The battle of the two penguin trademarks! Pudgy Penguins NFT accused of infringing on established copyrights

Original Penguin clothing brand’s licensing company PEI Licensing filed a lawsuit against Pudgy Penguins in a Florida federal court on Wednesday, accusing them of trademark infringement, dilution, and unfair competition, specifically targeting Pudgy Penguins’ apparel product line.

Full Litigation Breakdown: PEI’s Three Claims and Four Demands

（Source: CourtListener）

PEI Licensing’s complaint reveals the full legal context of the case. As early as October 2023, PEI had sent a cease-and-desist notice to Pudgy Penguins, demanding they abandon multiple penguin trademark applications filed with the U.S. Patent and Trademark Office (USPTO). When there was no response, the lawsuit was ultimately initiated.

PEI has made four specific requests in the lawsuit:

USPTO Application Rejection: Request the court to order the USPTO to reject all of Pudgy Penguins’ penguin-related trademark applications.

Injunction: Prevent Pudgy Penguins from continuing to use the accused infringing trademarks in apparel and related businesses.

Product Destruction: Order the destruction of all existing inventory of products that could cause confusion with PEI’s trademarks.

Profit Restitution: Require Pudgy Penguins to hand over all profits from the sale of such products.

PEI’s language in the complaint is strong, claiming Pudgy Penguins “misappropriated PEI’s valuable intellectual property rights,” and they submitted side-by-side images of apparel as key evidence to the court.

Pudgy Penguins’ Response: “Visually Distinct, Market Completely Different”

Jennifer McGlone, legal director of Pudgy Penguins, told Cointelegraph that the company was “surprised by this action, especially since the two sides had been engaging in productive private negotiations.” She emphasized that Pudgy Penguins’ trademarks “are visually distinct and serve entirely different audiences and markets,” expressing confidence that PEI’s claims lack merit.

McGlone further pointed out that Pudgy Penguins has received multiple approvals from the USPTO for applications covering its brand and related trademarks, which in itself strongly counters PEI’s infringement claims. The official Pudgy Penguins X account also posted a meme implying there are no similarities between the two brands.

Legal Risks of NFT Brand Commercialization: Lessons from the Pudgy Penguins Case

This lawsuit highlights the structural legal challenges NFT projects face when expanding into consumer product brands. In recent years, Pudgy Penguins has actively entered the physical toy, apparel, and other consumer goods markets, aiming to convert digital asset brand value into traditional commercial revenue. However, this strategy also inevitably brings them into the scope of traditional trademark protections.

PEI’s lawsuit serves as a clear warning to NFT projects: even if the markets, audiences, and positioning differ significantly, visual elements that could cause confusion may still trigger legal challenges from established brands.

Frequently Asked Questions

What are the differences between PEI Licensing’s and Pudgy Penguins’ penguin trademarks?

PEI Licensing’s Original Penguin is a traditional apparel brand with a penguin logo primarily used for adult casual wear, with over 68 years of commercial use. Pudgy Penguins’ trademark originates from an NFT art project, serving the crypto community and expanding into toys and streetwear. Pudgy Penguins claims their designs are “visually distinct,” but ultimately, the court will assess similarity based on trademark resemblance and likelihood of market confusion.

Does USPTO approval of Pudgy Penguins’ trademark application mean a higher chance of winning the lawsuit?

USPTO approval indicates the examiner found the application met basic requirements, but it does not prevent third parties from asserting infringement in court. In trademark litigation, federal courts have independent standards and can find that a registered or approved trademark infringes or dilutes a well-known mark, regardless of USPTO approval.

What does this case imply for the commercial expansion of NFT projects?

This case clearly demonstrates that NFT projects expanding into traditional consumer goods must conduct comprehensive trademark due diligence beforehand. Even if the NFT brand is highly recognized digitally, entering markets like apparel and toys—where established trademarks are protected—may lead to infringement lawsuits from traditional brand owners.