The beverage company counter-sued, stating that Grumpy Cat hadn't held up its end of an agreement to promote the iced coffee.
Grumpy Cat, whose real name is Tardar Sauce, went viral due to her permanently moody face, which is thought to be caused by feline dwarfism and an underbite.
It all began in 2013, when Nick and Paul Sandford, the owners of Grenade struck a licensing deal with Grumpy Cat Limited to sell a line of iced coffees called "Grumpy Cat Grumppuccino".
A year later, her fame led to a deal with USA coffee company Grenade Beverage LLC.
Though coffee bosses filed a countersuit, claiming Grumpy Cat didn't hold up its end of the deal, the jury found in favour of the vehicle and awarded it $701,000 (£500,000).
The coffee company also alleged that the owner of the cat told them that she would appear in a movie with other celebrities.
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Ultimately, the judge sided with the cat, saying Grenade needed to pay $710,000 in damages as well as a $1 nominal damage fee for breach of contract.
She later formed Grumpy Cat Limited, monetizing the dour kitty. And the cat's handler's didn't mention the coffee during an interview with Fox News, either, The Washington Post reported.
Bundesen leveraged her pet's worldwide fame into endorsement deals for clothing, homeware, books and even a 2014 Christmas special.
But in 2015, Grenade made a decision to create a line of "Grumpy Cat Roasted Coffee", which was not part of the deal.
The complaint went on to state that Grenade's T-shirt line "blatantly infringe on the Grumpy Cat copyrights and Grumpy Cat trademarks".
There has been no reaction on the court victory from Grumpy Cat herself, except for a photo posted on social media. The cat's lawyer, however, noted that "Grumpy Cat feels vindicated and feels the jury reached a just verdict".