Disney Sued Over 'Lotso' Bear From 'Toy Story 3'

Disney is in hot water over its use of "Lotso" the bear in "Toy Story 3."

The New Jersey-based company that created “Lots of Hugs” stuffed toy bears is alleging that Disney’s use and characterization of the product was a trademark violation that caused unfair competition for its business.

Many may remember the “Lots-O’-Huggin” bear, also known as “Lotso,” as the main villain in the 2010 smash hit film "Toy Story 3." The bear was a bad guy who routinely foiled Buzz Lightyear and Woody’s attempts to help Andy’s toys escape from the Sunnyside Day Care Center, which Lotso ruled with an iron fist.

According to a copy of the 14-page complaint, the plaintiff, Diece-Lisa Industries (DLI) -- which has been selling the bears since December 1995 -- says it believes Disney Enterprises Inc. owes the company money because "Toy Story 3" had a negative effect on its ability to market the toy.

In 2011, for example, a DLI affiliate entered into a license agreement with Interactive Group that would allow the company to market and sell DLI's bear product, the complaint notes. However, the company declined to partner with the business unless DLI changed the name of its bear to "hugalots" rather than "Lots of Hugs."

The complaint says Interactive Group feared the product would be associated or confused with the film's "Lots-O’-Huggin" or "Lotso" character.

In addition, the document notes that DLI, which also has a registered patent on the "Lots of Hugs" bear line, licensed its brand to a company affiliated with Disney. This led DLI to argue that Disney knew about its intellectual property and, thus, knowingly abused it in the movie.

The Huffington Post reached out to Disney about the pending lawsuit but did not receive an immediate response.