Hallmark Yields to Smaller Rival, Will Halt ‘Copycat’ Cards

After a two-year legal battle with Hallmark Cards, a tiny Boulder, Colo., greeting card maker succeeded Monday in getting the industry giant to stop marketing what it called “copycat” cards.

In a court settlement with Blue Mountain Arts, Hallmark agreed to stop publishing its Personal Touch line of cards and promised to help Blue Mountain get “equal and free” access to Hallmark card shops.

“We are absolutely thrilled with this decree,” said Blue Mountain co-founder Susan Polis Schutz, who started the business with her husband out of a pickup truck and drove cross-country to get stores to handle their cards. “This is important not only for us, but for all artists and businesses.”

During the battle, Blue Mountain portrayed Hallmark as a corporate villain that ripped off the ideas of small card makers, copied their products and used its power to force Hallmark stores not to handle their wares. Hallmark flatly denied it all.

“Every aspect of going to court is unpleasant and emotionally devastating,” Schutz said. “However, it is essential to stand up for what you believe in, no matter how hard it might be.”

Will Discontinue Line

The settlement, which included an undisclosed monetary amount, was a big concession for Hallmark, which had taken its fight all the way to the U.S. Supreme Court.

But last week the high court rejected the appeal to overturn a favorable lower court ruling that backed Blue Mountain’s contention that Hallmark was infringing on the “trade dress” or “look” of the Colorado firm’s AireBrush Feelings and Water Color Feelings poetry cards.

As part of the settlement, Hallmark also agreed to discontinue the use of the Personal Touch name and to repurchase such cards from Hallmark Stores. “We have common ground with Blue Mountain because we are interested in promoting fair competition with protecting both companies’ trademarks,” Hallmark Cards Chief Executive Irv Hockaday said in a statement.

Steve Doyle, a spokesman for Hallmark, said the company will replace the Personal Touch with a new line that appeals to the same kind of consumer needs for “honest open, emotion-based sentiments.” The Personal Touch line accounted for 98 designs out of Hallmark’s total of 16,000 cards.

Blue Mountain Arts is one of the so-called alternative card creators whose offerings are avant-garde, funny, irreverent and risque. Such cards did not exist a dozen years ago and are the fastest-growing segment of the $3.9-billion greeting card market, according to the Greeting Card Assn. in Washington. Sales of alternative cards have been growing 15% to 20% a year, compared to 5% for the industry as a whole.

Hallmark, with annual sales of more than $2 billion, accounts for more than 40% of the market. American Greeting Cards and Gibson Greetings also are big firms in the industry. But there are as many as 1,000 card creators in the country, according to the association.

“For Hallmark to win this particular case would have been a tragedy for an outfit like Blue Mountain Arts and many, many other small companies trying to establish themselves,” explained Milton Kristt, editor of Greetings Magazine, a monthly trade magazine that covers the greeting card industry. “They won’t all be a Hallmark, but they would like to share (the market). It’s good for the artists. . . . It has far reaching impact beyond greeting cards.”