Build-A-Bear, maker of Warren Buffett's Squishmallows face off in court

Build-A-Bear Workshop

12/02/2024 20:42

By Jonathan Stempel
       NEW YORK, Feb 12 (Reuters) - Warren Buffett is taking on
Build-A-Bear.
    Jazwares, the Berkshire Hathaway-owned  BRKa.N  maker of the
popular Squishmallows plush toys, sued Build-A-Bear Workshop
 BBW.N  on Monday, calling its new Skoosherz plush toy line
"knockoffs" that infringed its intellectual property rights.
    Not to be outdone, Build-A-Bear filed its own lawsuit
against Jazwares on Monday, saying Skoosherz are based on its
existing plush animals, and that its advertising and marketing
since last month's launch make clear who made them.
    The dispute marks Jazwares' latest effort to protect
Squishmallows from alleged knockoffs and counterfeits, including
a lawsuit against online retail platform Alibaba  9988.HK .
    Squishmallows joined the ranks of the world's hottest toys
after becoming a viral sensation on TikTok, and winning devotees
like Lady Gaga and Kim Kardashian.
    They have been a part of Berkshire since Buffett's Omaha,
Nebraska-based conglomerate bought Jazwares' parent, the
insurance holding company Alleghany, in October 2022.
    Jazwares sued Build-A-Bear in Los Angeles federal court.
    It said Build-A-Bear "blatantly and intentionally"
undermined its goodwill and created substantial confusion among
consumers by copying Squishmallows' look and feel, including
"shaped fanciful renditions" of animals, "simplified Asian style
Kawaii faces," and "velvety velour-like" fabric.
    "When it comes to intellectual property rights, imitation is
not the sincerest form of flattery," Jazwares' lawyer, Moez
Kaba, said in a statement.
    According to Build-A-Bear's lawsuit in St. Louis federal
court, however, Squishmallows lack a consistent look and feel,
and Skoosherz are simply the most recent type of "soft,
pillow-like squishie-type" toys that have been trending for
years.
    Build-A-Bear said it launched Skoosherz in anticipation of
Valentine's Day, Feb. 14, to tap a market for plush toys that
were "uniquely styled for optimal hugging benefits."
    Neither Build-A-Bear nor its lawyers immediately responded
to requests for additional comment.
    Jazwares wants Build-A-Bear to stop selling Skoosherz and
similar products, and pay unspecified triple damages.
    Build-A-Bear wants a court declaration that it did not
infringe Jazwares' "trade dress" rights in Squishmallows, and
that any such rights are unenforceable.
    Squishmallows were created in 2016 by Kelly Toys. Jazwares
bought a majority stake in that company four years later.
    The cases are is Kelly Toys Holdings LLC et al v
Build-A-Bear Workshop Inc, U.S. District Court, Central District
of California, No. 24-01169; and Build-A-Bear Workshop Inc v
Kelly Toys Holdings LLC et al, U.S. District Court, Eastern
District of Missouri, No. 24-00211.

 (Reporting by Jonathan Stempel in New York; Additional
reporting by Blake Brittain in Washington
Editing by Matthew Lewis)
 ((jon.stempel@thomsonreuters.com; +1 646 223 6317; Reuters
Messaging: jon.stempel.thomsonreuters.com@reuters.net))