CASE IN POINT

Counterfeiting is never child’s play even when it involves a kid’s game. We represented Konami Digital Entertainment in a trademark counterfeiting and copyright infringement case against The Upper Deck Company, a well-known distributor of trading cards and sports memorabilia. Konami hired Upper Deck as its exclusive distributor of Yu-Gi-Oh! TCG in North America based on Upper Deck’s reputation for guaranteeing the authenticity of the products it distributes. Konami’s trading card game is based on a popular Japanese comic series and has sold more than 22 billion cards worldwide. It came as a shock to the industry when we discovered that Upper Deck was distributing counterfeit copies of the most sought- after cards from Konami’s game at the same time it claimed to be acting as Konami’s agent and distributor.

Upper Deck responded by vigorously denying any involvement in counterfeiting: It issued press releases and filed lawsuits in courts in the United States and Europe claiming that any suggestion it was involved in counterfeiting was “absurd,” and it filed a litany of counterclaims against Konami, including for slander. According to Los Angeles based Wendy Ray, lead associate on the matter, “The case began to crack when we subpoenaed the shipping company whose labels were on the boxes of counterfeit cards that we seized. At the time, we did not know whether the boxes were the ones used to ship the cards, and the subpoena was a long shot. The documents that were produced showed that the boxes were shipped from a printer in China. With the help of investigators in China, we got from the printer a key Upper Deck email, identifying a company called InnerWorkings. We subpoenaed InnerWorkings and hit the jackpot; they produced numerous email communications with Upper Deck about a suspicious project to print 9 playing cards, code-named Wiz Kids.” Wendy took the Inner Workings depositions at which the witnesses confirmed that Upper Deck had commissioned Inner Workings to get 9 of the rarest Yu-Gi-Oh! Cards counterfeited in China.

Through tenacious discovery efforts, we uncovered a secret project at Upper Deck to manufacture in China and import without Konami’s authorization counterfeit rare cards from the Yu-Gi-Oh! TCG. Five long-time employees of Upper Deck then pleaded the Fifth Amendment in deposition.

Upper Deck fought back aggressively by bringing a laundry list of contractual counterclaims against Konami. Wendy argued the summary judgment on the counterclaims. The Court granted our client’s motions for summary judgment as to Upper Deck’s counterclaims and as to liability, found that Upper Deck had counterfeited hundreds of thousands of rare cards from the Yu-Gi-Oh! TCG. Wendy noted, “These rulings were tremendous victories for our client. They allowed us to go to trial and focus on Upper Deck’s wrongdoing only, without having to defend against Upper Deck’s spurious claims against Konami.”

On the eve of trial, Upper Deck stipulated to a finding that its counterfeiting was done willfully. In January 2010―more than one year after Upper Deck had declared that Konami’s allegations were “baseless” and absurd―the parties delivered their opening statements to a federal jury in Los Angeles. Faced with the record developed by our team, Upper Deck’s counsel told the jury that “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’m not going to defend. I’m here representing a counterfeiter. And now I have to deal with that issue.” The case settled after opening statements.

Shortly after the settlement, the Court entered a permanent injunction against Upper Deck, prohibiting it from engaging in further counterfeiting or holding itself out as an authorized distributor of Yu-Gi-Oh! TCG.

John Metzidis was assigned to the case shortly after he joined the firm. As a first year associate, he took several depositions, including those of some of Upper Deck’s witnesses who took the Fifth. He also played a big role in researching and drafting the summary judgment papers and preparing the case for trial.

Commenting on her experience in this case, Wendy said, “In my experience, partners at the firm are very willing to provide hands-on experience to associates who want to strengthen their litigation skills. The partners on this case, Anthony Press and Ben Fox , gave me countless opportunities to handle all aspects of the case, including arguing motions, dealing with opposing counsel, communicating with our client, preparing and deposing witnesses, and working with our expert.”