Kmart sued by toymaker over allegedly counterfeit stuffed bunnies

Credit: AAP Image/Paul Miller

Kmart is being sued in federal court for selling counterfeit stuffed animals.

UK-based toymaker Jellycat has accused the department store of profiting from a range of soft toys that ‘replicate’ their popular shy Jellycat bunny, which is sold in Australia and around the world.

Federal Court Cases Seen By The new daily claim that Kmart and its supplier, Headstart International, have “refused to comply” with requests to stop selling the toys, which Jellycat says are “passing off” as its own.

Kmart, which continues to sell the toys online, calls them “resoftables.”

But Jellycat alleges that Kmart customers were misled or deceived into believing that Kmart’s stuffed animals are genuine, reputable Jellycat toys because they have similar characteristics.

Jellycat wants the Federal Court to issue an injunction requiring Kmart to stop selling the toys and pay damages to compensate the company.

“The reputation and goodwill of Jellycat in the shape and characteristics of the Jellycat Shy Bunny and Jellycat’s business in general has been harmed,” lawyers for the UK-based company told the Federal Court.

Kmart and Jellycat Rabbits

Kmart’s bunny (left) and Jellycat’s bunny (right). Photo: The new daily composite

Jellycat also claims that Kmart breached Australian consumer law.

“Jellycat has suffered lasting loss and damage…and, unless such acts are restrained, will continue to suffer loss and damage,” he said.

Retailers like David Jones charge $32 for branded Jellycat bunnies in Australia, while Kmart’s stuffed animals are just $15, less than half the price.

Kmart has run into legal trouble in the past for selling allegedly counterfeit products at low prices. The popular discount retailer was also taken to court in 2018 for selling counterfeit cargo pants.

Intellectual property lawyer Nicole Murdoch said the case hinges on the idea that Kmart passed off its resoftables bunnies as Jellycat’s.

She said Jellycat will try to convince the court that it has a reputation with Australian consumers for selling its toys and that Kmart is trying to pass off its line of resoftables as Jellycat products.

“Their bunny has exaggerated features, he has overly long ears and a certain look on his face,” said Ms. Murdoch, a partner at EagleGate attorneys.

“It will be those characteristics that they believe are unique to them, that they have a reputation for selling a rabbit with those characteristics.”

Court documents claim Jellycat has sold 670,000 rabbits in Australia through its exclusive distributor since 2010.

The company says those sales amount to $16 million, which could play a role in damages awarded if the company wins its lawsuit.

But Jellycat may struggle to convince the court that customers were misled into thinking Kmart’s plush toys are Jellycat products.

“This type of claim is very much dependent on the reputation of the original rabbit,” Ms Murdoch said.

“If they can’t establish a reputation there, then how could anyone be misled into thinking they’re buying the original [Jellycat] rabbit?”

A potential problem for Jellycat is that Kmart has not adopted its brand name in its sale of the resoftables line, meaning it relies on the idea that customers recognize the over-the-top features of Jellycat bunnies.

This article was first published by The new daily.

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