trademark

Your Squishmallow Isn’t Who You Think It Is: Setting The Bounds Of The Soft Toy Market 

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By: Caroline Dolan

Squishmallows were introduced in 2017 and went viral on TikTok and Instagram during the Covid-19 pandemic in 2021. People fell in love with these affordable and huggable plushies that are available in more than 3,000 different characters. Their unique sizes and colors provide comfort and joy for all ages and even serve a niche of Squishmallow collectors. 

Trade Dress: The Look and Feel

Trademarks are “words, names, symbols, or devices” that are distinct, functional, and used in commerce to identify the source of a good. The Lanham Act provides federal protection over the good-will of such artistic creations from infringement, dilution, cybersquatting, and false advertising. It also protects consumers from being deceived by knock-off products. The Lanham Act also protects a product’s trade dress, which is “the commercial look and feel of a product or service that identifies and distinguishes the source of the product or service.” Similar to trademarks, trade dress can receive protection even without formal registration with the U.S. Patent and Trademark Office.  

To assert a trade dress infringement claim, a plaintiff must demonstrate that their product’s trade dress  (1) is distinctive; (2) is owned by the plaintiff; (3) is nonfunctional; and (4) that the defendant used the trade dress without consent in a way that is likely to confuse the ordinary consumer as to the source, sponsorship, or affiliation of the product. The Ninth Circuit has held that a trade dress that fails to be inherently distinctive may still be protected if it possesses a secondary meaning. To show a secondary meaning, a plaintiff must prove “a mental recognition in buyers’ and potential buyers’ minds that products connected with the [trade dress] are associated with the same source.” 

Build-A-Bear vs. Squishmallow

Warren Buffet’s investment company, Berkshire Hathaway, owns Alleghany Corporation which is the parent company of Jazwares LLC. Jazwares oversees Kelly Toys which is a leading toy manufacturer and the creator of Squishmallows. Squishmallows have seen its sales boom since 2021 and can be purchased in a variety of spaces, including in bulk at your local Costco. However, in January 2024, to offer “optimal hugging benefits” in light of Valentine’s Day, Build-A-Bear launched its Skoosherz line—a variety of collectible plush pillow-like toys. 

Once the Sckoosherz line was released, Kelly Toys promptly filed a lawsuit in the Central District of California claiming that Build-A-Bear’s Skoosherz line infringes on Squishmallow’s trade dress because Skoosherz imitate Squishmallows’ “shape, face style, coloring and fabric.” Kelly Toys’ complaint alleges that Skoosherz “have the same distinctive trade dress as the popular Squishmallows, including: shaped fanciful renditions of animals/characters; simplified Asian style Kawaii faces; embroidered facial features; distinctive and nonmonochrome coloring; and velvety velour-like textured exterior.” It asserts that these similarities seek to “trick consumers” and has harmed the Squishmallows brand by “divert[ing] sales and profits from Kelly Toys to Build-A-Bear.” Kelly Toys is seeking unspecified damages and an injunction to stop the sale of Skoosherz. In Kelly Toys’ view, Build-A-Bear is intentionally copying the distinct physical characteristics and exterior appearance of Squishmallows to capitalize on Squishmallows’ international success.

Build-A-Bear has responded by filing its own complaint in the Eastern District of Missouri asserting that its Skoosherz line is merely an extension of its already existing line of animal toys. In Build-A-Bear’s view, Skoosherz merely imitates the popular plushies that Build-a-Bear has previously sold. For instance, Build-A-Bear claims that the Skoosherz Pink Axåolotl is merely an imitation of its original Pink Axolotl toy. The company is seeking a declaratory judgment stating that Skoosherz do not infringe on the Squishmallow trade dress and furthermore, that the Squishmallow trade dress is not even protectable under the Lanham Act. Build-A-Bear asserts that the Squishmallow trade dress lacks a consistent look and feel and shares characteristics with toys already present in the market. According to its complaint, “[i]f each aspect of the claimed trade dress were in fact protected trade dress, it would be virtually impossible for competitors to create alternative designs.”

