In just under six months, Hattie Peze built a multi-million-dollar business selling mermaid tail-shaped blankets. On the heels of launching The Grace List, "a highly curated members-only group whose mission is to bring together liked-minded people for business and pleasure," Peze, 35, branched out in August 2015, founding the New York-based company, Blankie Tails, which has subsequently found fans in hundreds of thousands of kids, designer Marc Jacobs and pop star Miley Cyrus.
Thanks in part to the overwhelming response via social media and praise from publications, such as Glamour.com, Babble.com, and Buzzfeed.com, among others, Peze has made almost $16 million, with the company selling about 136,000 blankets during its first holiday season alone.
According to a statement released by the company this summer, "Peze quickly found herself in the quintessential All-American dream scenario when her product became an overnight sensation and turned into a multi-million Dollar success in less than a year. Peze credits the company's grass-roots efforts via social media and endorsements from top national online publications for a great part of their success." In light of such seemingly overnight results, Peze’s design has become the target of widespread copying, and the company has opted to wage war against some of its largest rivals.
According to Bloomberg, Allstar Marketing Group LLC, one of the most problematic of Peze's rivals, is “the ‘as seen on TV’ operation behind infomercial products like Snuggie blankets and Chop Magic food slicers started its own mermaid business. It bought the URL for a website and sought to trademark ‘Snuggie Tails’ in April. By July, they were on the market: mermaid blankets in eye-popping colors and patterns. Another company and numerous crafters on Etsy were also hot on Peze’s trail.”
The battle between the two started by way of the U.S. Patent and Trademark Office ("USPTO"). Last year, Allstar filed an application to register its “Snuggie Tails” trademark, and Peze’s Blankie Tails filed to oppose it.
For the uninitiated: Before a trademark may be registered with the USPTO (and enforced by a trademark holder on a nationwide basis as a federally registered mark, as opposed to on a state-by-state basis for common law marks), a number of requirements must be satisfied. For instance, the mark must be published for opposition in the Official Gazette, a weekly publication of the USPTO. After the mark is published, any party who believes it may be damaged by registration of the mark has thirty days from the publication date to file either an opposition to registration or a request to extend the time to oppose. If no opposition is filed or if an opposition is unsuccessful, the application enters the next stage of the registration process.
Allstar responded to Peze's opposition by filing a counterclaim, alleging that Peze’s own federally registered trademarks (the company has two registered marks for "Blankie Tails," which were respectively registered with the USPTO in May and November 2016) are merely “descriptive." Moreover, Allstar argued that the “Snuggie Tails” mark will not be confused with Peze's existing marks, given Allstar’s product “incorporates the famous Snuggie mark.” (Note: In order for a trademark to be eligible for registration with the USPTO, it must not be merely descriptive (aka: it must not merely describe or name a characteristic or quality of the goods at issue) and it must not be confusingly similar to already registered trademarks).
Around the same time, another mermaid blanket product called "Magic Tails" made its way into the market and Peze was quick to shut them down, sending owner Ontel Products Corp. a cease-and-desist letter. And all the while, there are, of course, the many China-made fakes. (Note: Peze’s own product is made in China) flooding Amazon.com Inc. and Alibaba’s marketplace sites. Peze frequently requests take-downs of products believed to be counterfeit.
But back to Allstar. Peze did not stop at the USPTO. Blankie Tails filed suit against All Star in federal court, citing claims of trademark infringement and unfair competition. The company has filed to voluntarily dismiss the lawsuit, which suggests that the parties have reached an out of court settlement of sorts. The two parties have, after all, entered settlement negotiations with regard to the trademark issue. “Allstar’s counterclaims with the USPTO are still live and the parties are discussing settlement of those claims,” Jennifer De Marco, a lawyer for Allstar, told Bloomberg.
De Marco asserts that Allstar “has not infringed any intellectual property rights of Blankie Tails and there was no merit to the claims in the federal action.” She added that Allstar’s activities “with respect to its Snuggie Tails product have nothing whatsoever to do with the unrelated Blankie Tails product.”
But that does not mean Allstar is now pursuing claims of its own. In fact, in early December, Allstar sued Amazon in federal court, alleging that the online marketplace allows the sale of “an astronomical number of counterfeit and infringing products.” In other words, Allstar is none-too-pleased that products similar to its own are sold online — the same complaint Peze had about it.
Peze says that while the company has found fans in Miley Cyrus, Marc Jacobs (who bought the blankets for his dogs) and hundreds of thousands of kids, she laments that shoppers are mistaking other brands for the real thing.
Interestingly, while Bloomberg says that “Peze may be the world’s most prolific mermaid blanket entrepreneur, she did not invent the blanket. She stumbled upon the idea on Facebook, where she saw a hand-crocheted mermaid tail blanket go viral. She wanted to buy one, but quickly realized none were mass-produced. She partnered with a manufacturing expert and said she is the first to bring factory-made mermaid blankets to the online market. She designed the styles herself, ranging from a menacing great white shark to a rainbow mermaid tail in every size, from child to adult to dog. There are even tiny mermaid tails for kids to put on their dolls.”
Bloomberg notes that Peze “is trying to move on” from the abundance of fakes. “She hopes that licenses for her products can set her apart from rivals. Blankie Tails scored a deal with a major entertainment franchise and plans to release exclusive designs next year, she said. (Peze declined to share additional details, citing a business agreement.)”