Grumpy Cat Wins $710K Verdict

Grumpy CatWhat can a grumpy cat do with $710,000? Eat gourmet tuna dinners every night? Buy an endless supply of scratching poles?

While even $710,000 isn’t likely to make a grumpy cat happy, the internet sensation whose real name is Tardar Sauce and whose nickname is Tard (maybe that’s why she’s grumpy) now has a pile of money. Federal banking regulations (perhaps unfairly) make it quite difficult for cats to open bank accounts, so it will be up to Grumpy Cat’s owners to decide how to spend the money.

Grumpy Cat Sues

Grumpy Cat is an iconic presence on Facebook and other social media outlets. Her unwavering sullen expression conveys a sense of displeasure to which unhappy humans can relate. Tard’s owners posted the cat’s photo to Reddit, then posted videos to prove that the photo wasn’t photoshopped. When the videos went viral, the owners decided to monetize their cat’s popularity.

Grumpy Cat Ltd. was formed to take advantage of the public’s fascination with Tard’s frowning visage. Grumpy Cat t-shirts, coffee cups, posters, books, and other products have been developed to cash in on Tard’s popularity.

Grumpy Cat holds a copyright on certain photographs and drawings depicting Tard and her frown. The company also trademarked the term “Grumpy Cat” as well as an image of Tard that it uses to market products on the company’s website.

In 2013, Grumpy Cat Ltd. licensed Grumpy Cat’s image to Grenade Beverage, a company that wanted to market an iced coffee called Grumpy Cat Grumppuccino. The company paid Grumpy Cat $150,000 in advanced royalties, but began using the cat’s image to market a line of coffee products and t-shirts that were not contemplated by the licensing agreement. Grumpy Cat sued for copyright and trademark infringement, as well as breach of contract.

Grenade Beverage Countersues

The beverage company countersued for $12 million, claiming that Grumpy Cat understood that it intended to develop Grumpy Cat as a brand when it created a company called Grumpy Beverage. Grumpy Cat contended that it had, in fact, denied permission to create other coffee products.

The countersuit alleged that Grumpy Cat undermined the product launch of Grumppuccino by posting an image of the iced coffee before it was ready to go to market. Grenade Beverage argued that premature disclosure of the product caused consumers to search for the product online, only to discover that it wasn’t available. Grumpy Cat’s witnesses told the jury that posting the image helped the product launch by contributing to market hype.

According to Grenade Beverage, Grumpy Cat did not do enough to promote Grumppuccino, posting “only” 17 social media mentions of the beverage and straying from talking points about the beverage during a Fox News interview. In particular, Grenade complained that the cat owners failed to say “Watch out Starbucks. The cat’s coming for it.” Grumpy Cat, however, told the jury their job was to promote the cat, while it was up to Grumpy Beverage to promote the iced coffee.

Grenade Beverage also complained that Grumpy Cat’s product manager made false claims about the production of a Grumpy Cat movie starring Will Ferrell and Jack Black in order to induce their agreement to purchase the right to make Grumppuccino. Grumpy Cat argued that Grumpy Beverage did not rely on the product manager’s speculation that the movie would be made, an argument that was supported by the absence of any reference to the movie in Grenade Beverage’s marketing plan.

Verdict

The jury rejected all of Grenade’s counterclaims. It also found in Grumpy Cat’s favor on its trademark and copyright infringement claims, and on its breach of contract claim.

The jury awarded $480,000 in damages for trademark infringement and $230,000 for copyright infringement. The jury may have tried to sweeten the cat’s sour face when it added an extra dollar for breach of contract, about the price of a can of gourmet cat food.


Photo Credit: Gage Skidmore, Grumpy Cat at the 2014 VidCon at the Anaheim Convention Center in Anaheim, California. Attribution-ShareAlike 2.0 Generic (CC BY-SA 2.0).

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