BFV Perspectives, Corporate Matters, Georgia Business Disputes, Noncompete & Trade Secrets, | Apr 12, 2023

What Can Your Business Learn From a Fast Food Trademark Dispute?

Intellectual property disputes, including trademark disputes, occur more frequently than ever in today’s global economy. That is because intellectual property is an essential aspect of many businesses. Therefore, it’s important for business owners to take preventative measures to prevent intellectual property disputes, including trademark disputes.

Intellectual property is any intangible asset that a business has created. It may include patents, copyrights, trade secrets, or trademarks, among others. Taking efforts to establish and protect your company’s intellectual property has many benefits. Benefits include providing a competitive advantage, generating revenue, building brand recognition and visibility, and avoiding legal issues, such as a trademark dispute.

A Trademark Dispute Between Chipotle and Sweetgreen

Recently, two heavy-hitter fast-casual restaurant chains became involved in a trademark infringement dispute. Trademark infringement is defined as the unauthorized use of a trademark. It can occur when one party uses a trademark that is too similar to another party’s trademark which, causes consumer confusion in the marketplace. When this happens, the trademark owner may bring a trademark infringement claim.

Sweetgreen is a trendy salad chain that debuted a “Chipotle Chicken Burrito Bowl” as a new menu item. Chipotle, the popular Mexican food chain, allegedly sent Sweetgreen a cease-and-desist letter before filing the lawsuit and demanded that Sweetgreen remove the word “chipotle” from the name. Sweetgreen apparently did not respond, and Chipotle moved forward with its trademark infringement claim.

Just days after the “Chipotle Chicken Burrito Bowl” debuted on Sweetgreen’s menu, Chipotle filed suit in a California federal court. The company alleged that Sweetgreen’s menu item infringed on its trademark. Specifically, Chipotle was claiming likelihood of confusion among customers. The lawsuit was resolved quickly. Sweetgreen renamed the new dish “Chicken + Chipotle Pepper Bowl.” The name rebrand allowed Sweetgreen to keep the item on its menu.

Elements and Defenses to a Trademark Infringement Claim

If the lawsuit had proceeded, Chipotle would have had to demonstrate the following elements to prove infringement:

(1) showing that it had a valid trademark;

(2) showing that Sweetgreen had used the trademark in commerce; and

(3) showing the likelihood of confusion of the trademark based on Sweetgreen’s use.

Each of these elements is necessary to support a trademark infringement claim.

Sweetgreen likely would have raised certain defenses, such as:
Descriptive fair use. This is the good faith use of a trademark for its primary, descriptive meaning (chipotle as a smoked, dried jalapeño pepper) rather than its secondary meaning (Chipotle as the fast-casual restaurant).

After the trademark dispute lawsuit was reported, Sweetgreen’s stock dipped 6%. This hit shows  the impact that intellectual property and disputes can have on a business. Not only does intellectual property play a role in a company’s ability to carve out a space in the marketplace and generate revenue, but it is also critical in the eventual sale of a business.

How to Protect Your Business’ Intellectual Property

To protect your business’ trademarks, be sure to choose a unique trademark that is not similar to an existing trademark. Running a trademark search through the U.S. Patent and Trademark Office (USPTO) can help with that decision. Then, the business should complete its own federal trademark registration through the USPTO.

Businesses should regularly monitor for infringement of their registered mark and take prompt action to address it. If your business is seeking to protect its intellectual property or defend against a trademark dispute, or other intellectual property theft or infringement, we can help.

BFV Perspectives, Corporate Matters, Georgia Business Disputes, Noncompete & Trade Secrets, | Apr 12, 2023
Ashley M. Bowcott
Ashley M. Bowcott

Law is driven by compelling storytelling.  Ashley Bowcott grew up as a writer in a family of legal professionals.