Can Chili Crunch Be Trademarked? | Pivot

1. KSKara Swisher0:00

   David Chang's Momofuku finds itself in the middle of some Chili Crunch drama. Momofuku has trademarked Chili Crunch, a spicy, oily, crispy condiment, popular in Asian countries. After sending cease and desist letters to manufacturers using the name, the brand has been accused of trademarking a generic cultural product. Some critics have compared it, the move to trademarking ketchup and suggested it's mono- it is monopoly behavior. A company in Denver previously owned the trademark and sent a cease and desist letter to Momofuku, which instead, has in- instead worked to purchase the trademark for itself. I, I, uh, Scott, you're a branding person. What the heck? Chili Crunch? I've seen Chili Crunch stuff all over the place, uh, in Asia, and also anytime you go to an Asian market, there's a million Chili Crunch things. This seems crazy for, for, for Momofuku and David Chang to do. He looks like an asshole. Your thoughts on, like, this marketing thing?

2. SGScott Galloway0:48

   Well, I- i- it's like the majority of bad ideas started out as good ideas, and that is our ability to protect IP is really important. Whether it's someone's likeness, whether it's the, the patents or the, you know, chemical context of a pharmaceutical, America's innovation and our economy relies on what you would loosely call intellectual property protection and our ability to legally protect it. This has had gone crazy. This reminds me of when Paris Hilton tried to trademark "that's hot."

3. KSKara Swisher1:15

   Oh, right, yeah. I, yeah. Uh-huh. I knew you'd be good at this. Go ahead.

4. SGScott Galloway1:19

   And someone said that, "No. You can't trademark this." So, the reason why we have thoughtful judges in law, in, in, in cases is that we can say, "All right. There is a line here." Because what you have is it's been weaponized in the sense that these, especially big companies or well-resourced companies send cease and desist letters to everyone for anything that smells of anything remote, and they use it as a means-

5. KSKara Swisher1:43

   Yeah.

6. SGScott Galloway1:43

   ... of suppressing competition. And also, they use it as a means of trying to get unearned PR. For example, Amazon will file a patent-

7. KSKara Swisher1:52

   Mm-hmm.

8. SGScott Galloway1:52

   ... for a, not only a floating warehouse, which is probably, um, physically, uh, impossible for the next couple centuries. They will file a patent for a projectile defense shield of their-

9. KSKara Swisher2:07

   Mm-hmm.

10. SGScott Galloway2:07

    ... floating warehouse, and the reason they do it is they know that reporters at Forbes and other business magazines troll patent filings and then write about them. So, IP protection has taken on all this different nuance including intimidation, including well-resourced monopolies. The cons- Because if you get a cease and desist letter and you're a small company, you're sort of inclined to say, "Am I really gonna take on this well-resourced company or am I just gonna find another name?" But this is an example of it gone haywire. These are generic terms, and I believe the court will say, "Sorry, this term has become generic, and you can't own it."

11. KSKara Swisher2:43

    I think, uh, that, this is exactly why I wanted to talk about this. Even though people are sort of losing their mind on, um, on the internet here, it's really important what has, he's done here. Like, and I agree with you. I agree with you. This is a ... Where do you think it's gonna end up?

12. SGScott Galloway2:56

    It'll be dismissed, and, uh-

13. KSKara Swisher2:58

    Dismissed. Meaning he won't be able to, to cease and desist them.

14. SGScott Galloway3:02

    No. Yeah. Uh, it'll be, uh, this'll be, as you call it, legal harassment. They'll say, "You have no domain over this name," and-

15. KSKara Swisher3:09

    Yeah.

16. SGScott Galloway3:09

    ... and you should pay back the legal fees for the people where you're creating, you know, s- s- whate- whatever you call it, a superfluous-

17. KSKara Swisher3:16

    Mm-hmm.

18. SGScott Galloway3:16

    ... or whatever the term.

19. KSKara Swisher3:17

    But it's an issue around the trademark office, too, 'cause I think he, he does own the trademark, right? He owns it.

20. SGScott Galloway3:22

    Well, but c- but if it's trademarkable-

21. KSKara Swisher3:25

    You can't-

22. SGScott Galloway3:25

    ... they'll, they'll say, "Okay."

23. KSKara Swisher3:26

    Right. That's right. I can't believe he got the trademark at all.

24. SGScott Galloway3:29

    Right. So I don't, I just don't, I, I don't know. Uh, you know, I, look, this is a, this is for IP lawyers, but your ability to encr- to encourage people to make the requisite investment in developing important differentiated intellectual property is really important and to provide that protection. At the same time, you have to ensure that there's a competitive marketplace where people who are trying to develop their own IP don't bump into IP that's been inflated beyond reasonable protection.

Episode duration: 4:03