Are digital penguins a threat to a clothing brand?

The clothing brand Original Penguin has used a penguin as a distinctive element of its brand identity for decades.

It is therefore not surprising that PEI Licensing has taken a critical stance toward the use of penguin branding by Pudgy Penguins, a brand that first became known in the Web3 and NFT space. While one brand built its reputation in the traditional fashion industry, the other has increasingly moved into clothing and merchandise. That is precisely where the conflict arises.

In a recent complaint, PEI argues that the name and visual style used by Pudgy Penguins come too close to the earlier PENGUIN trademarks of Original Penguin. According to PEI, there is a risk that consumers may assume a commercial connection between the two brands.

Pudgy Penguins

PEI had previously sent a cease and desist letter to Pudgy Penguins. It is now asking a federal court in Florida to, among other things, block trademark applications filed by Pudgy Penguins with the United States Patent and Trademark Office and to remove the disputed products from the market.

From a legal perspective, the case revolves around a familiar question in trademark law: is there a likelihood of confusion? The fact that Pudgy Penguins originated in the world of NFTs and digital communities is not in itself a sufficient defense if both parties offer or intend to offer clothing. Once trademarks overlap in the same product category, the key question becomes whether the later brand is sufficiently distinct.

For practitioners, the case serves as a reminder that trademark strategy does not end at the borders of your original market. Brands expanding from a digital environment into physical products should carefully review existing registrations and earlier rights beforehand. At the same time, the dispute shows that established brands need to remain alert to new entrants with strong concepts and recognisable branding that can gain traction quickly.

New brand ecosystems may feel innovative, but trademark law remains remarkably consistent in what it seeks to protect: a clear indication of origin and as little risk of confusion as possible.

Author: Erwin Haüer

Bio: Erwin is a trademark attorney and, as the managing partner, in charge of IT and Information Management. He works extensively with startups and scale-ups, while his clientele also includes numerous multinational corporations. Erwin possesses a sharp wit and a keen eye for remarkable trademark news and curious brand infringements.