Trademarks, Patents and Legal Protection For Toys & Games – Practical, Commercial Insights

LEGAL DISCLAIMER: This article should in no way be taken as offering legal advice, neither the author (writing on a work for hire basis) nor the publisher intend or are even qualified to offer legal advice. We highly recommend anyone needing advice in this area to seek qualified, legal expert help. This article is intended to offer practical and commercial perspectives on how product creators can protect their work. Furthermore, not every area of legal protection mentioned in this article can be applied to every country, the law obviously varies from country to country – so take local expert legal advice where required. In short, you wouldn’t go to an automotive mechanic to fix you teeth would you – so please do more diligence on this topic than just reading this quick summary commentary! (Don’t you just love an article which starts with a full paragraph legal disclaimer!).


Anyone who has worked in the toy business for a while encounters some kind of IP (intellectual property) infringement or ‘me too’ product. It can be challenging to take effective steps in such circumstances. So, we’ll take a look at some of the standard legal protections you have available to you & discuss the practicality of these. Then we’ll look at more commercial/pragmatic solutions outside the remedies of the law.


TRADEMARKS

Brands are a big thing in the toy & game business. Brands get sold for big money e.g. Mega Bloks $500m+ usd, Hit Entertainment’s portfolio of brands including Thomas the Tank Engine for $680m usd, Marvel Entertainment $4billion and of course Lucasfilm, owner of the Star Wars brand for $4billion.


What trademarks allow you to do in practical terms is to register proprietary ownership of a brand. That can be a text-based trademark i.e. the brand name, or a design trademark, the most obvious and iconic example of which would be the Nike swoosh logo.


If you have a registered trademark and another company launches a product featuring that trademark, then you have clear legal remedy i.e. if you take them to court you have an obvious claim. In reality any kind of legal action carries costs and risk, but a registered trademark gives you strong legal protection if you have the means and wherewithal to defend it.


Different countries or regions have separate trademark registration systems and processes, so it can take some paperwork and cost to register in multiple markets, but for instance, in the UK you can register a trademark for around £200 gbp, which is not a prohibitive amount for most companies.


PASSING OFF Passing off refers to a company trying to ‘pass off’ their products as those of a different brand they don’t own. For example, you may notice that in the toy market there are lots of blocks that look the same shape and look of Lego blocks. It could be argued in a court of law (& most probably has been argued at some point we guess) that these blocks are passing themselves off as Lego. But what these ‘me too’ products don’t do (at least not if they have any sense) is to add the Lego brand name to the products, because that would be both a trademark infringement and a clear example of passing off.


PATENTS

Patents protect technical invention (at least in theory). By outlining a clear technical innovation, the patent applicant can seek to obtain a patent which ensures their ownership and sole control and commercial usage of that innovation. The challenge, as with all things related to the law, is that practically speaking to enforce a patent is immensely costly, and therefore, within the realms of toys & games unlikely to be practically enforced by most companies.


OTHER LEGAL MECHANISMS AND PROTECTIONS

There are some other protections and actions companies can take. The most practical of which is probably a ‘cease and desist’ letter. It should be quite obvious what that letter does, it instructs the alleged infringer to cease and desist their infringing. Practically speaking, in some blatant cases, where it is obvious a company is infringing the legal rights of another company, an aggressively worded cease and desist letter may be enough to stop the infringing. The cease-and-desist letter also pre-notifies the alleged infringer that legal action may be taken if they don’t stop, at which point in time, the alleged infringer could also become liable for damages and paying the legal costs of the other party.


Litigation may at some point become necessary (in which case, for heaven’s sake don’t rely on a free article on the internet, get qualified legal advice!). There are various strategies for approaching this which go way beyond our expertise but be prepared for a lengthy bitter battle which will put a lot of money at risk and take your time away from managing your business.


Sometimes, practically speaking, some degree of imitation in the marketplace is inevitable if you are successful. Sometime the best approach is to keep trying to develop the next big product and staying ahead of the competition.

Our Managing Director, Steve Reece has worked as a toys expert witness and a board games expert witness, for the Royal Courts of Justice in London and the Hong Kong courts. To find out more about this, just click here: https://www.kidsbrandinsight.com/expert-witness-toys-board-games/

5 Key Features Of Successful New Toy Launches

Every year hundreds of thousands of new toys come to the market globally. The majority of these toys achieve an acceptable amount of sales, but comparatively few – probably as little as 5% or 10% achieve real success. Partly this is due to statistics, with so many new toys many will not achieve full distribution, and even fewer will achieve physical prominence in retail.

