## Facts

- New Line Cinema produced and distributed the *A Nightmare on Elm Street* film series and exploited merchandising associated with the character Freddy Krueger, including his distinctive bladed glove.
- Easter Unlimited manufactured and sold a Halloween novelty glove marketed through costume and Halloween retail channels.
- Easter’s glove resembled Freddy Krueger’s glove in overall appearance, though it differed in material and certain construction details (including color and the absence of openings present in the film glove).
- Easter’s product packaging prominently used the word “nightmare,” increasing association with the *A Nightmare on Elm Street* franchise.
- New Line sued seeking injunctive relief, alleging that Easter’s glove and packaging misled consumers into believing the product was licensed, sponsored, or affiliated with New Line.

## Issues

1. Whether Easter’s sale and marketing of a glove resembling Freddy Krueger’s glove, combined with “nightmare” packaging, was likely to cause consumer confusion as to sponsorship or authorization under trademark/unfair competition law.
2. Whether injunctive relief was warranted to prevent misappropriation of New Line’s goodwill associated with the *A Nightmare on Elm Street* franchise and character merchandising.

## Decision

- The court ruled for New Line on the core infringement-by-association theory.
- The court found a likelihood of consumer confusion or deception regarding affiliation, sponsorship, or authorization.
- The court granted injunctive relief restraining Easter from continued marketing of the challenged glove and packaging, including the “nightmare” association, within the scope of the court’s order.

## Legal Principles

- Trademark and unfair-competition law can protect distinctive, source-identifying elements of a fictional character’s commercial image when those elements function in the marketplace as indicators of origin or sponsorship.
- Likelihood of confusion analysis considers overall commercial impression; minor product differences do not preclude liability when the defendant’s product and marketing cues evoke the plaintiff’s protected goodwill.
- Verbal packaging cues linked to a famous title or brand (e.g., prominent use of a key term associated with the franchise) can materially increase the likelihood of confusion when combined with a visually similar product.
- Injunctive relief is appropriate where unlicensed merchandise in a related market is likely to mislead consumers into assuming an authorized tie-in and threatens the plaintiff’s goodwill.

## Conclusion

The court enjoined Easter’s marketing of a Freddy Krueger–evoking glove and “nightmare” packaging because the combination of product resemblance and branding cues was likely to confuse consumers into believing the glove was an authorized *A Nightmare on Elm Street* item, thereby misappropriating New Line’s goodwill under trademark and unfair-competition principles.


New Line Cinema Corp. v. Easter Unlimited, Inc., 17 U.S.P.Q.2d (BNA) 1631 (E.D.N.Y. 1989)