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Upper Deck in trouble
majorflux
Posts: 178 ✭
Hitting the 'deck'
Suit puts big crease in baseball card maker
By PETER LAURIA
Last Updated: 6:33 AM, January 12, 2010
Posted: 2:30 AM, January 12, 2010
A major maker of baseball cards is being accused of playing dirty.
Upper Deck could be facing hundred of millions of dollars in damages, as a result of a little-noticed California lawsuit that threatens to cripple the company.
Japanese entertainment company Konami Entertainment sued Upper Deck for copyright infringement, breach of contract and trademark counterfeiting, alleging Upper Deck illegally reproduced more than 600,000 of Konami's popular Yu-Gi-Oh! cards.
After more than a year of trading motions, a judge is set to rule on damages to be awarded to Konami on Jan. 26.
Senior execs from Carlsbad, Calif.-based Upper Deck did not dispute accusations that the Yu-Gi-Oh! cards, which are based on a Japanese animation show, were counterfeit. Instead, five Upper Deck execs involved in the alleged fakes -- including Chief Executive Richard McWilliams -- have resisted being deposed, citing their Fifth Amendment privilege against self-incrimination.
Under court order, however, one exec, Stephanie Mascott, provided e-mails and other damning testimony that claimed, among other things, that she witnessed McWilliams shredding the fake cards in his office, according to court filings. The filings added that she said McWilliams instructed one distributor to "remember that you do not know where you got the card from, OK?"
In criminal cases, the court is not allowed to draw any inference from a defendant's refusal to speak. But in civil suits, that's not the case.
Speaking of McWilliams, for instance, a court order in November noted: "In the face of allegations that he shredded cards in a meeting, instructed an employee or a third party to forget where the counterfeit cards came from, and made plans for future counterfeiting, he has said nothing. The court infers from McWilliams' silence that those allegations are true."
Calls to Upper Deck and its law firm, Rutan & Tucker, were not returned.
Legal sources suggested the execs took the Fifth to avoid exposing themselves to potential criminal charges, like mail fraud or wire fraud, stemming from testimony uncovered in the civil case.
Upper Deck, which has expanded its business into memorabilia like autographs, still generates the bulk of its revenue through trading cards.
It had a distribution deal with Konami going back to 2002, but allegedly began making and selling fake cards outside of the deal.
Ben Fox, Konami's lawyer at Morrison & Foerster, said his client was looking for "hundreds of millions of dollars" in damages.
"This could be the end of Upper Deck," said Joshua Leland Evans, chairman of memorabilia shop Leland's Auction House in Bohemia, NY. "I'm not sure they can survive this. We are hearing big rumors of financial trouble at Upper Deck. It could only be a matter of time before they go out of business."
Original scan of the story from the paper -
Suit puts big crease in baseball card maker
By PETER LAURIA
Last Updated: 6:33 AM, January 12, 2010
Posted: 2:30 AM, January 12, 2010
A major maker of baseball cards is being accused of playing dirty.
Upper Deck could be facing hundred of millions of dollars in damages, as a result of a little-noticed California lawsuit that threatens to cripple the company.
Japanese entertainment company Konami Entertainment sued Upper Deck for copyright infringement, breach of contract and trademark counterfeiting, alleging Upper Deck illegally reproduced more than 600,000 of Konami's popular Yu-Gi-Oh! cards.
After more than a year of trading motions, a judge is set to rule on damages to be awarded to Konami on Jan. 26.
Senior execs from Carlsbad, Calif.-based Upper Deck did not dispute accusations that the Yu-Gi-Oh! cards, which are based on a Japanese animation show, were counterfeit. Instead, five Upper Deck execs involved in the alleged fakes -- including Chief Executive Richard McWilliams -- have resisted being deposed, citing their Fifth Amendment privilege against self-incrimination.
Under court order, however, one exec, Stephanie Mascott, provided e-mails and other damning testimony that claimed, among other things, that she witnessed McWilliams shredding the fake cards in his office, according to court filings. The filings added that she said McWilliams instructed one distributor to "remember that you do not know where you got the card from, OK?"
In criminal cases, the court is not allowed to draw any inference from a defendant's refusal to speak. But in civil suits, that's not the case.
Speaking of McWilliams, for instance, a court order in November noted: "In the face of allegations that he shredded cards in a meeting, instructed an employee or a third party to forget where the counterfeit cards came from, and made plans for future counterfeiting, he has said nothing. The court infers from McWilliams' silence that those allegations are true."
Calls to Upper Deck and its law firm, Rutan & Tucker, were not returned.
Legal sources suggested the execs took the Fifth to avoid exposing themselves to potential criminal charges, like mail fraud or wire fraud, stemming from testimony uncovered in the civil case.
Upper Deck, which has expanded its business into memorabilia like autographs, still generates the bulk of its revenue through trading cards.
It had a distribution deal with Konami going back to 2002, but allegedly began making and selling fake cards outside of the deal.
Ben Fox, Konami's lawyer at Morrison & Foerster, said his client was looking for "hundreds of millions of dollars" in damages.
"This could be the end of Upper Deck," said Joshua Leland Evans, chairman of memorabilia shop Leland's Auction House in Bohemia, NY. "I'm not sure they can survive this. We are hearing big rumors of financial trouble at Upper Deck. It could only be a matter of time before they go out of business."
