A hard-edged battle over squishy toys

Squishmallows maker Jazwares has filed more than three dozen lawsuits against hundreds of companies producing alleged knockoffs. Judges have tossed some of the complaints. Some small defendants located overseas haven’t bothered to show up in court. But now a heavyweight battle is brewing with Build-A-Bear, which is expanding its empire beyond its customizable stuff-your-own animals.

Earlier this year, Build-A-Bear debuted its Skoosherz, which it touted as “uniquely styled for optimal squishing and hugging benefits." The company said their debut came in time for National Hugging Day, which falls halfway through the dispiriting stretch between the end-of-year holidays and Valentine’s Day. The new stuffies were extra plush, cutesy and, according to the company, “perfect for big, ‘skooshy’ hugs."

Lawyers for Jazwares, which is owned by Warren Buffett’s Berkshire Hathaway, weren’t squishy in their response. They first sued Build-A-Bear in state court in Florida, seeking to immediately squash all Skoosherz production.

“Squishmallows has a rainbow bear, Build-A-Bear made a rainbow Skoosherz; Squishmallow has a green frog, Build-A-Bear made a green frog Skoosherz," the lawyers wrote. The list went on, they said: “Dinosaurs, axolotls and soon vegetables."

The judge took no immediate action. “DENIED as an emergency," she wrote.

The company the next month tried a new approach, filing a lawsuit in federal court in California, arguing that Build-A-Bear had copied its “trade dress," or the overall look and feel of its pillows. That same day, Build-A-Bear had already jumped into the fray, asking a federal judge in Missouri to declare Skoosherz weren’t copycats and accusing Jazwares of a “history of litigious conduct." A judge there said he had no jurisdiction to get involved.

“If you steal someone else’s ideas, you should be held accountable," Moez Kaba, a lawyer for Jazwares, said in a statement.

The money in the stuffie business is real. Build-A-Bear had $486 million in revenue during the last fiscal year. Squishmallow sales topped $200 million in 2022.

Squishmallows hit store shelves in 2017 and within several years became a phenomenon. Celebrities Kim Kardashian and Lady Gaga posted Squishmallow collections on social media. Aficionados traveled hours to snap up limited edition pillows, which fans affectionately call Squish. (Among the rarest: squishy likenesses of Berkshire Hathaway chairman Warren Buffett and former vice chairman Charlie Munger, who died last year).

The stuffed toy wars have been litigious for years, with judges weighing key questions including whether consumers are confused when an alleged knockoff enters the marketplace. There is also the question of whether toys such as the Squishmallow are distinctive enough to enjoy intellectual property protection to begin with.

“There’s a long tradition in the soft toy industry of doing this," said Rebecca Tushnet, a Harvard Law School professor. “If you can scare people further away from your niche, that can preserve a competitive advantage."

Jazwares’s lawyers in court papers have acknowledged that defining Squishmallows’ cute look is “not easily reduced to writing." They gave it their best shot anyway, citing characteristics that they said made the products distinct: fanciful egg-shaped animals; simplified “Kawaii" faces, modeled after a cute Asian style; embroidered facial features; unique coloring; and velvety texture and a marshmallow feel.

“Amorphous," responded Build-A-Bear’s lawyers. “There is no common feature across the entire line."

They accused Squishmallows’ team of concocting 14 different definitions, across various legal filings, of its purportedly signature look.

In July, the California judge handed Squishmallows a win, rejecting Build-a-Bear’s bid to have the case dismissed before trial. U.S. District Judge Josephine Staton said Squishmallows’ claims, supported by photos of its stuffed toys, were sufficient to allow the proceedings to move forward.

The next phase of the case, during which both Jazwares and Build-A-Bear exchange evidence, could get messy. Jazwares has previously accused Build-A-Bear of seeking to hide its correspondence with a Squishmallows manufacturer. The Squishmallow lawyers said in court papers that its manufacturer claims that three emails show it was pressured by Build-A-Bear into making copycat plushies.

Build-A-Bear didn’t respond to a request for comment.

Attorneys uninvolved with the case said such internal documents can be among the most painful finds.

“Lawyers go ‘ouch’ when a client does something like that," said attorney Geoffrey Potter, who represents companies in intellectual-property disputes.

Other related cases in the Squish wars have ended in a truce. Jazwares in another lawsuit asked a federal judge in Illinois to temporarily block Beanie Babies creator Ty from distributing its plushy entrant, Squish-a-Boos. Ty’s lawyers said Team Squishmallow was effectively seeking “monopoly rights in pillow-type toys."

The judge declined to halt sales, saying customers weren’t likely to be confused by the products. The companies later settled. Ty’s Squish-a-Boos remain on store shelves.

At a Build-A-Bear store in Manhattan this summer, young experts delivered their own verdict on Squishmallows v. Skoosherz. Most said that the stuffies were similar—and maybe too much so—but even kids are smart enough to figure out which toy is which.

Brooklyn Hastie, from Jacksonville, Fla., perused a Skoosherz display of Watermelon Frogs and Rainbow Sparkle Teddy Bears. “They’re dupes," said the 11-year-old, with a tween eye roll. “That’s annoying."

Maria Rodriguez, 17, whose Squishmallows collection includes a Stitch that she sleeps with nightly, offered a softer response.

“I think they’re cute," Rodriguez, who lives in New York’s Nassau County, said of the Skoosherz. “But they should have added a couple things that make them unique."