A federal judge in Colorado has upheld a decision by Magistrate Judge Susan Prose in the ongoing Animal Toy Co. Trademark Dispute between Kong Co. and its former collaborators. The ruling rejected Kong Co.'s request for reconsideration of the decision, which allowed both Kong and its defendants to disclose an additional expert witness after accusations of evidence destruction in relation to trademark infringement claims.

U.S. District Judge Daniel D. Domenico confirmed the magistrate's ruling, stating that Kong Co. did not adequately evaluate the defense's records produced after the filing of its motion for sanctions. He further supported Judge Prose's decision to allow limited discovery regarding late-produced records, ensuring both parties could obtain necessary information for trial.

Kong Co. is suing Bounce Enterprises LLC, a holding company, along with KSP USA LLC, over terminated agreements involving the marketing and sale of zoo and non-domesticated animal products. The dispute centers around an agreement allowing KVP International Inc. to use Kong trademarks on certain products. However, questions remain about whether a new trademark licensing agreement was formed between Kong, Bounce, and KSP.

While Kong Co. did not contest the rejection of its motion for sanctions, it opposed the decision to permit the disclosure of another expert witness. Judge Domenico clarified that no significant evidence had been destroyed or altered by the defendants, and any prejudice caused by the late production of evidence could be remedied through additional discovery.

The dispute involves the use of websites and social media accounts transferred to KSP in early 2022. Following the lawsuit, a KVP representative located and produced backup copies of the relevant records, just shy of two months after the close of fact discovery. Kong Co. has continued to seek sanctions in connection with the late disclosure.

Judge Domenico has set a deadline of June 13 for the parties to disclose their additional experts. Kong Co. is also permitted to conduct a seven-hour deposition of the defendants regarding the belatedly produced records.

This case, Kong Company LLC v. Bounce Enterprises LLC et al., is currently being litigated in the U.S. District Court for the District of Colorado under case number 1:22-cv-02001.