Bearing a Squishy Future

Trade dress is a critical element of trademark law and serves to safeguard the goodwill of creators, the protection of consumers, and a competitive market. Although this dispute resides in the market of soft toys, it highlights a new perspective of trade dress law and application. If a jury trial is granted, Kelly Toys will likely rely on side-by-side comparisons to highlight the visual similarities between Squishmallows and Skoosherz as well as present consumer comments that have been made on Build-a-Bear’s social media account dubbing Skoosherz as “knockoff Squishmallows.” Although such evidence can support Kelly Toys’ infringement claims, it will still have the initial burden of proving that its trade dress is protectable.

Momofuku’s Chili Crunch Oil Catastrophe

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By: Stella B. Haynes Kiehn 

The famous culinary brand Momofuku’s recent attempt to trademark “Chili Crunch” oil has ignited a sizzling debate between federal trademark law and a beloved cultural staple, ultimately leading to a public apology by the brand’s founder.

Momofuku, a food empire owned by celebrity chef David Chang (“Chang”), comprises four restaurants in New York, Las Vegas, and Los Angeles. Chang founded Momofuku in 2004 with the opening of Momofuku Noodle Bar in New York City. The New York Times credits Momofuku with “the rise of contemporary Asian-American cuisine” and Bon Appétit magazine named Momofuku the “most important restaurant in America.”  Momofuku also sells “restaurant-grade products for home cooks” and bottled versions of their famous sauces – the start of the currently contested trademark issue.

Early this year, Momofuku launched a pre-packaged version of their infamous chili sauce, calling it “Chili Crunch.” The sauce is described as “a spicy-crunchy chili oil inspired by Chinese chili crisp and Mexican salsa seca and salsa macha.” Consumers can purchase the Chili Crunch through Momofuku’s website for $13 per 5.5oz jar. On March 29, 2024, shortly after the product was introduced, Chang applied for federal trademark registration of the term “Chili Crunch.” The mark’s application sought to cover “condiments; sauces; food flavorings being non-essential oils; chili oil for use as a seasoning or condiment; chili oils being condiments.”

The names of foods can be trademarked in certain situations. A trademark is a word, phrase, symbol, or design that identifies and distinguishes one party’s goods from those of another party. In other words, a trademark sets one product apart from its competitors. Therefore, in the culinary world, a food trademark is a name, logo, or phrase used to brand and distinguish a food product from similar food products made by other companies. Momofuku likely would have applied sooner for federal trademark protection but was limited because federal registration requires the mark to have been used (or have a bona fide intention to use) in commerce.

Currently, the mark is merely at the application stage, and no decision has been issued by the United States Patent and Trademark Office (USPTO) as to the validity of the mark. Despite this, Chang’s team began to send out cease and desist letters to other businesses using the term “chili crunch” to describe their chili oil sauces. One such recipient, Michelle Tew (“Tew”), founder of the Malaysian food brand Homiah, told The Guardian that the letter states “that Momofuku is the ‘owner of all trademark rights’ for ‘chile crunch’ and ‘chili crunch’ (two different spellings) and that her product, Homiah Sambal Chili Crunch, is a trademark infringement. Tew said her chili crunch is based on her Malaysian family’s recipe, where she grew up.” Buzzfeed published a similar story about another cease and desist letter recipient; “MìLà, a company specializing in frozen soup dumplings and founded by husband-and-wife team Caleb Wang and Jen Liao, posted a similar statement on Instagram after receiving their own cease-and-desist from Momofuku, stating that there’s ‘’” In both letters, Momofuku informed recipients that they had 90 days to cease use of the “Chili Crunch” mark prior to legal action.

The registration of names for food products is nothing new. However, at issue here is both the general community’s and the AAPI (Asian American Pacific Islander) community’s argument that Chang’s excessive policing of “Chili Crunch” essentially turned him into a “trademark bully.” Notably, businesses that were the subject of the cease and desist letters were quick to take to social media and point out that they were all recipients were members of the AAPI restaurant community. Additionally, many recipients also noted that the term “chili crunch” was a “generic cultural term.”

