Trade mark imitator grilled in open court

The Federal Court of Australia recently handed down its decision in In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd. 

In-N-Out Burgers, Inc (In-N-Out) is a Californian based fast food chain. It is well known and has stores all over the world.

Hashtag Burgers Pty Ltd, a company located in Sydney, created its own fast food brand “Down-N-Out” (DNO), with a menu reminiscent of In-N-Out.

Unsurprisingly, In-N-Out contacted DNO to request that it discontinue use of its brand.    Although DNO made some changes to its branding, it kept the name “Down-N-Out”, albeit with the inclusion of a hashtag “D#wn-N-Out”.

In-N-Out subsequently commenced proceedings against DNO for:

• trade mark infringement; 
• passing off; and
• misleading or deceptive conduct. 

The decision

The Court accepted that “Down-N-Out” and “In-N-Out” can have very different meanings. However, the Court applied the test of “whether people with imperfect recollections of the [In-N-Out] mark might be confused or deceived when coming across the [Down-N-Out] mark".¹

When considering the surrounding circumstances relevant to DNO’s use of the “Down-N-Out” brand, the Court concluded that the “In-N-Out” trade mark had been infringed. Interestingly, the Court relied on evidence of DNO’s intentions in order to infer that deception or confusion was likely to occur. 

On the evidence before the Court, it was clear that:

• DNO was created as a “cheeky” homage to In-N-Out; 
• DNO had previously denied its use of the terms “Animal Style” and “Protein Style” on its menu (which terms are indicative of In-N-Out), at which time it knew those denials were false; and
• DNO had not provided adequate discovery of documents relating to the creation of the “Down-N-Out” brand, which documents (when produced by subpoena) were adverse to DNO’s case. 

The evidence established that DNO “had something to hide”, leading the Court to infer that the public may confuse In-N-Out with Down-N-Out.  

Accordingly, In-N-Out was successful in its trade mark infringement claim (as well as in its passing off and misleading or deceptive conduct claims).

Lavan comment

DNO’s brand “sailed too close to the wind”.²  In paying homage to In-N-Out, it infringed on its registered trade marks. Although there were key differences between the competing marks, the evidence told another story. 

A key takeaway from this case is that correspondence as at the time of creation of a brand may be discoverable in an infringement claim. A Court may look beyond a comparison of the marks in order to determine whether it was the respondent’s intention to mislead.