Is this any way to celebrate National Burrito Day?
April 6 marks the day when people honor this particular culinary delight, but instead of celebrating, two fast food chains are locked in a legal burrito battle.
Chipotle Mexican Grill (CMG) filed a lawsuit against Sweetgreen (SG) alleging that the salad restaurant chain operator's "Chipotle Chicken Burrito Bowl" infringes on its trademark and is confusing customers.
The lawsuit was filed April 4 in the U.S. District Court for the Southern District of California and charges Sweetgreen with a "willingness to infringe Chipotle’s intellectual property, confuse and/or deceive consumers, and wrongfully profit from and trade off of Chipotle’s valuable goodwill and reputation."
Chipotle maintained that its chicken burrito bowls are among its most popular items.
Chipotle Suggests a Name Change
The company charged that Sweetgreen advertises the bowl using the word "Chipotle" in the same font and style as the Mexican-food chain and uses a background with Chipotle's trademarked "Adobo Red" color.
Chipotle asked the court for an order blocking Sweetgreen from using the "Chipotle" name and an unspecified amount of money damages.
Sweetgreen told Reuters that it was aware of the lawsuit and does not comment on pending litigation.
The Los Angeles-based company's stock tumbled south of the border on April 5, but was moving into the green at last check.
Sweetgreen introduced its the chicken burrito bowl on March 30, saying in a news release that "the new item marks the latest iteration of sweetgreen’s menu innovation strategy, as the brand evolves beyond salads to introduce a bowl without any green."
The company continued infringing despite a cease-and-desist letter and phone call from Chipotle's legal department, according to the lawsuit.
Chipotle said that it suggested Sweetgreen re-name its menu item using “chipotle” in lower-case, in a textual sentence, to accurately describe ingredients of its menu item, such as “. . . with chipotle flavoring.”
Case Has 'Meat on the Bone'
The lawsuit said Chipotle suggested that “chicken bowl with chipotle” may be a more appropriate name.
Prof. Stephen Zagor, a business professor at Columbia Business School, said Chipotle appears to be “challenging the terminology, the font of the print, the actual way that it’s listed rather than the item itself.”
“I think that it has real meat on the bone, to use a restaurant term—or should I say ‘chicken on the bone'?” he said. “It’s very, very difficult to protect your recipe, but this is something that would be provable in court.”
Trademark infringement lawsuits that advance to trial are estimated to cost between $375,000 to $2 million per case, according to Thomson Reuters Legal Solutions.
While trademark infringement proceedings vary from jurisdiction to jurisdiction, litigation typically takes at least a year, and often longer, Thomson Reuters said.
"It's a battle where every company is trying to protect their presence in the market," Zagor said. "And when you have an in-house counsel or you have a legal team that's basically poised and ready to fight, the return on their on aggravation is probably pretty good."
