Lanyard Toys V Five Below - Complaint

Case 2:18-cv-05845 Document 1 Filed 07/03/18 Page 1 of 60 Page ID #:1
1 Richard P. Sybert, Bar No. 80731

rsybert@gordonrees.com
2 GORDON & REES LLP
101 W. Broadway, Suite 2000
3 San Diego, CA 92101
Tel (619) 230-7768 / Fax (619) 696-7124
4
Reid E. Dammann, Bar No. 249031
5 rdammann@gordonrees.com
GORDON & REES LLP nd
6 633 West Fifth Street, 52 Floor
Los Angeles, CA 90071
7 Tel (213) 576-5000 / Fax 213-680-4470
8 Attorneys for Plaintiff
LANARD TOYS LIMITED
9
10 UNITED STATES DISTRICT COURT
11 CENTRAL DISTRICT OF CALIFORNIA
101 W. Broadway Suite 2000
12
San Diego, CA 92101
Gordon & Rees LLP
13 Lanard Toys Limited ) CASE NO. 2-18-cv-05845

)
14 Plaintiff, ) COMPLAINT FOR
)
15 vs. ) 1) FALSE DESIGNATION OF
) ORIGIN [15 U.S.C. §1125(A)];
16 Five Below, Inc. ) 2) TRADEMARK
17 Defendant. ) INFRINGEMENT [15 U.S.C.
) §1114];
18 )
) 3) DESIGN PATENT
19 ) INFRINGEMENT [35 U.S.C
) §271];
20 )
) 4) CALIFORNIA UNFAIR
21 ) COMPETION; [Cal. B.&P.
) Code §17200 et seq.];
22 )
) 5) COPYRIGHT
23 INFRINGEMENT [17 U.S.C.
) §101 ET SEQ];
24 )
) JURY TRIAL DEMANDED
25
26
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28
1
COMPLAINT
1 COMPLAINT AND DEMAND FOR JURY TRIAL

2 1. Plaintiff Lanard Toys Limited (“Lanard”) hereby alleges the following
3 as its Complaint against Defendant Five Below, Inc. (“Five Below”) or
4 “Defendant”).
5 NATURE OF THE ACTION
6 2. This is an action for false designation of origin, trademark
7 infringement, design patent infringement, unfair competition, and copyright
8 infringement arising from Defendant’s unauthorized making, using, offering to
9 sell, and/or selling a chalk toy design that infringes Lanard’s intellectual property.
10 Defendant’s infringement has irreparably harmed the goodwill and reputation of
11 Lanard and caused Lanard irreparable damage and monetary harm, for which
12 Lanard requests relief in this Court.

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13 THE PARTIES
14 3. Plaintiff Lanard Toys Limited is a Hong Kong company with its
15 principal place of business at Elite Centre, 28th Floor, 22 Hung To Road, Kwun
16 Tong, Kowloon, Hong Kong. Lanard manufactures and sells toys throughout the
17 world, including to companies in the United States.
18 4. Upon information and belief, Defendant Five Below is a Philadelphia
19 company with its principle place of business at 1818 Market Street, Suite 2000,
20 Philadelphia, PA 19103. Upon information and belief, Five Below is a chain of
21 discount stores that sells various products.
22 JURISDICTION AND VENUE
23 5. This is an action for design patent infringement arising under the
24 patent laws of the United States, 35 U.S.C. §§ 1, 271 and 289 et seq., the Lanham
25 Act, 15 U.S.C. §§ 1051 et seq., United States Copyright Act, 17 U.S.C. §§ 101 et
26 seq., and includes related claims for unfair competition arising under state law.
27 6. This Court has original jurisdiction over this dispute pursuant to 15
28 U.S.C. § 1121, 28 U.S.C. § 1331, and 28 U.S.C. §§ 1338(a) and (b), as this action
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COMPLAINT
1 arises under the Lanham Act (15 U.S.C. §§ 1051 et seq.), United States Copyright
2 Act (17 U.S.C. §§ 101 et seq.), and includes claims of unfair competition that are
3 joined with substantially related claims under the patent, and trademark laws of the
4 United States pursuant to 28 U.S.C. § 1338(b).
5 7. This Court has supplemental jurisdiction over the state law claim of
6 this complaint pursuant to 28 U.S.C. § 1367(a).
7 8. Venue is proper within this District under 28 U.S.C. § 1391(b) and 28
8 U.S.C. §§ 1400(a) and (b), as a substantial part of the events giving rise to the
9 claims in this complaint occurred in this judicial district, and Defendant resides
10 within this judicial district, within the meaning of 28 U.S.C. § 1391(c).
11 9. Defendant regularly conducts business in this district and throughout
12 the United States, and actively engaged in promoting, advertising, marketing,

