Trademark rights are vital assets of brands that symbolize, both legally and to the public, a company's status and name recognition in the marketplace.
With those rights, companies also have an obligation to defend their marks to protect their exclusivity. As a general practice, vigilance in asserting those rights is the norm.
However, as recent developments with Momofuku show, such watchfulness may have a negative business impact, resulting in the dilution or genericide of the marks. Accordingly, understanding the full marketplace, not just the trademark assets of your client, is critical in understanding how to advise your client fully.
The restaurant world was uncharacteristically abuzz with interest in trademark claims this spring.
Trademarks are not typically a cause of concern in this industry, but in April, when one of the biggest names in culinary arts, the dominant David Chang, known for his Momofuku empire, sent cease-anddesist letters out to small and predominantly minority-owned businesses to allege trademark infringement for a commonly used condiment phrase, it was big news.
Momofuku1 is not just a stand-alone Michelin-starred restaurant in NYC, but a brand — Chang has several TV shows, hundreds of employees and food goods sold in over 300 stores.2 Momofuku not only wanted to be on diners' plates, but also on grocery store shelves and in-home pantries, and in 2020, entered this space by launching a spicy condiment called "Chili Crunch."3
4
History of "Chile Crunch" and "Chili Crunch" Marks
The two trademarks making the news are "Chile Crunch" and "Chili Crunch."5
Currently, Momofuku has a registered trademark for "Chile Crunch" and a pending trademark application for "Chili Crunch." Momofuku is not the initial holder of the "Chile Crunch" mark.
In 2022, Chile Colonial LLC, owner of the trademark for "Chile Crunch" since 2015, filed suit in the U.S. District Court for the District of Colorado against Momofuku for trademark infringement. The case ended in a settlement whereby Momofuku purchased the mark for a six-figure sum.6 7
What is interesting about the "Chile Crunch" mark is that the initial application with the U.S. Patent and Trademark Office was denied. When Chile Colonial filed in 2014, the USPTO had reservations about the "Chile Crunch" mark and denied the application as it "merely describes a desirable feature of applicant's goods," is "merely descriptive," and therefore not a protectable class of goods.8
In rebuttal, Chile Colonial claimed that "no claim is made to the exclusive right to use CHILE" and that "the mark has become distinctive ... through ... substantially exclusive and continuous use in commerce."9
Ultimately, the USPTO reversed its decision and granted trademark protection. As shown below, that claimed exclusivity no longer applies to the term "Chile Crunch" and the question remains if it ever did.
Thereafter, in March 2024, Momofuku applied to trademark "Chili Crunch" in the categories of "condiments; sauces; food flavorings ... [and] chili oils."10 11 Momofuku argued that the first use of "Chili Crunch" was "7/00/2020." That application is currently pending with the USPTO.
In conjunction with that application, on March 18, Momofuku sent out cease-and-desist letters to several smaller predominantly minority-owned culinary brands, seeking to enjoin those parties from using the phrases "Chile Crunch" and "Chili Crunch," despite not yet having a registered trademark for the latter.12
The online community did not take kindly to this show of force, and Momofuku faced immediate backlash, with Chang being labeled a "trademark bully."13
Despite the hot topic, cooler heads prevailed, and on April 12, Chang said in his popular podcast that Momofuku would no longer be enforcing the trademarks.14
Generic and Descriptive Phrase Defense
Largely missing from the debate within the USPTO and in Reddit threads is whether the phrases "Chile Crunch," "Chili Crunch," or any iterant thereof are either too generic or merely descriptive to effectively neuter the phrases.
While online commentators certainly argued that Momofuku ethically should not seek to protect the marks used commonly by so many other companies, the legal question of whether or not they can remains open, unless and until Momofuku obtains protection for "Chili Crunch," and follows the ceaseand-desist letters with litigation.
