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Restraining Order Denied In Toy Dispute

CHICAGO (CN) - A federal judge denied Little Tikes' motion for a temporary restraining order to prohibit Kids Station Toys from selling anything with the Little Tikes' trademark.

Little Tikes and Kids Station signed a licensing agreement in December 2003, which and Little Tikes terminated in February this year, citing quality problems with a toy cell phone made by Kids Station.

But Kids Station said the agreement went sour after MGA Entertainment bought Little Tikes. Kids Station claimed MGA produced similar products to Kids Station and wanted to eliminate the competition.

According to Kids Station, MGA and Little Tikes falsely claimed that Kids Station owed $13.5 million in royalties, which MGA and Little Tikes later rescinded, and MGA and Little Tikes began to make bogus safety claims about Kids Station's products.

U.S. District Judge Joan B. Gottschall ruled that even though Little Tikes met the criteria for a TRO regarding success on merits, no adequate remedy at law and irreparable damage, the Little Tikes argument of potential harm is not as strong as Kids Station's.

Gottschall wrote, "if the TRO is granted, Kids Station faces potentially serious damage to, and possible ruination of, both its finances and its reputation. The court therefore finds that preserving the status quo ante will result in substantially less damage to both parties, whereas granting Little Tikes injunctive relief poses potentially devastating consequences to Kids Station. Therefore, the balance of hardship analysis strongly favors denial of the TRO."

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