Back in November 2014, Crayola filed suit against Alex Toys in federal court in Missouri alleging claims for counterfeiting, trademark dilution and infringement, and unfair competition under federal and Missouri state law. You can read Crayola's complaint here, which has such fun facts as the following:
- "The CRAYOLA mark has been used since at least as early as June 31, 1905[.]"
- "The CRAYOLA mark was coined by Alice Binney, the wife of company co-founder Edwin Binney, from 'craie,' the French word for chalk, and 'ola,' from 'oleaginous,' meaning oily."
- "To this date, Crayola has sold over 200 billion crayons bearing the CRAYOLA mark and Crayola continues to produce nearly 3 billion Crayola crayons each year."
- "The extraordinary popularity associated with Crayola brand products and the CRAYOLA mark is forever enshrined at the Smithsonian Institution where a permanent display featuring many Crayola brand products has been constructed."
The less fun facts relevant to the district court's decision to be discussed are that the Crayola Plaintiffs are Delaware entities with their principal place of business in Pennsylvania; their parent company (Hallmark Cards, Inc.) is headquartered in Missouri; and Defendant Alex Toys is a New Jersey company with its principal place of business in that state.
Alex Toys filed a motion to dismiss Crayola's complaint for improper venue or, alternatively, to transfer the case to the District of New Jersey. Notwithstanding the general (often considerable) deference afforded a plaintiff's choice of forum, the district court concluded that overall, the facts favored transferring the case to New Jersey.
The fact that the Crayola Plaintiffs were not Missouri residents decreased the amount of deference afforded their choice of forum. And the nature of the claims--infringing/diluting use of Crayola's mark--also supported a New Jersey forum, the court concluded, as the allegedly offending packaging was designed and developed in New Jersey, where Alex Toys is headquartered.
The fact that Hallmark, Crayola's parent company, is headquartered in Missouri did not tip the balance back in favor of a Missouri forum. The court specifically noted that the case turned upon use of the CRAYOLA mark and Crayola, not Hallmark, is the registrant of the mark.
Thus, the court concluded that these and other facts and considerations favored transferring the case to the District of New Jersey. The court did not address the substance of Alex Toys' alternative motion to dismiss, denying it as moot based on its decision on the motion to transfer.
Apparently, at the time the Missouri court granted Alex Toys' motion to transfer the case, Crayola's motion for a preliminary injunction had been fully briefed and was pending. That motion will now be decided by the District of New Jersey.
The case cite is Crayola Properties, Inc. v. Alex Toys LLC, Civil No. 4:14-cv-00992-BCW (W.D. Mo. Jan. 7, 2015). The case has been assigned case no. 2:15-cv-00278-WHW-CLW by its new home, the United States District Court for the District of New Jersey.