Spicy Things Happen When You Aren’t Strategic About Your IP
Momofuku and its famous ambassador, David Chang, are in a lot of hot water over the decision to enforce a trademark in CHILE CRUNCH. Momofuku sent cease and desist letters to several companies, big and small, many of them with AAPI founders and told them to stop using the phrase on their products. This news caught my eye because I’m a huge David Chang fan, my kids and I watch all his shows (he is in large part the reason my kids care to learn about the culture behind the food they eat). Enforcing a trademark against other AAPI companies did not seem consistent with the David Chang I watched on TV because, on TV, he is always advocating for the culture behind the food. Trying to keep other members of the AAPI community from using CHILE CRUNCH seemed very un-David Chang-like.
David Chang has explained his side of the story, and it is an excellent example of what happens when your intellectual property strategy is not tailored to your business needs.
CHILE CRUNCH was initially registered as a trademark in 2015 by a Colorado, Chile Colonial company. It sells what it describes as a “crunchy” condiment called CHILE CRUNCH. Chile Colonial’s condiment is of Mexican origin. Chile Colonial enforced its trademark rights against companies in the past, including against Trader Joe’s, when it came out with a “Chile Onion Crunch.” Then, Chile Colonial asserted its mark against Momofuku. In response, Momofuku purchased the trademark from Chile Colonial, granted Chile Colonial a license to use it, filed for a second trademark on CHILI CRUNCH, and started an enforcement campaign against other companies.
From a purely trademark perspective, buying the CHILE CRUNCH trademark was a smart move. It gave Momofuku a trademark that it would not have otherwise been able to register, and it settled any dispute with Chile Colonial. From a marketing and brand perspective, however, it does not make sense. The only reason to buy the trademark is if you intend to enforce it and prevent others from using it. Momofuku should have known that other AAPI companies used the phrase before it purchased the trademark. Momofuku bought the trademark in March 2023. At that time, businesses like Xiao Chi Jie, now known as MiLa, were already using CHILI CRUNCH in the market.
Before buying the trademark, Momofuku should have discussed with its attorneys about whether CHILE CRUNCH was at all valuable to the business, whether Momofuku really intended to use it as a brand, and whether it was really going to enforce it against the other AAPI businesses that were using it. Based on David Chang’s recent apology on his podcast, The Dave Chang Show (April 12, 2024) (obtained on Spotify), those strategic decisions were either never discussed and made, or the backlash has made David Chang change his mind. I thought his apology seemed genuine so I chose to believe he never had the strategic conversation before he bought the trademark.
Momofuku had other options besides buying the trademark. It could have fought Chile Colonial and argued that CHILE CRUNCH was descriptive. Descriptive trademarks are those that “merely describe” the goods. Descriptive trademarks are not enforceable because we want to maintain the public’s freedom to use descriptive language in the marketplace. It is not that far-fetched to consider CHILE CRUNCH descriptive of Chile Colonial’s condiment. Chile Colonial refers to its condiment as “crunchy,” and it is made out of chiles, ergo CHILE CRUNCH. In fact, the United States Patent and Trademark Office (USPTO) initially rejected the application for CHILE CRUNCH because it found the phrase descriptive. Chile Colonial overcame this objection simply by stating that it had exclusively used the mark for over five years. This is a claim that certain AAPI companies clearly disagree with, given the uproar over the enforcement of the trademark. Indeed, Chile Colonial did not provide any evidence to support this claim, so it is possible that Momofuku could have disproved this assertion if it had fought the mark.
Had Momofuku really thought about the issue, it could have taken Taco Bell's route with regard to TACO TUESDAY. When Taco John tried to register TACO TUESDAY, Taco Bell did not swoop in and force Taco John off the mark by buying it or securing it for itself. Instead, Taco Bell fought the registration and loudly proclaimed that it was liberating TACO TUESDAY for everyone, big and small. When it was successful, it turned the whole thing into a huge marketing ploy and hosted the biggest Taco Tuesday ever through DoorDash.
The moral of these stories is that registering intellectual property just for the sake of registering it is not helpful to a business. Sometimes there are other, better options. Businesses and their attorneys should be strategically thinking about their intellectual property and how they can realistically use it in their market to promote their brands and protect their market share.