Tropicana wants out of Beanie Baby slots lawsuit

Grace Leong

Friday, June 9, 2000 | 10:57 a.m.

Phoenix-based Aztar Corp., accused of illegally promoting Ty Inc.'s "Beanie Baby" toys in exchange for slot play at its Tropicana hotel-casinos in Las Vegas and Atlantic City, is seeking dismissal of an injunction it claims is moot because it has already stopped the promotion.

Westmont, Ill.-based Ty sought an injunction in early May in U.S. District Court in Las Vegas to stop Aztar's "Beanie Babies Giveaway Slots," a Tropicana slot promotion that began around April 1999. It awarded the wildly popular plush toys as awards to its slot machine patrons.

Aztar, in a response filed Monday opposing Ty's copyright infringement lawsuit, said it was served the injunction on May 17 even after it had removed all billboard and casino floor signs advertising the Beanie Baby giveaways and ended the promotion on May 16.

Aztar claims Ty's injunction is nothing more than a "penalty for alleged past wrongs," because it says 'there is no threat that the program will be reinstituted."

But James White, Ty's Chicago-based counsel, disagreed. "The injunction is not moot because we have no assurances without an order from the court that Aztar won't do this again."

"We sent them a cease and desist letter asking them to end the promotion, which they did," he said. "But we also asked them provide an accounting of their profits and to enter a written agreement to not reinstate the program, and they refused."

"The trademarks and copyrights are property of Ty's. Aztar can't infringe the trademarks and say it has stopped and not give written assurances or an accounting. If they had said they would give assurances and agree to deal with accounting, the suit would not have been served," White said.

Aztar argued Ty cannot restrict it from reselling or giving away Beanie Babies because it bought the toys from Ty and other Ty-approved sources and was therefore "privileged to do whatever it wanted to do with them." "Ty is trying to control the vertical distribution of of its product after it has sold them by using intellectual property laws. Ty cannot use the courts or intellectual property laws for the purpose of controlling the secondary market in products for which it has relinquished title," Aztar said.

"But that's a red herring," White said. "They are using Ty's trademarks and copyrights as a come-on to entice customers to spend money at their casinos. They are using Ty's trademarks for a purely commercial purpose."

Ty, which said in its lawsuit it wasn't asked for permission to run the promotion, claims mixing its product with slot play will likely tarnish its trademarks because anyone looking at the Tropicana's slots or billboards would assume Ty endorsed the promotion or casino.

Aztar, however, said it took steps to preclude perceptions that Ty and Tropicana are affiliated in any way with its disclaimers of affiliation on the signs or "a notice of Ty's ownership of the trademarks and copyrights."

Photo exhibits included with the Aztar response showed a billboard that proclaims, "Win Beanie Babies on our new slots! Exclusively at the Tropicana!" This sign also featured pictures of Beanie Babies and the Ty logo.

At the sign's bottom, in small print, is a disclaimer: "Ty and Beanie Babies are trademarks of Ty Inc." Aztar said the displays in the casinos were solely to identify slot machines that patrons could play and earn coupons to exchange for Beanie Baby toys.

"Nowhere does (the billboard) promote BEANIE BABY GIVEAWAY SLOTS, and nowhere is there any suggestion that it is selling Beanie Babies slot machines or that the name of the slot machines is Beanie Babies," Aztar said.

But White disagreed.

"This is more an attribution of rights than a disclaimer, and it does nothing in this situation. Firstly, it's in small print even though they attribute the Beanie Babies are Ty Inc.'s. Consumers don't usually read small print. Secondly, a disclaimer doesn't exonerate you from trademark infringement."