Japanese company says having to take its one-time partner to court over a rogue move to print cards in China “came as a huge shock”.
Konami Digital Entertainment, which settled its long-running trademark infringement case against Upper Deck Company last week, took some shots at the California card maker Wednesday.
United States District Judge Valerie Baker Fairbank ruled in December that Upper Deck violated trademark, copyright and unfair competition laws by counterfeiting Yu-Gi-Oh! TCG cards through a printer in China. The two companies settled Konami’s multi-million dollar claim last week, keeping the financial details confidential just as the damages phase of the trial began.
After Upper Deck issued a press release claiming victory despite a judge’s ruling that the company was liable for damages, the Japanese company used comments from Upper Deck’s own attorney during the case to state its objection.
The Konami release quoted Upper Deck attorney Richard Howell, of Rutan & Tucker’s opening statement during the case: “At this point, Upper Deck doesn’t have a lot of Life Points. We’re talking about behavior that, from a defense attorney’s standpoint, I can’t defend and I am not going to defend,” Howell was quoted as saying. “I’m here defending a counterfeiter. And now I have to deal with that issue.”
While Upper Deck claimed Konami was the one who backed off, leading to the settlement, KDE said it was “extremely pleased with the successful resolution of our case against Upper Deck.”
Upper Deck claimed last week that “rulings by the court sent Konami and its attorneys into retreat as Konami’s case was disintegrating. These events, and these events alone, provided the framework for the case to be resolved after opening statements were presented to the jury.”
Konami apparently saw the statements from its one-time business partner and felt the need to respond.
“This entire situation came as a huge shock to us,” said KDE’s Vice President of Card Business Yumi Hoashi. “As a company that has based their entire business model on producing authentic entertainment and sports licensed products, Upper Deck went against their very core beliefs by counterfeiting Yu-Gi-Oh! TCG Cards. It was very disheartening to learn that a trusted business partner would take these actions to dupe us and the Yu-Gi-Oh! TCG community.”
The litigation began in October 2008, when KDE discovered that counterfeit cards from the Yu-Gi-Oh! TCG were being sold in Toys “R” Us stores by a sub-distributor for Upper Deck. KDE filed suit, and the sub-distributor told KDE that the counterfeit cards were supplied by Upper Deck.
“As a leading company in this card industry, Upper Deck should have known more than well that counterfeit activities would irreparably harm the trust of Duelists and the integrity of the Yu-Gi-Oh! brand,” said KDE’s Hoashi.
In its release, Konami sought to paint Upper Deck as the unquestioned villian in the case.
“Discovery in the lawsuit revealed that Upper Deck had counterfeited Yu-Gi-Oh! TCG cards, and that it took extensive steps to cover-up that activity. The cover-up included a meeting in the office of Upper Deck’s chairman, in which he and at least one other Upper Deck employee compared samples of authentic Yu-Gi-Oh! TCG cards against fakes made by Upper Deck, and shredded the samples in the chairman’s office, as well as an e-mail from an employee of Upper Deck to other employees asking to provide her information on how to obtain Yu-Gi-Oh! TCG security foils “in secrecy.”
Following almost one full year of court proceedings, Upper Deck finally admitted to having printed in China and importing to the U.S. hundreds of thousands of bogus Yu-Gi-Oh! TCG cards. Mr. Howell of Rutan & Tucker noted in the opening statement to the jury: “The behavior is still undeniably wrong. And I am in here, as counsel for the two defendants, asking you to hold my clients accountable for that behavior; asking you to hold my clients responsible for this conduct that there is no dispute, and there was no disputing even before this case started today, that it was wrong.”
KDE announced in mid-December 2008 that it would assume responsibility for the distribution of its Yu-Gi-Oh! TCG in territories outside of Asia because of Upper Deck’s involvement in printing and distributing the counterfeit Yu-Gi-Oh! cards.
Upper Deck was scheduled to make the first of three payments to Konami last week.