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13 and/or offering products within this judicial district, including the accused product
14 at issue in this lawsuit. Defendant has placed and continues to place infringing
15 products into the stream of commerce, with the knowledge or understanding that
16 such products are sold in the State of California, including in this District. The acts
17 by Defendant cause injury to Plaintiff within this District. Upon information and
18 belief, Defendant derives substantial revenue from the sale of infringing products
19 within this District, expects its actions to have consequences within this District,
20 and derives substantial revenue from interstate commerce. Defendant’s contacts
21 with this district are sufficient to confer personal jurisdiction over Defendant.
22 BACKGROUND FACTS
23 Lanard And Its Distinctive Chalk Bomb!® Product
24 10. Lanard is a leading manufacturer and seller of toys throughout the
25 world, including sales on a private label basis to other toy retailers.
26 11. In 2015, Lanard’s designers developed a unique and original chalk
27 toy— a hand-sized bag filled with powdered chalk styled as a hand grenade.
28 Children can toss it at targets or others to leave marks of colored, washable chalk.
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COMPLAINT
1 The products come in a variety of fabric colors with corresponding internal chalk
2 colors and feature either a yellow or red cord “fuse.”
3 12. Lanard called its toy the “Chalk Bomb” and has sold it packaged as
4 single toys or in multi-packs of three and ten. And as detailed below, Lanard
5 sought and received various forms of intellectual property protection for the
6 “Chalk Bomb” product. A photograph of the toys in point-of-sale packaging are
7 shown below.
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19 13. Lanard published its work by November 7, 2015. It submitted two
20 copyright applications for the packaging to the United States Copyright Office on
21 December 29, 2015. The Copyright Office registered Lanard’s copyrights
22 effective as of the same date and assigned Registration Nos. VA 2-022-296 and 1-
23 999-283. True and accurate copies of the applications and resulting registrations,
24 are attached hereto as Exhibits A and B. Since that time, Lanard has remained the
25 sole owner of these copyrights.
26 14. Lanard also applied for a federal trademark registration for the mark
27 CHALK BOMB! For “toys comprised of chalk powder, namely, tossing toys and
28 drawing toys” in International Class 028. The mark registered as U.S. Registration
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COMPLAINT
1 No. 5,046,808. A true and accurate copy of the registration certificate is attached
2 hereto as Exhibit C.
3 15. Lanard also applied for and received several design patents, and is the
4 owner by way of assignment, on its ornamental design of the “Chalk Bomb”
5 product from the United States Patent and Trademark Office. On December 5,
6 2017, Lanard received a registration for Design Patent No. D804,596 for the Chalk
7 Bomb (hereinafter “’596 Patent”). Exhibit D. On April 10, 2018, Lanard received a
8 registration from the United States Design Patent No. D815,220 (hereinafter “’220
9 Patent”). Exhibit E. The ‘220 Patent claimed priority to, and is a divisional
10 application of, the ‘596 Patent (hereinafter, unless referred to individually,
11 “Asserted Patents”).
12 16. By virtue of significant sales, quality and uniqueness of design, and

