Toymaker May Get Paid for New Hasbro Nerf Gun

GREEN BAY, Wisc. (CN) - Inventors of the air-operated foam dart gun can pursue claims that Hasbro owes loyalties for its popular Nerf brand of the toy, a judge ruled.

Sturgeon Bay, Wis.-based Hedeen and Cos. says Hasbro agreed in 1994 to pay royalties on all Nerf guns that included a "barrel post" feature, as well as some products without the feature.

Shortly after signing the agreement, however, Hasbro allegedly stopped selling its implicated toys, including the Sharp Shooter. "Hedeen has learned that after the passage of many years ... Hasbro has reintroduced the toy guns that include the barrel-post feature," but Hedeen has received no royalty payments, according to the complaint.

Hasbro filed for summary judgment, claiming that its new product, the N-Strike blaster, is sold under a different name excludes it from the parties' settlement agreement, even though it is nearly identical to the Sharp Shooter.

U.S. District Judge William Griesbach rejected this claim Monday. "Hasbro's reading of the settlement agreement is too narrow," he wrote. "Hasbrow would have this court say that a name change could have gone into effect the day after the settlement agreement was signed and Hasbro would be free to market this identical product, one day later, under its new name. At the very least, the contract is ambiguous as to whether it would allow such action to avoid further royalty payments to Hedeen. To be sure, the settlement agreement specifically names the product for which Hasbro agreed to continue paying royalties. But the agreement does not say that Hasbro can avoid paying royalties by simply changing the name of the product it was selling."

Even though Griesbach denied Hasbro's motion for summary judgment, the toy giant still "may be able to supplement its motion with additional facts and/or provide the court with others bases upon which summary judgment could be granted," according to the three-page order.

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