Heelychat, the forum for heelys, the shoes with wheels - View topic - Heelys licenses Spinners- WTF???

(Emphasis is all mine. Comments in red.)

On March 13, 2008 Heeling Sports Limited (“HSL”), a subsidiary of Heelys, Inc. (the “Company”), entered into a confidential Settlement Agreement (the “Settlement Agreement”) effective March 11, 2008 with Elan-Polo, Inc. (“Elan-Polo”) to settle the pending patent and trademark lawsuit Heeling Sports Limited v. Wal-Mart Stores, Inc., and Elan-Polo, Inc. , Civil Action No. 3:07-CV-1695 in the United States District Court for the Northern District of Texas, Dallas Division (the “Lawsuit”) . The Lawsuit was filed in connection with wheeled footwear made by Elan-Polo with a wheel both in the heel and in front of the heel (“Two-Wheel Shoe Skates”) that were sold exclusively at Wal-Mart under the brand name “Spinners.” Wal-Mart was previously dismissed from the Lawsuit. HSL and Elan-Polo filed a proposed Final Judgment with the court that provides, among other items, that Elan-Polo is prohibited from making or selling the Two-Wheel Shoe Skates without HSL’s prior written permission.

Pursuant to the Settlement Agreement, among other things, HSL and Elan-Polo agreed to settle the Lawsuit and release any claims against the other party, Elan-Polo acknowledged the validity and enforceability of HSL’s patents, agreed not to contest the validity of such patents, and agreed not to seek any patent rights with respect to the Two-Wheel Shoe Skates that were the subject matter of the Company’s infringement claims. Elan-Polo agreed to cease use of the “Spinners” logo and to never use any of HSL’s trademarks, including marks such as HEELYS, HEELIES, WHEELIES, WHEELYS, or any mark or logo that may be confusingly similar to any of HSL’s or the Company’s trademarks. Owned. Elan-Polo represented to HSL that 1,210,000 pairs of Two-Wheel Shoe Skates were manufactured on behalf of Elan-Polo in 2007, and that those were the only wheeled footwear that Elan-Polo had manufactured. Elan-Polo agreed to pay the Company an aggregate of $1,400,000 in connection with settling the Lawsuit, and such payment will be made, as follows: $750,000 upon execution of the Settlement Agreement, $250,000 in April of 2008 and February of 2009, and $150,000 in February 2010. In addition, if HSL and Elan-Polo agree to extend the Technology License Agreement, which is described below, for a fourth year, then Elan-Polo will pay HSL another $150,000. Elan-Polo further agreed to indemnify, defend and hold harmless HSL and the Company against certain claims, losses and expenses.

As part of the settlement, HSL and Elan-Polo entered into a Technology License Agreement (the “License Agreement”), pursuant to which Elan-Polo was granted a limited license to manufacture and sell only to certain approved mass-retailers located in the United States and Canada (the “Approved Retailers”) no more than 750,000 pairs of Two-Wheel Shoe Skates with non-removable wheels for the period ending March 10, 2009,

WHAT THE FUCK????

Heelys, you did NOT just do this. You did NOT just license your patent to the people who make fucking Spinners! These things are the epitome of shit. Kids are going to get themselves hurt on these piles of crap. Seven hundred and fifty thousand of these abominations in a year? You're just going to let this happen in exchange for a hefty settlement agreement? Maybe it would be a decent idea if they weren't fucking shit, but people are still going to get Heelys and whatever the fuck these are called confused, these are still going to be a gigantic pile of crap, and it'll only end in tears.

no more than 750,000 pairs of Two-Wheel Shoe Skates with non-removable wheels for the one year period from March 11, 2009 through March 10, 2010, and no more than 150,000 pairs of such shoe skates for the one year period from March 11, 2010 through March 10, 2011. With both parties agreement prior to March 10, 2011, Elan-Polo shall have the right to sell to the Approved Retailers no more than 150,000 pairs of Two-Wheel Shoe Skates with non-removable wheels during the one year period from March 11, 2011 through March 10, 2012. Additionally, Elan-Polo agreed to assign all of its improvements or innovations related to any wheeled footwear to HSL during the pendency of the License Agreement, and for a period thereafter.

In the License Agreement, HSL granted Elan-Polo a license to explore interest from the Approved Retailers to place an order to purchase wheeled footwear with certain wheel configurations different from the Two-Wheel Shoe Skates with non-removable wheels, but no right to sell such wheeled footwear.