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13 the substantial time, effort, and money expended over the years by Lanard in
14 creating, promoting, and popularizing this product, Lanard has developed a
15 valuable reputation and goodwill in connection with its CHALK BOMB!® and the
16 trade dress associated therewith. Lanard enjoys substantial demand for this
17 product, and Lanard’s trade dress embodied in the CHALK BOMB!® has become
18 well known to consumers and the trade by widespread, continuous, and exclusive
19 use thereof. The purchasing public and customers of Lanard associate the CHALK
20 BOMB!® trade dress exclusively with Lanard. Such trade dress is protectable and
21 has acquired secondary meaning.
22 17. As a result of the foregoing, the relevant public has come to recognize
23 an association between the CHALK BOMB!® design and Lanard, and have come
24 to understand chalk toys having the design elements used by Lanard are made
25 exclusively by Lanard or otherwise are associated with Lanard.
26 Lanard And Its Original “Total X-Stream Air Over Under” Product
27 18. In 2005, Lanard created an original design toy gun. The toy is called
28 the “Total X-Stream Air - Over Under.” Lanard published its work by June 9,
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COMPLAINT
1 2006. It submitted a copyright application for the original design to the United
2 States Copyright Office. The Copyright Office registered Lanard’s copyright
3 effective as of November 8, 2012 and assigned Registration No. VA 1-842-993. A
4 true and accurate copy of the application and resulting registration, are attached
5 hereto as Exhibit F. Since that time, Lanard has remained the sole owner of these
6 copyrights. A picture of the “Total X Stream Air Over Under product is provided
7 below.
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20 Five Below’s Wrongful Conduct
21 19. Five Below is now and has been offering for sale in this district, and
22 elsewhere in the United States, an unauthorized and infringing product, entitled the
23 “Chalk Smash” (alternatively “Accused Chalk Product”).
24 20. A picture of the “Chalk Smash” product offered by Five Below is
25 reproduced below along with Lanard’s CHALK BOMB!® product.
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COMPLAINT
1
CHALK BOMB®! CHALK SMASH
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13 21. Upon information and belief, the Accused Chalk Product comes in a
14 variety of fabric colors with corresponding internal chalk colors is identical or
15 substantially similar to Lanard’s CHALK BOMB! Product.
16 22. Upon information and belief, the Accused Chalk Product, its
17 packaging and trademark, “Chalk Smash,” are remarkably or confusingly similar
18 to Lanard’s CHALK BOMB!®, and copy the original protectable expression in
19 Lanard’s design.
20 23. Upon information and belief, Five Below’s “Chalk Smash” product
21 infringes on Lanard’s Asserted Patents in its protected design. The Accused Chalk
22 Product and the Asserted Patents are provided below in a side-by-side comparison,
23 and reveal that Defendant’s “Chalk Smash” product is identical or substantially
24 similar to the Asserted Patents.
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COMPLAINT
1
2 ACCUSED CHALK PRODUCT D804,596
FIVE BELOW CHALK SMASH
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D815,220
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Exhibit G
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24 24. Five Below is thus marketing, advertising, and selling identical or
25 similar products embodying original protected expression, trademark confusingly
26 similar to Lanard’s CHALK BOMB!® and infringing the Asserted Patents of
27 Lanard.
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COMPLAINT
1 25. Because of Lanard’s registered trademark, the relevant public has and
2 continues to be deceived and/or confused into believing that Five Below’s
3 unauthorized “Chalk Smash” originated from Lanard, or is somehow authorized,
4 sponsored by, or in some way associated with Lanard.
5 26. Five Below’s unauthorized reproduction of Lanard’s trademark and
6 product has created a likelihood of confusion among the relevant public due to the
7 relevant public’s association between the look of Lanard’s work and Lanard.
8 27. Five Below’s unauthorized infringement has been willful, and Five
9 Below intentionally interfered with Lanard’s business relations by offering to sell
10 the Accused Chalk Product, thereby wrongfully diverting sales from Lanard.
11 28. Five Below’s unauthorized use and infringement, promotion, and sale
12 of the Accused Chalk Product has caused Lanard irreparable financial harm.
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13 29. Five Below is also, now and has been, offering for sale in this district,
14 and elsewhere in the United States, an unauthorized and infringing product,
15 entitled the “AIR FORCE Quick-Fire Air Blaster” (item number of FB11741)
16 (alternatively “Accused Gun Product,” and in combination, “Accused Chalk
17 Product” and “Accused Gun Product,” are the “Accused Products”).
18 30. A picture of the AIR FORCE Quick-Fire Air Blaster product offered
19 by Five Below is reproduced below in comparison with Lanard’s Registration in its
20 Total X-Stream Air - Over Under, Registration No. VA 1-842-993. Exhibit F.
21 /////
22 /////
23 /////
24 /////
25 /////
26 /////
27 /////
28 /////
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COMPLAINT
1
AIR FORCE QUICK-FIRE AIR BLASTER
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TOTAL X-STREAM AIR OVER UNDER
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COMPLAINT
1 31. Lanard has established copyrights in the design of its Total X-Stream
2 Air - Over Under and its design constitutes copyrightable subject matter under the
3 copyright laws of the United States. Lanard is the owner of U.S. Copyright
4 Registration No. VA 1-842-993 directed to its Total X-Stream Air - Over Under
5 design. Lanard is the owner of all right, title, and interest in and to the copyrights
6 in this design.
7 32. Defendant’s copying and use of AIR FORCE Quick-Fire Air Blaster
8 is a violation of Lanard’s exclusive rights to the original work of authorship in the
9 design, including but not limited to the exclusive right to make reproductions and
10 distribute copies to the public. The infringing copies include AIR FORCE Quick-
11 Fire Air Blaster, item number of FB11741.
12 33. Upon information and belief, the acts of Five Below were committed
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13 willfully, knowingly, maliciously, and in conscious disregard of Lanard’s rights.

