TF_GIJoe_SDCC2013Yesterday, Anime News Network reported that the lawsuit between Harmony Gold and Hasbro was dismissed. Harmony Gold originally filed suit against Hasbro in June under allegations of copyright infringement. Harmony Gold alleged that Hasbro violated the company’s rights to Macross, Genesis Climber Mospeada, and Southern Cross due to Hasbro’s distribution of the “G.I. Joe and the Transformers … The Epic Conclusion” toy set. The case was dismissed on September 23, under a Stipulation for Dismissal of Action. The documents stipulate that the case was dismissed with prejudice, which means that Harmony Gold cannot file suit under the same circumstances, and both parties will pay their own legal fees.

When we last examined this case, Comic Con had just ended, and the filings were just announced. At the time, the case seemed silly at best, and malicious at worst. The molds for the specific toy used in the set, and the color schemes had no specific match to the standard existing Valkyrie lines. While Jetfire was originally a modified Valkyrie mold, the toy was produced under a license, and promptly discontinued after the rights lapsed. The new toy uses a modified Skystriker mold, which is based on the F-14 Tomcat. While the Valkyrie is based on the F-14 as well, we’d be seeing Harmony Gold’s lawyers arguing that Hasbro infringed with a figure, which was based on a figure using a licensed Veritech mold. At the same time, they would be fighting negligence of copyright, as numerous incarnations of Skystriker and Jetfire have been on the market for decades.

The fact that Harmony Gold willingly entered into the mutual dismissal clause is telling on two counts. The first is that the company made a gross miscalculation in logic when filing suit against Hasbro. The mutual dismissal clause, while not declaring a victor, is a de-facto defeat on Harmony Gold’s part. The second point is that the case was never going to see the walls of a courtroom. A legal loss, while impressive and exciting, would be devastating to both parties.

To explain this, I’d like to delve into a pair of hypothetical cases, both of which involve the case going to trial. In the first case, we see that Harmony Gold lost the case at trial, leaving them to pay the damages of Hasbro’s legal fees and counter-suit. This creates a precedent in the legal system. Basically, it would create a rule, to which courts would refer in cases of a similar nature going forward. So, if Harmony Gold lost, their powers of the license they hold would be diminished, as cases of a similar nature would give leverage to the defendant. Likewise, Hasbro, another company that’s protective of its intellectual property, would see similar restrictions on future copyright cases.

In the second scenario, if Hasbro lost, we would see a precedent created that gives leverage to those making similar copyright claims. So, in cases like this, where the defendant offered a product tangentially related an intellectual property by a party, the prosecution would have added leverage in civil cases going forward. In both cases, the outcome has distinct upsides and downsides for either party. However, the downsides do outweigh the upsides, as they create potential hindrances for either company. With this in mind, it’s easy to see why both companies were happy to drop the case, rather than take it to trial.

While the resolution to the case wasn’t as exciting as some had hoped, it is good to see this case get some closure on the matter. Likewise, it’s good to see that the case did get resolved in something a bit more substantial than a token settlement.