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Upper Deck Settles With Konami

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The damages phase of a trial that pitted Upper Deck against its one-time partner was over almost before it began. How much it's costing the California card maker is a mystery.

A damages tril in the Konami Digital Entertainment v. Upper Deck case was scheduled to begin Tuesday, but after a jury was sworn in and opening statements given, the long-running dispute came to an abrupt end when the two companies settled privately for an undisclosed award.

Last month, United States District Judge Valerie Baker Fairbank ruled that Upper Deck counterfeited over 600,000 cards from the Yu-Gi-Oh! trading card game, and was liable to the Japanese company for damages.

Yu-Gi-Oh! is based on a Japanese animation show. Upper Deck and one of its subsidiaries had been a distributor for the product.

In depositions filed with the court last year, Upper Deck admitting it had ordered the printing of the cards, which the court ruled violated trademark, copyright and unfair competition laws.

The bogus cards were printed in China during 2007 and imported to the U.S. without KDE's knowledge or authorization.

Discovery in the lawsuit revealed that Upper Deck employees, including its Chairman, Richard McWilliam, participated in a 2008 meeting in McWilliam's office, where they discussed that the cards made without authorization by Upper Deck "did not look authentic enough". Samples of the counterfeit cards were then shredded according to testimony from Upper Deck executive Stephanie Mascott.

The jury seated for the damages trial, consisting of four men and four women, could have been in for a two-week stay but were excused once attorneys for both sides declared their truce about mid-afternoon Tuesday.

The terms of the settlement are confidential. Konami had indicated it would ask the jury for "hundreds of millions of dollars" in damages. Upper Deck's first payment to Konami is due Friday. Its last is due March 31.

Upper Deck also agreed to a permanent injunction barring it from distributing the Yu-Gi-Oh! Trading Card Game.

"We are pleased that it's over," Benjamin J. Fox, a partner at Morrison & Foerster in Los Angeles, who represented Konami, outside Fairbank's courtroom. Konami had asked for at least $50 million and up to $150 million in damages.

"Upper Deck is extremely pleased with the cooperative resolution with Konami," Richard K. Howell, an attorney with Rutan & Tucker in Costa Mesa, told the Los Angeles Daily Journal.

KDE announced in mid-December 2008 that it would assume responsibility for the distribution of Yu-Gi-Oh! in territories outside of Asia, a decision the company says was due to Upper Deck's involvement in printing the unauthentic cards.

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  1. […] that time was the loss of their MLB license along with a cash settlement to MLB early in 2010 and settling a lawsuit with Konami Entertainment over its creation of non-approved Yu-Gi-Oh! trading cards.  Upper Deck agreed to pay Konami an […]

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