On April 15, likely due to pushback from the culinary AAPI community, Chang announced that he would not enforce the trademark for “Chili Crunch.” While Momofuku still owns the rights to the term “Chile Crunch” (spelled with an “e”), Chang stated that Momofuku will no longer enforce that mark (Momofuku acquired the trademark for the name “chile crunch” from Chile Colonial in 2023). Momofuku elaborates that their decision to no longer enforce the mark could open the door for another company to claim the mark in the future.

Ultimately in a statement to The Eater a Momofuku spokesperson stated; “this situation has created a painful divide between Momofuku, the AAPI community we care deeply about, and other companies sharing grocery store shelves. But the truth is, we all want the same things: to grow, to succeed, and to make America’s pantries and grocery stores a more diverse place.” Ultimately, Momofuku’s case has highlighted that while companies may pursue trademark protection to safeguard their brand identity and market position, companies must also navigate the delicate balance of respecting cultural heritage and community sentiments.

Monster Energy vs. Everyone: Why is a drink company challenging video games for using the word “monster”?

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By: Perry Maybrown

Have you ever been playing Monster Hunter and thought, “Huh, this must be related to Monster Energy.” While I personally have never faced this conundrum, it’s a scenario that Monster Energy has been very worried about. So much so, that for the past few years they have been targeting a wide range of industries to protect their trademark of the word “monster.” Two notable attacks that have been revived by the media were against Pokémon for “Pocket Monster” and Capcom for their videogame franchise “Monster Hunter.” Both complaints were filed in Japan and promptly dismissed. 

This has not deterred the energy drink company in the slightest however, as they have recently sent a cease and desist letter to independent development studio Glowstick Entertainment for their game Dark Deception: Monsters & Mortals. In their letter, Monster Energy requests that Glowstick never again attempt to trademark something with the word “Monster,” or have any trademarks that could at all resemble their own. They go on to request that the logo of the game be modified and sent to them for approval. Monster asked Glowstick to refrain from using the colors green, white, and black (a task that is especially daunting considering the Glowstick logo is green on a black background). Furthermore, Monster required Glow Stick not emphasize the word “monster” more than any other in the title of their game.

Furious with these demands, founder and CEO of the studio, Vincent Livings, took to Twitter to air his complaints and share the cease and desist letter. This has led to extreme reactions from the Twitter sphere and news outlets which have shared the story. 

Are these reactions warranted? Or is Monster simply protecting its rightful trademark? 

A trademark can be composed of a variety of elements: words, images, sounds, even colors can be used as a way to denote a specific brand or product. What a trademark is not, is complete ownership of a single word, symbol or color in all situations. Rather, a trademark only protects the use of your mark in connection with similar goods or services. Boiling it down to the most basic level, infringement occurs when a consumer may become confused between two marks. This is referred to as the likelihood of confusion. 

The courts have determined a test and list of factors that they weigh when deciding infringement. On the west coast (9th Circuit) these are referred to as the Sleekcraft Factors. The factors are as follows:

(1) Strength or Weakness of the Plaintiff’s Mark. 

(2) Defendant’s Use of the Mark

(4) Actual Confusion.  

(5) Defendant’s Intent.  

(6) Marketing/Advertising Channels. 

(7) Consumer’s Degree of Care.  

(8) Product Line Expansion. 

(9) Other Factors.

On the east coast they are the polaroid factors, which are similar to Sleekcraft: 

(1) the strength of the plaintiff’s mark; 

(2) the degree of similarity between the two marks; 

(3) the proximity of the products; 

(4) the likelihood that the owner will bridge the gap; 

(5) evidence of actual confusion; (6) defendant’s good faith in adopting the mark; 

(7) the quality of defendant’s product; and 

(8) the sophistication of the consumers. will likely cause confusion with plaintiff’s mark.

While a court may review all of these factors to determine the likelihood of confusion, there are several that are most pivotal when reviewing the scant facts we know for Monster Energy. To start with, product line expansion refers to whether the goods and services are related and the likelihood of one company expanding into the others business. This again is to help figure out “likelihood of confusion” on the part of the consumers. For example, it’s easier to become confused between two purses both made by a company called Gucci, however consumers are less likely to relate the two if it’s a sink maker that goes by that name. 

