United States District Court, C.D. California, Southern Division
FINDINGS OF FACT AND CONCLUSIONS OF LAW RE:
CYBERSQUATTING AND DECLARATORY RELIEF FOR NON-INFRINGEMENT OF
TRADEMARK AND COPYRIGHT
O. CARTER UNITED STATES DISTRICT JUDGE
case concerns Grumpy Cat, a viral Internet meme that
transformed a house cat named Tardar Sauce into one of the
most famous cats in the world. Complaint (Dkt. 1) ¶ 13.
Plaintiff Grumpy Cat Limited (“Plaintiff”), owns
intellectual property rights associated with Grumpy Cat,
including a registered trademark and four registered
copyrights. See Id. ¶¶ 14, 15, 16.
Plaintiff alleged that Defendant Grenade Beverage LLC
(“Grenade”) and its members, Defendants Nick and
Paul Sandford-in creating and selling a ground coffee
product-used the Grumpy Cat name and image beyond what was
authorized in a licensing agreement (which Plaintiff alleged
only authorized iced coffee products). Id. ¶ 2;
see generally MSJ Order (Dkt. 92). Grenade
defaulted, and Grumpy Beverage intervened and joined with the
Sandfords (collectively, “Defendants”) in filing
a counterclaim. Counterclaim (Dkt. 39).
trial in this matter was held on January 16-19 and 22, 2018.
See Minutes (Dkts. 121, 122, 124-26). On January 22,
2018, a jury returned a verdict for Plaintiff, and against
Grumpy Beverage and Paul Sandford. See Redacted Jury
Verdict Form (Dkt. 131) at 1-7.
the December 18, 2017 Final Pretrial Conference Order (Dkt.
102), the parties agreed that the Court is to decide the
following outstanding claims: Plaintiff's cybersquatting
and accounting claims; and Defendants Paul Sandford, Nick
Sandford, and Grumpy Beverage LLC's (collectively,
“Defendants”) counterclaims seeking declaratory
relief for ownership of trademark, copyright, and domain
name; and declaratory relief for non-infringement of
trademark and copyright. Final Pretrial Conference Order at
January 10, 2018, Defendants filed proposed findings of fact
and conclusions of law on their counterclaims for declaratory
judgment of copyright and trademark non-infringement.
Defendants' Proposed Findings of Fact and Conclusions of
Law (“Def. FFCL”) (Dkt 119). On January 10, 2018,
Plaintiff filed proposed findings of fact and conclusions of
law requesting that the Court deny Defendants'
counterclaims for declaratory judgment of copyright and
trademark non-infringement, and grant Plaintiff's claim
for cybersquatting and accounting. Plaintiff's Proposed
Findings of Fact and Conclusions of Law (“Pl.
FFCL”) (Dkt 118-1).
January 24, 2018, the Court set a post-trial briefing
schedule for amended proposed findings of facts and
conclusions of law, based on the evidence admitted at jury
trial. See Order Setting Briefing Schedule (Dkt.
January 31, 2018, Defendants filed Amended Proposed Findings
of Fact and Conclusions of Law regarding their counterclaim
for declaratory relief for non-infringement of trademark and
copyright (“Declaratory Br.”) (Dkt.
138). On February 7, 2018, Plaintiff filed
Amended Proposed Findings of Fact and Conclusions of Law in
opposition to the counterclaim for declaratory relief for
non-infringement of trademark and copyright
(“Declaratory Opp'n”) (Dkt. 139).
January 31, 2018, Plaintiff filed Amended Proposed Findings
of Fact and Conclusions of Law regarding its cybersquatting
claim (“Cybersquatting Br.”) (Dkt.
137). On February 7, 2018, Defendants filed
Amended Proposed Findings of Fact and Conclusions of Law in
opposition to the cybersquatting claim (“Cybersquatting
Opp'n”) (Dkt 137).
Court issues the following findings of fact and conclusions
of law, pursuant to Federal Rule of Civil Procedure 52. To
the extent that any findings of fact are included in the
Conclusions of Law section, they shall be deemed findings of
fact, and to the extent that any conclusions of law are
included in the Findings of Fact section, they shall be
deemed conclusions of law.
FINDINGS OF FACT
Declaratory Relief For Non-Infringement
Grumpy Cat is a viral Internet meme that transformed a house
cat named Tardar Sauce into one of the most famous cats in
the world. See Trial Testimony of Tabatha Bundesen;
see also Declaratory Br. ¶ I.1 (citing Compl.
