Hartford Business Journal

14 Hartford Business Journal • February 23, 2015 www.HartfordBusiness.com RepoRteR's Notebook Lego heads back to CT court to fight 'infringers' Danish toymaker Lego is again using Connecticut federal court to wage a legal battle against competitors it says are infringing on its world-famous toy blocks. Lego, the world's largest toymaker with its U.S. headquarters in Enfield, has filed suit against two separate toymakers accusing them of copyright infringement. One suit is against a familiar foe, Best- Lock Construction Toys Inc., a Florida- based rival that Lego has sued in the past for making toy blocks similar in look and shape to Lego's 1.5-inch-tall, trapezoidal action figures. In the latest suit, filed Feb. 10 in Con- necticut federal court, Lego is accusing Best-Lock of infringing on its patented "Friends" figurines, which were intro- duced in 2012 and have been a popular seller to girls. Lego said Best-Lock is making minia- ture figurines similar to its Friends' char- acters. Specifically, the infringing figurine, Lego claims, is marketed and sold in Best- Lock's "Fairy Tale High" toy sets, or as a "Best-Lock Fairy Tale High" case. Meantime, Lego is also suing Canada's Mega Brands for infringing on the same Friends toy line. Lego says the infring- ing figurine is marketed and sold in Mega Brands' "My Life As" toy sets. Lego says both copyright infringe- ments are causing the company irrepara- ble harm. It also says Best-Lock and Mega Brands are violating the Connecticut Unfair Trade Practices Act. Lego is asking for monetary damages and a permanent injunction to stop both companies from producing their respective blocks. Lego has also asked the U.S. International Trade Commission to block those toys from being imported into America. Lego and Best-Lock have been in legal tussles dating back to 1998, and while a fight over toy blocks may seem like child's play, typically hundreds of millions of dol- lars in future sales can be at stake for the companies involved. Lego, in particular, has a significant stake in protecting its trademarked prod- ucts. Just last week, Consultancy Brand Finance named Lego the world's most pow- erful brand, a ranking determined by sev- eral metrics including consumer loyalty and ad recognition. It was the first time Lego made the list's top spot, knocking Ferrari from the No. 1 position. Best-Lock, Mega Brands, and Hartford lawyer Elizabeth A. Alquist, who is repre- senting Lego, didn't not respond to email requests for comment. — Greg Bordonaro CT, Okla. 'payday' tribe in staredown A temporary standoff has been reached between Connecticut banking regulators and an Oklahoma tribe pressing to pitch their ultra-high-interest online "payday loan" services to state residents. A Connecticut judge recently handed the state a minor win by keeping in place $1.5 million in fines and penalties against a pair of tribal entities — Great Plains Lend- ing LLC and Clear Creek Lending — and the tribe's chairman, John R. Shotton. However, the tribes could claim a tiny victory, too, after the same judge also ordered that the state cannot enforce its ruling against the co-defendants nor take measures to collect the fines, pending out- come of the tribe's court appeal. The legal wrangling started in October when the Connecticut Banking Department issued a cease and desist order and fined the tribe for violating the state's usury law, which prohibits anyone from making loans at more than 12 percent interest without a license, effectively banning payday lenders from operating in this state. The tribe challenged the ruling, argu- ing that "tribal sovereignty" allows them to grant loans in Connecticut for less than $15,000 with interest of 200 percent to 450 percent, even though such lines of credit violate state law. They claim Connecticut's and other states' consumer-protection laws cannot bar it from pursuing enterprises that gen- erate income and jobs for tribal members. The Banking Department on Jan. 6 upheld its ruling. A few weeks later, the tribe and its chairman filed an administrative appeal in New Britain Superior Court, simul- taneously asking for a temporary injunction. The state also pressed for a dismissal. Both parties now await a hearing date to be set. — Gregory Seay Lego's "Friends" block toy is shown in the middle. Best-Lock's toy is shown to the left, Mega Brands, right. P H O T O s | C O n T R i b u T e d from page 1 Amazon's new distribution center won't open until sum- mer, but it's already attracting significant interest from com- mercial tenants who want, or even need, to locate near it. That's adding momentum to Greater Hartford's industrial real estate market, which has now fully recovered from the Great Reces- sion as employers ranging from light manufacturers to distribution compa- nies add space to sate increasing consumer demand. Most in demand, brokers and landlords say, are existing indus- trial properties with mid-size footprints of 35,000- to 45,000 square feet; and bigger, built- to-suit facilities sized six figures or larger. Industrial brokers say deals like Ama- zon and Pilot's underscore cravings among investment-oriented landlords, owner occu- pants and tenants for the Hartford region's industrial space. "The market is clearly better than it has been in the last five years,'' said Sean Duffy, senior industrial broker for realty brokerage- advisor Cushman & Wakefield in Hartford. "I see there's been a massive flight to quality. There's been more demand for the better, newest and cleanest buildings.'' Central Connecticut's industrial-ware- house sector had 850,000 square feet of net absorption in 2014 — 250,000 square feet greater than in 2013, according to CBRE- New England's latest survey. That lowered the region's industrial vacancy rate to 12 percent, down from 13.2 percent a year earlier. Hartford has also filled all of the industrial space vacated by employers in 2008 and 2009. In 2014, central Connecticut industrial rents averaged anywhere from just under $4 a square foot, to nearly $6.50. Indeed, industrial brokers plying Con- necticut and western Massachusetts who belong to the state chapter of the Society of Industrial and Office Realtors (SIOR) are more bullish in their outlooks now than they were this time last year, a fresh survey shows. CT SIOR's December 2014 member sur- vey found two-thirds (67 percent) of brokers reported seeing market improvements in the latter half of 2014 vs. the first. A year earlier, in December 2013, barely six in 10 (59 per- cent) brokers saw second-half improvement. Brokers also harbor optimism about the industrial market for 2015. One reason is that sales prices and rents for industrial space continues to favor buyer and tenants, brokers say. That's because so many of the industrial buildings available are older, usually tired spaces that beyond need- ing basic repairs, like new roofs and heating/ cooling systems, lack amenities and features that modern tenants crave. A sizable chunk of the Hartford region's industrial buildings were erected before 1970, and have shorter-height ceilings and bay doors than the 20- to 24-foot dimen- sions common in newer industrial space, Duffy said. "Buildings with ceiling heights below 20 feet are functionally obsolete,'' said Michael Gallon, managing broker for realty adviser Reno Prop- erties Group. "It's all about modern distribution and warehousing and vertically storing your goods.'' Mark Duclos, president of commer- cial broker Sentry Commercial, says that despite the disparity in amenities between older and newer buildings, there is very little pricing support in current rents to Short, 20-foot bays 'obsolete' Recent Greater Hartford Industrial Deals Tenant Square Feet/Deal Location Thriftbooks 82,500/lease Windsor Locks American Floor Covering 76,725/Sale East Hartford MultiMode 70,000/lease Windsor Locks Classic Restaurant Supply 65,000/sale Newington TLD 60,000/sale Windsor Safelite 36,000/lease Cromwell Recyc-Mattress Corp. 30,000/lease East Hartford National Lamp Recycling 25,000/lease East Windsor Speciality Packaging 24,500/sale East Windsor Fenn Manufacturing 22,500/lease Berlin s O u R C e : C b R e / n e w e n g l a n d Continued Pilot Freight Services has leased larger space in this building in the shadow of Bradley International Airport. P H O T O | C O n T R i b u T e d

• Cover