In the case of Monster,it is critical to ask, how likely is a beverage manufacturer to enter the video game market? Not only are the two products completely unrelated, the video game industry is difficult to break into on a good day. 

Furthermore,  the strength of the mark is evaluated on a sliding scale, with the weakest being what is called a “generic mark.” Generic words do not receive trademark protection because everyone needs to use them to describe their business. For example, if I created a coffee company called Coffee Company that would be generic. Imagine if I could now prevent all other coffee companies from using the word “coffee.” That would be wild! 

Next up is determining how descriptive the trademark is. Basically, is your trademark just describing the thing you are selling? These types of trademarks usually do not receive protection, but can in certain instances. 

The strongest marks are fanciful, arbitrary or suggestive. A fanciful mark is the best one you can get from a legal standpoint, because it’s a word you just made up (think Pepsi, Kodak etc.). A suggestive mark is one that kind of sounds like the product (like Netflix). And finally is arbitrary, which is just a random word that is used on a product that may have meaning elsewhere but isn’t directly descriptive of the product itself (Apple Computers is a great example of this). The Monster Energy mark would likely either be considered arbitrary or suggestive. Maybe suggestive because its name implies that you get monstrous, or huge amounts of energy from it. Arbitrary perhaps because the monster seems unrelated to the beverage. 

Here is the issue for Monster; while it is arbitrary for their product in particular, the word is descriptive when it comes to the video games they are challenging. Take for example Monster Hunter, which is a game series where you… hunt monsters. Or Pocket Monsters, where you collect monsters, you can fit in your pocket. At worst the word may be considered generic as it is used so ubiquitously throughout the industry to describe games and their contents. 

This is important because courts are unwilling to impose trademark protections for generic marks, because of how damaging it could be to the market. While descriptive marks may receive some kind of protection it’s a challenge that requires a large amount of work from the company that wishes to secure the trademark. Thanks to this, courts would be even more unwilling to find in Monster’s favor and force video game companies to stop using such a descriptive term. 

Conclusion

Like the saying goes, “with great power comes great responsibility.” While trademark owners do have rights to that mark, their power comes with responsibility  as they must defend their mark or risk losing it. In that sense, it seems logical that Monster is so zealously fighting to keep the word “monster” out of other companies’ mouths. On the other hand, this overkill method to attack any use of such a common word isn’t a great look for the company. 

At the end of the day, the decision of whether infringement exists is for the courts to decide. And it’s Monster’s choice to spend the money getting to that point, win or lose. We don’t have all the facts for either of these cases, and only know one side of the story, so it’s difficult to say if there are more factors that could play into this issue. But for now, it seems to be David vs Goliath. And the public is on David’s side.

Duped or Duplicated? The Difference Between A Counterfeit And An Accessible Homage

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By: HR Fitzmorris

Even non-legally versed consumers know that counterfeit or fraudulent products are illegal. In fact, some may have even experienced the euphoria of getting what they thought was a steal on a new designer product only to find out that it was a different type of ‘steal’ altogether. 

But what about “dupes”?

Unlike counterfeit products, which are copies of trademarked consumer goods meant to be passed off as the real thing, dupes (short for duplicate or duplication) are products that mimic other companies’ popular products without seeking to trick the consumer into thinking it’s the real deal. Dupes usually mimic high-end, in-demand goods and are sold at a much lower price-point—essentially the Gen Z version of a “knock-off.” Dupes have become extremely popular with the rise of social media advertising aimed at younger demographics. Teens that may not be able to afford a wildly trendy Cartier ring ($2,995) certainly may be able to scrounge up the change for the Amazon dupe ($12.99, with free next day shipping!).

The “Real” Fakes

To the everyday consumer the distinction between a counterfeit and a dupe may seem dubious, but in legal terms it’s significant. Counterfeiting is a concept used to “indicate an infringement of intellectual property rights, namely acts (use, manufacturing, or sale, for example) carried out without the consent of the intellectual property right holder.” “Counterfeiting” is the “act of making or selling fake products with the intent to deceive consumers. In the United States, it is illegal to produce, distribute, or sell counterfeit goods.” 

