Lloyd & Mousilli, PLLC is a boutique law firm specializing in intellectual property and technology law based out of San Francisco, California and Austin, Texas with lawyers in New York, Los Angeles, Dallas, and Houston. Lloyd & Mousilli helps entrepreneurs, startups, and other businesses create and grow their brand and services by utilizing IP to achieve business success.

About Igor Sikorsky Kyiv Polytechnic Institute

National Technical University of Ukraine “Igor Sikorsky Kyiv Polytechnic Institute” (KPI) was founded in 1898 and is the largest technical university in Ukraine and one of the leading universities in Europe and the world. About 25,000 students study at KPI, including foreign students. The University has 19 faculties, 9 educational and scientific institutes, several scientific and research institutes and educational centers.

About Taras Shevchenko National University of Kyiv

Known as KNU, the Taras Shevchenko National University of Kyiv was established in 1834 in the Ukrainian Capital of Kiev. It is the country’s third oldest university and was renamed in 1939 after Taras Shevchenko, a Ukrainian poet and political figure who is considered a founder of modern Ukrainian literature. The KNU university is located in the center of Kyiv around the Red University Building is the principal university building, and is recognized as a national symbol of Ukraine’s higher education system.

About National University of Kyiv-Mohyla Academy

The National University of Kyiv-Mohyla Academy is a national, coeducational research university located in Kyiv, Ukraine. The Kyiv-Mohyla Academy, the school’s predecessor, was established in 1615. The NaUKMA is also one of the smallest universities in Ukraine, with just under 4,000 students and offers 22 bachelor programs, 28 master programs, 15 Ph.D. programs, and eight experimental Ph.D. programs.

About Fulbright

The Fulbright Program is one of the most prestigious academic programs in the world. More than 60 Fulbright alumni have won Nobel Prizes; 86 have won Pulitzer Prizes. The program is administered by cooperating organizations such as the Institute of International Education and operates in over 160 countries around the world. The Bureau of Educational and Cultural Affairs of the U.S. Department of State sponsors the Fulbright Program and receives funding from the United States Congress via annual appropriation bills. Additional direct and in-kind support comes from partner governments, foundations, corporations, and host institutions both in and outside the U.S. In 49 countries, a bi-national Fulbright Commission administers and oversees the Fulbright Program. In countries that have an active program but no Fulbright Commission, the Public Affairs Section of the U.S. Embassy oversees the Fulbright Program.

Businesses, startups, and entrepreneurs looking to build a strong foundation for their IP strategy – including trademarks, patents & copyrights – and develop an intellectual property portfolio for their success, can schedule a free consultation with Lloyd & Mousilli, PLLC at lloydmousilli.com, or by calling +1 (512) 609-0059.

Sep 1, 2022

The Rusty Krab Press Release in Response to Viacom’s Lawsuit

HOUSTON, TX – PIXI Universal, LLC (“PIXI”) was recently informed by TMZ reporters that Viacom International Inc. (“Viacom”), owner of the SpongeBob SquarePants franchise (“SpongeBob”), filed a lawsuit against PIXI for operating the whimsical, pop-up restaurant known as The Rusty Krab in Houston, Texas.

“The Rusty Krab is a parody restaurant concept inspired by SpongeBob giving it a new comedic purpose within the context of a restaurant. While Intellectual property law is complex, it is not a “secret formula.” Per U.S. copyright and trademark law, parody squarely fits into the fair use doctrine, which provides for the legal, unlicensed use of copyrighted material,” said Feras Mousilli, managing partner of Lloyd & Mousilli, the law firm defending PIXI against Viacom’s allegations.

“We have extensive experience prosecuting and defending against intellectual property infringement claims. It’s our bread and butter, so to speak. As with all of our cases, we intend on advocating zealously for PIXI,” added Lloyd & Mousilli’s litigation partner, Lema Barazi, who will serve as the lead attorney representing PIXI in court.

Unfortunately, Viacom asserts rather porous claims that The Rusty Krab misleads consumers to believe the restaurant is affiliated with Viacom’s SpongeBob franchise.

“Ever since Pop-Ups by PIXI started, we have clearly stated that we have no affiliation with the brands we are parodying.  As with our prior well-known pop-ups, and with the Rusty Krab, potential customers are made aware prior to purchasing tickets that there is no affiliation to the brand itself,” said Sanju Chand, President of PIXI Universal, LLC.

The Rusty Krab is a place for fans of all ages to indulge in a paradoxical world reminiscent of SpongeBob SquarePants, as told through the eyes of PIXI.

All requests for comments may be directed to info@lloydmousilli.com.