Federal Court decision: In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd  FCA 193 (26 February 2020)
Final injunctions were made in this Federal Court case a week or so ago, but the principal judgment from February commences with a pithy summary of what this case is about: “What is the line between inspiration and appropriation? That is the question at the heart of the dispute in the present case.”
The well-known (even in Australia, it can now be confirmed) American hamburger chain “In-N-Out” took action against a Sydney-based hamburger start-up named “Down-N-Out” which had styled itself as a “Down Under” variation of the original. Was this mere flattery, or suggesting there is a southern hemisphere connection or approval? In-N-Out has registered trade marks in Australia.
This case is a good example of trade mark infringement by “deceptive similarity” rather than the side-by-side comparison for “substantially identical” infringements. Trade mark infringement was established on the basis that the infringing name and logos are likely to deceive or cause confusion – some people with an “imperfect recollection” off the In-N-Out trade marks may be “caused to wonder” whether Down-N-Out was some way related.
The Down-N-Out brand was also found to constitute misleading and deceptive conduct under the Australian consumer law, and the (mostly co-extensive) tort of passing off, the court acknowledging that even before the arrival of the Internet, the law already recognised that the reputation or goodwill of an overseas business could exist in Australia.
- In branding, flattery can quickly become liability creating imitation.
- A business not operating in Australia can still have a reputation in Australia that is capable of protection. This is all the more so in a digitally connected world, where people (used to) travel frequently and brands trade online globally.
- When setting up branding and identity for a new business, do your brand clearance checks and research globally as well as locally.