Plaintiff is the owner of the intellectual property rights
associated with Grumpy Cat, including a registered trademark
and four registered copyrights. See Trial Testimony
of Kia Kamran; see also Declaratory Br. ¶ I.2
(citing Compl. ¶¶ 14, 15, 16).
or around May 31, 2013, Plaintiff, the owner of Grumpy
Cat's intellectual property, entered into a license
agreement with Defendant Grenade Beverage that granted
Grenade certain exclusive rights to use Grumpy Cat's
copyrighted and trademarked name and image. See
Trial Testimony of Kia Kamran and Paul Sandford; Def. FFCL
No. I.3; Declaratory Br. No. I.8; Declaration of Brian
Kindler (“Kindler Decl.”) (Dkt. 88-2), Ex. 1
(“License Agreement”) (admitted at trial,
see Exhibits Admitted (Dkt. 129) at
License Agreement granted Grenade a “license and
privilege” for the use of the Licensed Properties
“in connection with the manufacture, advertisement,
merchandising, promotion, distribution, and sale of solely
Products . . . .” License Agreement ¶ 2(a).
License Agreement defines “Products” as “a
line of Grumpy Cat-branded coffee products, or other
additional products within the Product Category that may,
upon the Parties' mutual approval, be marketed
hereunder.” Id. ¶ 1(b).
License Agreement defines “Product Category” as
“non-alcoholic beverages.” Id. ¶
Grant of Rights of the License Agreement states:
Licensor hereby grants to Licensee, and Licensee hereby
accepts from Licensor, the exclusive, non-assignable,
non-sublicensable (except as set forth in Paragraphs 6[c] and
13 below), non-transferable right, license and privilege,
solely during the Term, solely in the Product Category of
utilizing Licensor's Licensed Properties in connection
with the manufacture, advertisement, merchandising,
promotion, distribution, and sale of solely Products, in any
and all media and forms of communication and through all
channels of trade and distribution throughout the Contract
Territory [the Universe] during the Term defined in Paragraph
3 below [five year terms that automatically renew.
Id. ¶¶ 1(b), 2(a), 3.
Ownership section states:
All right, title and interest in and to all copyrights and
trademarks in and to the Licensed Properties shall at all
times be owned by, and remain the property of, exclusively
Licensor, and Licensee covenants and agrees that this
Agreement shall be deemed a license, not a transfer, of
Licensor's rights in the Licensed Properties. All Works
created hereunder by Licensee or any of its agents and/or
employees embodying the Licensed Properties, including any
adaptations thereof or derivations therefrom (which shall at
all times be made solely with the prior written consent of
Licensor) and the right to copyright and/or trademark
therein, shall from the inception of its creation, be the
sole and exclusive property of Licensor throughout the
Territory in perpetuity within the meaning of the Copyright
and Trademark Laws throughout the world, free of any claim
whatsoever by Licensee or by any persons deriving any rights
or interests therefrom . . . .
Id. ¶ 4(b).
Defendants used the Grumpy Cat name and image to market iced
coffee and non-iced coffee products, including ground coffee.
See Declaratory Br. ¶ 37; see, e.g.,
Trial Testimony of Kia Kamran, Paul Sandford.
third party owned the domain www.grumpycat.com prior
to Grumpy Cat being born, and before Grumpy Cat went viral on
the internet. See Trial Testimony of Kia Kamran.
Plaintiff's intellectual property counsel, Kia Kamran,
understood the third party to have a seniority interest in
the domain, compared to Plaintiff's trademark interest in
the domain. See id.
Plaintiff was unable to obtain the domain from the third
party. See id.
some point, Paul Sandford and/or Grumpy Beverage obtained the
domain name from the third party prior owner, after Mr.
Kamran could not obtain the domain name from the third party
prior owner. See id.
October 2014, Paul Sandford and Grumpy Beverage, through
their counsel, Brian Kinder, proposed that-in exchange for
Paul Sandford and Grumpy Beverage transferring
www.grumpycat.com to Plaintiff-the license agreement be
changed: (1) to apply to “Grumpy-Cat branded coffee
products, ” rather than “a line of Grumpy-Cat
branded coffee products”; and (2) to add language
requiring that approval of products “shall not be
unreasonably withheld.” See Trial Testimony of
Kia Kamran and Paul Sandford; see also
Cybersquatting Br. at 2.
Plaintiff declined the proposal regarding the transfer of
www.grumpycat.com and a proposed modification to the License
Agreement. See Trial Testimony of Kia Kamran.
some point, Grumpy Beverage used www.grumpycat.com
to redirect traffic to Grumpy ...