A federal district court judge has denied a motion for summary judgement in a case involving squishy toys.
The decision notes that
As this case demonstrates, beneath the innocent and playful smile of the modern plush toy lurks a thicket of intellectual property law. The crux of this case is whether Defendants’ use of several allegedly infringing marks on its plush toys infringed on Plaintiffs’ unregistered “HUGME” mark, used in connection with Plaintiffs’ plush toys.
As the judge explained,
Plaintiff NECA LLC (“NECA”) creates, markets, and distributes licensed consumer products based on movies, video games, comic books, and pop culture. …
NECA operates through subsidiary companies such as Plaintiff Kidrobot, LLC (“Kidrobot”), a “creator and dealer of limited-edition art toys.”
As early as October 26, 2017, Plaintiffs launched their “HUGME” line of toys consisting of “‘HUGME’ branded plush toys based on a variety of licensed characters,” such as SpongeBob, Disney’s Lilo and Stitch, and Trolls characters, which they have since sold continuously. …
Plaintiffs also license characters from horror-oriented franchises for their “HUGME” line, but design those toys “in a way that the character[s] do[] not appear scary.” … Plaintiffs’ “HUGME” toys are characterized by the “shake feature,” such that products in this line “vibrate when [a] user claps or squeezes the toy,” making it so that a hug, among other actions, trigger this feature.
Defendants Jazwares, LLC (“Jazwares”) and Kelly Toy Holdings, LLC (“Kelly Toys”) own and sell a line of plush toys known as “Squishmallows.”
At issue in the case is Defendants’ use of the marks “HUGMEES,” “COCOMELON HUGMEES BY SQUISHMALLOWS,” “HUG MEES BY ORIGINAL SQUISHMALLOWS,” and “SQUISHMALLOWS HUG MEES.”
Defendant Kelly Toys filed a trademark registration application with the United States Patent and Trademark Office (USPTO) for the mark “SQUISHMALLOWS HUG MEES” in June, 2019.
Plaintiffs claimed that they didn’t learn about Defendants’ use of “HUG MEES BY SQUISHMALLOWS” until February, 2023. Plaintiffs then sent Defendants a Cease-and-Desist Letter.
That same day, Plaintiff Kidrobot filed a trademark registration application for the mark “HUGME.”
In March, 2024, the USPTO refused Plaintiffs’ registration of the “HUGME” mark “because of a likelihood of confusion” with two marks—Australia Brilliance’s “HUG ME NOW” mark and Kelly Toys’s “SQUISHMALLOWS HUG MEES” mark.
While the plaintiffs’ trademark application was pending, they filed suit against the defendants for alleged federal common law trademark infringement pursuant to § 43(a) of the Lanham Act, 15 U.S.C. § 1125(a), federal unfair competition, false designation of origin, and false advertising, among other claims.
The Defendants moved for summary judgement.
The court noted that
The validity and level of legal protection afforded to a particular mark is determined based on the type of mark it is. … “Distinctiveness is often expressed on an increasing scale: Word marks ‘may be (1) generic; (2) descriptive; (3) suggestive; (4) arbitrary; or (5) fanciful.’”
Defendants argued that Plaintiff’s “HUGME” mark is generic or at best descriptive but lacking secondary meaning, such that they “cannot establish any enforceable trademark rights.”
As the court explained,
Plaintiffs maintain that “HUGME” is suggestive because “in isolation the name provides virtually no information about the nature of the product itself,” noting that “HUGME” could be descriptive of a wide range of things such as cozy clothing, furniture, baby related goods or services, elder care, dating services, or therapeutic services, among others.
The court found Defendants did not meet their initial burden of demonstrating there is no genuine issue of material fact as to whether “HUGME” is generic.
Also, said the court,
Plaintiffs have demonstrated a genuine issue of material fact as to whether “HUGME” is descriptive. A descriptive mark “describes the qualities or characteristics of a good or service” and has achieved secondary meaning.
In addition, said the court, “this case is rife with contested facts that are material to the likelihood of confusion inquiry” – i.e., are consumers likely to be confused as to the source of the goods with similar names?
The court concluded that these factual issues would need to be resolved by a jury and not via summary judgment.
Bottom line: although the case will go forward to an unknown conclusion – perhaps including a jury verdict — the plaintiffs could have saved themselves time, money, and uncertainty by seeking trademark registration for the “HUGME” brand when they started selling it – or even before.
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