Shake Shack’s Trademark Shake Up
Shake Shack is quickly becoming one of the fast food greats, as the chain expands from its NYC home across the country. Known not only for their namesake shakes, the chain has received rave reviews for their burgers, hot dogs and fries. This May, Shake Shack applied for a trademark for “Chicken Shack,” indicating that the company will likely expand into chicken as well.
Shake Shack’s application process is not going smoothly. While the mark seems like a good idea, especially to launch new menu items, it happens to already be in use. Chicken Shack is currently being used in Detroit, as part of a brand associated with Sobeck Enterprises Inc. The USPTO found the two so similar that they refused Shake Shack’s application.
Chicken Shack does what it says on the box – it is a chain that sells fried chicken. This is a major issue for Shake Shack. The USPTO found that, because the marks are identical, and because the goods/services involved are so similar, there is a likelihood of confusion. While both companies are relatively small, with Chicken Shack having only 21 locations to Shake Shack’s 40, the chance of consumer confusion was big enough for the Trademark Office. Not only that, the examiner went on to say that because the two names were so closely related, they would not even need to be identical or competitive to be refused.
The USPTO is clearly heading off what is a somewhat rare situation in trademark law called “reverse confusion”—where the second user of a similar mark becomes more famous than the first user. This usually happens where the second user is larger, and with more market reach than the original, more geographically limited user—in this case the Detroit area as opposed to Shake Shack’s national ambitions. Trademark law almost always protects the first user. Shake Shack might successfully argue that its national use would exclude the Detroit area and a successful registration would keep Chicken Shack (Detroit) from expanding beyond their current geographic area. But that is unlikely as Chicken Shack (Detroit)’s 1998 registration entitles the owner to presumptive right of use throughout the United States. A different and dissimilar name is likely the better go-forward strategy.