Mrs. Colonel Sanders: Playing Chicken with Trademarks
The Claudia Sanders Dinner House, a restaurant previously owned by Kentucky Fried Chicken’s founder Colonel Sanders, hit the open market in June.[1] The restaurant and estate owners are looking for $9 million, which includes the intellectual property rights to Claudia’s name and likeness.[2] Claudia was the second wife of Colonel Harland Sanders and together they started the restaurant in 1968,[3] operating it until their retirement in the 1970s. The Sanders then transferred ownership to their friends, the Settles, who have operated it continuously since.[4] The sale and possible franchise interest some buyers have expressed has caught the attention of Kentucky Fried Chicken, Inc. (“KFC”) and their parent corporation, Yum! Brands, Inc. However, franchising a restaurant that serves the Colonel’s southern staples, such as fried chicken, and uses the name and likeness of Mrs. Sanders raises significant intellectual property concerns.[5]
Colonel Sanders first started selling fried chicken out of a service station during the Great Depression.[6] By 1940 the Colonel had developed his secret 11 herbs and spices recipe and pressure frying chicken process to improve flavor, moisture content, and cooking speed.[7] In 1952, the Colonel first licensed the name “Kentucky Fried Chicken” and his secret recipe to restaurant operator Pete Harmon of South Salt Lake Utah.[8] In 1962, he patented a pressure fryer design for frying chicken,[9] and in 1963 he obtained a registration for the trademark “It’s Finger Lickin’ Good.”[10] Colonel Sanders recruited most of his franchise restaurants personally over the years, traveling around the country and pitching his frying process and chicken recipes to potential restaurants.[11] Restaurants and restaurant patrons loved his chicken, and after several years of growth, Colonel Sanders sold his company to investors in 1964.[12]
The relationship between Colonel Sanders and the new owners and operators of the KFC corporation quickly soured. The Colonel was “vexed almost beyond endurance” when KFC began modifying his recipes to make them easier and cheaper for the franchises to cook.[13] The Colonel, who was still employed by KFC as a director, would visit KFC restaurants unannounced to inspect the kitchens and quality of the food, which often resulted in the Colonel screaming, swearing, and smacking nearby objects with his cane.[14] Visiting a Greenwich village KFC in 1976, the Colonel declared it to have the worst fried chicken he had ever seen, compared their gravy to “sludge” and when asked about the new KFC products, exclaimed “they really gag me, that’s what I think of them.”[15]
In 1975, KFC sued the Colonel for libel and defamation when he made similar disparaging comments about the new KFC recipes to a Courier-Journal reporter.[16] After the Colonel stated the new gravy was “pure wallpaper paste” and the new chicken recipe was “nothing… but a damn fried doughball stuck on some chicken,” KFC sued, bringing it all the way to the Kentucky Supreme Court in Kentucky Fried Chicken, Inc. v. Sanders.[17] The Kentucky Supreme Court thew the case out.[18] Ironically, it was only a few years prior that KFC had begun using the image and likeness of the Colonel to advertise its chicken, despite his distaste with the recipe changes. KFC even registered the trademark “Col. Sanders’ Recipe” for exclusive use despite continuing to make adjustments.[19]
The Colonel’s love of cooking and continual frustration with KFC’s recipe changes motivated him to open the Claudia Sanders Dinner House in 1968, originally named “The Colonel Lady’s Dinner House.”[20] The Colonel and his wife even made preliminary efforts to franchise her new restaurant in 1972. [21] In 1974, Heublein, Inc., the then-parent company of KFC, filed suit to prevent this new franchise, claiming trademark protection gave them exclusive rights over the Colonel’s name.[22] Colonel Sanders and Claudia countersued, claiming interference and misuse of the Colonel’s name and likeness, and demanded $122 million.[23] The parties reportedly settled, with the Sanders receiving $1 million but agreeing to change the name of their restaurant to its current name, The Claudia Sanders Dinner House, and drop the reference to the Colonel.[24]
This sort of aggressive litigation regarding their IP rights has been typical of Kentucky Fried Chicken, Inc. and its various parent organizations. KFC has successfully fended off copycat restaurants such as “Colonel’s Fried Chicken,” “Old Kentucky Home Fried Chicken,” and “Al’s Kentucky Fried Chicken,” among others.[25]
Keeping these historical battles in mind, we arrive at the current controversy: whether a current buyer of Claudia Sanders Dinner House could use its intellectual property and begin a franchise.[26] As the major disagreement regarding the rights of Claudia Sanders Dinner House vis-à-vis KFC was settled, there is neither precedential value nor public record of the terms of their settlement.[27] It is even possible that the settlement agreement was never codified in writing, and it is uncertain whether such an agreement might apply to a third party buyer multiple years removed.
There are further wrinkles to consider: On March 10, 2022, three months prior to soliciting offers for Claudia’s restaurant, the Claudia Sanders Dinner House Corporation filed to register their trademark “Claudia Sanders.”[28] Surprisingly, at the time of filing, KFC’s original trademark registrations for “Colonel Sanders’ Recipe” and “Colonel Sanders’ Recipe Kentucky Fried Chicken” – upon which they likely relied when suing the Sanders in 1974 – have been allowed to lapse; both marks were removed from the Principal Registry in 2007 and 2008 for lack of maintenance.[29] In fact, the only live registration KFC has that includes the Sanders’ name is “Col. Harland Sanders Original Recipe Since 1940,”[30] which could be vulnerable to a cancellation proceeding.
Although the specifics of the original KFC recipe are kept secret, the controversy between the Colonel and KFC is sufficient to show that the fast food chain is not using the original recipe. Furthermore, it would be easy to uncover recipe changes during discovery in a potential lawsuit. This might allow a purchaser of Claudia Sanders’ IP to argue that KFC’s sole remaining registration over the Colonel’s name is not “original” and is deceptive.[31] The typical test for deceptiveness invokes three questions: 1) is the mark misdescriptive of character, quality, function, composition, or use of the goods; 2) are prospective buyers likely to believe that the misdescription actually describes the goods; and 3) is the misdescription likely to affect a relevant consumer’s decision to purchase?[32] The answer to the first question seems to be in the affirmative, as the composition of the recipe is no longer the same. The answers to the remaining two are less certain.
Regardless of how such a proceeding might turn out, and whether a successful cancellation would even affect the commercial rights of KFC, the corporation has already taken steps to mitigate these risks and place pressure on any potential purchaser of Claudia’s restaurant.[33] Immediately after Claudia Sanders Dinner House hit the market, KFC filed a new application to the U.S. Patent and Trademark Office for a logo which includes the terms “Kentucky Fried Chicken,” “Colonel Sanders’ Original Recipe,” “It’s Finger Lickin’ Good,” and “Col. Harland Sanders.”[34] This filing date was after the application for “Claudia Sanders” was filed. Both applications are still pending examiner review as of this post’s publishing.
Ultimately, the fate of the Claudia Sanders Dinner House is uncertain, but substantial litigation seems likely, particularly if a buyer attempts to start a franchise. Questions abound: who has the rights to the Sanders name? Could a lawsuit over the original recipe expose the secret 11 herbs and spices? Neither party has filed suit; for now, they seem content to play chicken.
Footnotes