14 34. The aforesaid infringement by Five Below has caused, and unless
15 restrained by this Court will continue to cause, immediate and irreparable injury to
16 Lanard’s property and business. Lanard has no adequate remedy at law.
17 35. Upon information and belief, by the acts alleged above, Five Below
18 has made substantial profits to which they are not entitled and have caused Lanard
19 to lose sales and/or other opportunities for monetary relief.
20 FIRST CLAIM FOR RELIEF
21 False Designation of Origin Under 15 U.S.C. § 1125(a)
22 36. Plaintiff realleges and incorporates herein by this reference each of the
23 allegations contained in Paragraphs 1 through 35 as if fully set forth herein.
24 37. United States Trademark Registration No. 5,046,808 for the mark
25 “CHALK BOMB!” was duly and legally issued by the United States Patent and
26 Trademark Office on September 20, 2016.
27 38. Five Below’s use of the “Chalk Smash” mark in interstate commerce,
28 without Lanard’s consent, is a false designation of origin causing a likelihood of
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COMPLAINT
1 confusion, mistake, and deception as to source, sponsorship, affiliation, and/or

2 connection in the minds of the public. Five Below’s conduct has infringed
3 Lanard’s trademark rights in violation of Section 43(a) of the Lanham Act, 15
4 U.S.C. § 1125(a)(1).
5 39. By reason of the foregoing, Lanard has been injured in an amount not
6 yet fully determined. Further, Five Below has been unjustly enriched by virtue of
7 its deception of consumers and misappropriation of Lanard’s goodwill.
8 40. As a result of Five Below’s acts of infringement, Lanard suffered and
9 will continue to suffer irreparable harm for which Lanard has no adequate remedy
10 at law, including damage to Lanard’s goodwill. Unless Five Below’s acts of
11 infringement are enjoined by this Court, Lanard will continue to suffer irreparable
12 harm.
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13 41. Defendant’s actions are known, intentional, wanton, and willful. The
14 principles of equity warrant an award to Lanard of treble damages and profits,
15 attorney’s fees, and the costs of this action pursuant to 15 U.S.C. § 1117.
16 SECOND CLAIM FOR RELIEF
17 Trademark Infringement (15 U.S.C. § 1114)
20 43. United States Trademark Registration No. 5,046,808 for the mark
21 “CHALK BOMB!” was duly and legally issued by the United States Patent and
22 Trademark Office on September 20, 2016.
23 44. This claim is for trademark infringement under the laws of the United
24 States, Section 32 of the Lanham Act, 15 U.S.C. § 1114(1)(a).
25 45. Five Below used the “Chalk Smash” mark to promote and sell Five
26 Below’s Accused Chalk Product in violation of Lanard’s rights in its registered
27 trademark.
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COMPLAINT
1 46. Five Below’s use of the “Chalk Smash” mark is likely to cause
2 confusion, mistake, and to deceive consumers.
3 47. Five Below’s actions constitute a blatant attempt to confuse the
4 consuming public and to trade off Lanard’s goodwill.
5 48. Five Below acted knowingly and willfully, with full knowledge of the
6 likelihood of confusion and with the intent to deceive consumers in order to trade
7 off the efforts and earned goodwill and reputation of Lanard.
8 49. By reason of the foregoing acts of trademark infringement, Lanard has
9 been injured in an amount not yet ascertained. Further, Five Below has been
10 unjustly enriched by virtue of its deception of consumers and misappropriation of
11 Lanard’s goodwill.
12 50. In addition, as a result of Five Below’s acts of infringement, Lanard

