In-N-Out Sues Australian Burger Joint, Despite Having No Restaurants In The Country

from the burgers-everywhere dept

Fri, Apr 13th 2018 3:58pm — Timothy Geigner

Whenever companies and brands begin behaving badly when it comes to enforcing their trademarks, one common reaction from outsiders is "why?" The reason for that singular question can vary, whether it stems from a lack of true infringement taking place to the seemingly harmless nature of use in dispute to everywhere in between. But perhaps there is no better example of a trademark dispute inducing a "Why?" than in the news that In-N-Out is suing an Australian burger company without doing any real or regular business on that entire continent.

Californian burger chain In-N-Out has no presence in Australia. Or anywhere much further than the U.S. west coast and Texas, really.

That hasn't stopped In-N-Out from suing Sydney-based restaurant Down N' Out, which opened in 2016 and served burgers that were a tribute to the cult chain. As reported by the Sydney Morning Herald, In-N-Out claimed the Australian restaurant infringes on its trademark and engaged in misleading or deceptive conduct by using the Down N' Out name and logo.

Ok, let's highlight this just so nobody can accuse us of being unclear on the point: Down N' Out is clearly referencing and paying homage to In-N-Out, the famous California burger chain. In-N-Out also claims that all of this amounts to Down N' Out trying to pass itself off as being related to the California company. Even if the latter were true, which I doubt is the case, the fact remains that In-N-Out has barely done any business on the entire Australian continent. Despite this, the chain argues that it has "substantial goodwill" in Australia. How that would be, other than by reputation in the media, is anyone's guess.

Despite that, In-N-Out is demanding the Australian company change its name and hand over a bunch of money.

Legal proceedings were launched in Australia's Federal Court in October last year, and In-N-Out has until June to submit evidence to support its claims. In-N-Out wants Down N' Out to stop using the brand, and to pay damages or hand over profits made while using the name.

Again, why? This is dumb, and it's a terrible use of legal funds to wage trademark war on a country in which In-N-Out has no storefront. There's no threat here, because the company isn't operating in that market. All we are left with is our singular question: why?

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Filed Under: australia, trademark
Companies: in-n-out

27 Comments

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Anonymous Coward, 13 Apr 2018 @ 4:44pm

All we are left with is our singular question: why?
Money
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rorybaust (profile), 13 Apr 2018 @ 4:50pm

All we are left with is our singular question Why
Greed pure and simple , and a funny thing just happened to their reputation they ruined it for me one less potential customer
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That Anonymous Coward (profile), 13 Apr 2018 @ 5:55pm

Lawyers... making everything shitty.
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Pseudonym, 13 Apr 2018 @ 7:15pm

Re: All we are left with is our singular question: why?
Because they want to expand into Australia, but not yet.

I can pretty much guarantee that if In-N-Out pursues this, the judge will insist that they hand over a bunch of money to a trust in Australia which can be taken if they lose. Unlike some countries, Australian courts know they have no jurisdiction over assets which aren't subject to Australian law (unless there's a treaty), so they are going to insist on some assets being present first.
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Anonymous Coward, 13 Apr 2018 @ 8:53pm

really this is silly
Down-n-out, In-n-Out... they should just cut to the chase, join forces and sue the real villain- the Cum 'n Go.
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Anonymous Coward, 13 Apr 2018 @ 9:25pm

keeping options open via a pre-emptive strike
Just in case they might ever decide to open up shop in Australia, perhaps years from now when that company is bigger and more able to fight back.
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Anonymous Coward, 13 Apr 2018 @ 10:33pm

I'm curious how trademarks and copyright work in Australia. If you are the first presence using a name in a country, I would think that it would not be possible for a business that doesn't even exist in Australia to do something like this. In Germany, the Ford Mustang was sold as the "Ford T5" because an existing business in Germany owned the rights to use the Mustang trademark in Germany. In this case Ford would have no right to sue for infringement and more than the company in Germany (I'm writing this from memory and don't remember the name) would have to sue the Ford motor Company for using the name in the USA.
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Anonymous Coward, 14 Apr 2018 @ 12:35am

Re:
If you have a presence and precedent in your name here, you are generally the one who wins. Just because you may be a big company somewhere else (say USA) doesn't mean that the courts will give you an easy win.
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Anonymous Coward, 14 Apr 2018 @ 1:26am

Hey Lynsi
I'm perplexed. What about Leviticus 19:28?
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Daydream, 14 Apr 2018 @ 4:00am

I'm confused; if In-N-Out is a franchise, and this Down N' Out wants to be an In-N-Out restaurant, why not just talk things out and license Down N' Out to use their symbols and brands and whatnot?
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David, 14 Apr 2018 @ 4:46am

Why, you ask?

the fact remains that In-N-Out has barely done any business on the entire Australian continent. Despite this, the chain argues that it has "substantial goodwill" in Australia.

Well, obviously they don't currently have the means to expand to Australia but a distracting substantial goodwill. So they get rid of the latter.

It's like ruining a clock or relationship for good: you do it for peace of mind. At least afterwards you know that there is nothing to salvage any more and that it is definitely and terminally finished.

You can tell your shareholders "no point worrying about it any more".
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AnonCow, 14 Apr 2018 @ 5:44am

If you were In-n-Out's legal counsel, would you rather save them a few bucks and let this slide, knowing that at some point your business might expand to Australia or the knock-off company is hugely successful in Australia so it actually shows up on the radar of your execs and then you have to explain why you didn't kill it in the crib.

This is just smart lawyering.
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AnonCow, 14 Apr 2018 @ 5:49am

Re:
There are operational requirements and costs to running a franchised business.

