Juicy Trademark Dispute Over SMASHBURGER

Icon Burger Development Company, LLC (“Icon”), the owner of the burger chain “Smashburger,” filed a declaratory judgment action in U.S. District Court for the Eastern District of Kentucky against Dairy Cheer Stores Inc. (“Dairy Cheer”), the owner of several “Dairy Cheer” restaurants in Kentucky. See Icon Burger Development Company, LLC v. Dairy Cheer Stores Inc., Case No. 10-cv-00345 (E.D. Ky. Filed September 29, 2010). A copy of the complaint can be downloaded here (via Courthousenews.com).

The dispute centers around the name SMASHBURGER. Icon began its SMASHBURGER restaurant chain in June 2007 and now has locations in major urban cities in 16 states (including right here in Las Vegas). Icon holds trademark registrations for the SMASHBURGER word mark and design mark (pictured above) in connection with restaurant services.

Dairy Cheer operates four soft-serve ice cream stands/fast food restaurants in the State of Kentucky under the name “Dairy Cheer” – the name came from the fact that the first restaurant opened by Dairy Cheer was a former “Dairy Queen” restaurant that was rebranded “Dairy Queen.” Specifically, Dairy Cheer restaurants are located in the rural areas of Pikeville, Carlisle, West Liberty and Prestonsburg, Kentucky.

Relevant to the instant dispute is that part of Dairy Cheer’s storefront signage for its restaurants states “Home of the Smashburger” – with “Smashburger” identifying one of Dairy Cheer’s menu items.

What prompted the dispute is that Icon notified Dairy Cheer earlier this year about its plans to open a “Smashburger” store in Lexington, Kentucky. Not surprisingly, Dairy Cheer, recognizing that it did have some limited prior user rights to the name “Smashburger,” saw this as an opportunity to get a big windfall from a nationwide company with deep pockets that was eager to use the name for a Kentucky-based location. According to the complaint, representatives of Dairy Cheer demanded a “substantial monetary payment” from Icon to settle the dispute over Icon’s Lexington SMASHBURGER location.

Icon apparently refused to give in to Dairy Cheer’s demands, and so on June 18, 2010, Dairy Cheer filed a Petition for Cancellation with the Trademark Trial and Appeal Board to cancel Icon’s SMASHBURGER word mark registration. See Dairy Cheer Stores Inc. v. Icon Burger Development Company, LLC, Cancellation No. 92052579 (Filed June 18, 2010). Dairy Cheer claims that Icon’s registration of the SMASHBURGER mark for restaurant services so resembles Dairy Cheer’s common law trademarks SMASHBURGER and HOME OF THE SMASHBURGER (which Dairy Cheer claims go back to 1992) as to cause a likelihood of confusion, and thus the registration should be canceled.

With Icon’s federal action seeking a declaratory judgment that its use of SMASHBURGER does not infringe any trademark rights held by Dairy Cheer, the dispute now moves to a federal court (and the Cancellation will certainly be suspended pending the outcome of the civil case).

Sidenote: For those of you who live in a city which has a “Smashburger” location (Icon's “Smashburger” -- not Dairy Cheer's “Smashburger”), I highly recommend giving it a try. It’s rare that a new restaurant chain impresses me with its food offerings, especially hamburgers. After having eaten a fair share of “so-so” and “ok” hamburgers for many years, Smashburger reminded me that, when prepared properly, an ordinary hamburger can be incredibly delicious. I consider the burgers made by Smashburger to be the best tasting hamburgers I’ve ever eaten . . . so far anyway (although hamburger connoisseurs wanting to judge my credibility for judging hamburgers should know that I am one of the few people in the world that does not like hamburgers from In-N-Out Burger – and it has nothing to do with their overly aggressive trademark enforcement).