In-N-Out Burger causes In-N-Out of Business

Despite not having a location in Australia, the popular US fast food business In-N-Out Burger occasionally hosts highly successful one-day-only popup events there that draw eager local foodies and hours of long queues.

Background

In-N-Out Aussie Burger, a Queensland-based company that offers burgers and chips via UberEats, Menulog, and DoorDash home delivery services, received a cease and desist notice from In-N-Out Burger. In-N-Out Burger asked In-N-Out Aussie Burger to stop providing home delivery services, selling hamburgers, chips, and beverages, as well as using any names that are similar to In-N-Out trademark.

The respondents, Rich Asians Pty Ltd and Mr. Puneet Ahori, continued to provide home delivery services for burgers, chips, and beverages but altered the name and logo to “In & Out Aussie Burgers with arrows logo” (shown below) and also used “Over & Out Aussie Burgers”.

In-N-Out Burger sued the respondents in July 2021 and asked for compensation for:

  1. trade mark infringement; and
  2. passing off and misleading or deceptive conduct in contravention of the Australian Consumer Law.

The Respondents did not hire a lawyer to represent them in court.

On March 22, 2022, the parties stated that a settlement had been reached, and the Respondents provided the Court and In-N-Out Burger with the following undertaking:

  • Within 30 days, stop using all variants of the marks Aussie Burger, In-N-Out, In-And-Out, In-N-Out, Over-N-Out, and Over N Out (thereafter, “Aussie Burger Marks”) in connection with burgers and related foods and beverages, or in connection with related restaurant and takeout services;
  • will no longer utilise the Aussie Burger Marks in connection with burgers and related restaurant and takeaway services, as well as associated food and beverages;
  • will not use In-N-Out Burger and any variations of the In-N-out Logo, or any mark that is essentially the same as or confusingly similar to them in connection with the same goods and services;
  • removal of all products, including promotional materials, business cards, written and electronic matter, merchandise, and equipment bearing any of the Aussie Burger Marks, and delivered to In-N-Out Burger’s attorneys for disposal;
  • The “In-N-Out Aussie Burgers” and “In & Out Aussie Burgers” business name registrations must be cancelled within 30 days, along with the URL information including the Instagram page, and the removal of the Aussie Burger Marks from all delivery listings.

Although the Respondents provided the aforementioned undertaking, they failed to follow through on any of them.

On November 22, 2022, an interlocutory application was held in accordance with Rule 39.21 of the Federal Court Rules 2011, and the Court issued an order compelling the Respondents to fulfil the aforementioned undertaking and pay the costs of the interlocutory application.

In-N-Out Burger has already been successful in getting a company to alter its name as a result of a lawsuit. They prevailed in their legal struggle with Sydney’s Down N’ Out Burger, which now operates as Nameless Bar.

Insights of the Case

  • The “Use it or lose it” principle is the foundation for trade mark registration in Australia. A pop-up event held by In-N-Out Burger every few years would satisfy the requirements for trademark usage while also granting commercial exclusivity because it would be a one-day pop-up store. They can assert that the In-N-Out branding has “significant reputation and goodwill” as a result of these pop-up events and the astronomical success of these one-day events. The purpose of these pop-up events is to allow the company to maintain exclusive trade mark rights for its brand even though there isn’t an actual In-N-Out Burger outlet in Australia.
  • How should I respond to a cease and desist letter?

It is advisable to get professional help as soon as possible after receiving a potential infringement notice like a cease and desist letter. Similar to the Respondents, it is unwise to attempt a case defence when they don’t appear to be knowledgeable about the specifics of infringement and passing off. A professional who deals with these issues on a regular basis would likely produce a better outcome for the Respondents.

The Respondents might have been able to settle this privately and without coming to court entirely if they had obtained expert advice sooner. They might have benefited from discussing possibilities with experts in order to keep their business of delivering burgers, chips, and beverages while making some concessions to the brand name without infringing on the rights of another brand or having to shut it down. In the long run, they will have saved a lot of money by hiring an professional to assist them.

If you need assistance with a proposed new brand or have questions about what constitutes trade mark infringement, please get in touch with us at Bookmark IP.

N.B. 1st photo: https://www.perthnow.com.au/local-news/perthnow-central/in-and-out-burger-at-market-grounds-perth-attracts-queues-of-hundreds-of-people-c-7254705

2nd photo: Photo Credit from https://thenewdaily.com.au/finance/finance-news/2021/07/17/in-n-out-burger-australia/