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Ty, Inc. v. Jones Group Inc.

United States Court of Appeals for the Seventh Circuit

December 4, 2000, Argued ; January 23, 2001, Decided

No. 00-2746

Opinion

 [***1618]   [*894]  Flaum, Chief Judge. The Jones Group, Inc. ("Jones") manufactures and sells "Beanie Racers," which are plush toys shaped like race cars. Ty, which sells plush toys under the name "Beanie Babies," obtained a preliminary injunction against Jones, forcing it to stop producing and selling Beanie Racers. Jones asks us to reverse the magistrate  [*895]  judge's grant of a preliminary injunction in favor of Ty on several grounds. For the reasons stated herein, we affirm.

I. Background

Ty in 1993 began selling plush toys throughout the United States under the name "Beanie Babies" and has sold over a billion Beanie Babies since the product's inception. Dozens of newspaper and magazine articles, television news stories, web sites, books, and magazines have emerged concerning Ty's Beanie Babies, apparently making the product a national sales phenomenon. Ty has obtained U.S. Federal Trademark Registrations for the marks "Beanie Babies" and "The [**2]  Beanie Babies Collection." Beanie Babies are small, plush animals filled with plastic pellets. Generally, they are eight to nine inches long and typically are made from a velboa-type fabric. A red, heart-shaped hang tag with Ty's logo on it is attached to each Beanie Babies product.

Jones is a licensee of NASCAR and began in 1998 manufacturing and selling Beanie Racers, which are bean-filled replicas of NASCAR racing cars. Attached to each Beanie Racer is a white and rectangular shaped hang tag with the following information on it: (1) the Beanie Racers mark; (2) the multi-colored NASCAR mark; (3) the signature of the driver of each NASCAR race car, including a disclosure which recognizes the individual or entity who owns the rights to [***1619]  such signature; and (4) the corporate sponsor of each NASCAR race car. Beanie Racers are approximately eight inches long, are filled with plastic pellets, and are made of velboa-type plush fabric.

Ty sent Jones a cease and desist letter dated July 17, 1997 informing Jones that its Beanie Racers infringed upon Ty's trademark rights. Jones proceeded forward with the production of its Beanie Racers and Ty responded by pursuing legal action against Jones.  [**3]  In its suit, Ty alleges that Jones engaged in trademark infringement, unfair competition, and dilution in violation of federal and state laws. On November 17, 1999, Ty requested a preliminary injunction against Jones prohibiting Jones from selling plush toys under the name Beanie Racers pending the outcome of the suit. The magistrate judge granted Ty's motion for a preliminary injunction in an Opinion and Order dated June 5, 2000. Jones requested a reconsideration of the magistrate judge's opinion, but the magistrate judge decided not to alter his original opinion. On July 7, 2000, the magistrate judge entered the preliminary injunction against Jones and set a bond in the amount of $ 500,000. Jones is appealing the grant of the preliminary injunction pursuant to an interlocutory appeal, 28 U.S.C. § 1292(a)(1).

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237 F.3d 891 *; 2001 U.S. App. LEXIS 843 **; 57 U.S.P.Q.2D (BNA) 1617 ***

Ty, Inc., Plaintiff-Appellee, v. The Jones Group, Inc., Defendant-Appellant.

Prior History:  [**1]  Appeal from the United States District Court for the Northern District of Illinois, Eastern Division. No. 99 C 2057. Ian H. Levin, Magistrate Judge.

Disposition: Affirmed.

CORE TERMS

magistrate judge, merits, preliminary injunction, marks, factors, products, harms, likelihood of confusion, likelihood of success, balancing, advertisements, injunction, similarity, hang, tag, trademark, consumers, selling, weighed, quotation, plush, toys, sliding scale, magazines, irreparable harm, concurrent, district court, most important, irreparable, speciality

Civil Procedure, Remedies, Injunctions, Preliminary & Temporary Injunctions, Grounds for Injunctions, Public Interest, Appeals, Standards of Review, Abuse of Discretion, Clearly Erroneous Review, Judicial Officers, Magistrates, Pretrial Referrals, Governments, Courts, Judges, Standards of Review, Trademark Law, Likelihood of Confusion, General Overview, Federal Unfair Competition Law, False Advertising, Business & Corporate Compliance, False Designation of Origin, Elements of False Designation of Origin, Lanham Act, Remedies, Entertainment Industry Falsity & Performance Misattribution, Trade Dress Protection, Causes of Action Involving Trademarks, Infringement Actions, Equitable Relief, Preliminary Injunctions, Particular Subject Matter, Names, Similarity of Marks, Appearance, Meaning & Sound, Appearance, Factors for Determining Confusion, Intent of Defendant to Confuse, Damages