Pudgy Penguins accused of trademark infringement by Penguin apparel brand

PEI Licensing, the owner of the Penguin apparel brand, alleges that the Pudgy Penguins NFT brand has committed trademark infringement, according to a filing with the federal court.

The company said that although it sent Pudgy Penguins a cease-and-desist in October 2023, the NFT brand continued with its strategy of producing retail goods, which has had the effect of diluting the value of PEI's Penguin brand, founded in 1955.

Pudgy Penguins has, in recent years, built a retail business that includes plush toys and apparel. In PEI's complaint — filed with the United States District Court for the Southern District of Florida — it provides examples of where it alleges Pudgy Penguins has infringed on its trademark.

"Defendant knew, or should have known, that Defendant’s unauthorized use of Defendant’s Marks would cause an injury via deception of representation, omission, or practice that is likely to mislead consumers, as it gives rise to the incorrect belief that Defendant has some connection with PEI," Penguin apparel's lawyers said.

Pudgy Penguins didn't immediately respond to a request for comment.

Pudgy pivot

As the NFT market crumbled and most popular brands struggled to forge alternative revenue streams built on physical products, Pudgy Penguins began selling plush toys in 2023. The brand offered its products in major retail chains like Walmart and Target.

Less than a year later, Pudgy Penguins CEO Luca Netz announced that his company had sold over one million toys.

Pudgy Penguins has also produced and sold apparel like hats, hoodies, and sweatshirts, some of which were shown in PEI's complaint. PEI is seeking monetary damages such as "all profits received by Defendant from sales and revenues of any kind ... and all damages sustained by PEI as a result of Defendant’s actions," the filing said.

PEI is requesting a jury trial.