Small, sweet bears with the capacity to inflict a very sore head have triggered an intellectual property dispute involving a multinational confectioner, a trio of enterprising Spanish students and a shot or two of alcohol.

A couple of years ago, three friends studying in the Basque country experienced an epiphany: what if they combined their childhood love of sweets with their adult taste for alcohol? And what if the delivery system were a small, chewy bear?

However, their firm, Ositos & co (Little Bears & co), had been selling the alcoholic sweets in bars and online for barely three months when, in January, they received a long cease-and-desist letter from the confectionery multinational Haribo.

Haribo’s gummy bears. Photograph: Alexandra Winkler/Reuters

The German firm had become aware of the ursine sweets and argued they were so similar to its gummy bears range as to infringe the trademark. The similarity, the letter went on, “cannot be explained or justified by a mere chance”.

It demanded that Ositos & co stop manufacturing and selling its boozy bears immediately and transfer the management and ownership of its domain name, ositosconalcohol.com, to Haribo.

Ander Méndez, the chief executive of Osito & co, said he remains shocked and puzzled.

“We’re all a bit scared by this to be honest,” he said. “I’m only 24 and have only just finished university. Everything that’s happening to us now is the kind of thing you see in films; you never think it’s going to happen to you.”

The business, which Méndez founded last year with his friends Tamar Gigolashvili and Julen Justa, was starting to take off as customers discovered a taste for its range, which includes gin and strawberry, whisky and cola, rum and pineapple, and tequila and lemon. Each bear contains 15% alcohol: seven or eight are equivalent to a beer or a glass of wine.

Julen Justa, left, and Tamar Gigolashvili who, with their friend Ander Méndez, founded Ositos & co. Photograph: Ander Gillenea/AFP via Getty Images

“People are pretty surprised the first time they try them: they really taste like sweets to begin with and have the same texture, but as you chew, you feel the alcohol coming out and get a warm hit in your throat,” Méndez said. “But it’s very sweet and pleasant.”

He said he and his colleagues could not understand the possible confusion with Haribo’s products: not only were Osito & co’s bears bigger and a different shape, they were also sold only online or in places where alcohol was served and were clearly marked as products for people aged 18 or older.

“The big debate is: who does the bear shape belong to? They’re saying we can’t use the bear shape, but we don’t get that. A bear is an animal that lives in the woods. Why can’t we use it for our sweets?” Méndez asked.

Haribo said it was only using “the standard legal procedure” to protect its registered trademarks and had no intention of entering the alcoholic sweet market. A spokeswoman said: “Haribo has requested the transfer of the internet domain of Ositos & Co to protect and defend its intellectual property rights and its image.”

Méndez said he and his friends were weighing up their options but they did not have the money to enter a protracted legal fight with a multinational.

In the meantime, they planned to carry on selling their products in Spain – and to their customers in France and the UK – to show that their bears would not be cowed.

“There could be more cases like ourselves happening elsewhere, where young people are being held back because they don’t have the resources to fight,” Méndez said.

“Maybe if we fight it, it could help others in the same situation. We’ve always been about fun and partying and we never thought we’d end up in a legal battle.

“What’s going on here is absolutely surreal: imagine you’re 22 or 23 and just out of university and a multinational starts threatening you and trying to destroy two years of work. It’s a nightmare.”