Upper Deck/Konami Legal Updates | The Irish Duelist

Upper Deck/Konami Legal Updates


Sources: Milord & Associates PC Scribd.com The New York Post

Court Rules That Upper Deck Sold Counterfeit Yu Gi Oh! Cards

Los Angeles, CA –
Yu Gi Oh! owner Konami sued Upper Deck, its former distributor, for selling counterfeit trading cards. (Details here) After hearing both parties’ motions for summary judgment, the Court found that Konami had “presented evidence to establish every element of liability [for] counterfeit activity and violation of federal unfair competition law, pursuant to the Lanham Act, on the part of the [Upper Deck] Defendants.” (Order available here) The Court also found that Upper Deck was liable for common law trademark infringement and California unfair competition under Business & Professions Code § 17200. On the copyright infringement claim, the Court partially found that Upper Deck infringed the “Reverse Art” copyright, which refers to the text that appears on the back of the trading cards. The statement of undisputed facts is available here.

In another order, available here, the Court ruled in Konami’s favor because the “reproduction and/or manufacture of unauthentic cards does not fall within the ‘Approval’ clause of the 2006 Letter of Intent.” Conversely, the Court denied Upper Deck’s motion to limit its liability. In yet more bad news for Upper Deck, in another order that’s available here, the Court found for Konami on Upper Deck’s counterclaims for breach of contract and slander per se.

The case is scheduled for trial on January 26, 2010. The case is Konami Digital Entertainment, Inc. v. Vintage Sports Cards, Inc. et al., CV08-06630 VBF (C.D. Cal. 2008)

Jan 06 2010Yu Gi Oh!Article

Hitting the 'deck'
Suit puts big crease in baseball card maker

A major maker of baseball cards is being accused of playing dirty.

Upper Deck could be facing hundred of millions of dollars in damages, as a result of a little-noticed California lawsuit that threatens to cripple the company.

Japanese entertainment company Konami Entertainment sued Upper Deck for copyright infringement, breach of contract and trademark counterfeiting, alleging Upper Deck illegally reproduced more than 600,000 of Konami's popular Yu-Gi-Oh! cards.

After more than a year of trading motions, a judge is set to rule on damages to be awarded to Konami on Jan. 26.

Senior execs from Carlsbad, Calif.-based Upper Deck did not dispute accusations that the Yu-Gi-Oh! cards, which are based on a Japanese animation show, were counterfeit. Instead, five Upper Deck execs involved in the alleged fakes -- including Chief Executive Richard McWilliams -- have resisted being deposed, citing their Fifth Amendment privilege against self-incrimination.

Under court order, however, one exec, Stephanie Mascott, provided e-mails and other damning testimony that claimed, among other things, that she witnessed McWilliams shredding the fake cards in his office, according to court filings. The filings added that she said McWilliams instructed one distributor to "remember that you do not know where you got the card from, OK?"

In criminal cases, the court is not allowed to draw any inference from a defendant's refusal to speak. But in civil suits, that's not the case.

Speaking of McWilliams, for instance, a court order in November noted: "In the face of allegations that he shredded cards in a meeting, instructed an employee or a third party to forget where the counterfeit cards came from, and made plans for future counterfeiting, he has said nothing. The court infers from McWilliams' silence that those allegations are true."

Calls to Upper Deck and its law firm, Rutan & Tucker, were not returned.

Legal sources suggested the execs took the Fifth to avoid exposing themselves to potential criminal charges, like mail fraud or wire fraud, stemming from testimony uncovered in the civil case.

Upper Deck, which has expanded its business into memorabilia like autographs, still generates the bulk of its revenue through trading cards.

It had a distribution deal with Konami going back to 2002, but allegedly began making and selling fake cards outside of the deal.

Ben Fox, Konami's lawyer at Morrison & Foerster, said his client was looking for "hundreds of millions of dollars" in damages.

"This could be the end of Upper Deck," said Joshua Leland Evans, chairman of memorabilia shop Leland's Auction House in Bohemia, NY. "I'm not sure they can survive this. We are hearing big rumors of financial trouble at Upper Deck. It could only be a matter of time before they go out of business."