Grumpy Cat, the Internet celebri-kitty known for her memes, finally has a reason to smile. Actually, she has over 700,000 reasons to smile. After a week-long trial, a federal jury composed of eight humans (and zero cats!) in Santa Ana, California decided that Grenade Beverage LLC, a Californian coffee company, breached the Grumpy Cat Limited’s copyright and awarded Grumpy Cat’s owner, Tabatha Bundesen, over $700,000 in damages for copyright and trademark infringement.
It seemed like a purr-fect deal. In 2013, Nick and Paul Sandford, the owners of Grenade, entered into a $150,000 copyright licensing agreement with Grumpy Cat Limited. In contrast to a copyright assignment, which permanently transfers ownership of a copyright, a copyright license agreement is a contract whereby a copyright owner permits another person or company to use the copyrighted content for a specified time and/or manner for a fee. Here, the copyright license agreement permitted Grenade to produce and distribute a line of “Grumpy Cat” branded iced-coffee beverages called “Grumpy Cat Grumppuccino.” The copyright licensing agreement clearly stated that any additional product offerings would require further negotiations and approval from Grumpy Cat Limited.
Grenade, however, arguably exceeded the scope of the copyright license agreement and infringed on Grumpy Cat Limited’s copyright in 2015 when it created a new line called “Grumpy Cat Roasted Coffee.” That’s when the claws came out. Grumpy Cat Limited filed a lawsuit in federal court in the Central District of California, Southern Division, naming Grenade Beverage LLC, Paul Sandford, and Nick Sandford as defendants and alleging copyright infringement, trademark infringement, false designation of origin, trademark dilution, cybersquatting, breach of contract, and accounting. The complaint asserted that Defendants sought Grumpy Cat Limited’s approval of the use of the intellectual property in connection with a roasted coffee ground product, and that Grumpy Cat Limited repeatedly, both in writing and verbally, told Defendants that the licensed intellectual property could not be used in that manner.
In response, Grenade filed a countersuit claiming that Grumpy Cat Limited did not offer any meaningful support whatsoever and breached its contract by failing to promote the iced coffee enough on social media and by not appearing in a film alongside Hollywood actors Will Ferrell and Jack Black. The jury was not purr-suaded by Grenade’s counterclaim.
In the end, Grumpy Cat was the last cat standing. Talk about a cat-astrophe for the Defendants! Nevertheless, as one of the first verdicts rendered in favor of a viral meme, this case demonstrates the importance of protecting and defending your copyright in the digital age. Hutcherson Law helps clients license their copyrighted material, transfer their copyrighted works, and defend their copyrights in court. If you are interested in licensing, transferring, or protecting your copyrighted works – contact Hutcherson Law today!