There are more issues with counterfeit goods outside of intellectual property infringement and their morally dubious nature. There are also possible health and safety issues with fake products that flout FDA or consumer protection standards.  There’s of course, the economic harm to legitimate businesses that lose money when their customers are lured away. The ever-present environmental harms associated with the flood of mass-produced, easily discarded items lurk behind the scenes. There’s even concern that counterfeit goods play a role in funding broader criminal enterprises.

Dupes: Duplication or Duplicity?

One of the important elements of counterfeiting is the “intent to deceive,” and this element is a significant piece of what separates dupes from counterfeits. Dupes do not claim to be the real-deal. In fact, part of their allure is that purchasers are getting the same or similar quality and functionality of the original without the original’s branding (and the associated price mark-up). As Claire Kane put it in her article for online publication MIC: 

While “fake” is a dirty word in fashion and “counterfeit” sounds unethical, the more neutral-sounding “dupe” suggests making savvy purchases and “somehow cheat[ing] the system” to get the look for less.

Companies hoping to crack down on dupes and knockoffs face an uphill battle in court. Without distinctive, trademarked branding that makes counterfeits fall within the reach of traditional trademark infringement, brands find little sympathy in the law. The current state of U.S. copyright law as it pertains to clothing and accessories has significant gaps. U.S. copyright law does not fully protect items defined as useful articles, which are “objects having an intrinsic utilitarian function” and “clothing” is the very first example of what counts. So, without the direct, obvious infringement on the branding, companies are unlikely to prevail.

Can You  Smell the Difference?

An especially interesting sector of dupes gaining popularity are designer fragrance dupes. Most dupes, like a certain handbag or shoe dupe, the knockoff brand doesn’t need (or want) to explicitly refer to the original product—it relies on the consumer to ‘get’ the reference. Not so with replica fragrance brands such as Oakcha, Dossier, or ALT Fragrances, which directly rely on references to their designer counterparts in their marketing. In fact, they often list the fragrance they were “inspired by” right on the bottle, or in the product description. So, what makes fragrance such a fertile ground for direct and blatant knockoffs without running afoul of trademark or copyright law? 

The answer is a combination of technology and law. First, new technological developments have made it extremely easy to reverse engineer specific fragrance formulations. Also, while the branding or packaging of a perfume may be eligible for copyright protection, a perfume’s scent is not because the scent serves as the “functional purpose of the product.” This makes it, under trademark law, ineligible for registration with the USPTO (functionality is a bar to registration). Perfumers can look to other avenues of protection such as obtaining a patent over the perfume formula, or trade secret protection, but these protections are difficult and costly to obtain and have drawbacks like disclosure. 

The legal landscape concerning dupes is unique and developing. It is inconsistent across products and complicated across industries. Whether you think dupes are simply knockoffs with a moral makeover or a legitimate industry that provides consumers with accessible choices, the law is unlikely to be the force that stems the tide.

“Adpocalypse”

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By: Carl Rustad

“Youtube Hate Preachers Share Screen With Household Names.” “Google’s Youtube has Continued Showing Brands’ Ads With Racist and Other Objectionable Videos.” These are the headlines Google faced in March 2017, as ads for Google’s advertising partners allegedly appeared alongside hateful or inappropriate Youtube videos. Within days, high-profile advertisers including Wal-mart, Pepsico, General Motors, AT&T, Dish, and Starbucks all pulled their ads from the platform. 

Google responded to these allegations by “implementing broader demonetization policies around videos that are perceived to be hateful or inflammatory” and “strengthen[ing] advertiser controls for video and display ads.” Using algorithms, Youtube “automatically weed[s] out inappropriate content,” sorting each uploaded video into categories purportedly reflecting their desirability to advertisers. Advertisers can exclude videos from categories like “tragedy and conflict,” “sensitive social issues,” “sexually suggestive content,” “sensational and shocking,” and “profanity and rough language.” Clearly these options reach far more content than the originally-complained-of hate speech. Videos determined inappropriate for advertisers are “demonetized,” meaning ads will not appear on them, they are deprioritized in search, and content creators will not receive any ad revenue from the video. The resulting drop in ad revenue is referred to as “Adpocalypse.”