Counsel for the letter recipients would likely argue that the marks are common generic phrases and are not afforded protection under the Lanham Act.15
A word or phrase functions as a trademark when it is "used by a source of [a product] to identify itself to the public as the source of its [product] and to create in the public consciousness an awareness of the uniqueness of the source and of its [products]."16
The specialty food market was already flooded with peppery crunch dressings and sauces using the same or similar words contained in Momofuku's marks, which may serve to defeat any claim of uniqueness.17
A competitor applied to the UPSTO to trademark "Kam's Garlic Chili Crunch" in April 2023, before Momofuku sought protection for the more general "Chili Crunch." Another company was granted trademark status for its "Surati Flavoured Potato Tubes Spicy Chili Crunch Tubes" in 2021.18 19
That is to say, even in the world of the USPTO, "Chili Crunch" is nothing new.
In common law, neither those terms that were generic nor those that were merely descriptive could become valid trademarks: "Nor can a generic name, or a name merely descriptive of an article or its qualities, ingredients, or characteristics, be employed as a trademark and the exclusive use of it be entitled to legal protection."20
The Lanham Act makes a crucial exception with respect to those merely descriptive terms that may have acquired secondary meaning. Momofuku relies on this exception to seek protection for "Chile Crunch" and "Chili Crunch."
However, the act also provides for the cancellation of a registered mark if at any time it "becomes the common descriptive name of an article or substance," according to Section 14(c), also known as genericide.
Common examples of this genericide include "Band-Aid," "Kleenex" and "Q-Tip." Here, there are myriad companies with a textured peppery condiment.
With the ubiquity of the condiment on the market, Momofuku's trademark rights may have been diluted to nonexistence. As some of the companies on the receiving end of Momofuku's legal threats have said, the phrases "Chile Crunch" and "Chili Crunch" have been used to describe the condiment long before Momofuku entered the picture.
The ubiquity of the phrases in commerce may provide a pathway for the marks to be canceled, "Chile Crunch," and denied, "Chili Crunch."
Future of Flavor
While Momofuku has decided to back off from enforcing its claimed trademarks around this condiment, how the USPTO will respond to its pending application is unknown.
Other registered trademark holders or companies with similar products may object to the filing. The cease-and-desist letters and spotlight in the news may have an unintended Streisand effect on Momofuku's pending application for "Chili Crunch."21
That is, companies not actively searching the USPTO database for pending applications are now aware of Momofuku's request and may seek to intervene as a roadblock to Momofuku.
In the end, Momofuku's enforcement strategy may backfire not just in the public eye, but with the USPTO as well.
Footnotes
1. MomoIP LLC is the trademark arm of the Momofuku empire. All references to Momofuku include MomoIP LLC.
2. https://ny.eater.com/2023/10/24/23930301/momofuku-ko-closing-david-chang.
3. https://www.insidehook.com/food/david-chang-momofuku-trademark-controversy.
4. https://shop.momofuku.com/products/chili-crunch-4-pack.
5. Gourmands will note that chile/chili crisp is conspicuously absent from the debate.
6. https://dockets.justia.com/docket/colorado/codce/1:2022cv02243/217956.
7. https://www.eater.com/24122387/momofuku-chili-crunch-chile-crisp-trademark-controversy.
9. Id.
11. Chili Crunch was a registered trademark by Pont Neuf Productions LLC, a Delaware LLC with operations in Boston, MA until it expired in August, 2023. https://tsdr.uspto.gov/documentviewer?caseId=sn87318086&docId=ER120220801061456&linkId =1#docIndex=0&page=1.
12. https://www.eater.com/24122387/momofuku-chili-crunch-chile-crisp-trademark-controversy
13. https://www.theguardian.com/food/2024/apr/04/chili-crunch-trademark-momofuku-david-chang.
15. (15 U.S.C. §§ 1051 et seq., the U.S. Trademark Act).
16. M.B.H. Enterprises Inc. v. WOKY, Inc., 633 F.2d 50, 54 (7th Cir.1980).
17. www.flybyjing.com; https://chilecrunch.com; https://thislittlegoat.com; www.shaws.com.
20. Delaware & Hudson Canal Co. v. Clark, 80 U.S. (13 Wall.) 311, 323, 20 L.Ed. 581 (1872).
21. https://en.wikipedia.org/wiki/Streisand_effect.
Originally published by Law360
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