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Hello Kitty
Hall Of Shame Member
Added May 22, 2007

Last Updated November 28, 2009

We have located two federal courts cases concerning the use of fabric to make items to sell:

In Precious Moments vs La Infantil, 1997, the federal court invoked the first sale doctrine in denying Precious Moments attempts to block the use of its licensed fabrics to make bedding for sale. The 1st Circuit Court said making a fabric item from fabric lacked any originality so it was not copyright infringement. Since then, M&M/Mars, Disney Enterprises, Major League Baseball, United Media (Peanuts fabric), Sanrio (Hello Kitty fabrics), and Debbie Mumm, have been sued when these companies tried to block the eBay sales of items hand-crafted from their licensed fabrics. Every one of them settled rather than risk losing the issue in court.

In Scarves By Vera, Inc. v. American Handbags, Inc, 188 F. Supp. 255 - US: Dist. Court, SD New York 1960, American Handbags was using towels manufactured by Vera to make handbags for sale. On some of these handbags made with plaintiff's towels there could be seen, at the bottom, the name Vera coupled with the figure of a Scarab or Ladybug, all three of which were registered trademarks of Vera. The judge rejected Vera's copyright claims.

It should be noted that in both cases the judges required the defendants to provide disclaimers attached to the items because the items were being sold in stores. The disclaimers were to plainly disavow any relationship between the manufacturer of the item and the trademark owner. This was done so "an ordinary, intelligent purchaser" would not be misled that there was any connection. When selling on-line, a prominent, highly visible and well-placed disclaimer, such as our recommended Tabberone Disclaimer, would likely serve the same purpose and legal need as the disclaimers required by the courts. Precious Moments disclaimer court quotation and Scarves By Vera disclaimer court quotation.

Why is the little kitty so happy? It can't be because Sanrio encountered Tabberone. Another faltering step by an ego-centric VeRO member who didn't believe licensed fabric could be made into an item and then sold. It's amazing how many companies actually believe that self-serving lie and continue to terminate perfectly legal eBay auctions only to back off quickly when sued. Sanrio is a really good example of that.

Tabberone had listed an auction of a fleece blanket made from licensed Hello Kitty fabric. This was a licensed fleece panel and the ONLY thing done to it was to serge the edges of the fleece panel. On January 28, 2004, eBay, in it's infinite wisdom and superior knowledge, terminated the auction at the demand of Sanrio who claimed the auction violated Sanrio's copyright, trademark, or other rights.

A flurry of emails followed between Tabberone and Sanrio. Becky Hui, the Sanrio contact person appeared clueless. When asked why was the auction terminated, Becky Hui replied, "Can you send me a photo of the item you had listed so I can see why it was removed?" Huh? Becky, don't you keep track of what you are doing? Don't you keep files? If not, why the hell not? Someone could sue Sanrio for what you did! And someone did! Tabberone!

On February 2, 2004, Randy Patterson (remember this name because it will come up again) bluntly responded that "Auctions are terminated when the products being sold are unauthorized or counterfeit." Randy, were you playing in the kitty litter again? The fabric wasn't counterfeit and Tabberone was not violating the Lanham Act (the "unauthorized" part). Tabberone wasn't doing anything wrong. Randy did a lengthy song-and-dance routine defending their actions while admitting he had no clue as to why the auction was ended because his staff did not maintain records of what they had done. Very professional there, Randy. A lot of loose cannons rolling around on the deck of the USS Sanrio.

So, unable to resolve the issues with the dimwits who were running the Sanbrio offices, Tabberone filed a federal lawsuit against Sanrio on February 12, 2004, a mere fifteen days after the auction was terminated.

Guess what? The first word out of the mouths of Sanrio, and Randy Patterson (we told you to remember his name), was SETTLEMENT, which became effective May 3, 2004. From start to finish, a tad over three months. Now don't you suppose that a large, multi-national company like Sanrio, with really deep pockets, would embrace the chance to litigate the "issues" in federal court and let the sewing world know that licensed fabric could not be used for commercial purposes as stated on the selvage?

"Intended solely for non-commercial use" is written on the selvage of Hello Kitty fabric. Some sewing groups wrongly promote the notion that a fabric manufacturer can set limitations on the use of their fabric. Tabberone, representing herself, has been in federal court with M&M/Mars, Disney Enterprises, Major League baseball, United Media (Peanuts fabric), Sanrio, and others, over the commercial use of their licensed fabrics, and EVERY ONE of them has chosen to settle rather than become the losing side.

These VeRO bullies are brave until confronted with a federal lawsuit.

UPDATE - April 18, 2009 - It appears that Sanrio is still lying about their rights under trademark law and copyright law. The web site Etsy has been under attack by Sanrio because crafters there are (and/or were) selling items made from Sanrio fabrics and Sanrio again perjured itself telling Etsy to stop the sales. There are several blogs on Etsy that talk about this.

Etsy, like eBay, is protecting itself under the safe harbor provisions of the DMCA. But, unlike the cowardly eBay, Etsy appears to allow all takedowns to be challenged. However, like the cowardly eBay, Etsy appears to not require a specific statement of infringement that can be verified by their staff lawyer, Susan Feingold. Their is no legal liability to Etsy, or any other provider, if there is no infringement. Sanrio is lying about the infringement if the claim involves the use of licensed fabrics.




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