The Pudgy Penguins project has found itself at the center of a legal dispute. PEI Licensing, the company that owns the clothing brand Original Penguin, has filed a lawsuit against the NFT project, accusing it of trademark infringement and unfair competition.
The lawsuit was filed in federal court in the state of Florida. The main point of contention is the Pudgy Penguins clothing and merchandise collections, which, according to the plaintiff, use designations and images that are too similar to the registered trademarks of Original Penguin.
Dispute Over the ‘Penguin’ Brand
In its complaint, PEI Licensing claims that Pudgy Penguins uses an entire ‘family of penguin image trademarks’ that could mislead consumers.
According to the company, it is not only about visual elements but also about word marks. The lawsuit states that the project attempted to register various versions of the ‘Penguin’ mark for clothing and related products.
The plaintiff claims that such designations are too similar to existing Original Penguin trademarks. In the company’s opinion, this could cause confusion among consumers and weaken the brand’s value.
A Brand With History Since the 1950s
Original Penguin is one of the oldest clothing brands featuring a penguin image. The company states that it has used the word mark ‘PENGUIN’ since at least 1967. The penguin image itself appeared on clothing even earlier, in 1956, according to the lawsuit materials.
According to PEI Licensing, it is precisely the long-term use and recognition that have made these designations ‘famous and protected trademarks.’ The lawsuit claims that the use of similar symbols by Pudgy Penguins could mislead consumers and create the impression that the goods are somehow connected to Original Penguin.
The Conflict Began Back in 2023
The legal proceedings are a continuation of an earlier dispute between the parties. PEI Licensing claims that as early as October 2023, it sent Pudgy Penguins an official demand to cease using the disputed designations. In the letter, the company stated that the project’s merchandise infringes on its trademark rights and weakens the brand.
The plaintiff also demanded that the applications to register marks with the word ‘Penguin’ at the US Patent and Trademark Office (USPTO) be withdrawn.
According to PEI, the project ignored these demands and continued to use the disputed branding elements.
What the Plaintiff Demands
As part of the legal process, PEI Licensing is asking the court to take a number of measures against Pudgy Penguins. In particular, the company demands:
- to reject the project’s applications to register the disputed trademarks
- to prohibit further use of designations that could cause confusion
- to require the company to destroy goods that infringe on the brand’s rights
- to transfer to the plaintiff the profits from the sale of such merchandise
In the plaintiff’s opinion, the use of similar marks allowed the project to gain commercial benefit from the fame of the Original Penguin brand.
Pudgy Penguins Disputes the Allegations
Pudgy Penguins stated that they were surprised by the lawsuit. The project’s chief legal officer, Jennifer McGlone, noted that the parties had previously discussed a possible settlement without going to court.
According to her, the company is confident that the allegations are unfounded. Project representatives believe that the brands are visually distinct and target different audiences.
In addition, Pudgy Penguins claims that it has already received a number of approvals for its trademark applications at the US Patent and Trademark Office.
NFT Brands Move Offline
The conflict reflects a broader trend. Many projects in the NFT industry are actively expanding beyond digital collections and starting to develop full-fledged consumer brands.
Pudgy Penguins is one of the most prominent examples. The project sells toys, clothing, and various products featuring its signature characters, and also enters into partnerships with major retailers.
It is precisely this expansion into the traditional merchandise and clothing market that makes such projects participants in the same legal environment as classic brands. This means that intellectual property issues become just as important for them as for companies in the fashion or entertainment industries.
What Happens Next?
The fate of the dispute will now be decided in court. If PEI Licensing’s demands are met, Pudgy Penguins may face restrictions on the use of part of its branding in the clothing sector.
Otherwise, the court’s decision may confirm the NFT project’s right to use its designations in the traditional goods market. Such proceedings are gradually shaping legal rules for Web3 projects as they transform from digital collections into full-fledged global brands.
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