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13 suffered and will continue to suffer irreparable harm for which Lanard has no
14 adequate remedy at law, including damage to Lanard’s goodwill. Unless Five
15 Below’s acts of infringement are enjoined by this Court, Lanard will continue to
16 suffer irreparable harm.
17 51. Five Below ’s actions have known, intentional, wanton, and willful.
18 The principles of equity warrant an award to Lanard of treble damages and profits,
19 attorney’s fees, and the costs of this action pursuant to 15 U.S.C. § 1117.
20 THIRD CLAIM FOR RELIEF
21 (Infringement of D804,596 and D815,220)
22 52. Plaintiff incorporates and realleges paragraphs 1 through 51 of this
23 Complaint.
24 53. Upon information and belief, Defendant has infringed and continues
25 to infringe U.S. Design Patents D804,596 and D815,220 by using, selling and/or
26 offering to sell in the United States, and/or importing into the United States its
27 “Chalk Smash” product, which embodies the design covered by U.S. Design
28 Patents D804,596 and D815,220.
- 13 -
COMPLAINT
3 55. The aforementioned acts by Five Below in causing confusion among
4 the relevant public and causing a false association or sponsorship between Five
5 Below ’s goods and Lanard, in California and elsewhere constitute unlawful,
6 unfair, and fraudulent business practices prohibited by Business & Professions
7 Code Section 17200 et seq.
8 56. The acts by Five Below were committed willfully, knowingly,
9 maliciously, and in conscious disregard of Lanard’s rights.
10 57. As a result of Five Below’s unfair competition, Lanard has suffered
11 damage to its goodwill and reputation and has lost sales of its products.
12 58. Five Below has made substantial profits based on its unauthorized
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13 sales of their infringing “Chalk Smash” product.

14 59. Upon information and belief, the aforesaid conduct by Five Below
15 has caused, and unless restrained by this Court will continue to cause, immediate,
16 great, and irreparable harm to Lanard’s property and business. Lanard has no
17 adequate remedy at law.
18 FIFTH CLAIM FOR RELIEF
19 Copyright Infringement Under 17 U.S.C. § 101 et seq.
22 61. Lanard has established copyrights in the design of its Total X-Stream
23 Air - Over Under, U.S. Copyright Registration No. VA 1-842-993 and its design
24 constitutes copyrightable subject matter under the copyright laws of the United
25 States. Lanard is the owner of U.S. Copyright Registration No. VA 1-842-993
26 directed to its Total X-Stream Air - Over Under design. Lanard is the owner of all
27 right, title, and interest in and to the copyrights in this design.
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COMPLAINT
1 62. Defendant’s copying and use of Lanard’s Total X-Stream Air – Over
2 Under deisng is a violation of Lanard’s exclusive rights to the original work of
3 authorship in the design, including but not limited to the exclusive right to make
4 reproductions and distribute copies to the public. The infringing copies include the
5 “AIR FORCE Quick-Fire Air Blaster ” product sold as item number of FB11741.
6 63. Upon information and belief, the acts of Five Below were committed
7 willfully, knowingly, maliciously, and in conscious disregard of Lanard’s rights.
8 64. The aforesaid infringement by Five Below has caused, and unless
9 restrained by this Court will continue to cause, immediate and irreparable injury to
10 Lanard’s property and business. Lanard has no adequate remedy at law.
11 PRAYER FOR RELIEF
12 WHEREFORE, Plaintiff Lanard demands judgment as follows:

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13 A. A declaration that Five Below willfully infringed Lanard’s registered

