Thursday, November 14, 2013

Super Soaker Settlement $73 Million

The power of creating an incredible invention and having good counsel can be seen in a recent arbitration settlement in which the inventor of the Super Soaker, Lonnie Johnson Ph.D, was awarded $72.9 million in royalties against Hasbro. Although Johnson has over 80 patents, many of which we are sure relate to the Super Soaker or variations of it, Johnson was able to obtain this mammoth settlement based on a breach of contract of a more ambiguous nature rather than on any specific intellectual property. Namely, in a 1996 agreement, Hasbro agreed to pay Johnson royalties of 2 percent for “three-dimensional products” based on the appearance of the toy and 1 percent for “two-dimensional visual representations.” Negotiating such broad terms in his agreement opened the doors for Hasbro’s breach which ultimately led to this incredible settlement.


Just to put things in perspective, Johnson founded his company and licensed the Super Soaker for the first time in 1989, which generated more than $200 million in retail sales in the following two years.