In 'N Out Uses A Bullshit Pop-Up Every Five Years Strategy Just To Lock Up Its Australian Trademark

from the pop-up,-pop-down dept

When we recently discussed the rather odd story of the famous burger chain In ‘N Out suing an Australian burger joint over trademark concerns despite having no storefront presence in the country, there was one aspect of it glossed over in the source link and omitted by me that really deserves some fleshing out. You see, like here in America, Australian trademark law has a provision that you actually must be using the mark in question in order to retain it. More specifically, use must be established every five years in order to keep the trademark valid. Given that In ‘N Out operates no storefronts in Australia, readers rightly wondered how it was possible that the company even had a valid trademark to wield in its trademark battle.

The answer to that question is as cynical as it is perverse. It turns out that In ‘N Out turns up so-called “pop-up” storefronts for its chain in Australia and a few other countries every so often, specifically to keep just barely within the trademark law provisions.

In Australia, in particular, trademark laws have a “use it or lose” quality to them. If they are not used within a five-year span of time, companies could lose protection for their names and logos. International businesses, though they may never create a fully running branch overseas, could be vulnerable to someone else taking their ideas in other countries if they apply for a trademark. This would dilute the brand in a whole host of ways. To avoid the misfortune of Burger King, who lost its trademark and had to become Hungry Jack’s, In-N-Out found a workaround to establishing a permanent presence in the Land Down Under by simply hosting pop-ups every so often to use their trademark in the country.

Cynical, as I said, and a serious perversion of the purpose of trademark laws generally. The entire point of trademark protections is to keep customers informed as to the source of goods purchased and the affiliations of the companies from which they purchase them. Remember that the context of this story and the chain’s lawsuit is the existence of a single burger joint calling itself “Down ‘N Out.” While there is clear homage to In ‘N Out, the burger joint does nothing to convince the public that it’s part of the California chain.

So, instead of serving the public good by staving off confusion, what this gaming of Australia’s trademark law does instead is to simply lock up language similar to the In ‘N Out name by maintaining an insultingly limited presence in the country’s market. In ‘N Out does not operate these pop-ups in order to server the Australian market. Rather, they operate them specifically so as to deny that Australian market its sort of business. These pop-ups have, ahem, popped up for years, with no sign of In ‘N Out even considering having any real storefront presence anywhere in the country. Instead, the pop-ups serve only as an excuse to file lawsuits such as it did against Down ‘N Out.

Whatever you might think of In ‘N Out’s actual trademark claim in its lawsuit, that’s truly about as cynical as it gets.

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Companies: in-n-out

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Comments on “In 'N Out Uses A Bullshit Pop-Up Every Five Years Strategy Just To Lock Up Its Australian Trademark”

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37 Comments
Anonymous Coward says:

Fine. New law is needed if Australia really cares about such a thing. I have a feeling this would be something not on many people’s, let alone politician, radar. How big of a problem is this, really? We have a single case of this being, *maybe* a problem, but not really. More like a tempest in a teapot, as far as trademark management goes. In N Out owns the trademark. Burger joint is trading on that trademark even if it’s a homage and In N Out is sitting on the registration. I don’t really see the problem here.

It’s not like Caymus Vineyards filing a trademark infringement against a company that’s not even in its same industry when the Caymus Vineyard’s filing with the USPTO ONLY lists wine as protected by it. That’s a problem with our litigious society, and one the trial lawyers lobbies do their best to perpetuate. I don’t believe the Commonwealth countries have such a culture.

Anonymous Coward says:

Re: Re: Re:

Why shouldn’t they when they’re obviously taking someone else’s reputation and overtly trading on it. That’s the reason trademarks exist. The fact that Down N Out is trading on In N Out’s reputation isn’t even in dispute.

It’s not like McDonald’s is trying to sue a burger joint owned by John McDonald (hypothetically) also called “McDonald’s”, to which the guy should have a right to his own name.

Like I said, if the Australian people have a problem with this, they can enact a new law requiring a continual commercial presence for trademark validity.

Stephen T. Stone (profile) says:

Re: Re: Re: Re:

INO lacks a permanent physical presence in the country; it does a small amount of business once every five years in a temporary location to satisfy a legal requirement for Australian trademark law. If INO has a problem with DNO, establishing a permanent presence in the market would go a long way towards making its case seem like a genuine claim of trademark violation instead of a legal action taken out of spite.

The Wanderer (profile) says:

Re: Re: Re: Re:

Er… no, preventing someone from trading on someone else’s reputation is not the reason why trademarks exist.

Trademarks exist to prevent the customer from being confused about what they’re buying, and who they’re buying from.

As long as the name (et cetera) is sufficiently distinct that a reasonable customer would not be confused about those things (ref. the “moron in a hurry” standard?), it is – or should be – perfectly fine to have a name (et cetera) which is similar enough that customers will recognize it as being a reference.

Eldakka (profile) says:

Re: Re: Ain’t no common law down under you dipshit.

While I understand the post you are replying to is a troll post, I’m not sure if this is a troll post also. As Australia is a common law legal system country, and has common law precedents that trace back to English common law precedents set several hundred years before the British colonisation of Australia, there’s no other way to read:

Ain’t no common law down under you dipshit.

as anything but a troll.

randomjoe (profile) says:

I don’t know, but I think I can understand using “Pop-Ups” to protect your trademark from an imitator cashing in on your reputation in a foreign country on the cheap.

Actually establishing a presence, even if it’s only a few stores, would be better.

Using trademark law against a store when there’s little or no confusion involved is tacky.

