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Lawsuit Verdict Makes Grumpy Cat Smile

Posted in Contracts, Copyrights, Dilution, Infringement, Law Suits, Marketing, Mixed Bag of Nuts, Trademarks

For anyone unfamiliar with internet cat personalities, Grumpy Cat is a well-known feline whose dwarfism and underbite culminate in a perpetual—and adorable—sour expression.  Grumpy Cat’s real name is Tardar Sauce.  In 2012, when Tardar Sauce was only a few months old, she became an internet sensation after a photo of her endearing scowl was posted on Reddit.  Since that time, Tardar Sauce has made several public appearances, and was named to Forbes’ list of Top Pet Influencers.

Tardar Sauce’s owner, Tabatha Bundesen, formed Grumpy Cat Limited to handle licensing and merchandising of the Grumpy Cat brand.  Grumpy Cat Limited holds eight federal trademark registrations, including five registrations for the standard character mark GRUMPY CAT, and three registrations for this design mark:

Grumpy Cat Limited also owns multiple copyright registrations, including these:

 

In 2013, Grumpy Cat Limited entered into a licensing agreement with Grenade Beverage LLC.  Under the agreement, Grumpy Cat Limited licensed the Grumpy Cat trademarks and copyrights to Grenade in connection with a line of iced coffee products (appropriately named Grumppuccinos).

Three flavors of Grumppuccino

The licensing agreement additionally permitted Grenade to develop other Grumpy Cat beverage products, but only with the permission of Grumpy Cat Limited for each new product.  Under this provision, Grenade sought approval from Grumpy Cat Limited for a new line of Grumpy Cat-branded coffee beans.  Grumpy Cat Limited withheld approval for the coffee beans.  Grenade nonetheless moved forward with the new product.  Grenade also began selling unauthorized Grumppuccino t-shirts.

The offending beans

In late 2015, Grumpy Cat Limited sued Grenade for breach of contract, copyright infringement, and trademark infringement.  Namely, Grumpy Cat Limited asserted that Grenade’s use of the Grumpy Cat name and likeness on the coffee bean products and unauthorized Grumppuccino t-shirts was outside the permissible scope of the licensing agreement.

After a week-long trial, during which Tardar Sauce herself made an appearance, a jury decided in favor of Grumpy Cat Limited.  The jury awarded $710,001 to Grumpy Cat Limited: $230,000 in statutory damages for copyright infringement, $480,000 in statutory damages for trademark infringement, and $1 for breach of contract.  Presumably, the statutory damages awarded to Grumpy Cat Limited equal more than any actual damages the company could have obtained–a reminder of the value of statutory damages in trademark and copyright infringement suits.