A Pecking Order Problem: Pudgy Penguins Faces Penguin Trademark Lawsuit

As reported by Bloomberg Law News, PEI Licensing (“PEI”), the owner of the Penguin apparel brand, has sued Pudgy Penguins NFT (“Pudgy Penguins”) for trademark infringement.

Pudgy Penguins started as a non-fungible token (“NFT”) in 2021, but, as the NFT market struggled, Pudgy Penguins started selling plush toys and clothes with names such as “Pudgy Penguins", “Pengu Nation” and “Forever Pudgy Penguins”.

According to the complaint, PEI claims that Pudgy Penguins’ apparel and branding features a penguin motif and a group of marks that are confusingly similar to its federally registered PENGUIN marks. PEI further notes that it has been using the penguin logo design on apparel since 1956 and the “penguin” word mark since 1967. Accordingly, PEI asserts that Pudgy Penguins, which began selling its apparel in 2023, had “constructive notice” of PEI’s ownership of the PENGUIN marks.

PEI reportedly attempted to address the alleged trademark infringement before filing the lawsuit by sending a cease-and-desist letter. PEI also opposed Pudgy Penguin’s application to the U.S. Patent and Trademark Office to register “I am my penguin, and my penguin is me” and other Penguin-related marks. Given Pudgy Penguin’s continued use of allegedly infringing marks, however, PEI initiated the current suit in which it asserts trademark infringement, dilution, and unfair competition claims.

PEI is seeking injunctive relief to enjoin Pudgy Penguins from using the allegedly infringing marks, cancellation of the trademark registrations and monetary relief, including disgorgement of profits derived from merchandise bearing the disputed marks.