Can Two Restaurants in Different States Use the Same Name Without Conflict?

The territorial limits of trademark rights are an issue faced in every industry, but few industries face this issue more acutely than the restaurant and hospitality industry due to the ubiquity of restaurants and the typically local nature of the services offered (most of us aren’t flying across the country for dinner, after all). As independent restaurants expand regionally and national chains look for available names, these conflicts arise more often than most owners realize. A brand that starts local can suddenly reach new audiences through franchising, delivery apps, or even just social media visibility. That growth can quickly push two “local” brands into the same virtual neighborhood.

Common Law vs. Federal Trademark Protection

The very short answer to the question is that trademark rights are geographic in scope. Common law rights accrue in the geographic market in which you are actually offering your goods or services. Federal trademark registration grants your mark nationwide protection. For more on this you can read my prior blog entry, What is “common law” trademark protection and how does it work?

But there is a common factual scenario that is practically challenging in the restaurant industry. What happens when a mom-and-pop restaurant is the first to use a trademark, but then a far-away chain or big-budget corporate restaurant starts using the same name and gets a federal trademark registration? Or more complicated, what if two restaurants are organically opening and growing with the same name in two different geographic markets. This is exactly what happened in the “BURGER KING” trademark in Burger King of Fla., Inc. v. Hoots, 403 F.2d 904, 906 (7th Cir. 1968).

The Burger King Case: A Lesson in Territorial Trademark Conflicts

The facts of the “BURGER KING” case present a surprisingly common and interesting fact pattern. 

• Burger King of Florida, Inc. (who most of us think of as “BURGER KING”) opened its first “BURGER KING” restaurant in Jacksonville, Florida in 1953. 
• By 1957, they had thirty-eight “BURGER KING” restaurants across the south, but had not reached Illinois. 
• In 1957, Gene and Betty Hoots opened a “BURGER KING” restaurant in Mattoon, Illinois, and registered “BURGER KING” under the Illinois Trade Mark Act in 1959. 
• By 1961, Burger King of Florida, Inc. opened its first “BURGER KING” restaurant in Skokie, Illinois 
• Also in 1961, Burger King of Florida, Inc. received a Federal Trademark Registration for “BURGER KING”. 
• In 1962, the Hoots opened a second “BURGER KING”, now in Charleston, Illinois. 
• Litigation followed. 

The Seventh Circuit allowed the Hoots to keep using “BURGER KING” within a twenty-mile radius of Mattoon, Illinois, and barred Burger King of Florida, Inc. from operating under that name in that zone. Outside that area, Burger King of Florida, Inc. held nationwide rights, and the Hoots’ expansion to Charleston infringed those rights.

In essence, the Hoots and Burger King of Florida, Inc. were building parallel common law trademark rights in different geographic markets. When Burger King of Florida, Inc. received a federal trademark registration, they froze the geographic scope of the Hoots’s geographic common law rights and effectively captured all of the rest of the United States. 

This case could have gone another way if the Hoots had been the first to use “BURGER KING” anywhere, not just in Illinois. If that were the case, they might have been able to challenge Burger King of Florida, Inc.’s federal trademark registration based on likelihood of confusion and priority of use. They could even, potentially, have turned the tables on Burger King of Florida, Inc. by getting their own federal trademark registration. But then, Burger King of Florida, Inc. would likely have had very broad defensive common law rights in place throughout the geographic scope of the area in which they’d already opened restaurants – a huge swath of the country and virtually all of the South and parts of the Midwest stretching from Florida to Illinois.

Contact Us

To discuss a strategy for expanding and protecting your product line names and trademarks, contact Jimerson Birr.