Cat out of the Bag: Cat & Cloud Coffee fights back against construction giant’s frivolous trademark claims

June 26, 2019

3 min read

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What's going on here?

Caterpillar Inc, the world’s largest construction equipment manufacturer with net revenue exceeding $54 billion, recently applied to cancel the trademarks of several small businesses with “Cat” in their name – including Cat & Cloud, a local coffee shop based in Santa Cruz, California.

What does this mean?

A few weeks ago Caterpillar Inc. released a public statement on Twitter explaining their reasons for delivering a cease and desist against the Cat & Cloud coffee shop. They said they simply asked the U.S. trademark Office to remove Cat & Cloud’s trademark registration on footwear and apparel as it has a responsibility to protect their brand. Caterpillar’s registered trademark “CAT”, their shorthand moniker, is featured on their limited range of sporting apparel.

However, Cat & Cloud co-founders Chris Baca and Jared Truby have contested the claim and seek to defend themselves in court. Their existing trademark covers the business’s three coffee shops and line of merchandise including mugs, sweatshirts, skateboards and snapback caps. Truby adds “Caterpillar has released a blanket statement that seems to lead people to consider we may be negatively affecting their sales. They also fail to state that we are going to go to court to defend our trademark”. Baca and Truby set up a GoFundMe to raise $50,000 in legal fees as well as a petition on Change.org to “tell Caterpillar Inc. to stop bullying Cat & Cloud and other small businesses”.

What's the big picture effect?

Caterpillar’s claim against Cat & Cloud is just the latest example of brands vigorously pursuing intellectual property right claims, even into seemingly unrelated areas like in coffee shops. However, as Cat & Cloud co-founders have pointed out, the all-encompassing, cross-industry nature of Caterpillar’s complaint raises questions about the practical and legal feasibility of such a far-reaching claim.

If Caterpillar’s claim is successful, the word “Cat” could not be printed on any clothing or footwear without their permission. Discounting the numerous logistical and financial problems of chasing down every mention of “CAT” in the retail market, Caterpillar noticeably has not pursued Target’s “Cat & Jack” which suggests this is probably an industry giant pursuing frivolous claims against a small business.

Secondly, US trademark law stipulates cancellation of trademarks requires either:

  1. absolute grounds (i.e. it is generic); or
  2.  relative grounds (i.e. non-use or earlier application of the mark)

It is hard to see how either ground applies here. A simple glance at their respective online stores will show how the difference between Cat & Cloud’s surfer-esque snapback caps to Caterpillar’s blazing yellow trucking caps. It is also important to point out the alternatives that Caterpillar could pursue. They could have avoided litigation either by agreeing to license out their trademark, which means Cat & Cloud can use “CAT” if they pay for it, or allow the smaller firm to continue using their trademark as a “brand mark”.

Given all of the above, it is clear the debacle between Cat & Cloud versus Caterpillar is a question of size, resource and economics, rather than who is right or wrong. It remains to be seen how this legal tussle will turn out, but given the costs faced by Cat & Cloud to defend their trademark, the cards appear to be in Caterpillar’s favour.

Report written by Roslyn L

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