## Facts

- FASA Corporation developed and licensed rights in the BATTLETECH fictional universe; Virtual World Entertainment was a related entity involved in those rights.
- Playmates Toys, Inc. marketed ExoSquad, a line of robot-like battlefield toys.
- Robert Allen, an independent toy designer not employed by FASA, was authorized by FASA to present toy ideas to potential partners but was not authorized to waive FASA’s intellectual-property rights or legal claims.
- Allen met with Playmates to pitch concepts and, before Playmates would review his ideas, Playmates required him to sign a “New Product Submission Form.”
- The form contained a broad waiver purporting to release Playmates from all past, present, and future claims related to the submitted ideas, including unknown claims.
- After Playmates released ExoSquad, FASA and Virtual World sued Playmates for infringement (including copyright and trademark theories).
- Playmates asserted an affirmative defense that the submission-form waiver barred the plaintiffs’ claims and sought early resolution of that defense.

## Issues

1. Whether FASA was bound by the submission-form waiver Allen signed, based on actual or apparent authority principles.
2. Whether a boilerplate waiver releasing unknown future intellectual-property claims is enforceable or void as against public policy under applicable state law.

## Decision

- The court held Allen lacked actual authority to bind FASA because his authorization was limited to presenting ideas, not releasing FASA’s IP rights or claims.
- The court held Allen also lacked apparent authority because Playmates identified no manifestations by FASA that would reasonably lead Playmates to believe Allen could waive FASA’s rights.
- Independently, the court held the waiver provision was void as against public policy insofar as it attempted to release unknown future intellectual-property claims.
- The court rejected Playmates’ waiver affirmative defense, allowing the infringement litigation to proceed on the merits.

## Legal Principles

- Actual authority requires authorization by the principal to perform the specific act; authority to pitch ideas does not include authority to execute broad releases of the principal’s legal claims or IP rights.
- Apparent authority depends on the principal’s manifestations to the third party; a third party cannot rely on an agent’s signature without reasonable, principal-created grounds to believe the agent has that power.
- Contractual waivers purporting to release unknown future claims are strictly limited and may be void on public-policy grounds, particularly when they would operate to excuse intentional or willful misconduct.
- Boilerplate “submission form” releases that function as blanket immunization from later copyright or trademark liability may be invalid where they conflict with public policies served by intellectual-property law.

## Conclusion

The court refused to enforce a submission-form waiver against the IP owner because the signer lacked authority to release the owner’s rights and because a blanket release of unknown future IP claims was unenforceable as contrary to public policy.


FASA Corp. v. Playmates Toys, Inc., 892 F. Supp. 1061 (N.D. Ill. 1995)