Hasbro survives My Little Pony trade secrets appeal

A US appeals court has affirmed a lower court ruling that toy brand Hasbro should not be found liable for trade secret misappropriation, following a dispute with another toy maker that centred on the My Little Pony brand.

The US Court of Appeals for the Ninth Circuit affirmed a ruling from the US District Court for the Central District of California that rejected Elinor Shapiro’s request for a preliminary injunction.

Shapiro sued Hasbro in April last year. She claimed that the company asked her to submit ideas for the Littlest Pet Shop and My Little Pony lines.

Although it declined her proposals, Hasbro later began marketing toys that looked like her prototypes, Shapiro said.

In a ruling handed down in November last year, the district court found that the alleged trade secrets were in fact in the public domain, and that the brands were independently created by Hasbro before Shapiro presented her ideas to Hasbro representatives.

Hasbro claimed it did not take Shapiro’s ideas, a collection of sparkly toy characters filled with glittery liquid. It added that it had been developing similar products two years before Shapiro submitted her proposals.

In its June 30 ruling, the Ninth Circuit added that the lower court had correctly concluded that, as the alleged trade secrets were “generally known to the public or to other persons”, they did not actually qualify as trade secrets.

“Based on the finding of independent creation, the district court correctly concluded that Hasbro had not engaged in misappropriation of alleged trade secrets,” the appeals court wrote.