There are though 5 key features of most successful new toy product launches. None of these are likely to surprise – these are quite basic points, but they are so fundamental that we feel it is worth running through them:

  • Obvious & compelling product features

Children are not that complicated…unlike adults with all their social niceties, angst and complexity. Toys for children should therefore usually offer a very straightforward product concept/proposition which is clear, obvious and above all compelling. A classic example of this would be the Hatchimals Wow product from Spin Master, where the character has a large extending neck which extends to a very surprising extent – the clue is in the name ‘WOW’! Children find this type of WOW very compelling. If your product concept is very complicated and takes a lot of explaining the odds are that you won’t achieve success with it.

  • Packaging which showcases the best of the product

Packaging is the most fundamental marketing tool in selling toys & games. The bottom line is that anyone looking at your product will decide to buy or not based as much on the packaging as the product itself. Complicated packaging which fails to show what the product is about usually does not work. We recently worked on a project running a ‘post-mortem’ on why a major new product launch didn’t work. The reason for launch failure turned out to be the packaging. The product was basically cocooned in an artsy container which said nothing about the product or why a child may want the product (!).

  • Effective marketing to the right target market

Note that this is not necessarily about the biggest budget, because money is easily wasted in toy marketing. The critical success factor is effectiveness, how can you present the product to the most potentially interested consumers for the most efficient cost, with a message and product demonstration which is both compelling and clear?

  • Retail support

Not every product will achieve full mass market distribution, and sometimes that’s fine based on how niche the product and product category is. But without retail support, success is unlikely. One of the major risks toy companies face is developing and investing in products which don’t get picked up by retail. The bigger the company, the more likely it is that major product launches will be picked up, but every toy company can tell a story about a major retailer refusing to back a big new product launch and effectively killing the product in the process.

  • Effective merchandising

There are so many products on the market that trying to stand out from all the other brightly coloured and eye-catching toys can be very difficult. Aside from the joys of trying to rank online via complex algorithms, actively investing time, effort and marketing funds at the point of sale is a critical area of concern. From ‘Try Me’ features on products which need to be played with to close the sale, through to CDUs, FSDUs, video displays and more, this area typically yields much greater ROI on marketing investment by way of increased sell through than traditional broad blast marketing.

We run a Consultancy business helping toy & games companies get ahead. For more information, check out www.KidsBrandInsight.com/services


Our Managing Director, Steve Reece, works with a limited number of companies as a non-executive director, independent board director and as a board advised. If you are interested in finding out more about this, check out the link to our service above.

Why Toy Catalogues Are So Effective For Retailers

Here in the UK, the nation’s children historically pulled together their Christmas wish lists with the assistance of the bulky Argo catalogue. Argos reportedly printed 20 million of these copies until they stopped the catalogue in 2020 – just to put that in context there are estimated to be around 28 million households in the UK, so they were printing nearly one for every household.

On a recent visit to a Smyths Toys store in the UK I picked up a copy of their catalogue, which was pallet stacked on 2 pallets outside the entrance to the store. The print and production costs of this type of catalogue are obviously significant.

So why would retailers be producing catalogues in this day and age of social media and online media consumption?

Well, the answer to that is the way children choose what toys they want for Christmas. I have conducted several research studies historically looking at how and when children pull together their wish lists – this is obviously critically important for toy companies to understand, because media buying may need to be adapted to make sure communication is maximised at the point in time when children are actually making their choices, which is often surprisingly far in advance of purchase by parents. This varies significantly by market, but in the UK, Christmas lists can be finalised anytime from September onwards, with the October half term holiday (around the 3rd week typically) is normally the kick-off point for peak season sales for toys.

What catalogues allow children to do is to review a significant selection of toys, so they can enjoy the experience of looking at lots of aspirational products, before eventually making a choice and passing that onto their parents. From the parental perspective, this exercise and the catalogue itself are very helpful, because not only can they see whether the toys their child requests are appropriate and meeting with their approval, they can also see the price and how that and everything else compares with the obvious competition. For example, some households may prefer to buy a generic version of something over a higher priced brand, or to change their child’s choice for some other reason of values, taste, socialisation or play value.

So, while the UK may still be getting used to the absence of the Argos catalogue, there is no doubt that catalogues will continue to be effective for retailers both in the UK and around the world.

We run a Consultancy business helping toy & games companies get ahead. For more information, check out www.KidsBrandInsight.com/services

We also run a Strategic Sourcing Consultancy advising toy & game companies around the world on their Sourcing strategies, reviewing their vendor base & suggesting improvements. To date our Sourcing services have saved our clients $tens of millions. For more information on how we can help, just go to: www.ToyTeamAsia.com