A federal jury Wednesday ordered Taco Bell Corp. to pay $30.1 million to two men who claimed the fast-food chain stole their idea for the advertising campaign featuring a talking Chihuahua.
The chain restaurant said that it would appeal the verdict.
Thomas Rinks and Joseph Shields, both of the Grand Rapids area, sued Taco Bell in 1998, saying they pitched the idea for a character called "Psycho Chihuahua" more than a year before Taco Bell began airing the dog commercials in 1997.
They said Taco Bell advertising executives reached an oral agreement with them to use their idea, but then introduced the Chihuahua character without paying them.
Taco Bell has said it decided to use a talking dog in commercials after the ad agency TBWA-Chiat-Day proposed it.
"It's been a long time," Rinks said. "It's been 5½ years of litigation and it's just really exciting that the jury system works the way it's supposed to work and that the truth is finally going to be out there."
Rinks characterized his reaction upon hearing the verdict as "relief and just total excitement. It was a great day," he said on the CBS News Early Show.
Taco Bell's parent, Louisville, Ky.-based Yum! Brands Inc., said it will appeal. The company also said it will reduce its second-quarter earnings by 6 cents per share to cover the verdict.
"Taco Bell continues to strongly believe that the Chihuahua character was created by the Chiat-Day advertising agency, not the plaintiffs, and we intend to appeal the jury's verdict," said Laurie Gannon, a spokeswoman for Taco Bell Corp., based in Irvine, Calif.
The ads, since discontinued, featured a Chihuahua named Dinky that appeared to say "Yo quiero Taco Bell," which is Spanish for "I want Taco Bell." The campaign became wildly popular and led to toys, T-shirts and other products featuring the little dog.
"We developed the whole campaign, taking it from the cartoon dog to the live version that you see all the way down to the executions on the commercials," Rinks told Early Show co-anchor René Syler. "Within two months after our final presentation to them, they had a new agency and the ads started coming out."
Rinks said he isn't sure what he'll do with his share of the award, but isn't likely to spend it on chalupas.