When Hallmark Cards last year closed its Enfield, Conn., distribution center, it “entrusted significant quantities of greeting cards” and other Hallmark-brand products to a company that was supposed to recycle them “in unsaleable condition.”
Somehow, perfectly good greeting cards found their way to market, spawning a lawsuit.
Kansas City-based Hallmark Licensing LLC and Hallmark Marketing Co. LLC have brought suit against Dickens Inc., a reduced-price card distributor that isn’t a Hallmark vendor.
Hallmark said in the case, filed in U.S. District Court in the Eastern District of New York, that Dickens obtained “as many as 8 million or more Hallmark Brand Products … which constitutes a significant threat” to the Hallmark trademark.
Hallmark said it had a contract with NorthStar Pulp & Paper Co. “for the sole purpose of recycling those products.” But Hallmark said it discovered in March that Dickens was selling its products to non-Hallmark retailers and on the Dickens website at discounted prices.
The lawsuit made no further reference to NorthStar concerning the Enfield products.
A Hallmark district sales manager in New York said a Dickens vice president told him that Dickens acquired 75 truckloads of Hallmark products by paying an unnamed third party 10 cents per card.
Hallmark sent a cease-and-desist letter to Dickens and was granted a request for a temporary restraining order last week. A hearing on the lawsuit is scheduled for April 24.
James Chou, Dickens’ president, published a response to the lawsuit on the Dickens website. Chou wrote that Hallmark “falsely suggests that we knowingly participated in obtaining ‘misappropriated cards,’ ” and he asked Hallmark to stop making the “false claim.”
Chou said Dickens “constantly search(es) for closeouts of name brand products with great value from different sources, and pass(es) along the savings to our independent retailers to fight against big chains.”
Chou said in his letter to Hallmark chairman Donald J. Hall that he verified the Hallmark products weren’t stolen before he bought them “to fight back against Hallmark” after he was approached by “some vendors of Hallmark closeouts.”
Chou said he had no obligation to comply with the cease-and-desist order and that he didn’t think his sales of Hallmark products would “tarnish your Hallmark brands as you claimed.”
Hallmark seeks compensatory, punitive and statutory damages for trademark infringement plus other awards from the court.