Infringing on someone's copyright or trademark is serious business - and it can put you out of business. That's how one store happened to see it. They were selling popular Harry Potter memorabilia.
Whimsic Alley, which is located in Los Angeles, was sued by Warner Bros. for selling imitation Harry Potter merchandise. Warner Bros. holds the trademark and copyright to Harry Potter movies and the majority of Potter trademarked merchandise. They accused Whimsic Alley of infringing on their trademark. The companies were set to go to litigation in January, but they have already reached a settlement.
Whimsic Alley wasn't selling all imitation Harry Potter merchandise. They were selling some official trademarked products, but they were also selling unofficial, unlicensed Harry Potter merchandise. Warner Bros. claims that their unlicensed merchandise was deceptive to customers. In addition to just selling merchandise, Whimsic Alley also rented out Harry Potter costumes and props, such as wands, a "Great Hall" and wizard costumes.
The store allegedly had a lot of followers who came out to support them when news of Warner Bros. suit against them was made public. The fans encouraged them not to close their doors. The store is famous for clerks that dress in popular movie-themed clothing, and the interior of the store is designed in a "Harry Potter world" fashion.
In the newly reached settlement agreement, Whimsic Alley is barred from selling or displaying any counterfeit Harry Potter trademarked merchandise or any unlicensed Harry Potter merchandise. They also cannot label day camps or parties under the Potter brand. However, the store is still allowed to sell the Harry Potter legitimately licensed merchandise. The settlement also included an undisclosed monetary amount for damages.
Infringement litigation is important to protect a company's trademarks and copyrights. If companies are allowed to counterfeit other company's work, they are not only stealing profits that rightly belong to the trademark owners, but they can sabotage the reputation of a company's trademark.
Source: latimes.com, "'Harry Potter'-themed Whimsic Alley and Warner Bros. settle lawsuit" Daniel Miller, Dec. 04, 2013