Just days ago, the famous California burger chain In-N-Out Burger filed a lawsuit against a Witchita, Kansas dry cleaner called In-N-Out Cleaners alleging trademark infringement. A picture is worth a thousand words:
Dozens of commentators on LinkedIn and elsewhere have deemed this a slam dunk case of trademark infringement. But I say not so fast. In it’s complaint, In-N-Out Burger says it received emails and messages from the consuming public saying that – from afar – the Defendant’s logo looked an awful lot like the Plaintiff’s logo. Indeed, some folks alerted In-N-Out Burger to the fact that the Kansas-based dry cleaning company had “stolen it’s logo” and “violated it’s trademark.” But it’s not quite that simple. In-N-Out Burger alleges a variety of claims, but let’s focus specifically on the federal trademark (Lanham Act) claims. Plaintiff states claims for (1) trademark infringement and (2) trademark dilution. These are two separate claims subject to two separate tests.
Claim for Trademark Infringement
First, let’s take trademark infringement claim. There is no question that In-N-Out Burger owns a valid trademark that is strong and particularly valuable. There is no question that In-N-Out Cleaners is playing on that brand. But does that create a slam dunk claim of trademark infringement? No. Not remotely. The key test for trademark infringement is whether the defendant’s use of a particular mark creates a likelihood of confusion. As any experienced trademark litigator can tell you, the test for likelihood of confusion contains eight factors. There’s no need to cover all of them. For our purposes, the most relevant factors are (1) the similarities of the goods and services involved (2) evidence of actual confusion (3) physical proximity and (4) liklihood of product line expansion. Let’s walk through these and apply them to the instant case.
- Similarity of Goods or Services: This is a non-starter. In-N-Out Burger sells, well, burgers. The Defendant is a dry cleaner. Defendant wins this factor.
- Actual Confusion: A customer looking up the street and mistaking the Defendant’s sign for that of In-N-Out Burger doesn’t carry the day. Likewise, prospective customers being disappointed to learn that there’s not a new In-N-Out Burger in Wichita, Kansas does not get it done. The question is: Are consumers actually confused? Call me a skeptic. The consumers mentioned in the complaint weren’t confused either — from a far, perhaps. But from up close? No. They clearly recognized that the Defendant was not a burger joint but a dry cleaner. Let’s call it a draw. Maybe In-N-Out Burger can structure a compelling survey that will show actual consumer confusion. But I think it will be tough.
- Physical Proximity: The Defendant is located in Kansas. There are no In-N-Out Burger locations in Kansas. The closest In-N-Out Burger is either in Texas or Utah. Again, this factor goes to the Defendant.
- Product Line Expansion: Although In-N-Out Burger makes t-shirts and sponsors race cars, I find it highly unlikely that they are planning to expand into the dry cleaning business. Again, point for the Defendant.
That’s the framework for trademark infringement. And in my view, In-N-Out Burger loses the infringement claim. But the claim for trademark dilution is a closer call.
Claim for Trademark Dilution
In addition to trademark infringement, the Lanham Act also creates a cause of action for trademark dilution. Trademark dilution, like infringement, has it’s own multi-element test. But for our purposes, the central question is this: Does the defendant’s use of the mark impair the distinctiveness of the famous brand? In other words, does In-N-Out Cleaner’s brand somehow dilute or harm In-N-Out Burger’s brand? In spite of all these supposed trademark and IP lawyers on LinkedIn calling this a slam dunk, the answer is not clear.
I’ll put it this way: The Defendant in this case is a small, Kansas-based dry cleaner. Probably very much a mom and pop shop. I highly doubt they have the resources to fight a company like In-N-Out Burger. They probably will fold, change their name and agree to an injunction. But if the Defendant had the resources to fight this? We’d have a ballgame. If the Court applied federal law faithfully, In-N-Out Burger would not get an injunction. There’s no immediate and irreparable harm. That means they’d have to fight this thing to the bitter end. A good trademark defense lawyer is going to rip their consumer confusion survey to shreds. Beyond that, proving dilution or harm to the In-N-Out Brand? Not a home run by any means. We’ll have to wait and see.
The case is In-N-Out-Burger v. In-N-Out-Cleaners and Phap Van Truong, 17-cv-02074 (D. Kan. 2017).