Trademarks: Chipotle v. Sweetgreen
Chipotle and Sweetgreen recently went to battle over Sweetgreen’s new burrito bowl, the “Chipotle Chicken Burrito Bowl.” Chipotle Mexican Grill claims that the naming of this burrito bowl by Sweetgreen infringes on Chipotle’s “chipotle” trademarks.
I'm not so sure about Chipotle's claim, but Sweetgreen was quick to surrender, agreeing to promptly change the name of its new burrito bowl.
Does Sweetgreen’s Chipotle Chicken Burrito Bowl Infringe on Chipotle’s Trademark?
We won’t find out anytime soon, because Sweetgreen backed down from the litigation and agreed to change the name to “Chicken + Chipotle Pepper Bowl.” This makes it exceedingly clear that the word "chipotle" refers to the pepper, not the rival food chain, in case that wasn't already obvious inside of the Sweetgreen location.
Sweetgreen was likely responding to its rapidly declining stock price after the announcement of the lawsuit. Executives were not able to hold the line against public market investors spooked by the lawsuit, albeit overly spooked in my opinion.
If the case had gone forward, and a judge had decided the question of infringement, it could have gone either way.
What are the limits of Chipotle’s trademarks?
Although it’s true that Chipotle has many registered trademarks related to the word chipotle, there are limits to those trademarks.
For example, if you are simply selling a Mexican-style food product that uses the pepper chipotle and you describe the product with the word chipotle, that is not necessarily an infringement of Chipotle Mexican Grill’s trademarks covering the word chipotle.
Remember, you can’t use trademarks to block a generic description of something. Most Mexican-style restaurants use the pepper chipotle, and they don't need to hide that fact under trademark law.
Therefore, you cannot completely remove a common word like chipotle from all marketing materials except those of your own company. However, you can still use trademarks to block usages of a common word like chipotle to the extent such usages are likely to cause consumer confusion.
What are the powers of Chipotle’s trademarks?
Chipotle has the power under trademark law to block branding that is so similar to Chipotle’s own trademarked branding that such branding is likely to cause genuine confusion between the two brands.
In other words, is any reasonable person really going to walk into Sweetgreen and think that Sweetgreen’s Chipotle Chicken Burrito Bowl is somehow related to Chipotle Mexican Grill? If the answer is yes, then there may have been an infringement of Chipotle's trademarks.
What would a jury have decided? We’ll never know in this exact case, but its possible Chipotle’s trademarks will be tested again soon.
The Bottom Line:
Litigation is very much affected by the stock market, not just the other way around.
In this case, Sweetgreen executives may have known that the lawsuit against their company was potentially bogus and worth fighting, but they did not fight it.
Why not? Because short term-ism is rampant in publicly traded companies. Sweetgreen executives have their back against the wall after poor performance post-COVID. Investors are pissed. Sweetgreen executives don’t have the political corporate capital to fight this one out over a potential multi-year timeline.
As a result, Chipotle smelled blood in the water and bullied Sweetgreen into an easy submission.
Adam Yohanan represents entrepreneurs, investors, freelancers, startups, small businesses, artists, and entertainers in a wide variety of transactional and regulatory matters, with an emphasis on complex commercial contracts, business formations, corporate governance, M&A, finance, intellectual property, and entertainment law. His office can be reached at 212-859-5041.
This guide is meant for educational and informational purposes only and should not be considered legal advice. It is essential to consult with an attorney or other advisors regarding all legal and other important matters.
