Michigan Creators Awarded $30.1 Million in Lawsuit over Ownership of Taco Bell's Chihuahua.
Business Editors/Legal Writers
GRAND RAPIDS Grand Rapids, city (1990 pop. 189,126), seat of Kent co., SW central Mich., on the Grand River; inc. 1850. The second largest city in the state, it is a distribution, wholesale, and industrial center for an area that yields fruit, dairy products, farm produce, , Mich.--(BUSINESS WIRE)--June 4, 2003
The Michigan creators of the cool, confident and edgy Chihuahua immortalized in Taco Bell Taco Bell Corp., a subsidiary of Yum! Brands, Inc., is a Mexican-style quick service restaurant chain based in Irvine, California, United States. The restaurant has locations primarily in the United States and Canada, but also operates outlets in several other markets. advertising were awarded $30.1 million today by a federal jury that agreed the fast-food giant should be made to pay for using their character.
This afternoon's verdict ends a five-year, multi-million dollar battle over rights to the Chihuahua made famous by Taco Bell, a subsidiary of Louisville-based YUM! Brands Yum! Brands, Inc. (NYSE: YUM) or Yum! is a Fortune 500 corporation, that operates or licenses A&W (excluding Canada), KFC, Long John Silver's, Pizza Hut, and Taco Bell restaurants worldwide. Based in Louisville, Kentucky, it is the world's largest quick-service (a.k.a. , Inc. (NYSE NYSE
See: New York Stock Exchange : YUM YUM
The ISO 4217 currency code for the Yugoslavia New Dinar. ). The dog's creators, Joseph Shields and Thomas Rinks, sued Taco Bell in federal court in 1998 for breach of contract and other claims for failing to pay for the use of the pair's Chihuahua character in a popular three-year advertising campaign. The pair was seeking $30.1 million in compensation from Taco Bell based on a percentage of the more than $500 million spent by Taco Bell on the Chihuahua campaign.
"We created the popular Chihuahua that Taco Bell used as its mascot and marketing icon," Rinks said. "After Taco Bell approached us and asked for our ideas, they just went ahead and used the character that we had created without paying for it. Now that we've been vindicated, we plan to aggressively pursue licensing opportunities with our Chihuahua character."
A jury of five women and three men deliberated approximately five hours before returning a verdict in favor of Shields and Rinks. The three-week trial was presided over by Judge Gordon Quist in U.S. District Court of Western Michigan
Western Michigan, also known as West Michigan, is a region of the U.S. state of Michigan. .
"This day has been a long time in coming, and we are extremely pleased with the jury's verdict," said Douglas A. Dozeman, lead attorney in the case and a partner with Michigan-based Warner Norcross & Judd LLP LLP - Lower Layer Protocol . "This lawsuit has been a classic case of David vs. Goliath, and demonstrates that even large, multinational corporations
The story began in 1995 when Shields and Rinks formed Wrench LLC (Logical Link Control) See "LANs" under data link protocol.
LLC - Logical Link Control and collaborated to create -- and then market -- the "Psycho Chihuahua," a cool, confident dog with an attitude. The pair enjoyed licensing success with their character, signing deals with T-shirt manufacturers, calendar makers and other manufacturers intrigued by the Chihuahua.
Wrench met executives from Taco Bell at a licensing show in New York City New York City: see New York, city.
New York City
City (pop., 2000: 8,008,278), southeastern New York, at the mouth of the Hudson River. The largest city in the U.S. the following year. At Taco Bell's request, Wrench adapted its cartoon dog into a live-action Chihuahua and developed a number of ideas and advertising storyboards, including numerous commercials. After meetings to discuss and refine the concept over a period of several months, Taco Bell broke off discussions with Shields and Rinks, but went on to use their Chihuahua character as the creative platform for a $500 million national advertising campaign.
Wrench filed a lawsuit against Taco Bell in January 1998, charging breach of contract and other claims. The suit was dismissed on technical grounds in June 1999, just days before the case was scheduled to begin trial. Shields and Rinks appealed to the Sixth Circuit Court of Appeals in Cincinnati, which unanimously reversed the ruling in July 2001 and returned the case to the original trial court. Taco Bell appealed this ruling to the Supreme Court, which declined to hear the appeal and cleared the way for the trial to begin in U.S. District Court in Grand Rapids in May 2003.
About Warner Norcross & Judd
Warner Norcross & Judd LLP is one of Michigan's leading providers of legal services legal services n. the work performed by a lawyer for a client. with more than 170 attorneys in five Michigan offices: Grand Rapids, Holland, Metro Detroit, Muskegon and Southeast Kent County. Warner Norcross has been recognized in America's Greatest Places to Work with a Law Degree. Nearly 40 percent of the Firm's partners are listed in the 2003-2004 edition of The Best Lawyers in America. The Firm represents local, statewide, regional, national and international clients in all areas of business and civil law.