Whataburger, the Texas-based fast-casual burger chain, has initiated a federal trademark lawsuit against What-A-Burger #13, a North Carolina-based restaurant, over the use of the name “What-A-Burger #13.” The legal action underscores the intricate nature of trademark law, particularly when two entities operate under names that may lead to consumer confusion.
Founded in 1950, Whataburger has expanded to more than 1,000 locations across 16 states. The company asserts that it has cultivated substantial brand recognition around its “WHATABURGER” mark, which it first registered federally in 1957. Whataburger claims that What-A-Burger #13 has used the same name since at least 1969, offering comparable services in North Carolina, including two physical locations and a food truck.
The dispute intensified when Whataburger announced its 2024 plans to enter the North Carolina market, a move that could significantly impact What-A-Burger #13’s operations. In 2022, Whataburger contacted What-A-Burger #13 to discuss expansion and the potential for consumer confusion, leading to a coexistence agreement in 2023. According to Whataburger, What-A-Burger #13 violated the terms of the agreement by forming a new entity, WAB #13, LLC, to continue its business.
What-A-Burger #13 has not yet formally responded to the lawsuit, but its legal team has outlined two potential defenses. First, they argue that the company has been in operation since 1956, one year before Whataburger registered its trademark. Second, they claim that Whataburger violated a 1970 agreement that promised not to interfere with their operations in specific North Carolina counties.
Trademark law is intended to protect consumers by enabling them to distinguish between brands. However, it also permits concurrent use in geographically separate regions, as long as there is no risk of confusion. This principle, known as the Dawn Donut rule, remains recognized in the Fourth Circuit, where the case is being heard. The rule does not apply if the senior trademark holder intends to expand into the junior user’s market, which is the situation here.
What-A-Burger #13 may have a compelling argument under Section 1115(b)(5) of the Lanham Act, which safeguards junior users who have continuously used a mark prior to the senior user’s registration. If the company can demonstrate it operated under the name since 1956, it could argue that it is not infringing on Whataburger’s rights.
The case highlights the need for trademark owners to conduct comprehensive due diligence before entering new markets. It also reminds smaller businesses that while federal registration provides robust protection, it does not confer unlimited rights. Good faith and continuous use can sometimes shield junior users from infringement claims, provided they can prove their prior use.
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