Upper Deck responds to Major League Baseball Properties in letter to distributors

By CHRIS OLDS | Beckett Baseball Editor

While Upper Deck declined to comment to Beckett Media regarding its two recently released baseball card sets that feature MLB players in uniforms displaying MLB logos, the Carlsbad, Calif.-based company sent a letter to its distributors on Friday defending its products after MLB Properties issued a statement Friday morning that said MLBP will “vigorously use all legal means to protect the intellectual property of Major League Baseball and its member Clubs.”

Upper Deck’s letter was in response to a letter sent to distributors by MLB Properties on Friday asking them to not sell the sets that are in question — 2009 Ultimate Collection and 2009 Signature Stars as well as the forthcoming 2010 Upper Deck set.

“Although MLBP contends in its letter that Upper Deck may not lawfully use images of professional baseball players in uniform, there is absolutely no law to support this position,” said Upper Deck in its letter, which also tells distributors that it has “reached out to MLBP” and offered to meet next week on the subject.

The letter also promises its own legal response: “If we cannot do so, then the issue will be resolved in court.”

More after the jump …

The two 2009 products carry statements saying they are not approved by Major League Baseball or its clubs on both the packaging and cards and do not utilize MLB logos as part of the card designs. However, none of the photographs have been altered to remove or obscure trademarks that MLB Properties claims are being used without permission. Upper Deck’s baseball card sets are licensed by the MLB Players Association, but not by MLB Properties, as Topps was awarded the exclusive contract beginning this year.

In its letter, Upper Deck said its “products are neither infringing nor unlawful. As you can see from even the most cursory inspection of the cards and packaging, Upper Deck has gone to great lengths to produce high-quality baseball trading cards that are respectful of MLBP’s trademark rights.”

Upper Deck also cites a U.S. Court of Appeals’ dismissal of an injunction from July 1998 that sought to prevent Pacific Trading Cards from distributing cards showing players in uniform. Those cards were approved by the MLBPA but not MLB Properties. Pacific stopped making baseball cards by 2001 and was out of business by 2004.

“Upper Deck urges you not to be dissuaded by MLBP’s scare tactics,” reads its letter. “MLBP’s letters were entirely out of line, and in fact, constitute illegal interference with our valued business relationships.

“If MLBP believes that Upper Deck’s products are unlawful and infringing it should seek an order so stating from a court of law. However, MLBP certainly has no right to demand that you stop selling Upper Deck’s products.”

It’s worth noting that Upper Deck’s settlement in its long-running lawsuit with Konami was officially filed on Friday in a U.S. District Court over UD’s production of more than 600,000 unauthorized Yu-Gi-Oh! trading cards. It’s a lawsuit in which Konami sought hundreds of millions of dollars in damages, and a case that included business-damaging accusations from both companies. (Read more about the case and download court documents regarding Konami’s claims by clicking here.)

Upper Deck, which was found to have made counterfeit cards, opted to settle the case after the first day of trial and was due to make the with the first multi-million-dollar payment (specifics of the settlement were confidential) on Friday. It’s a case in which a New York Post story says has fueled “widespread speculation that this case could severely hurt its financial health. Some believe the company is on the brink of bankruptcy.”

On Friday evening, Upper Deck issued a statement on the Konami case, which touted its building of a “a solid foundation on which Yu-Gi-Oh! will benefit for years to come” and that it was “pleased to announce that it has come to a successful resolution.”

It did not mention terms of the agreement.

“Though we are delighted that Konami was finally forced to see the light regarding its claims, there is, of course, a bittersweet side to the ending of this dispute,” said Richard McWilliam, Upper Deck CEO, in the release. “During the six years we spent building the Yu-Gi-Oh! brand we formed strong ties to the playing community, and, in the end, they are the ones that suffered most because of this lawsuit. Instead of focusing on the merits of the case, Konami focused its efforts on pursuing exaggerated claims and damages which it could not establish in the courtroom.”

Konami has not yet issued a statement on the settlement.

We’ll have more on this story as it develops.

Chris Olds is the editor of Beckett Baseball and Beckett Graded Card Investor. Have a comment, question or idea? Send an e-mail to him at colds@beckett.com.