7 Lessons in Trademarks: Smashburger/In-N-Out Burger Battle Royale

According to recent news reports, fast-food hamburger chain, In-N-Out Burger (“In-N-Out”) has filed a federal lawsuit alleging trademark infringement against Smashburger, another fast-food hamburger chain. The trademark fight is over names for various burgers. The case has an interesting history and provides some useful lessons about trademark procedure and law.

In-N-Out was founded back in the 1940s in California. It has slowly expanded over the years and now has restaurants in six states, mostly in the US south and southwest. Since the 1960s, In-N-Out has held registered trademarks for its sandwiches called “DOUBLE-DOUBLE” and the “TRIPLE TRIPLE.”

Smashburger, by contrast, is only about 10 years old. Smashburger began operating in Denver and has quickly expanded, now operating more than 350 restaurants, including 36 restaurants in California. In July of 2017, in celebration of its 10-year anniversary, Smashburger began selling a sandwich called the “TRIPLE DOUBLE” burger. The “double” and “triple” adjectives are referencing layers of cheese and beef. For example, the DOUBLE DOUBLE is two beef patties and two slices of cheese whereas the TRIPLE DOUBLE is two beef patties and three slices of cheese.

In its lawsuit, In-N-Out claims that TRIPLE DOUBLE infringes on its trademarks because it is likely to confuse and mislead the consuming public. In-N-Out also alleges trademark dilution and unfair competition under federal and California state law.

Lesson One: Lead Time is 9-12 Months for Intent-to-Use Applications

As noted, Smashburger wanted to launch its new menu item as part of its 10-year anniversary. It filed its intent-to-use applications on November 14, 2016 with the U.S. Patent and Trademark Office (“USPTO”). This offers some guidance in terms of lead time; if all goes well, an application might be finalized within nine to 12 months. In particular, the applications were filed November 16th and approved for publication by the Examiner on April 2, 2017.

Lesson Two: Conceptually Weak Marks can be Registered

In general, trademarks can be ranged on a spectrum of distinctiveness. At one end are marks that are entirely generic, without distinctiveness (such as colors). At the other end of the spectrum are marks that are fanciful and inherently distinctive (like “Exxon”). The purpose of a commercial mark is to identify your business as the source of that particular good or service.

In this respect, DOUBLE-DOUBLE and similar marks are somewhere in the middle of the spectrum, leaning towards conceptually weak. There is nothing about the DOUBLE-DOUBLE mark which, in the abstract, would make a typical consumer think “oh, that’s a burger from In-N-Out.”

However, that did not preclude In-N-Out from registering its various marks. AND it did not preclude Smashburger from obtaining a favorable result for “TRIPLE DOUBLE” from the trademark examiner at the USPTO.

Lesson Three: Monitor USPTO Publishings and be Prepared to Oppose

As noted, in this case, the USPTO approved Smashburgers’ applications on April 2, 2017. Smashburger’s application was published in the April 4, 2017 Gazette. See here.

In-N-Out, presumably had/has a trademark monitoring regime that regularly checks the USPTO Gazette and other publicly available databases for similar marks to guard against possible trademark infringements.

In this case, In-N-Out’s monitoring regime discovered Smashburger’s applications for TRIPLE DOUBLE and In-N-Out began an aggressive defense of its trademarks. Normally, the opposition period is 30 days. But, extra time can be obtained, and, based on the dates, In-N-Out asked for extra time. On June 2, 2017, In-N-Out filed its Notice Of Opposition. See Notice here.

Lesson Four: What is Notice of Opposition?

As the name suggests, a trademark opposition is a third-party’s opposition or objection to the registration of your trademark. The Notice of Opposition initiates an administrative proceeding similar to a civil lawsuit filed in federal court. The Notice serves the same function and looks similar to a Complaint. The proceeding is handled by administrative judges working for the Trademark Trial and Appeal Board (“TTAB”). The applicant has an opportunity to respond and file counterclaims. The case proceeds via documentary filings and transcriptions of testimony.

In this case, In-N-Out challenged the Smashburger applications on the grounds that TRIPLE DOUBLE would “…. likely to cause confusion, cause mistake, or deceive …” This is a claim of infringement under the Lanham Act, 15 U.S.C. § 1052(d).

In-N-Out also alleged that “[e]ach of Applicant’s Marks is likely to dilute the distinctive quality of Opposer’s Marks under Section 43(c) of the Lanham Act, as amended, 15 U.S.C. § 1125(c).” This is a claim of trademark dilution. “Dilution” is defined as “the lessening of the capacity of a famous mark to identify and distinguish goods or services, regardless of the presence or absence of (1) competition between the owner of the famous mark and other parties, or (2) likelihood of confusion, mistake or deception.” 15 U.S.C. § 1127.

Lesson Five: Aggressive Response to Aggressive Litigation — Burger Battle Royale

As noted, the applicant must file an Answer to the Notice of Opposition and has the opportunity to file counterclaims. In the case, Smashburger filed an Answer and a counterclaim seeking to invalidate several of In-N-Out’s trademarks on the grounds of abandonment. See here.

Lesson Six: What is Trademark Abandonment?

Under the Lanham Act, a trademark is considered abandoned if “its use has been discontinued with intent not to resume such use.” The Act further provides that “[n]onuse for 3 consecutive years shall be prima facie evidence of abandonment.” 15 U.S.C. § 1127. Note that two elements must be shown: no use and intent not to resume use.

The legal doctrine of abandonment is premised on the concept that trademark rights flow from use in commerce. If a mark owner stops using a mark, the mark falls into the public domain and is free for all to use. That is, “[a]bandonment paves the way for future possession and property in any other person.” McCarthy on Trademarks, § 17:1 (4th ed.2001)

Thus, in this case, if Smashburger successfully proves abandonment, then Smashburger will be free to use In-N-Out’s mark (if it wanted to) and, more importantly, the “confusingly similar” issue will vanish. Smashburger is seeking to cancel In-N-Out’s registrations related to TRIPLE TRIPLE and QUAD QUAD since, as Smasherburger claims, In-N-Out no longer uses the marks.

Lesson Seven: Off to Federal Court

As noted, in late August 2017, In-N-Out filed a lawsuit in federal court. This essentially removed the case from the TTAB. This is not uncommon in Opposition proceedings and the Opposition proceedings before the TTAB will be held in abeyance until resolution of the case in federal court.

Contact Revision Legal

We here at at Revision Legal will be watching the case with interest. Revision Legal offers a wide array of legal services related to intellectual property and business law, including all services related to trademarks. We can be reached by using the form on this page or by calling us at 855-473-8474.

 

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