Can Chili Crunch Be Trademarked? | Pivot

Kara Swisher 0:00 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,

Kara Swisher 0:30 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?

Scott Galloway 0:48 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."

Kara Swisher 1:15 Oh, right, yeah. I, yeah. Uh-huh. I knew you'd be good at this. Go ahead.

Scott Galloway 1:19 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-

Kara Swisher 1:43 Yeah.

Scott Galloway 1:43 ... of suppressing competition. And also, they use it as a means of trying to get unearned PR. For example, Amazon will file a patent-

Kara Swisher 1:52 Mm-hmm.

Scott Galloway 1:52 ... 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-

Kara Swisher 2:07 Mm-hmm.

Scott Galloway 2:07 ... 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."

Kara Swisher 2:43 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?

Scott Galloway 2:56 It'll be dismissed, and, uh-

Kara Swisher 2:58 Dismissed. Meaning he won't be able to, to cease and desist them.

Scott Galloway 3:02 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-

Kara Swisher 3:09 Yeah.

Scott Galloway 3:09 ... 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-

Kara Swisher 3:16 Mm-hmm.

Scott Galloway 3:16 ... or whatever the term.

Kara Swisher 3:17 But it's an issue around the trademark office, too, 'cause I think he, he does own the trademark, right? He owns it.

Scott Galloway 3:22 Well, but c- but if it's trademarkable-

Kara Swisher 3:25 You can't-

Scott Galloway 3:25 ... they'll, they'll say, "Okay."

Kara Swisher 3:26 Right. That's right. I can't believe he got the trademark at all.

Scott Galloway 3:29 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.