Manhattan Toy Sues NJ Co. Over Licensing Agreement

The Minneapolis-based toy seller claims that Automoblox Company did not honor obligations that were outlined in the companies' license agreement.

Minneapolis-based Manhattan Toy has sued Dover, New Jersey-based Automoblox Company alleging that it did not honor obligations that were outlined in the companies' license agreement.

According to the complaint, which was filed on September 13 in U.S. District Court in Minneapolis, Automoblox has failed to honor terms of a licensing agreement that the two companies signed in 2008, has made false claims against Manhattan Toy, and has threatened to terminate the companies' relationship.

Manhattan Toy and Automoblox signed a licensing agreement in April 2008, the suit said. Under that agreement, Manhattan Toy was licensed the right to market and sell wooden toy cars and related products under the brand name Automoblox in exchange for the payment of royalty fees.

Manhattan Toy claims in the suit that it fully complied with the license agreement and paid appropriate royalty fees to Automoblox based on its purchase orders.

The suit alleges that Automoblox and its owner, Patrick Calello, went against the license agreement and sold products directly through and on its own Web site, which violate its contractual obligations with Manhattan Toy.

Automoblox is also accused of interfering with Manhattan Toy's business relationships, failing to acknowledge Manhattan Toy's valid renewal of the companies' license agreement, and failing to provide Manhattan Toy with access to new designs-which was a term agreed upon in the license agreement.

Automoblox allegedly told its manufacturing facility in China to suspend the delivery of products ordered by Manhattan Toy, once again failing to honor obligations outlined in the license agreement.

Manhattan Toy is seeking injunctive relief, damages, and court fees. It is also asking to be compensated for cost and expenses associated with a false marketing case in which Manhattan Toy and Automoblox are codefendants.

-Melissa Loth