As a result of these efforts, Youtube claimed “many advertisers have resumed their media campaigns on Youtube,” but also acknowledged that content creators faced “revenue fluctuations” due to demonetization and promised to provide “more detail around advertiser-friendly guidelines.”  Meanwhile, some content creators on the platform claimed to see an initial 80 percent drop in ad revenue due to demonetization, leveling off to a “40, 50, 60 percent drop” as videos were deemed not suitable for all advertisers. Prominent vlogger Vlogbrothers opined “[demonetization] has really squeezed creators who are making content that’s maybe good, but not, like, super-happy-family-fun-time stuff.”

Private Platforms Provide Strong Extralegal IP Protections

Adpocalypse demonstrates both the interest and the power that companies have in protecting their brands on private platforms. Brands are already entitled to certain legal protections. A trademark holder is protected against damaging associations in several scenarios, including when unauthorized use of their trademark causes confusion as to the source or sponsorship of a product, or tarnishes the brand by association with “unsavory” ideas. See AMF, Inc. v. Sleekcraft Boats; Louis Vuitton Malletier S.A. v. Haute Diggity Dog, LLC. On the other hand, there is no trademark infringement when the trademark is being used to describe a product or talk about a competitor’s product. See KP Permanent Make-Up Inc. v. Lasting Impression I, Inc. These are considered “fair uses” of a trademark.

But the companies on Youtube, of course, do not have to point to their carefully balanced intellectual property rights in order to control their representation on the platform. They can simply refuse to advertise on a platform if it tends to associate their brand with any less-than-ideal content. This is not a new phenomenon. Media has long catered to advertisers, with media scholar C. Edwin Baker claiming “the greatest threat of censorship in this country comes not from the government, but from advertisers . . . .” As online platforms mediate a steadily increasing amount of our time, advertiser censorship may become correspondingly more pervasive and omnipresent. With algorithmic and computing advances, such censorship can be systematically extended to hosted individual speech as seen in Adpocalypse.  

Real Time Content Moderation: The Future of Advertising? 

Adpocalypse concerned advertisers’ association with undesirable uploaded videos, which are scanned for content and demonetized and search deprioritized if they are deemed unsuitable for advertisers. This hawkish breed of moderation is enabled by advances in automated decision making. Over 500 hours of content are uploaded to Youtube every minute; each video must be scanned and categorized as safe or unsafe for advertisers. 

Platforms are now facing pressure to provide real time moderation to prevent violations of their terms of service by censoring disinformation, incitations of violence, and other abuses. Facebook Horizons already includes real time moderation features  allowing it to instantly deplatform or censor abusive–as determined by Facebook alone–virtual reality users. The advantages of such a system are obvious. Hate speech, harassment, and other universally-condemned behavior can be taken offline before it happens. Unfortunately, the concerns real time moderation raises are just as obvious. 

Platforms will continue to compete for ad revenue. As Adpocalypse demonstrates, online platforms are not simply censoring hate speech; they are beginning to censor anything not “advertiser-friendly”. Allowing fine control over the spaces in which advertisers’ products appear, not just how their ads appear, is a profitable course of action. One easily foreseeable use of real time moderation is to limit the visibility of advertiser-unfriendly speech in VR chat. But there is no reason to believe the technology will be confined to such transparent and simplistic uses. Facebook already sells sophisticated and hyper-targeted ads. Plus, US advertisers are willing to pay about $250 billion a year to control what consumers associate with their products. The market is there.

Given the impending capability and incentives for online platforms to moderate speech and the environment of speech in real time, it is time to take a hard look at the role of advertisers in platform censorship. While the First Amendment does not apply to private platforms, consumers should demand transparency from platforms about how speech is moderated and hold them accountable when moderation technology is abused to accommodate advertisers.