TSR Now it’s WotC’s Turn: WotC Moves Against TSR3

I guess after you provoke somebody enough, they’ll eventually bite back. The company has begun trademark cancellation procedures against the newest TSR.

TSR3 briefly filed for a court declaration on Dec 7th as to their ownership of the TSR trademarks — with an IndieGoGo campaign to fund it — and then voluntarily dismissed it a couple of days later on Dec 9th.

This filing is dated Dec 6th, the day before TSR3 launched its campaign.

In WotC’s response, they cite fraud as one of the causes of action, alleging that TSR3 misled the trademark office in its original application.

Mike Dunford, on Twitter, breaks down the action.


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Shakeshift

Adventurer
Also NuTSR claimed to have founded GenCon which existed before original TSR was even founded

Chronology and causation are not really strengths of theirs
Pretending they were the original TSR (and that they somehow also founded GenCon) was one of Justin Lanasa's biggest blunders. Justin was assuming that the fans didn't know any better, when really you can't try to spin a lie like that without attracting the attention of every old-timer who's been to GenCon.

One guy posted a reply to Justin saying "Where were YOU in the early days of the convention? I never saw you!" and Justin's response was "Oh trust me, I was there!" and basically a dozen people jumped down Justin's throat and told him to PROVE he was there, since it was allegedly HIS con. Justin banned/blocked all the people and later deleted his entire post. It really sent a message though to the fans how he was a liar and a fraud. No credibility whatsoever.
 









Sacrosanct

Legend
Publisher
Tenkar had a livestream with an actual lawyer. Skip to the 40 minute mark when they actually appear. One thing I noted was how they seem to be in agreement from a legal standpoint that LaNasa could be on the hook for $300,000 (legal fees, damages, etc).

Hope it was worth it Justin.

 
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Cadence

Legend
Supporter
Tenkar had a livestream with an actual IP lawyer.

They say they're just a business attorney and not an IP one, right?

Anyway, there's more interesting stuff about personal liability (LLC notwithstanding) at around 55 minutes.
 
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bonchon

Explorer
Tenkar had a livestream with an actual lawyer. Skip to the 40 minute mark when they actually appear. One thing I noted was how they seem to be in agreement from a legal standpoint that LaNasa could be on the hook for $300,000 (legal fees, damages, etc).

Hope it was worth it Justin.

TL;DR - scroll down for my estimation and rationale that nuTSR could be facing a judgment of about $1.2 million.

A few years ago, I racked up over $100,000 in legal fees just showing the USPTO that we were using a mark in commerce after someone tried to register one of our existing trademarks for themselves. And that was without the expenses that were about to come up for depositions, which would have involved flying people across the country, etc.

Discovery alone racks up a lot of hours for the lawyers. And Wizards' lawyers are surely much more expensive than the ones we used. I wouldn't be surprised if WotC's legal fees alone hit the $200k mark or more.

The question then is what other damages might be awarded. This article lays out some good guidance around that question: How to Measure Trademark Infringement Damages - The Importance of Appropriate Calculation | Citrin Cooperman

FTA, the list of damages the Lanham Act allows for:
  • Owner’s lost profits
  • Disgorgement of infringer’s profits
  • Reasonable royalty
  • Corrective advertising
  • Augmented punitive damages
  • Statutory damages
  • Legal fees
I'd guess "lost profits" would be negligible, it's not like fakeTsr made any products that cost WotC sales of D&D.

Disgorgement of infringer's profits: we've seen that Wizards is already asking for that. It's probably a very small number.

Reasonable royalty: How much would Wizards charge someone for the right to sell merchandise with TSR logos? I can't even guess at this.

Corrective advertising: Probably zero, it's not like Wizards has to run any ads telling people about this.

Augmented punitive damages: What I've read about punitive damages in IP cases is that it's usually based on the financial resources of the defendant, and their intent. Punitive damages exist to deter an offender from doing it again, so a huge company like Costco might get hit with millions, but a small business wouldn't necessarily get hit with damages intended to put them out of business. LaNasa's companies don't have much money, and there are enough other damages to hit him with, so my entirely unqualified opinion is that a judge would probably not award much. Then again, it was clearly done in bad faith with ill intent, so you never know.

