Shots Fired At The Colonel In Australia’s Burger Wars

You might have heard that last year, Hungry Jack’s (Burger King in Australia) released their take on the Big Mac, a burger which they cheekily called the Big Jack.

Hungry Jacks described their burger as “Two flame-grilled 100 per cent Aussie beef patties, topped with melted cheese, special sauce, fresh lettuce, pickles and onions on a toasted sesame seed bun” – a blatant take on McDonalds “Two all-beef patties, special sauce …” jingle.

Unsurprisingly, McDonalds wasn’t “Lovin’ It”, and initiated legal action against Hungry Jacks, which is ongoing. The Big Jack has since been removed from menus, but regardless of the outcome, Hungry Jack’s has seen great publicity from its move.

Fast forward a year, and Hungry Jack’s is now launching a fried chicken burger, called the Jack’s Fried Chicken (JFC), clearly moving aim to another of Australia’s largest fast-food chains, KFC.

The Law in Australia

Trade marks that poke fun at others are not considered differently in Australia to any other trade marks, and the primary considerations are whether there is trade mark infringement, or whether the conduct is misleading or deceptive conduct and/or passing off.

Trade Mark Infringement

Section 120 of the Trade Marks Act 1995 (Cth) (“TM Act”) defines the circumstances which constitute an infringement of a registered trade mark. It relevantly provides that:

1. A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to, the trade mark in relation to goods or services in respect of which the trade mark is registered.
2. A person infringes a registered trade mark if the person uses as a trade mark a sign that is substantially identical with, or deceptively similar to the trade mark in relation to:
   • goods of the same description as that of goods (registered goods) in respect of which the trade mark is registered; or
   • services that are closely related to registered goods; or
   • services of the same description as that of services (registered services) in respect of which the trade mark is registered; or
   • goods that are closely related to registered services.

However, the person is not taken to have infringed the trade mark if the person establishes that using the sign as the person did is not likely to deceive or cause confusion.

In short, the two main considerations are 1) is the trade mark substantially identical with, or deceptively similar to the registered trade mark, and 2) are the goods or services of the same description, or closely related to registered goods or services of the registered trade mark.

In the examples above, the goods are the same (hamburgers), so the question boils down to whether the Hungry Jack’s trade mark is substantially identical with, or deceptively similar to the registered trade mark.

The deceptive similarity is complex and considers the impression left by the marks. The look and sound of the trade marks are considered, as are the goods to which the marks are to be applied, and the type of customer who is likely to purchase them.

Passing Off / Misleading and Deceptive Conduct

Section 18 of the COMPETITION AND CONSUMER ACT 2010 – SCHEDULE 2 The Australian Consumer Law (the ACL) states:

• A person must not, in trade or commerce, engage in conduct that is misleading or deceptive or is likely to mislead or deceive.

Section 29 of the ACL relates to false or misleading representations about goods or services, which includes misleading representations about approvals and affiliations.

Conduct is misleading or deceptive if it leads or is capable of leading a not insignificant number of people into error (Parkdale Custom Built Furniture Pty Ltd v Puxu Pty Ltd [1982] HCA 44; (1982) 149 CLR 191).

Well, is what Hungry Jack’s doing OK?

No decision has been handed down, and given that Hungry Jack’s have stopped selling “Big Jack” burgers, the dispute with McDonalds may even fizzle out. We are not aware of any legal dispute with KFC at this stage, but it is still early days. Thankfully, however, this is not the first case of its kind so we do have some legal precedent.

Last year, it was found that a Sydney hamburger business calling itself “Down-N-Out” infringed registered trade marks for “In-N-Out” (a cult US burger chain) and constituted misleading and deceptive conduct and passing off. (In-N-Out Burgers, Inc v Hashtag Burgers Pty Ltd [2020] FCA 193).

While the names “Down-N-Out” and “In-N-Out” are quite different in their normal meanings, it was found that the guys at Down-N-Out “sought to attract potential customers by having them wonder whether DOWN-N-OUT was, indeed, IN-N-OUT BURGER, perhaps a down-market or down-under version, or, at least, that the two were connected or allied in some way”.

As stated by Katzmann J, “They sailed too close to the wind”.

As such, you need to be very careful when playing with a competitors branding, even if you believe that your changes are sufficient to avoid confusion.

Unlike the In-N-Out case, what is likely to work in Hungry Jack’s favour here, however, is that McDonalds and KFC are among the largest fast-food chains in Australia, and their products are very well known.

As odd as it sounds, this may actually work against McDonalds and KFC, as consumers are probably less likely to be confused about their products.

Key Takeaways

While it may be tempting to follow Hungry Jack’s lead and have a poke at your competitor’s branding, doing so is associated with significant risk.

While you may believe that you are on the right side of the law, there is a significant grey area – which the founders of Down-N-Out Burgers found out the hard way.

Before adopting a trade mark using any aspects from one of your competitors, we strongly suggest obtaining specific legal advice.

Please contact us at Kings today if you want to know if your trade mark might be “sailing too close to the wind”!