Remember Taco Bell’s “Yo quiero Taco Bell” ads from the late 90’s? It turns out that the idea of using a Chihuahua to help sell Taco Bell tacos etc. was originated by a Michigan-based marketing firm (Wrench LLC) that had originally pitched Taco Bell on the idea. But Taco Bell and Wrench never struck a deal and later Taco Bell started working with the well-known advertising agency TBWA Chiat/Day, Inc. on an ad campaign that ended up becoming the “Yo quiero Taco Bell” ad campaign.
Wrench subsequently sued Taco Bell and was awarded $42-million for copyright infringement and breach of contract. That in and of itself was something of a remarkable result not only because of the amount of the damages but because Taco Bell claimed that the idea Wrench had presented – using a “Psycho Chihuahua” dog character – had nothing to do with the “Yo quiero Taco Bell” dog character. Wrench nevertheless prevailed.
Then Taco Bell turned around and sued TBWA Chiat/Day, Inc. to cover the damages award on an indemnification theory. In other words, Taco Bell claimed it was the ad agency’s fault. But in a decision last month, the 9th Circuit Court of Appeals let the ad agency off the hook because TBWA Chiat/Day, Inc. wasn’t a party to the implied contract between Wrench and Taco Bell and because the agency wasn’t aware of Wrench’s “Psycho Chihuahua” character at the time it got involved. So..unless Taco Bell can prevail on appeal, it looks like it’s going to have to sell quite a few more tacos and enchiladas to cover the $42 million in damages.
For a link to one of the original Taco Bell ads, try