Trademark Showdown: PEI Licensing Sues Pudgy Penguins Over ’Original Penguin’ Brand Rights

Another day, another crypto lawsuit—but this one's got feathers.

When Penguins Collide

PEI Licensing, the corporate steward behind the classic 'Original Penguin' apparel brand, just filed a trademark infringement suit against the blue-chip NFT project Pudgy Penguins. The claim? That the digital collectibles are treading on decades-old brand territory. Forget bear and bull markets—this is bird law.

Brands in the Crosshairs

The move highlights a growing tension as Web3 projects scale from niche internet communities to mainstream consumer brands. When a pixelated penguin starts selling physical toys and building a lifestyle empire, legacy trademark holders start paying attention. And sending legal papers.

The Stakes on Ice

For Pudgy Penguins, this isn't just about legal fees—it's about the future of its brand expansion. The project has aggressively moved into physical merchandise and licensing deals, a strategy that now faces a direct challenge. One industry watcher quipped, 'Nothing says decentralized future like a good old-fashioned corporate lawsuit.'

Finance's Icy Jab

Because what's a crypto story without a little financial cynicism? Trademark lawsuits: the ultimate proof that even in the decentralized future, lawyers still find a way to get paid—probably in stablecoins.

The outcome could set a precedent for how legacy brands engage with—or attempt to ice out—NFT projects building real-world empires. Grab your popcorn. And maybe a trademark attorney.

Pudgy Penguins dragged to court for trademark infringement 

According to PEI Licensing, the firm sent a cease-and-desist to Pudgy Penguins in October 2023. However, the NFT brand went ahead with producing retail goods, which trashed the value of PEI’s Penguin brand.

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.

Pudgy Penguins launched as an Ethereum NFT collection in 2021. It is now one of the biggest brands in the crypto ecosystem. It then launched a Solana-based coin called PENGU, landing its physical toy line in major retailers like Walmart and Target. They made more than $10 million in sales in less than a year. 

To back its claims, PEI shared merchandise with “immediate similarities” in its apparel and headwear side-by-side with those marketed by Pudgy Penguins. 

PEI asks PENGU to destroy any products found “likely to be confused” with PEI’s trademarks. They are also to receive all profits from the sales of such products. PEI requests that all Pudgy Penguins applications filed with the USPTO be rejected immediately. 

Pudgy Penguins’ popularity catches big brands’ attention

PEI’s lawsuit timing is calculated and timely. Its popularity has grown to new heights, registering a partnership with English football club Man City.

As reported by Cryptopolitan, Pudgy Penguins came under fire after an X post interpreted as stereotyping Indians as the largest community in InfoFi. Manchester City asked Pudgy Penguins to apologize to a community member who called it out as xenophobic.

Pudgy Penguins boasts a set of 8,888 flightless bird NFTs. It now has a standing partnership with Visa and KAST, enabling 150 million global traders to transact directly with crypto and stablecoins.

The success comes under Luca Netz, who bought the project for about $2.5 million after bad leadership from the founder, Cole Villemain. Under Villeman, the brand failed with the community voting to oust him.

Pengu Penguis reacts as its price remains unaffected

The firm has taken to X (formerly Twitter) to ascertain its position. They posted a meme implying that their brand has no similarities to Original Penguin.

According to on-chain data from CoinMarketCap, Pudgy Penguins is up 1.52% to $0.00721 over the past 24 hours, outperforming a broader market dip of 0.97% and showing signs of mild alpha. 

The market position is primarily driven by modest capital rotation into altcoins, with no clear coin-specific catalyst. The CMC Altcoin Season Index rose 2.7% to 38 in the past 24 hours, indicating increased capital flow toward altcoins.

As reported by Cryptopolitan, if bulls fail to trigger a surge, PENGU’s price may drop below the immediate support line at $0.005735.

NFT companies have recently faced market backlash and high-profile lawsuits amid major price dips from ATHs. 

There is Hermès vs. Mason Rothschild, in which Hermès sued over the MetaBirkins NFT collection. To that end, the court ruled that the NFTs infringed Hermès’ trademarks and created consumer confusion.

The Nike vs. StockX: Nike sued an online retailer selling NFTs featuring Nike sneakers. The case was eventually settled behind closed doors.

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