Kiwi toy maker Zuru wins Bunch O Balloons battle against US company

Monday, 4 December 2017

A US company was found to have copied Zuru's patented technology for filling up water balloons simultaneously.

A New Zealand-founded toy company has won a multi-million dollar payout against an American copycat.

A Texas jury found US company Telebrands infringed on Zuru's patented water-balloon filling toy, and awarded US$12.25 million (NZ$18 million) in lost profits and royalty damages to Zuru.

Zuru's Bunch O Balloons filled 100 water balloons simultaneously through a hose attachment and detachable straws.

The product was invented by a Texan father of eight, Josh Malone, in 2014 and he licensed the product to Zuru in August that year.

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James & Wells associate Sébastien Aymeric said patent litigation was notoriously long and expensive in the US.

But without a well-done patent, a court case could not be brought to order infringers to stop selling a copycat product, Aymeric said.

'It's an unbelievably complex area of law, but if legal action can protect your business for the future it's worth it.'

'There's a cost of doing business in any corner of the world, and in these patent cases it's unusual not to end up out of pocket.'

Similar cases in New Zealand tend to have more conservative payouts, Aymeric said.

Zuru was founded in Cambridge, New Zealand, but has grown to employ over 400 staff in its 10 offices around the world and retail to 121 countries.

It has reportedly contributed millions of dollars to Malone's water balloon product.

Telebrands and its subsidiary, Bulbhead.com, began selling similar products in late 2014, eventually making it into Bed Bath and Beyond, and Walmart stores. The company is known for its 'as seen on TV' products and is one of America's leading telemarketer brands.

Records show Telebrands has been sued many times over intellectual property rights since it was founded in 1983.

Zuru has sold over 3 billion balloons through its Bunch O Balloons product. It obtained three injunctions against Telebrands to bar the sale of its three similar water balloon products.

The company still has two ongoing cases against Telebrands regarding its 'Easy Einstein Balloons', and 'Balloon Bonanza' products.

After lab testing on the Easy Einstein Balloons found the presence of toxic chemicals in concentrations above the US legal limit, the product was pulled from shelves.

Zuru chief operating officer Anna Mowbray said 'Zuru works diligently to bring innovation to market and to stand by its inventors.

'We are committed to continuously fighting what we believe are knock-off companies like Telebrands who try to undercut inventors and claim innovations as their own.'

She said the company had confidence in the US legal system, and expected future damages awarded beyond the US$12.25m based on findings of Telebrands' 'willful misconduct'.

Telebrands did not respond to requests for comment.