Is Hallmark Cards counterfeiting Hallmark rings? It's a $20 million question

Is Hallmark Cards counterfeiting Hallmark rings?

A federal judge has been asked to rule on that question in what a New Jersey-based company says is a $20 million trademark infringement by the greeting cards maker.

Yes, you guessed it. The New Jersey company is called Hallmark, too. And this is just the latest salvo in a battle that began more than a decade ago.

We'll call them New Jersey Hallmark and Kansas City Hallmark, though actually Hallmark Industries Inc. sued Hallmark Licensing LLC, which is a subsidiary of Hallmark Cards.

Both Hallmarks claim ownership of "Hallmark Rings" and "Hallmark Diamonds" trademarks involving jewelry. They've battled in federal court in three states as well as in federal trademark proceedings.

A key moment came last May when a federal trademark board sided with Hallmark — the Kansas City Hallmark — in the battle over those trademarks.

Not so fast, said the New Jersey Hallmark in a 27-page lawsuit originally filed in New Jersey federal court and recently transferred to U.S. District Court in Kansas City.

New Jersey Hallmark claims it lost that battle because its own lawyer in the case was a fraud, though the company didn't know at the time. It said the lawyer failed particularly to point out in the proceedings that Kansas City Hallmark had lost an earlier trademark battle to oppose the Hallmark Rings and Hallmark Diamonds trademarks that New Jersey Hallmark is now defending.

The attorney also failed, the lawsuit said, to disclose that he was under investigation and that he was being barred from practicing before the U.S. Patent and Trademark Office, where the trademark disputes played out.

In its lawsuit, New Jersey Hallmark says it was "prejudiced by its own counsel … to such a grave extent" that the trademark board "erroneously, and unjustly ruled" against the company.

New Jersey Hallmark asks the federal judge to set aside that May 2017 trademark board decision; rule that New Jersey Hallmark holds the Hallmark Rings and Hallmark Diamonds trademarks; find that Kansas City Hallmark infringed on the trademarks, made false representations, counterfeited, engaged in unfair competition and deceptive acts; and award New Jersey Hallmark $5 million in actual damages and three times that in punitive damages.

A Hallmark Cards spokesman said the company "believes the case is without merit and is fully prepared to defend it." An attorney representing New Jersey Hallmark said his client declined to comment but stood by its claims.

The 2005 trademark case took five years to play out. But three years later, Kansas City Hallmark sued New Jersey Hallmark in federal court in Arkansas. Kansas City Hallmark voluntarily dismissed its own lawsuit in mid-2014.

Its claims in Arkansas were that Kansas City Hallmark had been selling a combination product of greeting cards and jewelry since "at least the 1960s" and has sold other jewelry products steadily through its current product lines.

Kansas City Hallmark said it learned about another company selling Hallmark-branded jewelry but concluded they could co-exist. The other company sold "high-end jewelry" to wholesale buyers, while Kansas City Hallmark sold its jewelry through national retailers. Different jewelry, different customers.

That company was called Diastar Inc., and it was the firm that Kansas City Hallmark originally fought in the 2005 trademark case that lasted until 2010. Diastar won and now Kansas City Hallmark and New Jersey Hallmark each claim to hold those trademarks.

This story was originally published March 29, 2018 at 5:27 PM with the headline "Is Hallmark Cards counterfeiting Hallmark rings? It's a $20 million question."