Juli Adams, a Seattle artist, has sued The Hartz Mountain Corporation for violating its license to use her “Angry Birds” plush pet toy line. Adams created the toy line before the insanely popular video game of the same name existed and licensed the line’s use to Hartz. Once the Angry Birds game exploded in popularity, Hartz used its license with Adams as leverage to negotiate with Rovio, the creator of the Angry Birds video game. As a result of the negotiations, Rovio gave Hartz exclusive rights to sell pet toys based on the video game characters, but Rovio did not inform Adams of this new contract. Now, Adams has sued Hartz for violating her trademark and breaching their contract.
Adams first created her Angry Birds toy line in 2006 at the request of a Hartz marketing executive, who had seen her art show in Montana while on vacation. Inspired by her own cats and their propensity to tear up their toys, Adams decided to make a line of pet toys that did not look happy to be messed with. Adams licensed the line to Hartz but retained the intellectual property rights so that Hartz couldn’t license it to anyone else.
When the Angry Birds video game came out in 2009, Rovio began to trademark as many Angry Birds-related products as they could. However, they were unable to trademark pet toys because Adams already owned the U.S. trademark. Adams alleges that, when Hartz heard of this, it used its license with Adams to pretend to own the IP rights to the toy line. Hartz then negotiated with Rovio to get exclusive rights to sell a new line of Angry Birds pet toys based off the video games characters (and not Adams’ art). After securing the contract with Rovio, Hartz let Adams go and told her that she couldn’t use the Angry Birds name anymore.
One of Adams’ attorneys believes that Hartz has made tens, maybe hundreds of millions of dollars from the Angry Birds pet toy line. Adams has only received around $11,200 of that, and her last royalty payment came in 2011. Rovio has not been named as a defendant in the complaint, but that doesn’t mean legal action against it is out of the question. It’s possible that Rovio independently created its Angry Birds video game characters, but Adams’ attorney indicated that “[a]t some point we will be in touch with Rovio to obtain information from them.”
Michael Atkins, a professor of trademark law at the University of Washington School of Law, said that “[r]eally, this is breach-of-contract case.” Although it is easier to empathize with the struggling artist than with the large corporation, it’s important to remember that this case is more about the terms of the license than any normative idealism. If Hartz indeed violated its license with Adams, then she should be awarded damages for her lost royalties. However, if Hartz found a loophole in the license and did indeed act legally, then Adams might be out of luck.