Original scan of the story from the paper -
0
Comments
With UD being the only football card maker beginning next year, they may be out of business......
FINISHED 12/8/2008!!!
<< <i>"This could be the end of Upper Deck," said Joshua Leland Evans, chairman of memorabilia shop Leland's Auction House in Bohemia, NY. "I'm not sure they can survive this. We are hearing big rumors of financial trouble at Upper Deck. It could only be a matter of time before they go out of business." >>
Ouch!! a thinning of the card makers (other than Topps) would probably be good to the collectibles popularity again.
there goes McWilliams' squeaky clean reputation.
I wonder, is this sort of dirty industry crap limited to just Yu-Gi-Oh cards?
With advanced manufacturing technology, how hard would it be for a major set up like Upper Deck to counterfeit profitable modern cards like 1993 Finest Refractors or the like? Shoot, maybe they're still printing 1989 UD Griffeys!
WTB: 2001 Leaf Rookies & Stars Longevity: Ryan Jensen #/25
they should have been done in 1989. get a hold of the book "Card Sharks" it details all of the mischief that occurred at UD.
<< <i>With advanced manufacturing technology, how hard would it be for a major set up like Upper Deck to counterfeit profitable modern cards like 1993 Finest Refractors or the like? Shoot, maybe they're still printing 1989 UD Griffeys! >>
Or cutting up a new jersey, rubbing a little dirt on it, and then selling it as a card in a $100 pack.
Sad thing is the Griffey back door conspiracy just became more credible.
Buying Vintage, all sports.
Buying Woody Hayes, Les Horvath, Vic Janowicz, and Jesse Owens autographed items
<< <i>Sad thing is the Griffey back door conspiracy just became more credible. >>
Tell us more please.....Had not heard of a Griffey conspiracy
<< <i>
<< <i>Sad thing is the Griffey back door conspiracy just became more credible. >>
Tell us more please.....Had not heard of a Griffey conspiracy >>
ALLEGEDLY
They printed thousands more (if not in the tens or hundreds of thousands) and sent them to "friends".
<< <i>They printed thousands more (if not in the tens or hundreds of thousands) and sent them to "friends". >>
As in the 89 Upper Deck #1 card?
<< <i>
<< <i>Sad thing is the Griffey back door conspiracy just became more credible. >>
Tell us more please.....Had not heard of a Griffey conspiracy >>
Never heard this one either,would like to..
J.R.
Needs'
1972 Football-9's high#'s
1965 Football-8's
1958 Topps FB-7-8
<< <i>
<< <i>They printed thousands more (if not in the tens or hundreds of thousands) and sent them to "friends". >>
As in the 89 Upper Deck #1 card? >>
YUP! That was the rumor going around. Like printing your own $100 bills!!!!!
Doug
Liquidating my collection for the 3rd and final time. Time for others to enjoy what I have enjoyed over the last several decades. Money could be put to better use.
<< <i>
<< <i>
<< <i>They printed thousands more (if not in the tens or hundreds of thousands) and sent them to "friends". >>
As in the 89 Upper Deck #1 card? >>
YUP! That was the rumor going around. Like printing your own $100 bills!!!!! >>
wow.. if that were ever verified those cards would drop like a rock in price, I suppose...
This Griffey reprinting thing is basically proven through various testimonials of Upper Deck employees. Plus the company admitted to cranking out tons of the 90-91 French Hi# cases, which included the then $200+ Sergei Fedorov French RC, after the presses were supposedly stopped on that product.
In the mid-90's, guys would come into the store I worked at (in Los Angeles) with plastic 100ct boxes of just the 1989 Griffey RC. I think one guy even had a 400ct cardboard box of them.
There should be no question at this point that extra cards were produced.
Collecting Robin Ventura and Matt Luke.
Just realized this was my 500th post. Nothing to brag about in these waters but I think CU should issue me a certificate or something to hang in my office. After all, most of these posts were left while on the clock. My employer might appreciate it.
Simsbury Taverneers
My PSA Sets
I imagine Topps or someone else would buy UD just for their licensing rights rather than let them go under.
Konami plays just as fast and loose with "the rules"
as any US corp does.
In the instant case, UD is guilty of some things, but
they were provoked; sadly, they were not very good
at covering their tracks.
.............
Unless the case is settled to UD's satisfaction, it may
be dragged out for years.
Even if the LEOs get tricked into helping the foreign nationals,
the civil case has almost no chance of halting the production
of football cards. Maybe we will be buying those cards from
the Konami gang, but we will be buying them.
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Folks interested in how biznez works in Japan, might enjoy
reading both "Rising Sun," and "Yakuza."
David Kaplan Gets It
Business Is War.
CDsNuts, 1/9/15
<< <i>Upper Deck was selling fake Gretskey rookies >>
No, they were selling counterfeited archival footage set to Sevendust of Felix Potvin making an amazing save on Wayne Gretskey.
This IMO is another blow to the modern card market, particularly with regards to redemptions and memorabilia/auto cards.
Kiss me twice.....let's party.
<< <i>The 90-91 French Hi# case issue is very interesting to me. I remember wax boxes peaking at about $120. I traded an 86 Canseco RC and $30 for one back in the summer of '91.
This IMO is another blow to the modern card market, particularly with regards to redemptions and memorabilia/auto cards. >>
those boxes actually topped out at around $450.00
Those who bought wax around that time will surely agree.
I still like Heritage!
mike