Pudgy Penguins has landed in trouble over its appealing logo with lawsuits now questioning the legitimacy of the design.
The company responsible for the Original Penguin brand, known for its clothing, has filed a lawsuit against Pudgy Penguins, alleging infringement and violation of their trademarks.
The basis of the conflict is whether or not the branding of the crypto-native brand is too similar to the original penguin logo of the fashion brand.
Within the lawsuit, PEI Licensing contends that the name and branding of Pudgy Penguins may cause consumers to believe it is associated with the clothing brand, Original Penguin, due to the NFT or merchandise being similar.
Pudgy Penguins has grown to be one of the biggest brands and IPs in the crypto space since it released its Ethereum NFTs in 2021.
The brand also owns its own culture coin on the Solana network, dubbed PENGU. Interestingly, Pudgy Penguins has managed to get its physical toys stocked in major retailers such as Walmart and Target, with sales of over $10 million in under a year alone.
The company claims that the crypto brand’s use of a penguin-themed identity in consumer products, including toys , “misleads” and “deceives” the public by creating the impression of an official partnership or endorsement.
What does the lawsuit include?
Original Penguin has been a well-known name in the clothing industry, providing customer support. It has a popular penguin mascot logo on clothes, shoes, and accessories, which makes it a prevalent retail establishment.
The company argues that Pudgy Penguins’ expansion beyond NFTs into physical retail products brings the two brands closer into direct commercial overlap, increasing the risk of confusion among buyers.
PEI Licensing says it issued a cease-and-desist to Pudgy Penguins in 2023
As per the lawsuit, the first step was taken by PEI Licensing, and the firm states that the first step was taken in the form of a cease and desist letter sent to Pudgy Penguins in 2023, demanding that the crypto brand refrain from using the brand that could interfere with the trademarks owned by the firm.
A cease and desist letter is the first step that is taken in the lawsuit against another firm, stating that the intellectual property rights of the firm have been interfered with.
However, the crypto brand, Pudgy Penguins, did not pay enough heed to the issues raised in the cease and desist letter issued by PEI Licensing.
The negligence has resulted in the company having no other option but to approach the court in order to protect its trademarks.
The case comes against the backdrop of a rise in trademark infringement lawsuits between crypto firms and traditional legacy firms.
In most of the trademark infringement cases, the courts are faced with the problem of deciding whether the trademark used by the crypto brand is similar to the one used by a traditional brand.
For PEI Licensing, the lawsuit aims to stop what it views as unauthorized use of penguin-themed branding that could dilute or damage the reputation of the Original Penguin brand.
For Pudgy Penguins, the case could determine how far NFT-born brands can expand their identities into real-world consumer markets without clashing with established intellectual property rights.