Stephen T. Stone (profile) says:

Re: Re:

I think I can understand using "Pop-Ups" to protect your trademark from an imitator cashing in on your reputation in a foreign country on the cheap.

As I asked above: Why should a company with a permanent presence in its place of business relent to a company that only does a small amount of business in that area within a five-year period just for the sake of a name?

Stephen T. Stone (profile) says:

Re: Re: Re: Re:

No, because that would be a blatant and unmistakable attempt to trade off the Rolex name and reputation. Down-N-Out may be an edge case in regards to “homage”, but it is not trying to make itself out to be In-N-Out in any meaningful way. And your reply still does not answer why In-N-Out should have the right to use the five-year "loophole" in Australian trademark law as a cudgel with which it can bludgeon a single restaurant with a permanent presence within the country.

Anonymous Coward says:

Re: Re: Re:2 Re:

And your reply still does not answer why In-N-Out should have the right to use the five-year “loophole” in Australian trademark law as a cudgel with which it can bludgeon a single restaurant with a permanent presence within the country.

Well that’s obvious. It’s because that’s how Australians chose to write and interpret their law.

It’s seems fairly clear that Down-N-Out is a blatant and unmistakable attempt to trade off the In-N-Out name and reputation. If In-N-Out didn’t exist, I’m pretty sure Down-N-Out wouldn’t exist either.

Anonymous Coward says:

Re: Re: Stephen T. Stone, writing at zombie dead 32 months!

Don’t you ever check to see if an “account” is credible?

32 months gone, then suddenly back without mention, bland, supportive of the site = astro-turf.

However, you do YOUR part to make it appear that Techdirt has lots of comments: you often make a sixth or fourth of comments! — Of course, you’re only up to ad hom attack and one-liners, trivial and easy.

Stephen T. Stone (profile) says:

Re: Re: Re: Re:

If you believe the gap in my comment history is anything beyond what it is—which is a gap during which I made comments on the site under either this name or close variations of it such as “S. T. Stone” without entering an email address that could later be verified—or that I am somehow compensated for my posting here on Techdirt, by all means, prove it. If you cannot prove it, you have proven yourself a fool and you can die angry about it.

Anonymous Coward says:

Re: Zombie Report: "randomjoe" crawled out, bland after 32 month

since a one-liner in 2015; 24 total comments, 7 per year, begun 13 Sep 2014.

Resurrecting from 2015 seems to be new pattern. My guess is because BARELY credible — and the Zombie Master doesn’t have any better ones to trot out.

EVEN IF these “accounts” with gaps of years between comments were real persons, they’re not much interested in the site! By all evidence don’t even read it during the gaps!

So the crucial question is WHY keep track of name and password? WHY even have an account? Don’t know that isn’t necessary here?

Just inexplicable without concluding are astro-turfing: “accounts” make the site look attractive instead of declining.

Discuss It (profile) says:

Not sure you can call this Bullshit

Timothy,

With respect, I don’t think one could call BS on this move by In-and-Out. It’s the cards they were dealt.

As for the “Down and out” vs. “In and Out”, there I agree. A “moron in a hurry” woulnd’t confuse the two.

That being said, if you live in an area with In-n-Out and What-A-Burger, there’s simply no question whose burger is better in my opinion. What-A-Burger is the superior product, and not just because I used to babysit the kids of one of their officers.

All the best,
DiscussItLive

Stephen T. Stone (profile) says:

Re: Not sure you can call this Bullshit

In-N-Out decided to use a loophole in Australian trademark law as a way of bullying a single, (theoretically) competing restaurant with a similar name. And as you said, the “moron in a hurry” test would likely fall on the side of Down-N-Out. If a single restaurant with a permanent presence in the country can be bullied into either changing its name or shutting down because a restaurant chain puts up a temporary presence every few years just for the sake of holding onto a trademark, I can and I will call that bullshit.

That One Guy (profile) says:

Re: Re: Re: Spirit of the law vs. Literal text

If the purpose of trademark law is to prevent customer confusion between business that are actually in the market, such that someone isn’t fooled into paying for one thing thinking it was another, one company that is actually in the market having the law used against them by a company that for all intents and purposes isn’t in the market very much strikes me as abusing the law.

They aren’t opening and closing the store in australia because they want to do business there, they are doing it to prevent anyone else from doing business there who might have a similar(or even identical) name as them.

G Thompson (profile) says:

Re: Re: Re:2 Spirit of the law vs. Literal text

The relevant section of the Trade Mark Act 1995 is section 92:

4) An application under subsection (1) or (3) ( non-use application ) may be made on either or both of the following grounds, and on no other grounds:

(a) that, on the day on which the application for the registration of the trade mark was filed, the applicant for registration had no intention in good faith :
(i) to use the trade mark in Australia; or […]
emphasis added

As you can see the operative words are "in good faith". It could be argued that putting together a pop-up every 5 yrs with the only objective to show that they are using the trademark ‘in trade’ could be against the spirit of the legislation and the courts must under our Acts Interpretations Act apply the purpose of the act to any vague notions such as good faith (Note: Aust does not have standard Good faith principles in Commercial obligations)

Especially when the definition of Trademark under the act is:
A trade mark is a sign used, or intended to be used, to distinguish goods or services dealt with or provided in the course of trade by a person from goods or services so dealt with or provided by any other person. [emphasis added]

In fact there are quite clear cases that apply the notion that ‘in good faith’ means you should not use the trademark for unintentional purposes (such as litigation or to bypass the purpose of the Act). Oh and the onus is on the tm holder to prove that they have not unconscionably gone beyond the legislations purpose. And that’s even before the courts look at the equitable principles maybe at play here.

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