Worldeez repackaging and relaunch
Worldeez repackaging and relaunch
Immediate steps taken by Cabo
Following MGA’s intervention, as set out above, The Entertainer cancelled the initial order it had placed for the Worldeez globe. TRU and Smyths likewise did not place any orders for the launch of the globe. The various planned meet and greets with Tiana at the stores of all three retailers were cancelled.
As an immediate measure, to try and launch the product in a form to which MGA would not take objection, Cabo repackaged some of the globes as blind bags. The Entertainer purchased a small number of those, along with some of the 5- and 10- pack products, and a video was later filmed with Tiana at The Entertainer’s Birmingham store to promote the Worldeez blind bags. Meanwhile Cabo redesigned the packaging of the Worldeez globe by replacing its blue plastic design with a white plastic design, and removing the image of the “Bella” figurine, as shown below.

The new design was sent to the Chinese factory on 2 June 2017, and existing stock in the UK was rewrapped at a local factory. This was all done before the product was launched, such that no globes in the original blue wrapper were ever marketed. That did not, however, cause MGA to lift its objections to the Worldeez globe: as described above, even in September 2017 Mr Laughton was making clear to The Entertainer that LOL would not be supplied if The Entertainer stocked the Worldeez globe. None of The Entertainer, TRU and Smyths ultimately stocked the Worldeez globe, even in its repackaged form. Nor did TRU or Smyths ever order any of the other Worldeez range (i.e. the blind bags or 5- and 10-packs). The Entertainer ultimately only ordered very small quantities of Worldeez.
The Second Claimant, The Licensing World (TLW), was incorporated on 30 May 2017, with the same shareholders as Cabo. An assignment agreement transferred to it Cabo’s goodwill and Worldeez trademarks for the sum of £1. This appears to have been done in an attempt to protect any Worldeez intellectual property rights in the event that Cabo was sued, as MGA had threatened to do.
- Heading
- INTRODUCTION
- THE EVIDENCE OF FACT
- MGA’s witnesses of fact
- Mr Larian’s breaches of purdah
- THE EXPERT EVIDENCE
- The economic and valuation experts: preliminary comments
- Assessment of the economic and valuation evidence
- The Decision Tree Model (DTM)
- ISSUES
- FACTUAL BACKGROUND
- The UK toy industry
- Table 1: NPD dolls classifications
- MGA and LOL Surprise
- Section 14
- The founding of Cabo and development of Worldeez
- Section 16
- The initial marketing of Worldeez
- Discussions with the launch retailers
- The Entertainer
- Toys R Us
- Smyths
- Other retailers
- MGA’s intervention
- Contacts with Cabo and Singleton
- The Entertainer
- Toys R Us
- Smyths
- B&M and other retailers
- AB Gee
- Worldeez repackaging and relaunch
- Launch of Worldeez globe in B&M
- Decline in B&M sales after August 2017
- Sales to other retailers
- Licensing and international distribution
- Nickelodeon advertising
- Demise of Cabo
- PROCEDURAL BACKGROUND
- ABUSE OF DOMINANCE CLAIM
- The relevant market definition
- The parties’ submissions
- Mr Colley’s approach
- Mr Parker’s approach
- Section 44
- Conclusions on market definition
- Whether MGA was dominant on the relevant market
- The parties’ submissions
- Table 2: 2017 market shares for Colley and Parker markets (%)
- Table 3: Parker market share estimates for 2018–19 (%)
- Table 4: 2017 market shares for extended Colley market (%)
- Market shares
- Figure 1: Colley diagram of 2017 MGA and competitor market shares
- Competition from products outside the relevant market
- Barriers to entry and expansion
- Countervailing buyer power
- MGA’s conduct
- Conclusions on dominance
- Whether MGA’s conduct amounted to an abuse
- The parties’ submissions
- The overall exclusionary campaign
- MGA’s “response to commercial attack” argument
- MGA’s passing off defence
- Section 63
- Conclusion on abuse of dominance
- UNLAWFUL AGREEMENTS CLAIM
- Agreements with the toy traders
- Discussion and conclusions
- Anticompetitive object or effect
- Discussion and conclusions
- Exemption under the VBER
- Scope of the VBER
- Market share threshold
- Excluded restrictions
- Conclusion on the VBER
- Exemption under s. 9 / Article 101(3)
- Conclusion on the unlawful agreements claim
- PATENT THREATS CLAIM
- Threats of patent infringement proceedings
- The parties’ submissions
- Discussion
- “Person aggrieved”
- Conclusion on the patent threats claim
- CAUSATION AND QUANTUM
- Legal principles
- Quantification of the loss
- The approach to claims for lost profits
- Conclusions on the overarching approach
- Causative effect of MGA’s conduct
- Actionable damage and causation: Cabo’s heads of loss
- Whether Cabo would have traded profitably in the counterfactual case
- Product quality
- Section 92
- Marketing campaign
- Retailer support
- Business plan/financial projections
- Inventory management
- Working capital
- Toy expert evidence on commercial success
- Breakeven analysis
- Table 5: Volumes and working capital required to break even in 2017
- International sales
- Conclusions on whether Cabo would have traded profitably
- The parties’ quantum models
- Mr Colley’s quantum models
- Table 6: Cabo calculations of losses (£m)
- Assessment of Mr Colley’s models
- Mr Parker’s quantum models
- Table 7: MGA calculations of losses (£)
- Assessment of Mr Parker’s significant success model
- Table 8: Loss calculation for significant success model, comparing MGA and Cabo cost stacks (£)
- Assessment of Mr Parker’s moderate success model
- Figure 2: Parker moderate success model: average monthly revenue (£)
- Conclusions on the quantum models
- DECLARATORY RELIEF
- Conclusions
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