What started as a business-to-business contract in 2013, ended as an intellectual property infringement case filed in 2015 and settled finally in 2018. The owner of Grumpy Cat brand joined forces with a coffee maker called Grenade Beverage for a limited product offering based on the internet star who first appeared online in 2012 known as Grumpy Cat and owned by Tabatha Bundesen. However, Grenade launched other products beyond the scope of the original agreement, including a line of ground coffee, resulting in Grumpy Cat Limited's brand owner, Bundesen, filing a lawsuit for copyright and trademark infringement.
The suit awarded Bundesen $710,001 for copyright and trademark infringement of her trademarked Grump Cat.
How do you define the scope of trademark or brand use?
In 1946, the Lanham Act was established to allow licensed use of trademarks as agreed upon by the trademark owner and the trademark borrower.
Why did Grenade lose the case?
After a trial, which lasted one week, Grenade Beverage lost this case because it blatantly went beyond the scope of the original agreement with the Grumpy Cat owner. Grenade also breached several areas of the original contract, including:
- Grenade used the Grumpy Cat image on products without permission from the trademark owner.
- Grenade marketed roasted coffee when the original contract only specified for the iced coffee Grumpy Cat Grumppuccino beverage to use the trademark.
- Grenade further overstepped its bounds by advertising across social media platforms, selling t-shirts with Grumpy Cat on them and marketing the brand through a website.
- Additionally, Grenade Beverage purchased the domain name of grumpycat.com while doing business with the Grumpy Cat owner, which is considered cybersquatting.
- Grenade also did not pay Bundesen the percentage they contracted for proceeds from the iced coffee sales.
When you're conducting business to business deals, having a lawyer review your contracts is essential. An experienced attorney can ensure that the scope of use of branding is carefully defined. Contracts must include specific details of projects, timelines, and allowable, agreed-upon use of a brand.