Los Angeles, CA – In Wham-O’s trademark and trade dress trial in October of 2007, a jury awarded Wham-O six-million-dollars in damages for willful trademark infringement of its registered trademarks, willful trademark dilution, and willful false advertising in connection with Toyquest’s use of the yellow color of Wham-O’s Slip-n-Slide toys, which color functions as a trademark. Toyquest is a dba of SLB Toys USA. The Court also entered a permanent injunction against the infringers and ordered that the infringer, including its officers, agents, servants and employees, forever refrain “from using the color yellow on the sliding surface of water slide toys, or packaging or advertising depicting the same, or any mark similar thereto or likely to cause confusion therewith.” The Court, however, denied WhamO’s request to order destruction of infringing articles and denied Wham-O’s request to order compliance reporting by the infringers.
In a newly filed trademark infringement, trademark dilution, false advertising, unfair competition (17200), contributory infringement, contributory trademark dilution, and judgment debtor’s interest (Cal. Civ. Proc. Code § 708.210) lawsuit, Wham-O alleges that SLB Toys initiated an elaborate scheme designed to evade judgment and deprive Wham-O of its monetary award through an assignment for benefit of creditors. Wham-O alleges that the individual defendants, who were officers of the defendant SLB Toys, have “flagrantly disregarded the terms of this Court’s injunction by continuing to sell and distribute to retailers unauthorized slides bearing” the yellow waterslide trademark and to advertise the same. Wham-O asserts that SLB Toys was merely an undercapitalized shell corporation that failed to follow corporate formalities and the individual officers and other companies which are owned by the officers are SLB Toys’ alter egos.
Through the creditor’s suit against Wal-Mart, Target, TRU, and Kmart, Wham-O attempts to recover from the retailers several million dollars in funds that are payable to the true judgment debtor, Manley Toys – which was allegedly set up by the same individual defendants that were officers in SLB Toys. The case is titled: WHAM-O, Inc. v. Manley Toys, LTD., CV08-01281 PSG (C.D. California).
PRACTICE NOTE: Officers of corporations or LLCs that authorize and direct infringing activities can be held personally liable. Committee for Idaho’s High Desert, Inc. v. Yost, 92 f.3d 814, 823 (9th Cir. 1996).