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Inside the Taco Bell Case
Competition in all aspects of the entertainment world – from television to movies, to the record industry, to the Internet, to the video game industry – has grown quite fierce over the past decade. The stakes are higher than ever. So is the demand for successful, breakthrough ideas. Consequently, cases alleging the theft of creative ideas are becoming more and more common. A recent case in which this writer served as plaintiffs' co-counsel demonstrates how substantial damages can be in lawsuits over ideas.
In June, after a three-week trial, a federal jury in Grand Rapids, MI, awarded plaintiffs Joseph Shields, Thomas Rinks and their company, Wrench LLC, $30.1 million against Taco Bell for breach of an implied-in-fact contract. Wrench LLC v. Taco Bell Corp., 1:98 CV 45. (Taco Bell is expected to appeal the case.) The plaintiffs claimed that Taco Bell used their ideas for a live-action Chihuahua with a feisty attitude and an obsession with Taco Bell food in a TV advertising campaign for 2.5 years without payment.
The plaintiffs came up with the idea for a character called Psycho Chihuahua in 1995. They licensed the character for such merchandise as t-shirts, posters and school supplies. In June 1996, Ed Alfaro, who was in charge of Taco Bell's licensing program, saw Psycho Chihuahua at the Licensing Expo in New York City.
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