Hallmark Suit Claims Rival Didn’t Care Enough To Send The Very Best

Hallmark Cards, Inc. was founded in Kansas City, Missouri in 1910.  It is the oldest and largest manufacturer of greeting cards in the United States.  Dickens Inc. is a rival greeting card company founded in 1982 which credits itself with the invention of "Musical Cards", the introduction of "LED Lighted Cards" and "Sound Effect Cards."  In 2017, Hallmark sued Dickens for trademark infringement alleging that it gathered and sold 8 million or so unsalable Hallmark cards intended for the scrap heap. According to Hallmark, it sent its less than best greeting cards to recycling company Northstar to be converted to paper pulp.  Instead, Northstar sold the cards to an intermediary who later sold them to Dickens.  Dickens thereupon sold the ersatz Hallmark cards to the public.

The story of the now three year old lawsuit is not likely ever to be dramatized on the Hallmark Channel, which is known for its non-violent mysteries and cloying romance pieces. Hallmark attorneys have accused Dickens President James Chou of calling them "dogs" and hurling profanity laced insults at them during a deposition.  Chou counters that Hallmark’s attorneys demanded to see his green card and threatened him with deportation (Chou has been a U.S. citizen for thirty years).  Despite the out of court drama, the suit moved one step closer to a conclusion when U.S. District Judge Sandra J. Feuerstein ruled on summary judgment that Dickens cannot avail itself of the first sale doctrine, codified at 17 U.S.C. § 109, which provides that an individual who knowingly purchases a copy of a copyrighted work from the copyright holder receives the right to sell, display or otherwise dispose of that particular copy, notwithstanding the interests of the copyright owner.  Judge Feuerstein determined that because Hallmark sent the cards to recycling company Northstar with the expectation that the cards would be recycled, Dickens cannot shield itself from liability by invoking a first sale doctrine as a defense.  

Despite the court’s ruling against Dickens, Chou has found a silver lining to this saga.  As a result of Chou’s experiences in the lawsuit, Dickens is promoting a new “GREEN CARD” on its website with the stated goal to “help people find a better way to respond if they are met with questions just because of their color.”  The company states that “net proceeds generated from “GREEN CARD” will go to the support of the equality of legalized immigrants and US citizens.”  For its part, Hallmark also sells a card congratulating the newly naturalized with the greeting “America is lucky to have a new citizen like you.” Unlike Dickens, however, Hallmark does not share the profits from sales of its $3.99 card.

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About Stephen Doherty

Stephen Doherty is Senior Counsel in the Pennsylvania office of Faruqi & Faruqi, LLP. Mr. Doherty practices in the area of antitrust law and is significantly involved in prosecuting antitrust class actions on behalf of direct purchasers of brand name and generic drugs and charging pharmaceutical manufacturers with price fixing and with illegally blocking the market entry of less expensive competitors. Earlier in his career, Mr. Doherty litigated consumer fraud and employment discrimination cases in both state and federal courts in Pennsylvania and New Jersey. He has served on numerous volunteer boards, including Gilda's Club of Delaware Valley and the BCBA Pro Bono Committee, has served as a volunteer instructor for VITA Education Services, and as a pro bono lawyer for the Consumer Bankruptcy Assistance Project.Mr. Doherty is a 1992 graduate of Temple University Law School, where he was senior staff for the Temple Law Review and received several academic awards and is the author of Joint Representation Conflicts of Interest: Toward A More Balanced Approach, 65 Temp. L. Rev. 561 (1992). Mr. Doherty is a 1988 graduate of Dickinson College (B.A., Anthropology and Latin American Studies).

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