A legal dispute between a traditional clothing brand and a Web3 company has reached a federal court in Florida.
PEI Licensing, the firm behind the Original Penguin apparel brand, filed a lawsuit against the nonfungible token project Pudgy Penguins, alleging trademark infringement, dilution and unfair competition linked to clothing products.
The case centres on Pudgy Penguins’ use of penguin themed branding in apparel and trademark filings in the United States.
PEI argues that the NFT project’s trademarks and merchandise create confusion with its long established PENGUIN marks used on clothing for decades.
Trademark dispute over apparel
PEI Licensing claims Pudgy Penguins used and attempted to register trademarks resembling its branding.
The complaint states that Pudgy Penguins used penguin-themed word and design trademarks linked to apparel and related goods.
PEI argues these marks are confusingly similar to its federally registered PENGUIN word mark and penguin design trademarks used by the Original Penguin brand.
According to the filing, PEI has used the PENGUIN word mark since at least 1967.
The company also says a penguin design appeared on its clothing as early as 1956.
The lawsuit alleges Pudgy Penguins’ trademark activity misappropriates PEI’s property rights and could lead consumers to associate the two brands.
Cease and desist letter
PEI Licensing said it attempted to address the issue before filing the lawsuit by sending Pudgy Penguins a cease and desist letter in October 2023.
The letter stated that Pudgy Penguins’ products infringe and dilute the Original Penguin trademarks.
It also demanded that the NFT project abandon several applications submitted to the US Patent and Trademark Office seeking to register penguin related trademarks.
PEI claims the alleged infringement could create confusion among consumers purchasing apparel and related products.
Court action and demands
The lawsuit asks the court to block Pudgy Penguins from securing trademark protection for its penguin-related branding.
PEI Licensing requested that the court direct the US Patent and Trademark Office to reject Pudgy Penguins’ pending trademark applications.
The company also asked the court to stop the NFT project from continuing activities that allegedly infringe the Original Penguin trademarks.
PEI further requested that Pudgy Penguins destroy products likely to be confused with its trademarks and hand over profits generated from merchandise tied to the disputed marks.
Pudgy Penguins responds
Pudgy Penguins has rejected the allegations and said it intends to contest the case.
Jennifer McGlone, the project’s legal chief, said the company was surprised by the lawsuit, particularly because both sides had been engaged in discussions aimed at resolving the issue privately.
She said Pudgy Penguins had advanced its trademark applications with the US Patent and Trademark Office and believes the claims lack merit.
The company argues that the trademarks are visually distinct and target different audiences and markets.
McGlone also said Pudgy Penguins has already secured multiple trademark application approvals from the US Patent and Trademark Office covering the Pudgy Penguins brand and related marks.
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