Sweetgreen agrees to rename "chipotle" chicken bowl after Chipotle sues
Imitation may be the sincerest form of flattery, but for fast-food chain Chipotle it may also be grounds for a lawsuit.
Fast-casual restaurant chain Sweetgreen backtracked on plans to add a "Chicken Chipotle Burrito Bowl" to its menu after Chipotle sued, claiming the menu item infringed on the Tex-Mex chain's trademark rights.
The lawsuit, filed Tuesday in the U.S. District Court for the Southern District of California, alleges that Sweetgreen's burrito bowl advertisements feature the word "Chipotle"in all capital letters — as Chipotle does in its trademarked logo — and uses a background color "nearly identical" to the company's trademark-protected "Adobo Red." The "very similar and directly competitive" bowl is likely to confuse customers, the company said in the suit.
On Thursday, Sweetgreen said it would rename the offending item and settle the lawsuit.
"In order to focus on the business and continue serving our guests without distraction, we have decided to rename our bowl to the Chicken + Chipotle Pepper Bowl as part of a tentative agreement to resolve the lawsuit," the company told CBS MoneyWatch in an email. "We are looking forward to putting this lawsuit behind us as we continue to connect more people to real food."
In response to the change, Chipotle agreed to drop its suit, saying in a statement that it is "pleased that Sweetgreen has chosen to amend their materials in a manner that protects our trademarks and intellectual property."
Chain's first non-salad dish
The dish formerly known as the "Chipotle Chicken Burrito Bowl," first unveiled last week, is Sweetgreen's first non-salad menu item. The company called it an important step in "the latest iteration of Sweetgreen's menu innovation strategy" as the chain "evolves beyond salads." The bowl contains blackened chicken with rice, black beans, tomatoes, cabbage and salsa, the company said.
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The bowl's ingredients were another sticking point in Chipotle's lawsuit. Chipotle's complaint alleged Sweetgreen's burrito bowl contains similar ingredients to its own burrito bowls, which are also available with chicken, rice, black beans and salsa.
It was not immediately clear if the ingredients would change as part of the settlement.
Cease-and-desist notice
According to the suit, Chipotle's legal department sent a cease-and-desist letter and made a phone call to Sweetgreen to discuss the company's infringement concerns. In its letter, Chipotle suggested that its competitor rename the new burrito bowl "chicken bowl with chipotle" with the word "chipotle" in lowercase letters, according to the suit.
Sweetgreen failed to respond, according to the complaint, "necessitating the instant action."
Sweetgreen's stock fell roughly 13% to $6.39 per share immediately after the Chipotle suit was filed, but has since recovered to $7.41 as of Thursday afternoon.