For their bottom line, it makes more sense to franchise in the United States because they incur very little incremental cost.

Starting a new franchise in a foreign country would have relatively high incremental costs compared to a new domestic franchisee.

I would think that a franchise business would want to saturate their domestic market before spending the money and building out the resources to support an international expansion. And, if they did expand internationally, I doubt that Australia would be their first market of choice.
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Moron, 14 Apr 2018 @ 7:07am

I'm in a hurry
Damn! I just purchased tickets and Now I find out!!!!
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DNY (profile), 14 Apr 2018 @ 7:17am

Why? Rent seeking
The legal department at In-N-Out seems to have noticed that Australia has allowed copyright succcesful claims against transformative homages to songs (the flute riff on Waltzing Matilda in Men at Work's Down Under) with monetary damages,and figured they could apply the same "principle" in the trademark domain to get a bucket of money for very little work.
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Anonymous Coward, 14 Apr 2018 @ 10:33am

Response to: AnonCow on Apr 14th, 2018 @ 5:44am
Maybe smart lawyering but terrible business decision. This store is cheap advertising and they want to bring the In-N-Out experience to Australians. These lawyers are forcing them to stop and pay damages on the prospect of opening a store in Australia. An official store will have to fight the negative press and a competing burger chain.

Instead, they can work out an agreement now with backdoors written into it should anything fall through. A smart lawyer should be able to fight any contract.
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Anonymous Coward, 14 Apr 2018 @ 1:07pm

What we SHOULD be asking here is why in-and-out burger hasn't expanded further than it is.

And the answer is....States with higher hygiene regulation.

In-and-out burger is also not allowed to do "business as usual" in the UK or Europe because the food it supplies and the way it supplies it wouldn't meet regulations.

Make of that what you will.
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Ryan (profile), 14 Apr 2018 @ 2:14pm

This could be the why
When Burger King moved to expand its operations into Australia, it found that its business name was already trademarked by a takeaway food shop in Adelaide.[3] As a result, Burger King provided the Australian franchisee, Jack Cowin, with a list of possible alternative names derived from pre-existing trademarks already registered by Burger King and its then corporate parent Pillsbury that could be used to name the Australian restaurants. Cowin selected the "Hungry Jack" brand name, one of Pillsbury's U.S. pancake mixture products, and slightly changed the name to a possessive form by adding an apostrophe and "s" to form the new name "Hungry Jack's".[4] The first Australian franchise of Burger King Corporation was established in Innaloo, Perth on 18 April 1971, under the auspices of Cowin's new company Hungry Jack's Pty Ltd.[5] By the end of its first decade of operation, Hungry Jack's had expanded to 26 stores in three states. In October 1981, the company opened its first New South Wales store in Sydney's CBD on the corner of Liverpool and George Street. In 1986, the chain entered Victoria by purchasing 11 stores from the ailing Wendy's Hamburger chain, later converting them to Hungry Jack's.[6]
https://en.wikipedia.org/wiki/Hungry_Jack%27s#History_of_"Burger_King"_in_Australia
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Anonymous Coward, 14 Apr 2018 @ 2:53pm

Damages?
IANAL, but generally Australia doesn't have punitive damages. In n out may win, but their best upside is probably to spend a lot of money to get Down n out to change their name and any aspects that may have customer confusion.

Given that no one will be likely to confuse the two in such a way that costs In n out money, damages are likely to end in a very round, zero digit figure. This is because the following never happens: "Hang on! I'm in Down n out in Sydney? I thought I was in In n out in California!"
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DiscontentedMajority (profile), 15 Apr 2018 @ 7:45am

Re:
In-N-Out is not a franchise business. All of their restaurants are owned by the same company which is in turn owned by the same family.
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Anonymous Coward, 15 Apr 2018 @ 11:00am

While Down N' Out might be an homage to In-N-Out this is by no means clear. The amount of information given in the article is way too little to actually make this determination. I'm not going to take a reporter from Mashable's word on the subject without evidence backing it up.

Simply naming a restaurant something similar when it's halfway around the world and also serving burgers is not enough to prove a claim that copying is taking place.
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Pseudonym, 16 Apr 2018 @ 2:38am

Re: Re:
Three actual examples: Burger King, a fashion designer named Katie Perry, and actor/comedian Yahoo Serious.
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me, 16 Apr 2018 @ 7:43am

Sadder still
Is that In N Out is such an enterprise it makes Mcdonalds Food seem good (It isn't)
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Mason Wheeler (profile), 16 Apr 2018 @ 8:49am

Californian burger chain In-N-Out has no presence in Australia. Or anywhere much further than the U.S. west coast and Texas, really.

I've seen them in Utah as well.
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harbingerofdoom (profile), 16 Apr 2018 @ 1:01pm

Re:
i looked at down n out burgers in australia. there is absolutely nothing that remotely reminds me of in n out at all there. personally, i cant even see this as good lawyering...
at best this is flat out bullying based ONLY on the name down n out being somewhat similar. at worst this is just pure stupidity.

go look em up yourselves:
http://www.downnout.com.au/
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harbingerofdoom (profile), 16 Apr 2018 @ 1:04pm

Re: Sadder still
i go to both frequently enough to say this is complete b.s.

but thanks for trying?
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harbingerofdoom (profile), 16 Apr 2018 @ 1:06pm

Re:
what i will make of it is that you have offered nothing to back up what you're saying.

please do so and i will consider your comments with an open mind. until then, its coming across as typical anti corporate mudslinging that usually turns out to be inaccurate.
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