Statutory damages: This is probably where the hammer will come down the hardest, outside of the legal fees.
Here's the relevant portion of the law:
15 U.S. Code § 1117 - Recovery for violation of rights

(c) Statutory damages for use of counterfeit marks
In a case involving the use of a counterfeit mark (as defined in section 1116(d) of this title) in connection with the sale, offering for sale, or distribution of goods or services, the plaintiff may elect, at any time before final judgment is rendered by the trial court, to recover, instead of actual damages and profits under subsection (a), an award of statutory damages for any such use in connection with the sale, offering for sale, or distribution of goods or services in the amount of—
(1) not less than $1,000 or more than $200,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just; or
(2) if the court finds that the use of the counterfeit mark was willful, not more than $2,000,000 per counterfeit mark per type of goods or services sold, offered for sale, or distributed, as the court considers just.

This is a case of counterfeit marks. nuTSR willfully counterfeited the artwork in the real TSR logos. That means it's a minimum of $1,000 per mark per type of goods sold, and a maximum of two million dollars per. They counterfeited four marks according to the counter-claim: the lizardman, wizard, moon, and angled logo. They also used them in multiple USPTO classes: IC 016 (Game books), IC 028 (Dice and accessories for games), IC 035 (Trade shows), IC 041 (Entertainment), and IC 025 (Clothing).

So that's four counterfeit marks in five categories = 20 violations total.

The minimum award would be $20,000. I won't speculate on how high it could go. I'm sure it would never go to $2 million per violation, but even if it went up to $10k per violation, you're talking a base of $200,000 just for statutory damages, and that's before it's trebled.

Finally, we get to the cybersquatting. Statutory damages for cybersquatting are $1,000 to $100,000 per domain. (Statutory damages under the Anticybersquatting Consumer Protection Act)
Two domains are listed in the counterclaim, one for the museum and one for the game company. So there's a minimum of $2,000 in damages, and let's call it $10k per domain because it's clearly done in bad faith, but we're not talking about a huge company with deep pockets.

Keeping score:
Legal fees: $200,000
Profits: ????
Punitive damages: $0
Statutory damages: $200,000
Cybersquatting: $20,000

Total damages = $420,000
Treble damages, as the law requires = $1,260,000

I am not a lawyer, and you can make your own speculations about what Wizards is likely to ask for and what a judge or jury is likely to award. But I think it's pretty reasonable to say that even before the court hands over nuTSR's meager profits, Justin LaNasa is looking at a judgment of a million dollars or more for this adventure.

I'd love to hear from an IP lawyer with their actual expert opinion on my amateur speculation.
 


bonchon

Explorer
Treble damages are for actual damages; you never consider the attorneys fees as damages and they would not be trebled.

Good to know, then if they went with the statutory numbers I surmised, it would be a total of $820,000.

My guess is that Wizards will ask for a judgment that's large enough to scare him away from going to court and wasting any more of their time, so they can get him to settle and get rid of him. All it would take is a little bump on the statutory amounts in that case.

Make it $15k per counterfeit trademark violation, and you're at $300,000 for the base number.
With $20k for cybersquatting, that's $320,000, which triples to $960,000.

Add in the legal fees of 200k, and the amount they could ask for, and sound very reasonable doing so, would be back in the six figures = $1.16 million.
 



adamantyr

Adventurer
It may just be first steps to reaching a settlement rather than going to court.

Best case they make a settlement and meet most of WotCs demands (excising turning over business records and merchandise, with the understanding the latter must be destroyed or rebranded) and agree to never violate trademark or make any public comments on WotC ever again. The violation of which means immediate liability.

Worst case, well, they choose to go all the way to trial and lose. Badly. I'm pretty sure their legal counsel is telling them they have no chance of winning and settlement is the best thing to do.
 

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