Original Appalachian Artworks, Inc. v. Granada Electronics, Inc.

Jesmar, S.A. (Jesmar) had a restrictive license to manufacture and sell Cabbage Patch Kids dolls from the trademark owner, Original Appalachian Artworks, Inc. (OAA) (defendant), under which Jesmar could only sell the dolls in Spain. The Spanish Cabbage Patch Kids have Spanish adoption papers, which are different from those of the Cabbage Patch Kids manufactured in the United States, but the Spanish Cabbage Patch Kids still bore the original trademark. Dolls that were manufactured in the United States had adoption papers in English, and the purchasers could register the dolls with OAA in order to receive birthday cards from OAA. When Granada Electronics, Inc. (Granada) (plaintiff) imported and sold in the United States some of the Spanish Cabbage Patch Kids made by Jesmar in Spain, OAA sued to bar the importation of dolls bearing its trademark but manufactured abroad. The district court granted OAA a permanent injunction against Granada’s importing and selling of the dolls in the United States. The district court found the adoption process of OAA in the United States to be an important element of what made the dolls popular and successful. Despite the fact that the dolls were allowed through the United States Customs Service, the district court found that the trademark owner could still pursue a private remedy against the importer for violations of his rights. Granada appealed this decision.