Universal Sued for "Secretly" Distributing Children's Film Overseas

Universal Pictures

The front view of the Universal lot's main administration building after its completion in 1915. Irving Thalberg was 20 when he became president of production in 1919.

Universal Pictures is now being taken to court by the chirping toy makers of ZhuZhu Pets.

Cepia LLC designed the line of motorized animals, and to further capitalize on the "zhu-niverse" craze, spent $4 million to make a children's film, Quest for Zhu, and an additional $4.3 million for a sequel, Amazing Adventures of Zhu. In 2011, the company selected Universal to market and distribute the films internationally.

According to a complaint filed in Missouri federal court on July 31, Cepia was impressed by Universal's marketing plan for the first film, but found the plan for Amazing Adventures to have errors and without explanation for projected sales figures.

Cepia says it authorized Universal to proceed with distribution in certain territories on the condition that an acceptable marketing plan was submitted.

"Late in 2012, Cepia began hearing rumors related to the unauthorized distribution of the second Movie, Amazing Adventures of Zhu," it says. "Through its own investigation, Cepia learned that Universal International had distributed the Amazing Adventures of Zhu to at least two television broadcasters without Cepia's knowledge or approval."

Cepia adds that the "unilateral actions were especially harmful" because the television airings in Brazil and France "destroyed the potential DVD/Blu-Ray market" and further, "led to its availability on the Internet for free download."

The plaintiff is also upset that it has not been provided with a timely accounting of revenues. It's estimated that $728,679 is owed.

Cepia is suing for conversion as well as breaches of the distribution agreement and good faith and fair dealing. The plaintiff represented by Scott Eidson is asking for an injunction and unspecified monetary damages. Here's the complaint.

Universal hasn't responded to a request for comment.