Burger Wars: IN-N-OUT vs
DOWN N’ OUT
Imagine if a food vendor had the foresight to trademark
the word ‘BURGER’ when hamburgers first became popular,
which was at the 1904 St Louis World’s Fair. Today, the
licence fees from burger sales would be astronomical.
These days, ‘BURGER’ is not distinctive enough to be
registered. Instead, trademark wars are fought over copycat
names used as trading names and for menu items, especially
by a new burger business which looks to trade off the
reputation of an existing burger business.
In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd
 FCA 193 (26 February 2020), a decision of the Federal
Court of Australia (Katzmann J) illustrates how one such
burger war was fought and won.
In-N-Out Burgers was founded in 1948 in California. It
has over 300 permanent restaurants in the USA. It provides
“a significant and competitive presence in the US chain
restaurant industry” (according to its Vice-President of
In-N-Out burgers owns word trademarks in Australia:
IN-N-OUT BURGER, ANIMAL STYLE and PROTEIN STYLE, as well as
trademarks with logos.
Its online store was established in 2004 and sells
branded merchandise including T-shirts, caps, key rings, and
similar accessories. It has a Facebook page, an Instagram
page and a Twitter account.
Since 2012, In-N-Out has held eight very popular pop-up
restaurant events in Australia with long queues and burgers
selling out within hours. These were single day events,
promoted on social media, at which In-N-Out sold food and
In June 2015, five months after an In-N-Out pop-up event
in Parramatta in January 2015, the directors of Hashtag
Burgers held a ‘Funk-N-Burgers’ pop-up burger event at the
Lord Gladstone Hotel in Chippendale, promising a ‘Down’N’Out
burger served up ANIMAL STYLE’. They held another
‘Funk-N-Burgers’ pop-up event in January 2016. In June 2016
they announced a “Down-N-Out’ event at the Sir John Young
Hotel on social media in this way:
Hashtag Burgers are bringing In-N-Out inspired
burgers to Sydney’s CBD ... the menu will be similar to
the original In-N-Out, with … secret menu hacks such as
Animal Style and Protein Style … you can find some hints
on the DOWN-N-OUT Facebook page.
Following a visit to the event, In-N-Out’s General
Counsel issued a cease and desist letter to Hashtag Burgers:
… we note that as part of the event you have used the
names ANIMAL STYLE and PROTEIN STYLE, which are our
registered trade marks, and adopting the name
“Down-N-Out” displayed with a yellow arrow sounds and
looks very similar to In-N-Out’s name and logo.
We therefore request you do not use the … trade marks.
We also request you select a different name … that does
not adopt In-N-Out’s name and logo.
Acting on the letter, Hashtag Burgers changed their name
to D#WN N’ OUT and removed the arrow.
In-N-Out trade mark with logo Hashtag mark
June 2016 Hashtag mark new
They grew the business: They set up pop-up restaurants in
Penrith and on the Gold Coast. They opened burger
restaurants at the Sir John Young Hotel, in Liverpool
Street, in Wollongong and in Crows Nest.
In-N-Out commenced legal proceedings to restrain Hashtag
from using its trade marks, and for damages and restraining
orders for misleading and deceptive conduct and for passing
The first claim was for trade mark infringement,
for using a deceptively similar trade mark.
For the purposes of the Trade Marks Act 1995 (s
10) a ‘trade mark is taken to be deceptively similar if it
so nearly resembles that other trade mark that it is likely
to deceive or cause confusion’
The Court formulated the question to be answered as
whether people with imperfect recollections of the
In-N-Out marks might be confused or deceived when coming
across the Down N’ Out marks.
The Court found that:
- The overall impression created by the Down N’ Out
marks is of fast food, particularly burgers, and fast
service, the same impression as the In-N-Out marks.
- The intention of the directors of Hashtag was to
capitalise upon the reputation of In-N-Out; by
similarities in the menus and use of In-N-Out’s terms:
“Animal Style” and “Protein Style”.
- The failure by the directors of Hashtag to produce
documents under discovery indicated that they had
something to hide in terms of documents which might
assist In-N-Out’s case.
- There is both visual and aural similarity between
the marks, particularly the use of ‘N-OUT’
- The changes made to the Down N’ Out trade mark (the
use of an apostrophe, and a hashtag) did not affect the
sound of the mark (when spoken) or materially affect its
- There was a real, tangible danger of confusion.
The second claim was for breach of the Australian
Consumer Law (s 18(1)), for misleading and deceptive
conduct by suggesting an association between In-N-Out and
Down N’ Out, which did not exist.
The Court said that:
to deceive means to mislead into thinking that
In-N-Out is the source of the goods or services carrying
the Down N’ Out mark – that there is a “real risk” that
a number of persons will be caused to wonder or have
reasonable doubt about the matter – which is based on
recollections of people of ordinary intelligence and
memory and the impression they would have on seeing the
Down N’ Out marks.
The Court found that:
- In-N-Out has established that the brand enjoyed a
reputation in Australia, as at the relevant date which
was 26 May 2016, when the Down N’ Out Facebook page was
- The In-N-Out name and brand were known to a
substantial number of people who were its potential
customers, whether from visiting an In-N-Out restaurant
or from hearing about the restaurants and its burgers
(in the media or from the pop-ups in Australia). They
include Australian consumers and visitors to Australia,
particularly visitors from the United States.
- The directors deliberately used significant features
of the In-N-Out marks with the intention of confusing
consumers in order to appropriate part of In-N-Out’s
reputation. They appropriated significant components of
the marks, substituted “DOWN’ for ‘IN’ to evoke an
association with Australia (‘Down Under”), the common
use of the names to describe burgers and burger
restaurants, the use of colours, and by following the
‘In-N-Out’ pop-up events in Australia.
- The changes made to the name (the hashtag, the
apostrophe) made no material difference, and so gave
rise to a ‘hangover effect’, which is that the original
impression is reinforced.
The third claim was for passing off, for
The Court said:
The three essential elements of the tort, often
referred to as “the classical trinity” are the goodwill
or reputation acquired by the claimant in his goods or
services, name or mark; a misrepresentation by the
respondent leading to deception and confusion; and
damage caused by the misrepresentation.
The Court was satisfied that there was passing off by the
same conduct and for the same reasons as the breach of the
Australian Consumer Law.
Justice Katzmann commenced her judgment by asking:
What is the line between inspiration and
appropriation? This is the question at the heart of the
dispute in the present case.
After reviewing the facts and the law, she concluded:
They sailed too close to the wind.
What should Down N’ Out have done? Justice Katzmann
offered this advice:
Down N’ Out appropriated aspects of In-N-Out’s
registered marks in order to capitalise on its
reputation. If this were not their intention, why choose
DOWN-N-OUT? Why not stick with FUNK N BURGERS?
The judgment makes clear that incremental changes made to
an offending mark will not be enough. The trade mark will
continue to infringe because of the potential ‘hangover
effect’. That is, the prospect that previous customers would
recognise and patronise the new premises.
The judgment underscores the value of registering a
distinctive trade mark. Registration opens the door not only
to restraining the use of a deceptive or confusing trade
mark, but also to claims for damages and other orders
available under the Australian Consumer Law and for