Champion Bodyboarder Michael Stewart Wins Preliminary Injunction Against Mattel and Wham-O.

BEVERLY HILLS, Calif.--(BUSINESS WIRE)--May 5, 1998--Nine-time world champion bodyboarder and eight-time U.S. national champion Michael Stewart has been granted a preliminary injunction in his multimillion-dollar lawsuit against Mattel Inc. and Wham-O by U.S. District Court Judge John G. Davies.

Stewart's complaint, filed by his attorney Vincent Chieffo of Gipson, Hoffman and Pancione, alleged that numerous violations of Stewart's rights by Mattel and Wham-O, the new owners of Morey Bodyboards, for which Stewart was the former lead rider, included trademark infringement, unfair competition, wrongful appropriation of his name and likeness for advertising purposes, and breach of his contract with Mattel.

The district court ruling in Los Angeles (April 24, 1998) prohibits Mattel and Wham-O from using Stewart's name and likeness in any manner to advertise or promote its Morey-brand bodyboards. Mattel and Wham-O have been further enjoined from selling any of the Mike Stewart "Launch Vehicle Bodyboards," which were never approved by Stewart, and which were not manufactured to his design specifications.

Stewart's lawsuit arises out of a 5-year, million-dollar, guaranteed endorsement and design contract that he had entered into with Mattel when it acquired Morey Bodyboards in 1994. When Mattel sold Morey Bodyboards to Wham-O in the fall of 1997, Stewart did not consent to the assignment of his contract to the new owners of Morey Bodyboards.

Stewart asserted that Mattel had breached its obligation to him by going out of the bodyboard business and by attempting to terminate Stewart's contract for allegedly low royalties.

Stewart's lawsuit alleges that Mattel's own accounting stated that he had earned more than the contractual minimum even during 1997, when Mattel had announced that it was selling Morey Bodyboards to Wham-O, and even after Mattel had decided internally to de-emphasize the sale of certain of the Morey-brand bodyboards, including the Stewart Signature Bodyboards.

The district court noted that the accounting that Mattel presented in opposition to Stewart's request for a preliminary injunction contradicted Mattel's own accounting that it had sent to Stewart before the lawsuit was filed, and that Mattel's new accountings were based upon the wrong time period.

The court also noted that the jury in this case "is likely to find, given Mattel's intent to sell the Morey's Bodyboard business and the high number of defective boards produced, that Mattel artificially lowered (Stewart's) sales, leading to lower royalties than would otherwise have accrued," and that such "actions would be a breach by Mattel of the covenant of good faith and fair dealing."

"While Wham-O may sell its remaining inventory of certain other old signature bodyboards," according to Chieffo, "the court order requires Wham-O to advise the public that those bodyboards are older 1996 and 1997 versions and not 1998 models, and to further provide a written disclosure that Mike is not associated with Morey Bodyboards in any way."

Stewart, currently featured as the Wizard in TriStar Pictures' current theatrical release of the surf movie "In God's Hands," stated that he was pleased and encouraged by the court's ruling.

"The court's order will let everyone in the sport of bodyboarding know that the only new 1998 authorized Mike Stewart Bodyboards are the ones I am making, and will also set the record straight that I am no longer involved in any way with Morey Bodyboards."

CONTACT: Gipson, Hoffman & Pancione

Vincent Chieffo, 310/556-4660

or

Hanson & Schwam Public Relations 

Gene Schwam/Michael Gerety, 310/248-4488