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Squishmallow and Build-a-Bear head into legal battle over ‘knock-offs’

Feb 15, 2024, 1:27 PM

A split — with images from the Kelly Toys Holdings, LLC lawsuit — shows a Squishmallows product...

A split — with images from the Kelly Toys Holdings, LLC lawsuit — shows a Squishmallows product, left, and a Skoosherz product. Mandatory Credit: Jazwares/Build-A-Bear Workshop/Kelly Toys Holdings, LLC/US District Court for the Central District of California

New York (CNN) — They’re soft, cuddly, and heading into a legal battle.

The owners of Squishmallow, the popular egg-shaped stuffed animals, filed an intellectual property lawsuit against Build-A-Bear on Monday, claiming its new “Skoosherz” line is a knock-off version of its own. Build-a-Bear fired back with its own legal complaint, claiming “Skoosherz” is its own version of a popular toy style.

“Rather than competing fairly in the marketplace by creating its own unique concepts and product lines, Defendant Build-A-Bear, a company worth over 300 million dollars, decided that it would be easier to simply copy, imitate, and profit off the popularity and goodwill of Squishmallows, all in the hopes of confusing consumers into buying its products instead of Squishmallows,” the lawsuit by Jazwares and Kelly Toys said.

Squishmallow creator Kelly Toys and its owner Jazwares (which itself is owned by Warren Buffet’s Berkshire Hathaway) filed the lawsuit in the U.S. District Court for the Central District in California on Monday.

Launched in 2016, the now wildly popular Squishmallows were the top-selling toy in 2023, according to a Circana full-year report. Much like surges for Beanie Babies, Cabbage Patch dolls or Pound Puppies, Squishmallows have become a collectible item and developed an avid fanbase in both adults and children. Its sales totaled $200 million in 2022 alone, the lawsuit claimed.

Build-A-Bear has been around for more than 25 years, and saw a strong resurgence post-pandemic, much of it fueled by older customers. It has launched an online store called “the Bear Cave” that only customers aged 18 and up can access (one bear for Valentine’s Day is in a satin robe and has a bottle of champagne); collaborations with ‘Star Wars’ and ‘Pokémon;’ and in January 2024, its trademarked “Skoosherz.”

The Jazwares lawsuit claims Skoosherz have the same features as Squishmallows: “Asian style Kawaii faces,” embroidered facial features, distinctive coloring, and the same velvety texturing. Kawaii is the Japanese culture of cuteness.

The lawsuit claims Build-A-Bear has been trying to “trick” customers with such obvious knock-offs, stealing potential customers and sales from Squishmallows. Unlike regular Build-A-Bears, where customers customize their stuffed animals, Skoosherz are sold pre-made, the lawsuit said.

The lawsuit is seeking unspecified damages and for Build-a-Bear to stop selling Skoosherz.

Build-a-Bear fires back

But Build-A-Bear hit the toymakers with its own complaint in US district court in Missouri on Monday, challenging the claim that the company violated Squishmallow’s distinctive trade dress, or overall appearance or feel of a product.

The St. Louis-based company is seeking a declaration to quickly resolve the issue, that would make Squishmallow’s infringement claims on trade dress invalid.

Build-A-Bear claims it has sold pre-made stuffed animals on its site and on Amazon. It claims Skoosherz designs match its original stuffed animals, such as the Strawberry Cow and Spring Green Frog. It claims the Build-A-Bear logo is also clearly displayed on the stuffed toys.

“If each aspect of the claimed trade dress were in fact protected trade dress, it would be virtually impossible for competitors to create alternative designs,” the lawsuit claimed.

CNN has reached out to Build-a-Bear and the complaint’s lead counsel for comment.

Jazwares said that though it usually doesn’t comment on litigation, this time “we feel we must,” saying Build-A-Bear “has gone to great lengths” to copy its toys.

“Squishmallows has become wildly successful due to Jazwares’ creativity and investments. Jazwares will vigorously pursue and protect its clients’ rights. The law should protect innovation not imitation,” Moez Kaba, lead counsel representing Jazwares and Kelly Toys, said in a statement to CNN.


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Squishmallow and Build-a-Bear head into legal battle over ‘knock-offs’