“Food-delivery startup DoorDash has been sued by one of the restaurants that it buys food from, In-N-Out Burger….In-N-Out lawyers make the case that DoorDash is actually violating its trademark rights with its unlicensed delivery business.” [Joe Mullin, Ars Technica]
18 Comments
They haven’t sued Grubhub, as far as I know. What’s the difference?
They may have some kind of deal with Grubhub.
This seems like a fair and meritorious demand by In-N-Out. It’s their product, they don’t want the hassle and bad reputation that would come with delivery. I think this site sometimes jumps the gun on lawsuits: not every lawsuit is frivolous.
Not after they’ve sold it. They have no rights to the food itself at that point. I can sell a used Ford even though I never changed the oil and anyone buying the car might develop a bad impression of Ford. I can even mention Ford’s name when selling it. What I can’t do is pretend I’m actually affiliated with Ford.
I think it really hinges on whether a consumer would actually think the delivery service is affiliated with the restaurant. Since they do use the restaurant’s logo, and were apparently leaving fliers in the restaurant itself, that’s not really farfetched, and they may indeed have a case.
It’s their product until they sell it.
Reposting a perennial:
http://overlawyered.com/2013/04/a-reminder-evergreen-post/
Since it looks as if we’ll have thousands of new readers today, this might be a good time to reprint in slightly updated form an evergreen post that first appeared in 2007:
* When we post on Overlawyered about a real or potential lawsuit, it doesn’t necessarily mean we think the case is without merit. We regularly discuss meritorious cases.
* Not infrequently lawsuits we discuss are well founded on existing law, but that existing law is ill-conceived and deserves to be reconsidered. Or both law and lawsuit may make perfect sense, but the level of damages demanded may be excessive or implausible. Or the combatants on one side or both may pursue dubious tactics and theories. Or the media coverage of the case may have been credulous or one-sided. You get the idea.
* Sometimes it’s not clear what if anything either side did wrong in pursuing a dispute, but the case still stands as a monument to the high cost of resolving things through legal process. A recurring example: the family feud over a legacy that ends by consuming the estate in litigation costs.
* We also discuss a certain number of cases that are just plain interesting: they raise novel or non-obvious legal issues, or they shed light on human nature as it manifests itself in legal disputes. And, yes, it does happen on occasion that I take note of a case without being sure what I myself think of it.
* Finally, the multiple people who have posted content on the site are different people and don’t always agree with each other.
Sorry if this introduces complexity where people were expecting to find simplicity.
The use of the word evergreen in the name of this post suggests to me that someone at Overlawyered is a chess player.
Yes, I did spend my childhood as a serious chess player, but I would have guessed that the figurative use of the noun dates back longer in other contexts, for things like songs.
In-N-Out is a very popular burger chain, and it often has long lines at peak business times. I could see them deciding that they aren’t going to serve delivery customers who will often order twenty or more meals at a time and tie up the production line, interfering with the service for in-store customers (who, if they have a bad experience, will leave and not return.)
It should be relatively easy for a take-out chain to control disruptive large orders (as I believe some do) by specifying that customers with, say, orders above $75 must step aside and wait to order separately while the line serves regular customers. Indeed, this would offer a low-cost and hard-to-prove way of distinguishing between welcome/authorized and unwelcome/unauthorized bulk order middlemen, since those that are unwelcome can simply be served more slowly. But while ordering 20 meals at once might work for tour buses or college football teams, it doesn’t sound to me like the business plan of DoorDash, which seems to emphasize speed and individual service at a premium.
In this case (according to the complaint, which is all the facts to go on) the defendant here is actually counterfeiting plaintiff’s trademarks. Such use of trademarks would unquestionably confuse consumers over whether the delivery was authorized. When consumers get cold, greasy burgers, they will in fact leave poor on-line reviews to In-N-Out; and if they get sick, even if it was due to the transport, I can guarantee that they’ll name In-N-Out in any litigation, and that any PR would concretely hurt In-N-Out. So In-N-Out has excellent reasons, both for the protection of its brand and of consumers, to police its trademarks here.
The article linked to was pejorative in tone, but the legal status of this seems clear (probably one of those pop-legal articles).
I’d say in general trademark law is one of the most rational areas of law there is right now. Cost of litigation tends to be low, most cases are not tried in front of a jury, and it is an area of law that purely by its existence creates enormous economic value.
