PANews reported on March 6th that, according to The Block, PEI Licensing, owner of the Penguin clothing brand, has filed a lawsuit in federal court accusing the NFT brand Pudgy Penguins of infringing on its trademark rights. PEI claims that it issued a cease and desist letter to Pudgy Penguins in October 2023, but the latter continued to produce and sell retail goods such as plush toys and clothing, diluting the value of the Penguin brand, which PEI founded in 1955. The complaint cites examples of alleged infringement by Pudgy Penguins, stating that its unauthorized use of the trademark misleads consumers into believing there is a connection between the two.

Pudgy Penguins has not responded to requests for comment. The brand began selling plush toys in chains such as Walmart and Target in 2023, announcing sales of over one million units the following year and launching apparel products such as hats and sweatshirts. PEI is seeking damages for the defendant's sales profits and has requested a jury trial.