A major legal row has broken out between two companies that were supposed to be working together to reinvigorate the Good Luck Troll brand, but are now at each other’s throats.
Danish firm, The Troll Company, licensed the rights to the Good Luck Troll to US brand management company DIC Entertainment in 2003, and at the same time persuaded the firm to grant it permission to create a new range, Trollz, based on the traditional characters but aimed at a younger audience.
Four years later, neither line has made any impact, sales projections have proven to be woefully optimistic and both parties are suing each other for $20m.
DIC was the first to go legal last week when it alleged that The Troll Company had fraudulently misled it with regard to the state of the counterfeit Troll market.
When the initial deal was struck, the firm was concerned that any attempts to re-market the brand would be fatally undermined by the sale of cheap knock-offs. It was assured, however, that the situation had been contained.
Only after these guarantees, DIC claims, did it embark on a major programme of investment and development. Last week, in a Los Angeles court, it claimed that the project was doomed from the start due to widespread sales of counterfeit products and that The Troll Company was aware of the situation all along. It is seeking damages of $20 million.
On Monday (October 29th), The Troll Company responded by suing DIC for the same sum. It alleges that when the deal was struck DIC misrepresented its true financial position and its ability to successfully execute a global re-launch of the Good Luck Troll brand.
Rather than being “one of the largest and most successful animation companies in the world”, as DIC had pitched itself, it was actually “losing millions of dollars and teetering on the brink of financial collapse”. It was this, according to The Troll Company, rather than any counterfeiting issues, that meant the venture was doomed from the off.
The lawsuit goes on to claim that DIC also concealed its true intentions with regard to its new Trollz line. It claimed that this would be a sub brand designed to increase the profile and sales of the original, but The Troll Company alleges that it actually planned to focus primarily on Trollz, the brand it owned, at the expense of Good Luck Troll, the brand it had licensed.