Nerf Gun Inventor Wins $73 million Arbitrated Award
Toy maker Hasbro failed to pay Atlanta inventor all of the royalties it owed under contract
A former NASA engineer who invented the wildly popular Nerf dart guns has been awarded $72.8 million in a royalty fight with toy company Hasbro.
In issuing the award, arbitrator Richard Mainland of Fulbright & Jaworski held that Hasbro had breached a licensing agreement with Atlanta-based Johnson Research & Development Co. by failing to pay millions of dollars in royalties for company president and founder Lonnie Johnson's invention of the toy that fires foam darts. Hasbro sold the line of dart blasters under its Nerf brand. The military and sports fantasy toy dart guns are most often used in games of dart tag.
Johnson, formerly an engineer at NASA's Jet Propulsion Laboratory in Pasadena, Calif., has worked on the Galileo mission to Jupiter, the Mars Observer project and the Cassini Solstice Mission that explored Saturn. And he's no stranger to toys. In addition to the Nerf dart guns, Johnson also invented the Super Soaker line of toy water guns, which he also licensed to Hasbro. He holds more than 80 patents, ranging from toys to advanced space systems, environmental technology and methods of power generation.
"It was a very hard-fought case," said Jonathan Letzring, a member of a team of King & Spalding attorneys led by partner Benjamin Easterlin IV that also included Jessica Sabbath. Atlanta attorney A. Lee Baier also was associated with the litigation.
"What this case boiled down to is they [Hasbro] signed a contract they later determined they didn't like. The law doesn't allow you to get out of contracts just because you think the bargain isn't good anymore."
And, he added, "I think it's fair to say we got everything we asked for."
The award includes $51,663,853 in back royalty payments, $21,220,117 in interest, and $131,945 in fees associated with the binding arbitration. King & Spalding litigated the case on a contingency basis.
Los Angeles lawyer Jennifer Glad, one of a team of attorneys at O'Melveny & Myers who defended Hasbro, declined comment and referred questions to Hasbro's corporate headquarters in Pawtucket, R.I.
Hasbro spokeswoman Julie Duffy said in a written statement, "We strongly disagree with the decision and are considering all possible appeals and challenges to this award."
Letzring said the litigation was a contract rather than a patent dispute. Johnson developed and then patented the dart blaster technology before he licensed it to Hasbro. He then gave Hasbro the right to use his technology for Nerf dart blasters in exchange for royalty payments on each dart blaster sold, the lawyer said.