The License Agreement provides Elan-Polo with a royalty free license each year to manufacture a certain number of pairs of the Two-Wheel Shoe Skates, Oh, fuck that. after which a royalty is due as provided by the License Agreement. HSL can terminate the License Agreement if Elan-Polo fails to pay the royalties due thereunder, or otherwise breaches the License Agreement. The License Agreement remains in effect until March 10, 2011, unless extended by the Parties by agreement.

On March 19, 2008, the Company issued a press release regarding the Settlement Agreement and the License Agreement. A copy of the press release is attached as Exhibit 99.1 and is incorporated herein by reference. The press release says a lot less than this post, so forget it.

Joined: 27 Jul 2007 Posts: 252 Location: Ohio

angry face...I tried those, you cant turn, the wheels are placed so the if you walk, you stumble every 10 steps, and there louder than a helicopter

Joined: 14 Mar 2008 Posts: 179 Location: ALASKA! ha!

That's so ridicilus. Heely's will be going downhill from there! stalk up on em' folks! It's going to be a bumpy ride from here!

i saw a few kids (meaning like 5 or 6) with them at disney alot more in univresal studios in december on spinners. All of them kept falling when they tried to run.

Joined: 03 Jan 2008 Posts: 223 Location: Warshington, USA

IANAL, but the way I read it, it looks more like HSL is more or less allowing them to keep doing what they're doing, but get almost 2 MEEELION DOLLARS for their trouble.

Sure, I agree that HSL should have said "sorry, give us $1.75m AND stop making those pieces of crap" but I'd bet they wouldn't get near that much money without letting the Spinners people make more money by selling their knockoffs.

I also agree that it would have been better to just get the Spinners off the streets completely, but I'm pretty sure HSL is in this for the money, not the sport or even the athletes and fans. They cut a deal do get a massive cut of the profits from the Spinners, and ensured that they would only be around for a few more years.

I don't think this is the end of Heelys. It just means we'll have Spinners to deal with for a few more years. Imagine how pissed we'd all be if the Spinners people WON that case?

Joined: 29 Aug 2007 Posts: 567 Location: Centerville, Ohio

Hmmm well I agree with AMN that Heelys as a company is out for the money and doesn't really care about the sport or any of that(as much as I think they should).

Eh, I don't even know what to say to it. I'm sure Heelys won't be dying to it or anything like that and spinners most certainly aren't going to catch on as a sport, so whatever.

-tries to translate into 11yo english-

um so heelys is letting Spinners do what?

Joined: 03 Jan 2008 Posts: 223 Location: Warshington, USA

Heelys is letting Spinners keep making and selling Spinners for a few more years in return for $1,750,000.

Joined: 22 Feb 2007 Posts: 1548 Location: Ohio

Corporate-wise this is a very shrewd move in the short term and a neat device to put these clowns out of business. Heelys has profited nicely, enforced a slow death on Elan-Polo's wheeled-shoes division, and will nearly pinch them off with the "approved retailers" clause; any retailer that Heelys will approve probably isn't likely to carry the low-quality shit that Elan-Polo makes.

The thing is that some retailer eventually is going to sell these things, and thus, someone is going to wear them. Which is, in the long run, unacceptable. J. Random Consumer has a hard time telling real Heelys from the knockoffs; this is a big reason why Heelys has its lawyer army marching (rolling?) into patent courts. When people try whatever-they'll-be-called and realize that the things don't work, what kind of reputation is that going to promote?

You guys gotta remember that Heelychat represents the absolute cream of the crop (~4-5 standard deviations, for those familiar with statistics) as far as knowledge of the subject goes. All that'll go through J. Random's head is "I bought a pair of 'dem wheelie shoes for my daughter on her sixth birthday, and they din't even roll."

Also, sooner or later, some kid is going to eat complete shit, and it'll be the shoes' fault, and, for the first time ever, Heelys will have licensed the fucking things.

Joined: 22 Feb 2007 Posts: 1548 Location: Ohio

yeah.....you're right, I didn't think about that.......

But still.....if we could come up with a way to give ppl some sense and tell the difference between what's good quality and what's not, there won't be any problems

Joined: 03 Jan 2008 Posts: 223 Location: Warshington, USA

Joined: 22 Feb 2007 Posts: 1548 Location: Ohio

what is this elan-polo everyone keeps talking about?...