January 25, 2000
eToys Drops Lawsuit Against Artist Group
By MATTHEW MIRAPAUL 
Toys Inc., the Internet's leading toy retailer, agreed on Tuesday to drop its trademark-infringement lawsuit against etoy, a group of online conceptual artists in Europe. The move means the group will be able to return to www.etoy.com, the online home that a Los Angeles court had forced it to abandon in November.
In a telephone interview from Zurich, an etoy spokesman who gave his name as "zai" (the group's dozen or so members do not divulge their real names) said: "It's great. It's perfect. It is a huge relief." Acknowledging that the suit had raised etoy's profile in the United States, zai said, "It was a pleasure to do business with eToys."
The toy retailer will also reimburse etoy for up to $40,000 in legal fees. In return, etoy will drop its countersuit again the company. But the artists rejected eToys' suggestion that they move graphic images and language to other sites where children might be less likely to stumble upon them by mistake.
"There is no quid pro quo," said Chris Truax, the artists' lawyer, in a telephone interview from his San Diego office. "The only thing that eToys is getting out of this is a black eye; etoy isn't giving anything up at all."
Ken Ross, a spokesman for eToys, said: "We are pleased with the outcome. We heard from a lot of people and they overwhelmingly urged us to figure out a way to coexist with etoy, and that's what we're going to try to do."
Ross said eToys, based in Santa Monica, Calif., would act to end the suit in the next day or two, clearing the way for Network Solutions Inc., the firm controlling the contested domain, to restore it for etoy's use. Truax said the site would probably be back online early next week.
"It's a great victory for the community," said Wolfgang Staehle, executive director of The Thing, an arts-oriented resource in New York. Staehle helped mount a grassroots Internet campaign to support etoy. "It shows that the campaign had success."
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"We survived their brute force. It's minds over money." | |
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In September, eToys sued the artists after hearing from customers who went to the art site by mistake, including some who complained about its profane language. On Nov. 29, a Los Angeles Superior Court judge issued a preliminary injunction against etoy, threatening the artists with fines of as much as $10,000 a day unless they stopped using the www.etoy.com address. The artists complied and went into "exile" at a numeric address.
Although eToys holds a trademark for its name and the artists have yet to get one for theirs, trademark-law experts were skeptical that eToys would prevail, even though it had won the first round of the legal battle.
The seven original etoy members joined forces in 1994 and started their site in 1995; eToys was not founded until the following year and did not go online until 1997. Also the mission of etoy -- mimicking corporate behavior for artistic purposes -- did not overlap with eToys' efforts to sell Barbie Dolls and Furby Babies.
To end the dispute, the toy retailer offered to acquire the artists' domain for more than $400,000, which would have been a record price for an online-art site. The group declined, saying the amount was insufficient.
But what started as a simple domain-name dispute soon turned into a cause celebre on the Web as word spread of etoy's predicament. Supporters who viewed the case as an example of e-commerce muscle strangling artistic expression on the Internet mounted a vigorous campaign, using protest sites and e-mail.
On Dec. 29, eToys offered to dismiss the suit after receiving what Ross at the time called "a lot of heartfelt, well-reasoned e-mails." Negotiations took several weeks, in part because the artists had hoped to receive an apology, a goal that was eventually deemed unattainable.
In addition to monitoring the online campaign, etoy initiated Toywar, an online game that allowed participants to score points by helping the artists. But zai said he was not sure what projects the group would undertake next. "If we go on as we did before, that would be boring," he said. "We owe it to the people who are following us not to do that."
Once the injunction is lifted, etoy will again be able to sell its "shares" -- another of its pseudo-corporate projects -- in the United States. Those who supported the group during the lawsuit will be rewarded with shares, which are more valuable as a result of the suit, zai said.
Meanwhile, since the online campaign began, the toy retailer's share price has fallen below $20, down from its 52-week high of $86. Supporters of the anti-eToys campaign took credit for the drop. But Lauren Cooks Levitan, an analyst at Robertson, Stephens who follows eToys, said the company has "more important things to worry about," like customer service and thin profit margins. The company plans to announce its fiscal third-quarter results on Thursday.
For etoy and its supporters, the story's happy ending also comes with a moral. Staehle said it shows what can happen "if we all stick together."
The online campaign "started small and got bigger and bigger as everyone rallied around it," he said. "We survived their brute force. It's minds over money."
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Matt Mirapaul at mirapaul@nytimes.com welcomes your comments and suggestions.
