Plush Toy Manufacturers Build-A-Bear and Kelly Toys Engage in Legal Battle
The plush toy industry is not all fun and games as Build-A-Bear and Kelly Toys, parent company of Squishmallows, find themselves embroiled in a legal dispute. Kelly Toys, under the control of Berkshire Hathaway, has sued Build-A-Bear, alleging that their new line of toys, called Skoosherz, infringes upon the look and feel of Squishmallows, their highly popular products.
The lawsuit, filed on Monday, claims that the Skoosherz line bears a striking resemblance to Squishmallows in terms of shape, face style, coloring, and fabric. Moez Kaba, an attorney representing Kelly Toys and Jazwares, stated, 'If a picture is worth a thousand words, comparing the Squishmallows original products to Build-A-Bear's copycats speaks volumes.' They intend to vigorously defend their intellectual property rights and are seeking unspecified damages and a halt to the sale of Skoosherz products.
In a surprising turn, Build-A-Bear filed a countersuit on the same day, asserting that Skoosherz does not infringe upon the rights of Squishmallows makers. They are seeking a declaratory judgment stating that the claimed trade dress rights of the Squishmallow makers are invalid and unenforceable. Build-A-Bear asserts that Skoosherz is based on their own original plush animals, which have been on the market for several years. They highlight that other companies were using similar features that Jazwares now claims as its own well before Squishmallows came into existence.
Build-A-Bear argues that if every element of the claimed trade dress were protected, it would stifle competition and make it nearly impossible for competitors to create alternative designs. The company also argues that the Squishmallows line itself has evolved over time and lacks consistency. They insist that there is no actual confusion among consumers and that they have no intention to mislead.
Squishmallows, created in 2016, have gained immense popularity in recent years. According to market research firm Circana, their 8-inch plush assortment was the best-selling toy in the United States last year. These cuddly creatures have also gained traction on social media, with celebrities like Kim Kardashian and Lady Gaga showcasing their collections online.
Jazwares, the parent company of Kelly Toys, accused Build-A-Bear of trying to take advantage of Squishmallows' success and claimed that Skoosherz's appearance, name, and marketing have already confused consumers, potentially leading to sales losses.
This legal battle is not the first involving Squishmallows. Previously, in December, Kelly Toys sued Chinese e-commerce giant Alibaba, alleging that their online platforms facilitated the sale of counterfeit Squishmallows.
Jazwares, ultimately owned by Warren Buffett's Berkshire Hathaway through Alleghany Corp., has become a significant player in the toy industry. At Berkshire's annual meeting last spring, Jazwares even offered plush Squishmallow versions of Buffett and Charlie Munger, which were highly sought after by shareholders.
Both lawsuits, filed in different federal jurisdictions, are ongoing, and the outcome remains uncertain. As the plush toy business proves to be fiercely competitive, it will likely take some time before resolution can be reached. Meanwhile, industry watchers and toy enthusiasts eagerly await the next chapter in this legal saga.
