Last week, singer-songwriter Taylor Swift and the American Greetings Corporation (“American Greetings”) settled a legal dispute with Blue Sphere, Inc. d/b/a Lucky 13 (“Blue Sphere”) in connection with the name of their promotional sweepstakes collaboration.

Why did Blue Sphere have Bad Blood with Swift and American Greetings’ sweepstakes?

Taylor Swift and American Greetings’ Promotional Sweepstakes

In 2013, American Greetings and Taylor Swift launched the “Lucky 13” Sweepstakes, which consisted of 13 separate week-long contest entry periods. According to the Contest Rules, each weekly winner of the promotional sweepstakes received small prizes like a poster, t-shirt and notebooks. One grand prize winner won a trip for 4 to a Taylor Swift concert in Nashville.

Blue Sphere’s Lawsuit and Settlement

Bobby Kloetzly owns Blue Sphere, as well as 7 federally registered trademarks for LUCKY 13. The marks span a broad range of goods, including clothing, jewelry, cosmetics, paper products and other items offered internationally under the “Lucky 13” brand. In May 2014, Blue Sphere sued Taylor Swift and American Greetings (among others) in federal court in Santa Ana, California for alleged trademark infringement, unfair competition, trademark dilution and misappropriation.

Blue Sphere alleges that Swift and American Greetings violated its trademark rights by marketing and selling greeting cards through the subject promotional sweepstakes without first obtaining written consent or a license to do so. The lawsuit claims that “[c]onsumers are likely to purchase products from Defendants under the mistaken belief that Defendants and their ‘Lucky 13’ Sweepstakes are affiliated, connected, or associated with [Blue Sphere] itself.”

Among other things, Blue Sphere’s lawsuit seeks:

  • an injunction prohibiting Swift and American Greetings from using the “Lucky 13” name; and
  • an award of damages sustained by Blue Sphere or the profits made by the Defendants in connection with the promotional sweepstakes, plus punitive damages and attorneys’ fees.

Last Friday, the parties notified the Court that they have entered into a settlement agreement concerning all of Blue Sphere’s claims and requested that the case be dismissed with prejudice. The terms of the settlement agreement – including any settlement payment received by Blue Sphere – remain confidential.

Legal Compliance for Promotional Sweepstakes: Don’t Just Shake It Off

Generally, sweepstakes sponsors should obtain the written permission of any third-party brand owner whose name, logo or product is prominently featured in connection with a promotional sweepstakes. Among other things, trademark owners may insist on being: (1) explicitly disclaimed as a sponsor of, or affiliated with, the subject promotion in the official Contest Rules and in promotion advertising; (2) included as co-sponsors of the promotion; (3) acknowledged with trademark symbols (® or ™) when the sponsor references their brands; or (4) omitted from the subject promotion’s title and description entirely.