McDonald’s Ice Cream Machine Lawsuit: Kytch, Taylor, and the $900M Claim

The McDonald’s ice cream machine lawsuit was a $900 million action filed in March 2022 by Kytch, a small California technology company, against McDonald’s Corporation, accusing the chain of destroying Kytch’s business through false safety warnings, tortious interference, and anti-competitive conduct tied to the repair market for Taylor soft-serve machines. The case was terminated on May 9, 2025 in the U.S. District Court for the Northern District of California, though the docket does not indicate whether it ended by settlement, voluntary dismissal, or another mechanism, and the specific terms have not been publicly reported.¹

What Kytch’s Device Did

Jeremy O’Sullivan and Melissa Nelson began selling an aftermarket device in 2019 that installed inside a Taylor ice cream machine and connected wirelessly to a franchise owner’s smartphone. It monitored the machine’s internal communications in real time, alerted users to overfilling, flagged preventive maintenance, and adjusted hidden settings to head off errors before the machine shut itself down.² The testing firm Intertek certified the device as meeting Underwriter’s Laboratory safety standards.³

Franchise owners had reason to want it. The Taylor C602, installed in more than 14,000 U.S. McDonald’s locations, was estimated to be out of service at 20 to 25 percent of machines at any given time, producing cryptic error codes that under the Digital Millennium Copyright Act only Taylor-certified technicians were legally permitted to clear.⁴⁵ In 2017, roughly 6,500 certified Taylor technicians generated nearly $80 million in parts and service revenue. By 2020, Kytch described itself as the largest independent software vendor for shake machines in the McDonald’s system.²

The November 2020 Warning to Franchisees

In November 2020, McDonald’s sent emails to all of its franchisees instructing them to remove Kytch devices from their machines. The emails asserted that Kytch’s product violated machine warranties, intercepted “confidential information,” and posed safety risks that could lead to “serious human injury.” McDonald’s specifically warned that the device’s remote-operation function could cause the machine to start up while a crew member or technician was cleaning or servicing it.⁶

Kytch called those claims false. O’Sullivan and Nelson said removing the machine’s cabinet door automatically disables the motor, making the alleged injury scenario impossible, and that McDonald’s had “actual knowledge” that the device did not create the safety risks described.³ Kytch also alleged McDonald’s went beyond its own franchisees, warning other companies including Coca-Cola and Burger King against buying Kytch products.⁶

What Kytch Alleged in the $900 Million Complaint

On March 1, 2022, Kytch filed a 133-page complaint against McDonald’s in the U.S. District Court for the District of Delaware, seeking $900 million in damages — the projected value Kytch claimed its business would have reached without McDonald’s interference.⁷⁶ The complaint made three main claims:

False advertising, in that McDonald’s November 2020 emails contained defamatory statements about Kytch’s safety, warranty, and data-security record.
Tortious interference, in that McDonald’s deliberately destroyed Kytch’s relationships with existing and potential customers, including companies outside the McDonald’s system.
Anti-competitive conduct, in that McDonald’s sought to protect Taylor’s repair revenue model and steer franchisees toward a Taylor product then in development called Open Kitchen.

O’Sullivan and Nelson said in a joint statement that they founded Kytch “to improve the dismal performance and enhance the food safety of McDonald’s soft-serve machines. In response, they destroyed our business and our livelihood.”²

McDonald’s Response and the Path Through Court

McDonald’s called the claims “meritless” and said it “owes it to our customers, crew and franchisees to maintain our rigorous safety standards and work with fully vetted suppliers.”⁶ The company filed a motion to dismiss. A California judge rejected it in mid-2022, allowing the case to proceed.⁸ The case was transferred from the District of Delaware to the U.S. District Court for the Northern District of California in April 2023.¹

The Related Taylor Lawsuit

The McDonald’s suit followed a separate action Kytch filed in May 2021 in Alameda County, California, against Taylor Company and a McDonald’s franchisee, alleging breach of contract, tortious interference, and misappropriation of trade secrets.⁴ Kytch claimed Taylor, through a franchisee enrolled in a Kytch product trial, obtained a Kytch device and reverse-engineered it to build its own internet-connected monitoring product, Open Kitchen.⁹ Internal communications produced in discovery showed Taylor’s parent company, Middleby, viewed the project as a way to “head off this threat” from Kytch. Open Kitchen was tested at roughly 30 McDonald’s locations in October 2020 but, franchisees reported, never rolled out widely.¹⁰

How the Case Ended

Court records show the McDonald’s case was terminated on May 9, 2025. The docket does not indicate whether it ended by settlement, voluntary dismissal, or another mechanism, and no reporting has surfaced explaining the specific terms.¹

What Changed for the Underlying Repair Problem

While the lawsuits moved through court, the legal barrier that gave Taylor’s certified technicians their monopoly began to shift. On October 25, 2024, the U.S. Copyright Office granted a new exemption to Section 1201 of the DMCA, allowing third parties to circumvent digital locks on “retail-level commercial food preparation equipment” for diagnosis, maintenance, and repair.¹¹ The exemption took effect October 28, 2024, and was petitioned for by the consumer advocacy group Public Knowledge and the repair site iFixit.¹²

The ruling is narrower than what the petitioners originally sought, which was an exemption covering all commercial and industrial equipment.¹¹ It also comes with a limitation: while it legalizes the act of bypassing software locks for repair, it does not permit sharing or distributing the tools needed to do so, as iFixit’s Elizabeth Chamberlain noted.¹³ The exemption lasts three years and must be renewed through the Copyright Office’s triennial rulemaking process.¹⁴

1
CourtListener. Kytch, Inc. v. McDonald’s Corporation, 3:23-cv-01998
2
NBC News. Creators of Ice Cream Maintenance Device Sue McDonald’s
3
Inc. Kytch McDonald’s Lawsuit Taylor Ice Cream Machines Malfunctions
4
Keith.law. McDonald’s Ice Cream Machine Drama
5
iFixit. What’s Inside That McDonald’s Ice Cream Machine
6
Wired. Kytch Ice Cream Machine Hackers Sue McDonald’s
7
CourtListener. Kytch, Inc. v. McDonald’s Corporation, 1:22-cv-00279
8
Peoria Journal Star. Illinois Company McDonald’s Fight $900M Ice Cream Machine Lawsuit
9
New York Post. Feds Side With McDonald’s Franchise Owners in Battle to Fix Ice Cream Machines
10
Wired. McDonald’s Ice Cream Machine Hacking Kytch Taylor Internal Emails
11
Public Knowledge. Public Knowledge, iFixit Free the McFlurry Win Copyright Office DMCA Exemption for Ice Cream Machines
12
The Verge. McDonald’s Ice Cream Machines Right to Repair Copyright
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OPB. McDonald’s Can Now Legally Fix Its Own Ice Cream Machines
14
Federal Register. Exemption to Prohibition on Circumvention of Copyright Protection Systems for Access Control