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

It is common ground that Cabo did not carry out any formal consumer research before designing and launching Worldeez. That is not, however, fatal to its chances of success. The more important question is the quality of the product which Cabo ultimately produced. As to that, Cabo relied on the evidence of both witnesses of fact and the expert evidence.

Starting with the factual evidence, it is clear that some of the toy retailers and other industry players were very positive when they were first presented with Worldeez (see in particular Start Grant’s comments at §94). It is, however, necessary to put the evidence of the initial reactions to Worldeez in context. Many of the individuals who first saw and commented on Worldeez were friends of Mr Sivner and Mr Lazarus, and wished to encourage Cabo as a new entrant into the toy manufacturing business. That was undoubtedly the case for the Grants at The Entertainer, and Mr Garnham. They were therefore predisposed to be supportive of the product. As Mr Garnham said, he liked to encourage entrepreneurs in the industry, and described his approach as being one of “extreme positivity” in this context. Similarly Mr Grant said that Mr Sivner and Mr Lazarus were close friends “who I have always chosen to support with any product range that they wanted to launch”.

There is less reliable evidence as to the views of TRU and Smyths regarding the product quality of Worldeez. Mr Smyth’s witness statement stated that he did not consider Worldeez to be of a quality that would appeal to him as a retailer. As discussed at §147 above, however, while Smyths did not place an immediate order for Worldeez, the contemporaneous emails indicate that it was about to do so prior to MGA’s intervention. There is no evidence from TRU itself as to its reaction to the product, and for the reasons discussed at §§139–142 I do not consider Mr Larian’s account of a conversation with Mr Macnab to be reliable. As with Smyths, it is apparent that TRU was interested in stocking Worldeez, even if there is nothing suggesting that it was as enthusiastic as The Entertainer.

The factual evidence therefore indicates that the main toy retailers perceived Worldeez to be good enough to stock, or at least consider stocking, when it launched. That evidence does not, however, address the likely appeal of Worldeez compared to other comparable products on the market. On that point the best evidence before the court was that of the toy experts, who considered in detail the features of Worldeez and the extent to which those features were likely to enhance or reduce the appeal of Worldeez.

The toy experts agreed that Worldeez was an appealing toy, which tapped into the then-unfolding craze for unboxing collectibles, and which had a good brand name. They also agreed that Worldeez had well-executed figurines with good tactile appeal, appealing packaging and an extended unwrapping experience which included the use of a key to unlock the chamber of the globe which contained the figurines. The toy was lightly educational, and appealed to both genders although somewhat more to girls than boys.

While Mr Harper accepted that the packaging (including the key to unlock the lower compartment of the globe) was an innovative element of the globe, which would appeal to children, he considered that the figurines themselves were not particularly innovative – and as noted above, the experts agreed that having an innovative product is critical to success in this industry. Most obviously, the Worldeez figurines were very similar to Shopkins. Ms Munt noted the similarities between Worldeez and Shopkins, and agreed that these made Worldeez less innovative than other collectibles in the market.

It is apparent from the internal contemporaneous correspondence that Cabo’s designer, Mr Olivier, repeatedly warned the Cabo founders about the similarity with Shopkins, during the design process in 2016 and in March 2017. Of particular note was an email in September 2016 from Mr Olivier to Mr Cohen, expressing his concerns about the design direction:

“I can’t stop thinking about how this change of direction as bring Worldeez close to Shopkins, they are all unique and the concept is far from what they have implemented in the market, but at the ‘end of the day’ we have collectible toys that are characters within similar dimensions and with the same material … I am really concerned about how this will be translated in terms of intellectual property, but most important, I have no doubts about the potential of the concept, a potential that Shopkins as your competitors will see and soon or later a similar concept will be implemented by moose toys.

… I really am liking this direction, but concerned about the implications that it may have considering the strong competitor that we have ahead.”

Mr Michaelson’s response was revealing:

“I think we expected this?

I think the important thing would be to get it in store without anybody seeing it at trade shows etc and feeding back to Moose.

That is why I think the best approach is to make sure Marc gets it in to Smyths and the Entertainer … get big sales and then follow up with worldwide distribution.”

When cross-examined about this, Mr Michaelson gave an evasive answer. His intention was however, transparent on the face of his email: he was hoping to “get big sales” on Worldeez before Moose Toys, the suppliers of Shopkins, objected. What he did not appear to have considered was whether the similarity with Shopkins would reduce the innovative quality and hence dampen the consumer appeal of Worldeez from the outset.

The world theme itself was also not unique. Moshi Monsters had previously launched a range of products in 2010 called “Worldies”, with figurines similar to the Worldeez figurines that were later developed by Cabo. The trial bundle included the following picture as an example: