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MAR
27
2 YEARS

Judge Denies Hasbro's Attempt to Stop 'Transformer Prime' Laptop

The New York Times once deemed Optimus Prime to be the "toughest robot in the nerd universe," but Hasbro, the rightsholder on the Transformers characters, isn't tough enough to push away a laptop that is allegedly infringing its trademark.

In January, Hasbro sued Asus Computer International on claims that its new "Transformer Prime" tablet computer threatened to "undermine the decades of time and millions of dollars" developing its franchise, which includes comic books, animated TV series and blockbuster feature films. On Friday, a California federal judge denied Hasbro's motion for a preliminary injunction.

In doing so, the judge noted that Hasbro's marks were strong, yet the company hadn't shown a likelihood that consumers would be confused between Hasbro and Asus’s products.

At the start of his 25-page decision, U.S. District Court Judge Philip Gutierrez has to figure out what kind of marks "Transformers" and "Transformers Prime" represent, which isn't an easy task considering that the word, "Transformers," is found in the dictionary and associated with entertainment characters around for decades. As such, Hasbro's trademark could be "suggestive," indirectly alluding to the quality of the brand, which would please Hasbro, or "descriptive," conveying the goods that are being marketed. The judge writes:

"While there may be more to the Transformers than meets the eye, a jury could conclude that the Transformers mark is but a straight-forward description of the figurines’ central and uniting characteristic, and therefore that when faced with robots that transform into vehicles and other machines, “an entirely unimaginative, literal-minded person would understand the significance of the [“Transformers”] reference.”

Ultimately, on this question, the judge doesn't think the distinction between suggestive or descriptive is as important as other factors. The judge is more impressed by the number of Transformers news mentions plus the fact that the Transformers generated over $2 billion in revenue for Hasbro between 2004 and 2010, and Hasbro had spent $250 million promoting, marketing and protecting its famous brand. Hasbro is given the edge.

But that doesn't settle the issue.

Judge Gutierrez next has to weigh the various factors determining whether Asus' product is likely to confuse consumers or dilute Hasbro's trademarks. Unfortunately for Hasbro, the judge doesn't believe that the two companies are in the same business or that their respective products compete for the same consumers.

Hasbro had tried to introduce all sorts of evidence that it is involved in licensing the "Transformers" mark in the computer business.  It talked about an LG smartphone with Transformers decals on the back, computer mouses with Tranformers insignia on them, laptop "skins," Transformers-themed USB storage devices, and even an "educational laptop," which the judge examines and finds to be a huge stretch to call it such.

In contrast, Asus' Eee Pad Tranformer Tablet gets a ringing endorsement by the judge:

"There is nothing gimmicky about the Eee Pad Transformer or the Eee Pad Transformer Prime, nor can it be said that there is any similarity in the use or function between Hasbro and Asus’s products.These differences also strongly suggest that the products are not sold to the same class of purchasers...the popularity of the Transformers intellectual property with young adults generally says nothing as to whether the class of consumers interested in buying Transformers-themed speaker heads and USB storage devices overlaps with those in the market for the upscale Eee Pad tablets."

The judge then runs through an analysis of the similarity of the marks, the respective uses of the marks on marketing and retail channels like Google, Office Depot or Amazon, and whether Asus had intent to confuse customers. On each of these issues, the judge finds that the merits of the allegations should go before a jury.

For example, Hasbro is alleging that Asus partnered with Paramount Pictures prior to the London premiere of a Transformers film and had a promotion that gave away a Transformers-themed Asus laptop.

Is this evidence that Asus knew what it was doing? Maybe, but possibly not.

Asus says that it believed it had the right to use "transformer" in the descriptive sense, which a judge says could lead a jury to letting the defendant off the hook for innocent intentions.

Ultimately, a jury will have to figure out whether the "Transformers" mark is a famous household name under threat by the appearance of a consumer tech device. And a jury will have to weigh Asus' ability to use a word found in the dictionary to descriptively label its high-end tablet/laptop hybrid computer.

But for now, weighing the harm in granting an injunction, Judge Gutierrez finds in Asus' favor. He notes that Hasbro knew about the laptop for a year before filing a lawsuit and accepts Asus' word that considerable hardship would result from a recall of goods already in circulation. In conclusion, the judge writes:

"Having waited until the purportedly infringing and diluting tablets had been on the market for almost a year, the Court sees no grounds for invoking the extraordinary and drastic remedy of preliminary relief that would reverse the status quo ante before the parties have had the opportunity to try the case on its merits."

The full decision, a must-read for those interested in trademark law, is on the next page.

UPDATE: The lawsuit was settled in March, 2013 on confidential terms.

E-mail: eriqgardner@yahoo.com

Twitter: @eriqgardner

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