14 trademark and that defendant’s use in commerce of the mark Chalk Smash causes
15 damage to Plaintiff.
16 B. A declaration that Five Below willfully infringed each of the Asserted
17 Patents and Lanard’s copyrighted works;
18 C. A preliminary and permanent injunction enjoining Five Below, its
19 officers, agents, servants, employees, attorneys, and those in active concert or
20 participation with them who receive actual notice of the order by personal service
21 or otherwise, from: further acts of infringement of the Asserted Patents and
22 copyrights; utilizing or imitating Lanard’s trademark, including but not limited to
23 manufacturing, distributing, advertising, selling, or offering for sale, any products
24 which use any trademark which is confusingly similar to the Lanard CHALK
25 BOMB!®; injuring the commercial reputation, renown, and goodwill of Lanard;
26 and unfairly competing with Lanard in any manner whatsoever and ordering Five
27 Below to cancel all orders for the Accused Chalk Product embodying Lanard’s
28 design patents and trademark confusingly similar to Lanard’s CHALK BOMB!®
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COMPLAINT
1 and protected ornamental designs; and to cancel all orders for the Accused Gun
2 Product, ordering Five Below to deliver up for destruction all Accused Products,
3 labels, signs, prints, catalogs, sell sheets, purchase orders, invoices, packages,
4 wrappers, receptacles, articles, advertisements, and/or promotional materials in
5 their possession referring or relating to the Accused Products, or other products
6 incorporating Lanard’s protected copyrights, ornamental designs or trademark
7 confusingly similar to Lanard’s registered copyrights, trademark and all plates,
8 models, matrices, tooling, computer programs, and other means of making the
9 same, and ordering Five Below to recall any and all Accused Products and
10 infringing goods, or other products incorporating Lanard’s registered copyrights,
11 protected designs and trademarks that are infringing, identical, substantially similar
12 or confusingly similar to Lanard’s registered copyrights, design patents, and

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13 trademarks;
14 D. An award to Lanard of its actual damages and for all profits realized
15 by Five Below in connection with its infringing activities;
16 E. An award to Lanard of treble, exemplary, and/or punitive damages;
17 F. An award to Lanard of its reasonable attorney fees pursuant to 17
18 U.S.C. § 505 and/or 15 U.S.C. § 1117(a), filing fees, and the costs of this action;
19 G. A judgment declaring this case to be exceptional and awarding
20 Plaintiff their reasonable attorneys fees pursuant to 35 U.S.C. § 285;
21 H. A judgment awarding Plaintiff all damages adequate to compensate
22 for Defendant's infringement of the Asserted Patents, and particularly Defendant's
23 total profits pursuant to 35 U.S.C. § 289.
24 I. A judgment awarding Plaintiff all damages, costs, and interest,
25 including treble damages, based on any infringement found to be willful, pursuant
26 to 35 U.S.C. § 284, together with prejudgment interest.
27 J. An accounting of Defendant's profits.
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COMPLAINT
1 K. Prejudgment and post judgment interest on the above monetary

2 awards; and
3 L. Such other and further relief as this Court deems equitable and just
4
5 JURY DEMAND
6 Pursuant to Fed. R. Civ. P. 38(b), Plaintiff hereby demands a trial by a jury
7 on all issues so triable.
8
9 Dated: July 3, 2018 Respectfully Submitted,
10 GORDON & REES LLP
11
12 By: S/Richard P. Sybert

Richard P. Sybert
San Diego, CA 92101
Gordon & Rees LLP
13 Reid E. Dammann
Attorneys for Plaintiff
14 LANARD TOYS LIMITED
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COMPLAINT
Case
Case 2:17-cv-04472
2:18-cv-05845 Document
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EXHIBIT B
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Case 2:18-cv-05845
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EXHIBIT D
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Lanyard Toys V Five Below - Complaint

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Case 2:18-cv-05845 Document 1 Filed 07/03/18 Page 1 of 60 Page ID #:1

1 Richard P. Sybert, Bar No. 80731

13 Lanard Toys Limited ) CASE NO. 2-18-cv-05845

1 COMPLAINT AND DEMAND FOR JURY TRIAL

12 Lanard requests relief in this Court.

12 the United States, and actively engaged in promoting, advertising, marketing,

12 16. By virtue of significant sales, quality and uniqueness of design, and

13 willfully, knowingly, maliciously, and in conscious disregard of Lanard’s rights.

1 confusion, mistake, and deception as to source, sponsorship, affiliation, and/or

12 50. In addition, as a result of Five Below’s acts of infringement, Lanard

13 sales of their infringing “Chalk Smash” product.

12 WHEREFORE, Plaintiff Lanard demands judgment as follows:

13 A. A declaration that Five Below willfully infringed Lanard’s registered

12 or confusingly similar to Lanard’s registered copyrights, design patents, and

1 K. Prejudgment and post judgment interest on the above monetary

12 By: S/Richard P. Sybert

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