Troll Company Files Countersuit

LOS ANGELES, October 30: The battle between the Troll
Company and DIC Entertainment took a turn for the worse yesterday, with the
doll-maker accusing the kids’ content company of “fraudulently” obtaining
licensing rights to the Troll brand and then conducting “a disastrously
underfunded rollout.”

Last week, in a federal court in Los Angeles, DIC
Entertainment lodged a $20-million suit against the Troll Company alleging
claims of fraud in the inducement and negligent misrepresentation in connection
with its deals for the original Good Luck Troll and the revamped Trollz brand.
DIC maintains that prior to signing the deal, it expressed concern about the
sale of counterfeit Good Luck Trolls and other infringing products; concerns
that, DIC says, were dismissed by the Troll Company. Having spent nearly $20
million to develop and promote the Good Luck Troll and Trollz, DIC says that
the value of those properties was “compromised by rampant infringement.”

Troll Company, meanwhile, is also claiming
misrepresentation. The Danish company’s lawyer, Patricia L. Glaser, of
Christensen, Glaser, Fink, Jacobs, Weil & Shapiro, claims that DIC, when it
sought out the Troll rights, “was in dire financial straits and desperate to
find a source of fast cash.” A press release from the Troll Company alleges
that DIC’s chairman and CEO, Andy Heyward, “personally assured Troll Company
president and CEO Calle Østergaard that DIC had all the money it needed to
restore the Troll to its former glory.”

Furthermore, the Troll Company says that DIC convinced it
that the creation of a new brand, Trollz, which would involve a website,
television series and merchandise, would provide a boost to the original Good
Luck Troll. Instead, the complaint states that DIC’s intention was “to devote
its limited resources to the marketing of the derivative Trollz property, which
DIC owned. As for the Good Luck Troll, DIC's main interest was not for a source
of revenue for either itself or Troll Company, but rather to eliminate a
potentially competing ‘troll’ property from the marketplace and thus give DIC's
Trollz a clear field.”

The complaint goes on to call the 2005 launch of the tween
Trollz brand as “an enormous flop.” According to the complaint, “The
consequences for the Good Luck Troll were devastating. The bad feelings
generated among sublicensees and retailers because of Trollz left the Good Luck
Troll facing a hostile commercial environment. Indeed, several DIC executives
confirmed to Troll Company that the Good Luck Troll had been so badly harmed by
the failure of Trollz that they recommended keeping the Good Luck Troll out of
the market for a substantial period to give sublicensees and retailers a chance
to forget their negative experience with Trollz.”

The complaint continues: “In short, Troll Company has been
severely damaged by DIC's fraud. Not only did Troll Company fail to receive the
huge rewards that it had labored for years to achieve and that DIC had
predicted would occur; far worse, DIC took Troll Company's Good Luck
Troll—one of the most famous toy characters in the world, which DIC
itself described as a ‘multi-billion dollar renowned property’—and
rendered it, by DIC's own admission, unmarketable.”

The lawsuit seeks damages of $20 million, punitive damages,
as well as a permanent injunction to prohibit DIC from any further exploitation
of the Trollz and the Good Luck Troll character.

—By Mansha Daswani