In 1985 though the patents were still new. They are NOT now. I recall that case too, and it was filed based on PATENT violation right? Some company made fake Jumpstarters because they claimed that the Diaclone Attack Robot mold wasn't patented properly, so technically the design was in the public domain. The other toy company lost the case based on Hasbro owning the patent, not because they violated the IP of the Topspin character. So if they went back into production TODAY they would be legal, yes?
Actually, we had that discussion a few months back; Nevermore found the official rulings on the matter, and I translated them from legalese to basic English.
The gist of the matter was that certain figures didn't have copyright or patent information on them when they were first presented to the Japanese public, and so the bootleggers presumed that Takara had no legal claim on the figures. Thus, the bootleggers presumed that the figures had to instead be in the public domain.
The judge responded by noting that the bootleggers made the presumptions based on American IP law when they actually should have considered Japanese
IP law. As the judge noted, although the figures may not have had clear markings, Takara otherwise did everything in their power to act as if they were protected. Furthermore, the legal arrangement between Takara and Hasbro was enough to where, even if the figures were public domain in Japan, Hasbro could still easily claim protection retroactively.
What's more, the bootleggers undercut their own claims by visibly attempting to alter the individual figures. Had the figures been the exact same as the ones first presented in Japan, then the company could have easily claimed ignorance. But since the figures had modifications made to the molds, that raised the prospect the company actually knew they were dealing in bootlegs and were attempting to circumvent this by claiming differentiation.