In-N-Out Burgers, Inc. v Hashtag Burgers Pty Ltd  FCA 19
Sydney-based business Hashtag Burgers Pty Ltd has been back in Court this month, defending the use of “Down-N-Out” on its burgers and restaurants. The trade mark battle with US brand In-n-Out Burger earlier determined that use of the “Down-N-Out” brand by Hashtag amounted to infringing conduct.
Popular American fast-food chain In-N-Out Burger has been operating since 1948 and now has over 300 restaurant locations throughout six states in the United States.
In addition to food and beverage, the burger brand sells branded merchandise including t-shirts, caps, key rings, and similar accessories and owns several Australian trade marks for IN-N-OUT BURGER.
Since 2012 In–N-Out has hosted pop up events in other countries, including Australia. They hosted eight such events in several locations in Australia over a seven year period. In June 2015, following the fourth In-N-Out pop-up event earlier that year, Hashtag Burgers held a “Funk N Burgers” pop-up burger event at the Lord Gladstone Hotel in Sydney.
Promoting the event on social media, Hashtag Burgers posted a Facebook post announcing:
“This time on the menu we have the legendary In’N’Ou … I mean the Down’N’Out burger served up ANIMAL STYLE for all you fatties. Go single or double-double that sexy MOFO”.
This was the first of several social media posts that made reference to the ANIMAL STYLE and PROTEIN STYLE burgers.
In-N-Out burger sent a cease and desist letter to Hashtag Burgers requesting them to select a different name and logo and to stop using the ANIMAL STYLE and PROTEIN STYLE trade marks. Hashtag Burgers denied use of the ANIMAL STYLE and PROTEIN STYLE marks and argued the “Down-N-Out” name was not infringing. Despite this, Hashtag Burgers instructed their graphic designer to make changes to their “Down-N-Out” logo, with internal Hashtag Burgers correspondence revealed during proceedings stating “Need to differentiate ourselves ASAP before we get sued lol.”
Alleged Trade Mark Infringement
In-N-Out Burger is the registered owner of six Australian trade marks and commenced legal proceedings against Hashtag Burgers, claiming trade mark infringement, misleading or deceptive conduct and passing off.
Hashtag Burgers argued that “down and out” typically referred to a person who has fallen on hard times, unlike In-N-Out which is an action or progression alluding to fast service. They also claimed that use of the word DOWN was a deliberate allusion to Australia, which is colloquially referred to as “the land down under”.
In February this year, Federal Court Justice Anna Katzmann’s judgement said Hashtag Burgers had “sailed too close to the wind” with its “Down-N-Out” brand and ordered them to cease using the name.
Hashtag Burgers appealed that decision and In-N-Out Burgers served up a cross appeal. Arguments were presented earlier this month, with Hashtag arguing the trial judge erred in focussing on the ‘N-Out’ portion of the respective brands. The appeal judgment is due to be handed down at a later date.
N-OUT is a distinctive and essential feature of all In-N-Out’s trade marks
The case serves as a valuable reminder that:
1. Traders who take inspiration from another company risk a finding of trade mark infringement and the associated requirement to re-brand, which in itself can be a costly process;
2. It is not necessary for a Trade Mark owner to prove significant reputation in a brand jurisdiction to enforce its rights;
3. Evidence of intention can be relevant to a finding of trade mark infringement;
4. It is not always the earlier part of a brand that is the “most memorable feature” of a trade mark, insofar as consumer recollection is concerned.
Katzmann J’s inquiry as to “what is the line between inspiration and appropriation?” remains pertinent, and we eagerly await the appeal Judge’s comments in that regard.
If you are unsure of what constitutes trade mark infringement, or require guidance on a proposed new brand, please contact one of our trade marks attorneys for advice.
To read about another recent burger battle, check out this blog post: https://www.mbip.com.au/hungry-jacks-in-a-legal-pickle-with-mcdonalds/