Wrench, LLC v. Taco Bell Corp.
United States District Court, Western District of Michigan
51 F.Supp.2d 840 (1999)
Wrench, LLC (Wrench) (plaintiff) developed a fictional character known as “Psycho Chihuahua.” The character was a smart, feisty Chihuahua dog with a big attitude. Ed Alfaro, Creative Services Manager of Taco Bell Corp. (Taco Bell) (defendant) saw Wrench’s Psycho Chihuahua at a licensing trade show in June 1996 and asked for materials about the character to take back to Taco Bell. Alfaro began promoting Psycho Chihuahua around Taco Bell as a potential corporate icon for use in commercials and other advertising. In September 1996, Wrench hired Strategy Licensing (Strategy) to conduct licensing negotiations with Taco Bell on Wrench’s behalf. In November 1996, Alfaro asked Strategy to develop a proposal for the terms of Taco Bell’s use of Psycho Chihuahua. Strategy sent the proposal to Alfaro on November 18, 1996. Taco Bell neither accepted nor explicitly rejected the proposal, and Alfaro continued negotiations through spring 1997 with Wrench and Strategy about possible marketing campaigns based on Psycho Chihuahua. On March 18, 1997, Taco Bell hired a new advertising agency, TBWA Chiat/Day (Chiat/Day) to work with its marketing department and develop a new advertising campaign for Taco Bell products. On June 2, 1997, Chiat/Day presented Taco Bell with three separate advertising strategies. One strategy involved using a Chihuahua with an intense desire for Taco Bell. Chiat/Day said they came up with this idea independently of Wrench’s Psycho Chihuahua idea. Later in June, Alfaro again met with Strategy and Wrench and expressed a continued desire to work with them on using Psycho Chihuahua for Taco Bell. Strategy provided Alfaro with additional Psycho Chihuahua products, and Alfaro passed these along to Chiat/Day in July 1997. On December 28, 1997, Taco Bell launched a very successful national advertising campaign featuring commercials with a feisty Chihuahua. Wrench brought suit against Taco Bell in district court alleging claims for breach of implied contract, misappropriation, conversion, and unfair competition, among others. The district court granted Taco Bell’s motion to dismiss in part and denied it in part. Taco Bell appealed on several grounds, including that Wrench did not prove the existence of an implied in fact contract, and that even if it did, Wrench’s claims were preempted under the Copyright Act.
Rule of Law
Holding and Reasoning (Quist, J.)
What to do next…
Unlock this case brief with a free (no-commitment) trial membership of Quimbee.
You’ll be in good company: Quimbee is one of the most widely used and trusted sites for law students, serving more than 97,000 law students since 2011. Some law schools—such as Yale, Vanderbilt, Berkeley, and the University of Illinois—even subscribe directly to Quimbee for all their law students. Read our student testimonials.
Learn more about Quimbee’s unique (and proven) approach to achieving great grades at law school.
Quimbee is a company hell-bent on one thing: helping you get an “A” in every course you take in law school, so you can graduate at the top of your class and get a high-paying law job. We’re not just a study aid for law students; we’re the study aid for law students. Read more about Quimbee.
Here's why 166,000 law students have relied on our case briefs:
- Written by law professors and practitioners, not other law students. 13,800 briefs, keyed to 187 casebooks. Top-notch customer support.
- The right amount of information, includes the facts, issues, rule of law, holding and reasoning, and any concurrences and dissents.
- Access in your classes, works on your mobile and tablet. Massive library of related video lessons and high quality multiple-choice questions.
- Easy to use, uniform format for every case brief. Written in plain English, not in legalese. Our briefs summarize and simplify; they don’t just repeat the court’s language.