U.S. Supreme Court Revives Toy Inventor’s Trademark Lawsuit over Disney ‘Toy Story 3’ Character

U.S. Supreme Court Revives Toy Inventor’s Trademark Lawsuit over Disney ‘Toy Story 3’ Character

According to a New Jersey toy maker’s lawsuit, Disney infringed on her trademark rights when it used the character Lots-o'-Huggin' Bear in the popular acclaimed 2010 movie ‘Toy Story 3.’ The U.S. Supreme Court has decided that Disney must defend itself in Court.

The justices dismissed the Lower Court’s ruling that Disney was protected against the lawsuit from Randice-Lisa Altschul’s Diece-Lisa Industries by the U.S. Constitution’s First Amendment protections for freedom of speech.

The High Court had asked the Ninth U.S. Circuit Court of Appeals to reconsider Diece-Lisa’s case in light of a recent ruling addressing the intersection of trademark law and free speech in its 8 June ruling for Jack Daniel’s in a dispute over a dog chew toy fashioned to resemble the company’s distinctive whiskey bottles.

In 1994 Altschul had designed a stuffed animal with sleeves that could simulate an animal’s hug, and her company Diece-Lisa Industries owns intellectual property rights for a wearable Lots of Hugs bear.

Diece-Lisa sued Disney in 2012, arguing that Lots-o’-Huggin’ Bear and Disney’s toys based on the character closely resembled Lots of Hugs and infringed its trademark in the ‘Lots of Hugs’ name.

Lots-o’-Huggin’ Bear, nicknamed Lotso, is an antagonist in the movie Toy Story 3, which has previously won the Academy Award for best animated feature film and drew more than a billion dollars at the box office worldwide.

In 2021 Los Angeles-based U.S. District Judge Terry Hatter ruled for Disney in the light of First Amendment protections.

Subsequently, the San Francisco-based Ninth U.S. Circuit Court of Appeals in 2022 affirmed Hatter’s decision.

A legal doctrine known as the ‘Rogers Test’ has permitted artists to lawfully use trademarks without permission when the use has artistic relevance to their work and would not explicitly mislead consumers, however, in October, Altschul’s company argued before the Supreme Court that Disney should not have been protected under this rule.

Diece-Lisa claimed that the Ninth Circuit’s ruling ‘radically expanded’ the test beyond its original intent to protect ‘culturally significant’ marks and titles of artistic works.

Diece-Lisa was represented by William Delgado of DTO Law, whereas Robert Klieger of Hueston Hennigan appeared on behalf of Disney.