LAS VEGAS (CN) - A California toy company settled a federal lawsuit Monday by agreeing to stop making toys modeled after Belgian guns.
Jag Precision reached a mediated settlement with and Belgian gun maker FN Herstal and French Airsoft toymaker Cybergun.
Jag Precision agreed to stop making toy copies of FN Herstal's SCAR, M249 and P90 military rifles.
The settlement gives Jag Precision one year to sell its remaining stock of infringing toy rifles, but it cannot make or sell any others in any variation.
Gordon ordered all parties to pay their own attorney's fees and legal costs.
Cybergun makes Airsoft guns that shoot air-propelled plastic BBs .
In 2010, FN Herstal licensed Cybergun to make and sell Airsoft guns that are copies of FN Herstal's firearms designs.
That same year Cybergun acquired Spartan Imports, which also makes Airsoft guns. Cybergun said Spartan Imports informed it that it had been selling copies of FN Herstal firearms to Jag Precision. Cybergun said that was the first time it knew Jag Precision existed.
In August 2010 Cybergun demanded that Jag Precision stop infringing on FN Herstal's designs but a year later learned that Jag Precision was selling replicas of FN Herstal's SCAR special forces rifle.
Cybergun says it demanded again that Jag Precision stop selling the replicas. It and FN Herstal filed a federal complaint several months later.
Jag Precision claims that in 2006 FN Herstal had "constructive notice" of the replica toys it sold based on the firearms company's designs. Jag Precision claimed laches and statute-of-limitations defenses, saying the many-years delay by FN Herstal in challenging the toymaker's activity "unreasonable and prejudicial."
But FN Herstal claimed it learned of Jag Precision's trademark infringement only four months before it filed its lawsuit in 2012.
Judge Gordon ruled in December said that in laches defense claims a plaintiff cannot "sit on the knowledge" of a trademark infringement for an extended time and then seek to affirm its intellectual property rights. For its laches defense to succeed, Gordon said, Jag Precision must prove FN Herstal "unreasonably delayed filing suit" and that Jag Precision "was prejudiced" as a result.
"Even if I assume plaintiffs unreasonably delayed filing suit, Jag has failed to raise a genuine dispute about whether it was prejudiced," Gordon wrote.
To be prejudiced, Gordon said, Jag Precision would have had to invest heavily in the toy and continued the investment during the time FN Herstal delayed filing suit.
Jag Precision claimed it would have invested its efforts in developing a different toy if FN Herstal had enforced its rights sooner, but Gordon said this "speculation does not create a factual dispute."
Gordon said there is no specific statute of limitations on trademark infringement claims, though parties generally that agree Nevada's unfair trade practices law establishes a four-year statute of limitations.
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