If you want to complain about trademark, either the Redskins litigation or any of the ad-words litigation seems more worthy of complaining about, but really, as I said, it’s one of the best and most useful areas of law in my personal opinion despite some outliers.
Finally, I’ve been reading this blog for many years and despite Olson’s disclaimer, the vast, vast majority of cases on here discuss clearly improper litigation, and like I said, the tone of the article linked to was pejorative. So the inclusion of the case here in combination with the article would be taken as criticism by most people. I rarely disagree with the the choice of cases in fact, I think my last disagreement was the octogenarian CPR/DNR case.
But while ordering 20 meals at once might work for tour buses or college football teams, it doesn’t sound to me like the business plan of DoorDash, which seems to emphasize speed and individual service at a premium.
I don’t think that’s all of it, though. In-n-Out has a very carefully cultivated brand identity that DoorDash threatens to wreck with what is apparently their use of the In-n-Out logo
and by pretending they are affiliated with the chain. All it takes to ruin that reputation is a small series of screwups by DoorDash in this case, et voila!, 60 years of hard work goes poof. GrubHub I’m guessing is a different situation: we’ll go here, get you your food, we will deliver it to you. No, we are not allied with In-n-Out.
Remember that In-n-Out is a small chain based in SoCal, with all of the stores save for a couple (Vegas, Phoenix?) concentrated in that area. They can’t spread costs out like McDonalds or Burger King.
They’ve expanded as far east as Texas and as far north as Oregon, but have resisted entreaties to come to the East Coast:
http://www.in-n-out.com/locations
Wow- Texas, Utah and Oregon. They really have expanded out.
/something new every day
I assume that In-N-Out will at least obtain the limited remedy of getting DoorDash to make clear both verbally and graphically that it is not affiliated with the burger chain, and I’m not bothered at all by it getting that remedy. My reading was that it is asking for more than just that remedy, and, even if Joe Mullin’s piece was overly dismissive in tone, it remains important and unsettled how far trademark law can be stretched to prohibit the communication of the message “we’re not [Store X], but we’ll do your shopping there.”
In-N-Out is a very popular burger chain, and it often has long lines at peak business times.
Agreed, DD. They’re a license to print money. The In-n-Out near me is perpetually busy. Others I’ve gone past from Ventura and points south, the line is occasionally out the drive and down the street.
I assume that In-N-Out will at least obtain the limited remedy of getting DoorDash to make clear both verbally and graphically that it is not affiliated with the burger chain, and I’m not bothered at all by it getting that remedy.
Oh, certainly, remedy, yes. In-n-Out may be trying to make it absolutely crystal clear that this sort of behavior will not be tolerated, and will be met with overwhelming force. Pour encourager les autres, as it were.
it remains important and unsettled how far trademark law can be stretched to prohibit the communication of the message “we’re not [Store X], but we’ll do your shopping there.”
Mind you, I am definitely not a lawyer, so I can’t know with any certainty. But I think the difference with GrubHub is they aren’t using the trademarks as their own. Just so long as they don’t make the association, In-n-Out isn’t going to say much.
Several commenters have noted that once In-N-Out sells the food, they no longer own it.
I accept the premise but what happens if the food makes someone sick? What happens if DoorDash mishandles the food (warm mayo for example) that causes some one to get ill.
Who is on the hook if the consumer sues?
I think a decent (moral) case can be made that if DoorDash has a group of orders that they send one driver to pick up, pay for and deliver, In-N-Out’s reputation may be harmed by food arriving cold because the driver had 10 other stops before delivery. One of the things In-N-Out prides itself on is that the food is made to order. Nothing burger is cooked until there is a customer for that burger. They believe in and advertise that their food is hot because it is coming off the grill. Does a delivery service hurt that part of quality as well?
Furthermore, if DoorDash owns the food once they buy it, do they have to be licensed to sell food? Do the drivers have to go through food handling courses? (And while I know that the same thing can be said of Domino’s drivers, the difference is that Domino’s is controlling the driver and his training. In-N-Out is not controlling the person who drives for DoorDash.
Oh my gosh….it almost sounds like I am calling for more regulations or laws!!
(I am not,. but only looking at some other issues.)