MATTEL, INC. v. UNICORN ELEMENT

Background

Mattel sued entities and individuals associated with Unicorn Element, a PayPal merchant, an email address, Zita Element, Ecore Fun, EMMS Trading GmbH, Zhijian Li, Yang Liuhui, and Huang Qiong. Mattel alleged that the defendants infringed its registered Barbie trademark and copyrighted works connected to Barbie dolls, including an illustration from its “Barbie A Fashion Fairytale Fall 2010 Entertainment Style Guide.”

Mattel moved for prejudgment attachment under Rule 64 of the Federal Rules of Civil Procedure. This remedy allows property to be secured before judgment to help satisfy a potential money award. The court had previously entered a temporary order restraining defendants from removing funds from certain Amazon and PayPal accounts. The defendants opposed the attachment and argued that their uses of Mattel’s intellectual property were fair use.

Legal standard

Under Rule 64 and New York law, a court may order attachment when the plaintiff seeks a money judgment and specified statutory requirements are met. The plaintiff must show that it has a legally valid claim, is more likely than not to succeed on the merits, and seeks more than the amount of any known counterclaims. The court also has discretion to deny attachment if it is unnecessary to secure a potential judgment.

The parties agreed that several requirements were satisfied: Mattel had a legally valid cause of action, the defendants were not New York residents, the defendants had no counterclaim, and attachment was needed to secure a potential judgment. The disputed issue was whether Mattel showed a sufficient likelihood of success.

Trademark claims

The court concluded that Mattel was likely to succeed on its trademark claims. It was undisputed for purposes of the motion that Mattel owned a valid protected mark and that the defendants’ conduct could cause confusion. The defendants instead relied on fair use, which requires showing that the term was used other than as a trademark, descriptively, and in good faith.

The court was not persuaded that the defendants used “Barbie” descriptively. It found that the defendants appeared to use the term to attract consumers to their online listings rather than merely to describe the size of the dolls their products fit. The court also noted that the listings used phrases such as “5 Sets Barbie Clothes,” which could communicate that the products were Barbie-branded rather than simply compatible with a particular doll size.

The court further found that the defendants had not shown good faith. Their use of “Barbie Clothes” could lead reasonable consumers to believe that Mattel made or sponsored the products, and the listings did not clearly state that the defendants were unaffiliated with Mattel. Although a jury might ultimately accept the fair-use defense, the court found the defense insufficiently compelling at this preliminary stage.

Copyright claims

The court also concluded that Mattel was likely to succeed on its copyright claims. The parties did not dispute that the defendants used Mattel’s copyrighted Barbie Illustration on product packaging or that the use implicated rights protected by the Copyright Act. The defendants argued that the use was fair because it was transformative and limited.

The court considered the four statutory fair-use factors. First, the use was commercial and appeared intended to sell doll-related merchandise, so this factor weighed against fair use. Second, the defendants offered no substantial argument that the illustration deserved less copyright protection, so this factor also weighed against fair use. Third, although the defendants copied only a small portion of the Style Guide and used only a small part of it on their packaging, they copied the illustration’s face, which the court viewed as its most important and identifying part. This factor therefore also weighed against fair use.

Fourth, the court found likely market harm. It reasoned that allowing manufacturers to copy Mattel’s artwork without a license or apparent justification could impair Mattel’s ability to protect or license the artwork and could encourage increasingly extensive copying. Although the specific use was unlikely to replace the Style Guide entirely, the court found that it could reduce the value of Mattel’s potential uses of the illustration. Because all four factors weighed against fair use, the court found the defense unpersuasive for purposes of the motion.

Disposition

The court GRANTED Mattel’s motion for prejudgment attachment under Rule 64 as to Unicorn Element, the PayPal Merchant, the entity using the specified email address, Zita Element, Ecore Fun, EMMS Trading GmbH, Zhijian Li, Yang Liuhui, and Huang Qiong. The opinion did not enter a final judgment on the trademark or copyright claims; it granted the preliminary asset-security remedy based on Mattel’s likelihood of success and the other attachment requirements.