Sports Business Digest » Upper Deck strikes out.

Upper Deck strikes out.

Posted on February 5th, 2010. Written by Emmett Jones.

The mighty are not only falling…they’re dropping. quickly. Honestly, what is going on over at The Upper Deck company?

The problems all begin in 2008 when Upper Deck when Konami discovered that counterfeit Yu-Gi-Oh! trading cards were being sold in stores by an Upper Deck sub-distributor. After taking action against the sub-distributor, the sub-distributor dropped the dime; “the cards were supplied by Upper Deck”. Lovely.

One hundreds of million dollar lawsuit and year of legal discovery later? Turns out the sub-distributor was right; Upper Deck had not only created the counterfeit cards, they were shredding evidence.

Discovery in the lawsuit revealed that Upper Deck had counterfeited Yu-Gi-Oh! TCG cards, and that it took extensive steps to cover-up that activity. The cover-up included a meeting in the office of Upper Deck’s chairman, in which he and at least one other Upper Deck employee compared samples of authentic Yu-Gi-Oh! TCG cards against fakes made by Upper Deck, and shredded the samples in the chairman’s office, as well as an e-mail from an employee of Upper Deck to other employees asking to provide her information on how to obtain Yu-Gi-Oh! TCG security foils “in secrecy.” (via Earth Times)

Not surprisingly, Upper Deck settled the lawsuit with Konami, fearing what I would assume would be a losing court battle. Of course, if you read Upper Deck’s press release, you’d never know. (UD Press Release) Of course, if you read the opening argument from Upper Deck’s lawyer, you may have a slightly different opinion,

Mr. Howell of Rutan & Tucker noted in the opening statement to the jury: ”The behavior is still undeniably wrong. And I am in here, as counsel for the two defendants, asking you to hold my clients accountable for that behavior; asking you to hold my clients responsible for this conduct that there is no dispute, and there was no disputing even before this case started today, that it was wrong.” (via Earth Times)

Query: How do you make a bad “PR-counterfeit-multi-million dollar pay out” situation worse?

Answer: By adding a trademark infringement lawsuit to the mix.

For those that don’t remember, Upper Deck lost its ability to use the MLB logos and team names back in August, when MLB gave Topps the exclusive license on all MLB trading cards. Upper Deck’s rights to MLB’s logos and team names were to end on January 1, 2010. Not willing to accept the decision, Upper Deck re-signed its licensing agreement with the MLBPA, allowing the company to create cards with players images and likenesses. Of course, you know what happens next…

Upper Deck recently unveiled two new sets of cards — its “Signature Stars” and “Ultimate Collection” lines for the 2009 season — that do not have team names or logos printed on the borders of the cards, but do include pictures of players in MLB uniforms. The card of Boston Red Sox first baseman Kevin Youkilis, for example, shows him wearing the club’s jersey and signature “B” batting helmet, but the card’s border identifies his team only as “Boston.”

Those new card lines are at the center of MLB’s complaint, in which it alleges that Upper Deck’s conduct is “reflective of a pattern of utter disrespect for the contractual and intellectual property rights of those from whom it licenses valuable trademarks.” The suit was filed after MLB earlier sent a letter to card distributors asking them not to sell Upper Deck’s 2010 baseball sets. (via MLB Fanhouse)

Apparently, no one puts Upper Deck in a corner.

Its such a blatant disregard for intellectual property that its almost humorous. Even if for some strange reason Upper Deck thought they were in the right, they at the very least knew that this would bring a lawsuit or at least the ire of MLB. The question I’d ask is, even if they’re right, why put themselves through all of the unnecessary hassle? Just to be able to produce trading cards that don’t have MLB names and logos on them…When Topps already has the exclusive MLB license…At a time when the entire card industry is bottoming out and no one is buying cards anyway…

Maybe their money and time could have been better spent elsewhere.

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