March 9, 2004

The longstanding fight over the Taco Bell Chihuahaua, the star of a once hugely popular advertising campaign, has entered a new round according to the 10-K recently filed by Yum Brands (YUM) . Last year, Yum lost a lawsuit filed back in 1998 by two Michigan-based cartoonists who said their idea for the feisty dog was stolen by Taco Bell. The company was first ordered to pay $30 million in June 2003. Another $12 million in interest was tacked on by the judge in September and Yum took a $42 million charge against earnings in 2003, according to the K. The K also noted that Yum has filed an appeal with the Sixth Circuit Court of Appeals and has filed a lawsuit against its former advertising agency, Chiat Day. Though the K notes that the ad agency suit was filed on July 9, 2003, this is the first time that Yum chose to disclose it in its SEC filings.

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