Squishmallows vs. Build-A-Bear, the cutest legal battle ever, flares up

Squishmallows owner Kelly Toys is taking Build-A-Bear to court in perhaps the most fun legal battle ever. Both Kelly Toys and Build-A-Bear filed respective lawsuits on Monday after Build-A-Bear began selling its Skoosherz plush toys this year. For Kelly Toys, the problem is that Skoosherz looks too much like its Squishmallows. To that, Build-A-Bear replied: You can’t trademark cute animals!

Kelly Toys filed its lawsuit in California, while Build-A-Bear filed one in Missouri. In the first lawsuit, lawyers for Kelly Toys outline the timeline of Squishmallows: They were released in 2016 with distinctive designs: they are oval, usually animals, and have cute faces. The important thing is that they are terribly soft and malleable. (Kelly Toys is owned by Jazzares, by the way, which the Squishmallow maker acquired in 2020. Jazwares themselves are owned by Warren Buffet’s Berkshire Hathaway.) They quickly became popular collectibles, and later they became named one of the best-selling toys of 2022.

The New York Times has highlighted the Squishmallow culture, and according to the lawsuit, major celebrities like Lady Gaga and Kim Kardashian collect them. (Disclosure: I have an embarrassingly large Pokémon Squishmallow collection. See above – but two are missing, the large Gengar and the medium Togepi.) The company also revealed that its Squishmallows line, of which there are more than 3,000, earned $200 million in 2022, up 300% year over year. So when Build-A-Bear first unveiled its Skoosherz line — a departure from the store’s customizable stuffed animals — the first thing people did was compare them to Squishmallows.

You understand why, don’t you? Build-A-Bear said in its lawsuit that they aren’t copycats — they are round, pillowy versions of its own original stuffed animals. “Rather than compete fairly in the marketplace by creating its own unique concepts and product lines, defendant Build-A-Bear, a company valued at over $300 million, decided it would be easier to simply copy, imitate and capitalize on the popularity and goodwill of Squishmallows, all in the hopes of confusing consumers into purchasing their products instead of Squishmallows,” Kelly Toys wrote in its lawsuit.

Kelly Toys has several copyrights on the toys (but not specifically the words squish), but Build-A-Bear says they aren’t valid — the claims are so broad that no competitor could make pillowy stuffed animals if they were to be enforced.

“If features such as an egg/bell shape, Asian-style Kawaii faces with round/oval images, embroidered facial features, striking contrasting non-monochrome colors, or a short-pile exterior were protected trade dress, it would be virtually impossible for competitors to create alternative toy designs for the purpose of this item,” Build-A-Bear’s attorneys wrote. “From a toy designer’s perspective, each of these claimed trade marks is necessary to depict the various characters or animals, or is necessary to create this category of pillowy plush that is currently popular.”

Kelly Toys doesn’t believe that and argued that Build-A-Bear even had to correct social media users who called the toy Squishmallows. “Squishmallow!?!?” one user wrote, to which Build-A-Bear’s social media manager replied, “*Skoosherz.” In addition, Kelly Toys also claimed that Build-A-Bear also hired the same Chinese factory that produces Squishmallows to make its Skoosherz.

Build-A-Bear did not respond to Polygon’s request for comment. A Jazzares representative provided the following statement to Polygon:

Although Jazwares generally does not comment on lawsuits, we believe it should do so in this case. Jazwares vigorously protects its intellectual property rights for Squishmallows, the best-selling toy in the entire industry, according to Circana (annual report point of sale December 2023). Build-A-Bear has gone to great lengths to replicate the distinct look, feel and tactile design of Squishmallows to overtly and intentionally capitalize on Squishmallows’ global success. Like many popular global brands, combating counterfeiting and deliberate copycats is a pressing issue, and we trust that the US legal system will also see the clear infringement.

Kelly Toys has previously filed a lawsuit over its Squishmallows line, the latest of which was against Chinese e-commerce company Alibaba. That lawsuit was about Alibaba’s role in the sale of counterfeit Squishmallows on the platform. It also sued Flip-A-Mallows toys from Tee Turtle, Ty from Beanie Babies for its Puffies and Squish-a-Boos, and Dan-Dee International for its Squishy line. Several of these were dismissed, Build-A-Bear attorneys said. Others were processed, according to court records. Several Alibaba lawsuits against individual stores are still pending.