‘Grumpy Cat’ Licensing Fight Kicks Off in California

Grumpy Cat via Instagram

SANTA ANA, Calif. (CN) – Internet sensation Grumpy Cat, the feline who lamented life’s many challenges in morose memes on social media several years ago, took center stage in a contract dispute on trial in a Southern California federal courtroom on Tuesday.

Attorneys made opening arguments to a jury of eight on the relationship between plaintiff Grumpy Cat Limited and defendant Grenade Beverage.

In its lawsuit, Grumpy Cat says it gave Grenade a limited license to use Grumpy Cat’s image and name for an iced coffee drink called “Grumpy Cat Grumppuccino.” Grumpy Cat says it later learned of Grenade’s plans to sell Grumpy Cat roasted coffee, which was not included in the license.

Grenade fired back with a countersuit that claims Grumpy Cat did not honor the contract and trumped up reasons to get out of it. It seeks $1 million in damages from the botched product launch of “Grumpy Cat Grumppuccino.”

Defendants Nick and Paul Sandford, owners of Grenade, later formed a limited liability company Grumpy Beverage, which intervened in the suit and was represented in court on Tuesday.

Grumpy Cat’s attorney David Jonelis, of Lavely and Singer, told the jury the defendants had a license agreement for one product, the “Grumpy Cat Grumppuccino” iced coffee, and there were possible talks of future products.

“My client would have the unfettered right to decide for whatever reason if Sandford could put out a product other than iced coffee in the future,” Jonelis told the jury, emphasizing the license was for “a single line” of products.

Grumpy Cat, real name Tardar Sauce, was carried into the federal courtroom in a pet carrier but did not take the witness stand. Tabatha Bundesen, the cat’s owner, sat next to the carrier and is expected to show the jury of five men and three women her pet when she testifies.

Bryan Bundesen, her brother and business partner, posted a photo of Tardar Sauce online in 2012, inadvertently launching the Grumpy Cat empire.

U.S. District Judge David Carter said before the cat was brought into the courtroom, “She’s not going to be passed around.”

During jury selection, Carter asked the potential jurors if they followed Grumpy Cat on social media, if they ever applied for a copyright, web address, entered into a contract or worked with coffee. Some jurors said they were familiar with the internet meme of Grumpy Cat, but did not follow her many social media accounts.

Those social media accounts were of importance to the defense’s opening argument. Brian Kinder of Kinder Law Group said the Bundesens boasted of a large social media fan base which would buy Grumpy Cat products.

Grenade paid Grumpy Cat Limited $150,000 in 2013 as part of a joint venture agreement for the formation of Grumpy Beverage LLC. The Sandfords owned 90 percent of the company in that agreement with Grumpy Beverage. But after Grumpy Cat Limited received its upfront royalties it “failed to involve itself in the operation of the business or to offer any meaningful support whatsoever,” according to the lawsuit filed by the Sandfords.

When the Sandfords wanted to promote their products online through Grumpy Cat’s social media presence, they sent over advertisements to be posted.

“They did not post those copies that were sent to them,” Kinder told jurors.

Also, Bryan Bundesen torpedoed the launch of a product when he posted an image of the “Grumpy Cat Grumppuccino” before there ever was a product available for sale, said Kinder.

“They blew the launch,” said Kinder.

Meanwhile, plaintiffs said they requested accountings so they could gauge the success of their license agreement with Grenade Beverage, then Grumpy Beverage.

“Never once provided monthly accounting of the product,” said Jonelis of the defendants. However, Kinder said Grenade Beverage did provide “comprehensive” accountings, enough that at one time Grumpy Cat Limited said they were giving them too much information.

“This was more information than was required in a licensing agreement,” said Kinder.

The Sandfords believed they were more than licensing the Grumpy Cat brand when they brought the idea of the iced coffee.

Grumpy Cat Limited filed their complaint for copyright infringement, trademark infringement, trademark dilution, cybersquatting of a website, breach of contract and an accounting in 2015.

The Grumpy Cat Beverage/Grenade Beverage countersuit includes claims of breaches of contract and fiduciary duty, negligent misrepresentation, intentional misrepresentation, reverse name hijacking. The company seeks $1 million in damages.

The trial continued Wednesday morning and is expected to last through the end of the week.

Tardar Sauce owes her grumpy appearance – and her fame – to an underbite and feline dwarfism. The six-year-old part calico resides in Arizona.

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