(WGHP) — A Texas-based fast food chain that has plans to expand into North Carolina is suing a locally based restaurant alleging it violated terms of an agreement that allowed them to use similar names.
A lawsuit was filed in court Tuesday, where Whatabrands, LLC., the parent company of Whataburger, alleged trademark infringement and the violation of a contract against What-A-Burger #13, a small chain of restaurants with locations in Mount Pleasant and Locust.
Whataburger, which plans to expand into North Carolina and announced a Charlotte location in April 2024, was founded in 1950 in Texas. The North Carolina What-A-Burger #13 advertises having been operational since 1969, nearly two decades later.
“Local news outlets in North Carolina began speculating as early as 2022 about Whataburger’s potential expansion into the state,” according to the suit.
“Whataburger contacted certain of Defendants on October 13, 2022, in anticipation of its entry into North Carolina to notify them that continued use of their What-A-Burger #13 Mark creates a likelihood of confusion and thus infringes the WHATABURGER Mark given Whataburger’s nationwide priority in its WHATABURGER Mark as of 1957,” the lawsuit states.
They go on to say that they signed a co-existence agreement with What-A-Burger #13, allowing them both to operate under certain conditions to minimize confusion between the two brands. This agreement was effective May 19, 2023, according to the documents.
“Per the Agreement, Signatory Defendants could use the What-A-Burger #13 Mark only in connection with their existing brick-and-mortar locations (identified above) and in connection with their then-existing single food truck in limited ways.”
Now, Whataburger says that the owner of What-A-Burger #13 created a new Norwood-based LLC, WAB #13, before the agreement went into effect and did not tell Whataburger about it. The What-A-Burger owner reportedly characterized the new LLC as “part of a single ‘small, family owned, fast paced business’ founded in 1969,” like the other What-A-Burger #13 restaurants.
The Texas restaurant chain has accused the North Carolina owner of breaching their agreement by using the What-A-Burger #13 Mark with their food trucks “in ways that were not allowed under the Agreement.” Despite contact with the defendants over alleged breaches in their previously signed agreement, Whataburger claims that What-A-Burger #13 continues to operate in a way that violates the agreement.
Whataburger claims that this alleged violation automatically terminates their agreement with What-A-Burger #13 and is now asking the court to order What-A-Burger #13 to stop using the name.
“Defendants’ unauthorized use of the What-A-Burger #13 Mark is likely to cause confusion, to cause mistake, or to deceive customers and potential customers of the parties as to some affiliation, connection, or association of Defendants’ business with Whataburger, or as to the origin, sponsorship, or approval of Defendants’ goods or services,” the lawsuit alleges, going on to say that the continued use of the mark “removes from Whataburger the ability to control the nature and quality of products and services provided.”
“Unless these acts by Defendants are restrained by this Court, they will continue, and they will continue to cause irreparable harm to Whataburger and to the public for which there is no adequate remedy at law.”
Not the first time
Whataburger also filed a similar lawsuit against a restaurant in Virginia using the name What-a-burger in 2003.
The suit, accessed through web archive, was brought up against What-A-Burger of Virginia, Inc. and What-A-Burger of Newport News, Inc. It was ruled that the companies were unaware of the other’s existence when they were founded, and the original founders were dead by the time the suit was brought up in court.
The court ruled in 2004 that “no actionable damages had occurred” and “There is no evidence — nor can we imagine any — that consumers are currently likely to be confused about whether the burgers served by Virginia W-A-B come from Texas or Virginia.”