Aurora World vs. Ty Inc. Lawsuit

When Beanie Boos shipped to retailers in the USA in November 2009, two of the Boos previously available in the United Kingdom, Bubblegum and Cleo had been removed from US retailer order forms. Ty withheld these two Boos from US markets in response to a lawsuit filed in federal court by Aurora World, Inc.*

*Note - Aurora World, Inc., announced in a news release on December 1, 2009, it had filed a lawsuit in federal court against Ty, Inc., for copyright infringement and four other violations in regards to Aurora's plush line, YooHoo & Friends. The lawsuit also alleged claims against Ty based on violations of the Lanham Act and California Business and Professions Code, as well as common law misappropriation and unfair competition.

February 9, 2010 update - Aurora World, Inc., announced that Ty, Inc., agreed to stop offering Bubblegum and Cleo for sale at retail in the United States. Ty stated it had never sold and would not sell Bubblegum and Cleo in the US, and would also remove images of Bubblegum and Cleo from all displays and point of purchase (POP) materials in the USA. As for the remaining products in Ty’s Beanie Boos line, the judge ruled that the fate of these products and allegations would be determined at trial. The trial date was originally set for January 18, 2011, but subsequently postponed until May 3, 2011.

On March 15, 2011, it was reported that Judge Margaret M. Morrow of the U.S. District Court for the Central District of California had dismissed all except two of Aurora's claims against Ty. The two issues remaining from the original lawsuit were the copyright infringement charges related to Ty's Bubblegum and Cleo Boos.

Ty also countersued Aurora for Aurora's press release and an article that appeared in a trade magazine about an earlier decision by Judge Morrow not to issue a preliminary injunction against Ty in this case. Judge Morrow had determined that Aurora was not likely to succeed on the merits of the case.

Ty alleged the Aurora press release following that decision implied Ty was guilty of wrongdoing. Ty's countersuit accused Aurora of false advertising, defamation, trade libel and unfair competition. Aurora requested the copyright infringement and Ty counterclaims be divided into two trials. Judge Morrow denied Aurora's request.

FINAL OUTCOME

On December 21, 2011, Aurora World announced:

"The parties have reached an amicable settlement of their dispute and the Court has entered a consent decree in the action."

According to the text of that decree, Ty is permanently enjoined from distributing, selling and/or offering to sell its Cleo and Bubblegum Beanie Boos in the United States. Further, Aurora is permanently enjoined in the United States from making "any false or misleading statements of fact concerning Ty, Ty's Beanie Boo plush toys, the Litigation, the facts underlying the Litigation, and the final resolution and settlement of this lawsuit."

Both parties denied liability for all claims against them. Aurora's complaint (and Ty's counterclaims filed in March 2010) were dismissed with prejudice and each party was held responsible to pay its own fees and costs. Both parties agreed not to appeal.