When operating under a license agreement for use of copyrighted or trademarked work, it is important to know the scope and limits of said license so that you can avoid an expensive mistake. 

There is perhaps nothing more pervasive or popular on the internet than cat pictures; and perhaps the most famous of all such pictures is Grumpy Cat.  Grumpy Cat’s image can be found in countless memes, t-shirts, and even a line of iced coffee called the “Grumpy Cat Grumppuccino.”[1]  The owner of “Tardar Sauce,” the feline better known as Grumpy Cat, entered into a licensing deal with Grenade Beverages which would allow Grenade Beverages to use the Grumpy Cat trademark on the iced coffee beverages.  However, Grumpy Cat was sad to see that Grenade then also began to make Grumppuccino T-shirts and Grumpy Cat coffee grounds.  As a result, Grumpy Cat sued, and ultimately won $710,001.[2]

For a lot of businesses, its biggest asset is the goodwill that the company has built over years of work.  People see a particular brand or logo and they automatically associate it with the type and quality of product or service that they have come to expect from that business.  As a result, it is important for a business to protect that trademark from unauthorized use.

Businesses will often agree to let others use a particular trademark, as it can be potentially lucrative and could also increase brand awareness and distribution.  But, it is important for the trademark owner to have some sort of control over the licensed product, to ensure that quality standards are met and that it will not adversely affect the goodwill which the trademark owner has worked so hard to build.  To achieve this, licensing agreements will have specific, limited uses defined as being allowed.  As was learned the hard way by the makers of the Grumppuccino, if a company strays from the parameters of the agreement it can lead to an expensive lawsuit.

If you are thinking of licensing a trademark to another company, or will be using a trademark under a license agreement, it is best to ensure that you have an experienced attorney involved in reviewing and preparing the documents.  Before the documents are signed, you need to make sure that you understand the scope of what is and is not allowed.  For example, if you are making cappuccinos using that brand name, can you also make t-shirts to promote that brand?  Not in the case of Grumpy Cat. 

Call the experienced attorneys at Goosmann Law Firm, PLC, in our Omaha law firm, Sioux Falls law firm, or Sioux City law firm today, to discuss how you can better protect your brand from unauthorized use or to ensure that your use of someone else’s brand will not land you in the middle of a cat-fight. 

[1] http://www.adweek.com/creativity/grumpy-cat-now-has-its-own-branded-coffee-drink-grumppuccino-151472/

[2] https://www.npr.org/sections/thetwo-way/2018/01/25/580588088/grumpy-cat-awarded-710-000-in-copyright-infringement-suit


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