IP Law Daily, TRADEMARK—D.N.J.: Plush toy maker’s infringement lawsuit over ‘HUGME’ mark survives summary judgment challenge, (May 28, 2026)

By Mandavi Singh, LL.M.

The court found disputed factual issues regarding whether the unregistered mark was generic or descriptive and whether consumers were likely to confuse the parties’ plush toy brands.

A federal district court in New Jersey has denied summary judgment in a trademark dispute involving competing plush toy brands, holding that disputed factual questions concerning the validity of the unregistered “HUGME” mark and the likelihood of consumer confusion must be resolved by a jury. The court also declined to exclude expert testimony concerning market significance and consumer surveys (NECA LLC v. Jazwares, LLC, No. 2:23-cv-03863-SDW-MAH (D.N.J. May 27, 2026)).

Background. The plaintiff, NECA LLC, along with subsidiary Kidrobot, LLC, creates and markets licensed consumer products and collectible toys based on movies, comic books, video games, and pop culture franchises. The defendants, Jazwares, LLC and Kelly Toy Holdings, LLC, market the popular “Squishmallows” plush toy line.

Kidrobot launched its “HUGME” line of plush toys in 2017, featuring licensed characters such as SpongeBob, Stitch, and Trolls. The toys include a vibration or “shake” feature activated when users squeeze or hug them. Jazwares later introduced plush toys using branding including “HUGMEES,” “SQUISHMALLOWS HUG MEES,” and “HUG MEES BY ORIGINAL SQUISHMALLOWS.” Kelly Toys obtained federal registration for “SQUISHMALLOWS HUG MEES” under U.S. Registration No. 6654108 in February 2022.

The dispute arose after NECA and Kidrobot learned of the “HUG MEES” branding in 2023 and issued a cease-and-desist letter. They subsequently filed suit asserting Lanham Act trademark infringement and unfair competition claims, along with related New Jersey common-law claims. Jazwares and Kelly Toys moved for summary judgment, arguing that “HUGME” was generic or merely descriptive without secondary meaning and therefore not entitled to trademark protection. The plaintiffs also moved to exclude defense expert testimony relating to market significance and consumer confusion surveys.

Expert testimony. The court first addressed the motions seeking to exclude testimony from economist Richard Brady and survey expert Mark Keegan. Brady analyzed sales data and concluded that the “HUGME” product line represented only a small portion of Kidrobot’s overall business and of the broader plush toy market. Keegan conducted a Squirt-format consumer survey that produced a net confusion rate of 2.4 percent, which he considered insufficient to establish likely confusion.

Rather than excluding the testimony, the court concluded that the plaintiffs’ objections primarily concerned the weight of the evidence rather than admissibility. Citing Kannankeril v. Terminix Int’l, Inc., 128 F.3d 802, 806 (3d Cir. 1997), the court emphasized the liberal standard governing expert evidence and held that cross-examination provided the appropriate mechanism for challenging the experts’ methodologies.

Validity of the HUGME mark. A central issue was whether “HUGME” constituted a legally protectable mark. Under United States Patent & Trademark Office v. Booking.com B.V., 591 U.S. 549 (2020), trademark protection depends on whether a mark is generic, descriptive, suggestive, arbitrary, or fanciful.

Jazwares argued that “HUGME” was generic because plush toys are inherently designed to be hugged and because the phrase appears widely throughout the plush toy marketplace. NECA and Kidrobot maintained that the mark was suggestive or, alternatively, descriptive with acquired secondary meaning.

The court rejected the plaintiffs’ contention that HUGME was suggestive. Applying A.J. Canfield Co. v. Honickman, 808 F.2d 291 (3d Cir. 1986), it determined that the record lacked sufficient evidence showing consumers needed imagination or perception to associate the term with plush toys.

Genericness. Even so, the court declined to hold the mark generic as a matter of law. Unlike the terms examined in Canfield and Novartis Consumer Health, Inc. v. McNeil-PPC, Inc., 1999 WL 707721 (D.N.J. 1999), the defendants failed to establish that “HUGME” uniquely identified a product category requiring competitors to use the exact phrase. The record instead reflected multiple alternative descriptive terms, including “plush,” “soft,” “huggable,” “squishy,” and “squeezable.” Because competitors could communicate the same product attributes without using “HUGME,” genuine factual disputes remained regarding whether the mark was generic.

Secondary meaning. The plaintiffs also produced sufficient evidence to create factual disputes regarding secondary meaning. Citing J & J Snack Foods Corp. v. Nestle USA, Inc., 149 F. Supp. 2d 136 (D.N.J. 2001), the court examined factors including sales, advertising, exclusivity of use, evidence of copying, and consumer recognition.

Evidence showed that HUGME sales exceeded $9 million through 2023 and represented an increasing share of Kidrobot’s business. The parties also disputed who first used the mark and whether Jazwares adopted ‘HUG MEES’ branding with knowledge of the plaintiffs’ toys. Those issues, the court held, were for a jury to resolve.

Likelihood of confusion. Material factual disputes also precluded summary judgment on likelihood of confusion. Applying the Third Circuit’s Lapp factors from Interpace Corp. v. Lapp, Inc., 721 F.2d 460 (3d Cir. 1983), the court found conflicting evidence regarding target consumers, pricing, marketing channels, and actual confusion. Although both sides operated in the plush toy market, Jazwares characterized the plaintiffs’ products as aimed at older children and collectors, while NECA relied on evidence suggesting Squishmallows appeal to consumers across a broader age range. The parties also presented competing survey evidence regarding consumer confusion, further underscoring the existence of triable factual disputes.

Thus, finding substantial factual disputes regarding trademark validity, secondary meaning, and likelihood of confusion, the court denied the defendants’ request for summary judgment.

The Case is No. 2:23-cv-03863-SDW-MAH.

Judge: Wigenton, S.

Attorneys: Lance Rogers (Rogers & Associates, LLC) for NECA LLC. Abigail Jean Remore (Chiesa Shahinian & Giantomasi PC) for Jazwares, LLC.

Companies: NECA LLC; Jazwares, LLC

Cases: Trademark NewJerseyNews GCNNews