Beanies bargain site wins domain dispute

In the battle over a Beanie Babies domain, the bargain sellers have come out on top.

A federal appeals panel has ruled that the operator of Bargainbeanies.com is not violating the trademark of Beanie Babies creator Ty by offering used dolls through the Web address. The case is significant because it supports the ability of second-hand resellers to market and hawk their wares over the Internet without running afoul of trademark laws.

Ty had sued Ruth Perryman, arguing that her Bargainbeanies.com site diluted the company trademark.

However, a panel of the U.S. Court of Appeals for the Seventh Circuit sided with Perryman, ruling that she was not confusing site visitors or diluting the trademark because she was indeed selling Beanie Babies and included a disclaimer that she was not affiliated with Ty.

According to the judges, that would amount to saying that if a "used car dealer truthfully advertised that it sold Toyotas, or if a muffler manufacturer truthfully advertised that it specialized in making mufflers for installation in Toyotas, Toyota would have a claim of trademark infringement."

The judges also said Ty's practice of releasing large quantities of Beanie Babies for a limited amount of time creates a secondary market for the toys. Ty representatives could not be immediately reached for comment.