Hasbro, Inc. (NASDAQ:HAS) today announced a decision has been issued in an arbitration between the Company and one of its licensors.
Hasbro previously disclosed that an inventor had brought claims against the Company based on two license agreements between the parties. One license agreement related to certain products included in Hasbro’s SUPER SOAKER product line. The other agreement related to certain products included in Hasbro’s NERF product line. The inventor licensor, Johnson Research, claimed that the license agreements required the payment of royalties by the Company on a significantly greater number of products in each of those respective product lines than the Company believed was the case.
The claims related to the NERF products were pursued by the licensor in binding arbitration in Atlanta, Georgia, as was required by the license. The licensor made a demand for arbitration in February of 2013, seeking damages related to claimed non-payment of royalties on certain NERF products for the years 2007 through 2012. The licensor’s claims related to the SUPER SOAKER products are not subject to binding arbitration and are the subject of a separate complaint filed by the inventor in February of 2013 in the United States District Court for the Northern District of Georgia.
The arbitration hearing with respect to the NERF claims took place in August of 2013. Late on the afternoon of October 29, 2013, the arbitrator issued his ruling in the NERF arbitration. The arbitrator awarded a total of $72,932,686, including damages, interest, fees and expenses, to the licensor. Hasbro strongly disagrees with the arbitrator’s ruling and is considering all possible appeals and challenges to the award.
In accordance with applicable accounting requirements, the Company anticipates taking an additional charge to its earnings for the fiscal quarter ended September 29, 2013 in connection with this ruling. The Company is currently assessing the impact of this to the third quarter results and it will be reflected in its Form 10-Q for the period ended September 29, 2013.