Marketing firm Distinctive Assets face a damage action filed by the Academy of Motion Picture Arts and Sciences for deceptive marketing of the firm to public.
Distinctive Assets independently provides gift bags to major nominees and the event's host.
As stated in the lawsuit charge, "It uses the Academy's trademarks to raise the profile of its 'gift bags' and falsely create the impression of association, affiliation, connection, sponsorship and/or endorsement."
"'Distinctive Assets' continued use of the Academy's trademarks not only infringes the Academy's trademarks, but it is also likely to dilute the distinctiveness of the Academy's famous trademarks and tarnish their goodwill," as alleged further.
Furthermore, the Academy claims that the "less-than-wholesome nature of some of the products contained in the bags" hurt the reputation of the Oscars. This year, the gift bag contents are worth $232,000, based on Fortune's calculation.
"Press about the 2016 gift bags has focused on both the less-than-wholesome nature of some of the products contained in the bags, which purportedly include a $250 marijuana vaporizer, a $1,900 "vampire breast lift," skin treatments by Park Avenue plastic surgeons valued at more than $5,500, a $250 sex toy, and $275 Swiss-made toilet paper, and the unseemliness of giving such high value gifts, including trips costing tens of thousands of dollars, to an elite group of celebrities."
Allegedly, the use of the trademark is a clear indication that the marketing firm deliberately implied an official connection with Oscar's.
The Academy prayed in the lawsuit to prevent the defendant from using any Academy trademark and seeks compensation for damages, as well as three times the amount of the firm's profits and actual payment of the academy's legal fees.
After the practice has been under the close monitor of the Internal Revenue authorities, the Academy stopped giving giveaways to the nominees, presenters and performers.
Under the law, celebrities who receive gifts and free vacations at awards shows are expected to declare them as income and pay the appropriate taxes.
The Academy of Motion Pictures Arts and Science is known for hosting the Academy Awards to recognize excellence in cinematic achievements in the film industry.
