HP-2020-000016 - [2025] EWHC 1451 (Ch)

On the morning of 23 May 2017, whilst Mr Larian was attending the Las Vegas toy fair, he received an email from Mr Andrew Laughton (at 07:29 local time, i.e. Pacific Daylight Time, or PDT) with the subject line “Worldeez – lol copy – even using Tiana (Toys & Me) who we used to launch”. The email contained a link to the first Tiana Worldeez unboxing video. Mr Larian responded two minutes later (07:31) asking “Who are they?”. Mr Laughton immediately sent a text message to Mr Sivner to ask whether he was behind Worldeez. Mr Sivner responded confirming that he had invested in the product, to which Mr Laughton replied “You do realise this infringes on our patent with LOL – we will protect so expect contact from MGA legal today Marc”.

Mr Laughton confirmed to Mr Larian that Singleton had invested in Worldeez. Mr Larian replied instructing Mr Laughton to “send the correspondence”. What that meant became clear when later that day (by then the early hours of the morning of 24 May 2017 in British Summer Time, BST) Mr Benjamin Johnson, MGA’s Senior Litigation Counsel, emailed Mr Sivner a cease and desist letter.

The first paragraph of that letter stated that MGA had a patent pending for LOL Surprise. The letter went on to contend that Worldeez was marketing and/or selling toys in “packaging confusingly similar to that of LOL Surprise!, including color schemes, shape, art work, lettering, and play pattern replicating the unique unboxing aspect of L.O.L. Surprise!” After referring to MGA’s “substantial goodwill” in its LOL Surprise products, the letter contended that:

“The law prohibits conduct that is likely to mislead or deceive consumers, and it is likely that Worldeez’ packaging, shape, color, and art work, as well as the product concept, marketing methods, features, and play pattern will lead the public to mistakenly believe that Worldeez originate from, are associated with, licensed by, or connected with L.O.L. Surprise!”

The letter then demanded that Cabo immediately cease offering the product for sale in packaging that resembles LOL Surprise packaging, and in general refrain from “any infringement on L.O.L. Surprise! products or trade dress, or any other intellectual property of MGA”, failing which MGA reserved the right to take all available legal action to enforce compliance. It concluded by saying that this was “not a complete statement of MGA’s rights in connection with this matter and/or L.O.L. Surprise!” and that MGA reserved all further rights.

As it happened, Mr Sivner and Mr Lazarus were also attending the Las Vegas toy fair. On 24 May 2017, the day after receiving the cease and desist letter, they had a meeting with Mr Larian, at which they showed him samples of the Worldeez globe, and compared them with Mr Larian’s samples of LOL Surprise.

The reaction of Mr Sivner and Mr Lazarus at that meeting with Mr Larian is disputed. Mr Larian said that Mr Lazarus admitted the similarity between LOL and Worldeez. In email exchanges with Stuart and Gary Grant between 24 May and 1 June 2017, he claimed that Mr Sivner and Mr Lazarus had “agreed it is a knock off”, and that they had agreed to change the design of the shrink wrap packaging to make it different to that of LOL Surprise (see §§125 and 129 below).

Mr Lazarus in his evidence essentially confirmed that he had acknowledged that the Worldeez globe and LOL Surprise looked similar, and had suggested that Cabo could change the packaging design. At the time, however, when shown Mr Larian’s claims about what had been agreed at that meeting, Mr Lazarus was rather coy. He did not deny acknowledging the similarity of the products, but suggested to Mr Cohen and Mr Michaelson that they should discuss the matter with a lawyer, and that an email should be sent from the lawyer “clarifying what we said how we said we would consider looking at things”.

It seems likely, on the evidence, that Mr Lazarus and Mr Sivner did indeed acknowledge that the products looked similar, and agreed to reconsider the design of the shrink wrap packaging around the globe, but were then reluctant to admit to the Cabo founders that they had done so. It is, however, very improbable that they agreed that the Worldeez globe was a “knock off”: that was Mr Larian’s mantra, repeated pejoratively throughout his email exchanges on this issue as well as in court, but there is no evidence other than his account that Mr Lazarus and Mr Sivner agreed with that description of their product (and I have already found Mr Larian to be a thoroughly unreliable narrator).

On 25 May 2017, Mr Larian emailed Mr Sivner and Mr Lazarus, copying Ms Elizabeth Risha (MGA’s general counsel) and MGA’s solicitors Mishcon de Reya:

Cabo’s solicitors wrote to MGA the next day, 26 May 2017, responding to the cease and desist letter, and asking MGA to identify the patent or patent application on which it relied. MGA did not ever respond to that letter. Instead, on the same day Mishcon de Reya emailed a letter and draft undertaking to Singleton. The draft undertaking required all Worldeez stock to be withdrawn from sale and destroyed, along with any “components, moulds, prototypes and any other product-specific material”, as well as all advertising materials. It also required any altered designs to be submitted to Mr Larian and MGA for approval, and that Singleton, Sinco and Cabo each admit liability for “in respect of MGA’s claim for infringement of its intellectual property rights in the LOL Surprise! products”. The nature of these rights was, however, not explained, either in the draft undertaking or in the covering letter from Mishcon de Reya.

Cabo (unsurprisingly) did not sign the draft undertaking. It did, however, take MGA’s threats seriously. Mr Lazarus wrote in an internal WhatsApp message “This guy will tie us up in a million dollar lawsuit … He isn’t a joke. He is not afraid of courts … he will spend million dollars on court costs even if he [loses] just to fight for his brand. This is a serious and real issue now … The guy will do everything to try stop this. And throw all his resources at it. It’s what he does”. Cabo therefore changed the packaging of the Worldeez globe, as described further below, and took steps to protect its intellectual property rights in the event of litigation by MGA.

In the event, notwithstanding the threats made by MGA in correspondence, MGA did not ever bring proceedings against Cabo for infringement of any intellectual property rights related to LOL Surprise.