Burger King Case Study
The decision was made because Betty and Gene Hooks had already trademarked the name “Burger King” in the state of Illinois. People trademark their business names, phrases, symbols, designs, logos ,to prevent their competitors from using them, and any other extremely similar names, phrases, symbols, designs, logos, etc. Since Betty and Gene had already trademarked the name in the state, they were able to sue “Burger King” for copyright infringement. Unfortunately for Betty and Gene, Burger King was rapidly becoming a popular fast food joint nationally at around the same time, so it became difficult for them to have absolute rights to the name. In most cases, when a company or an individual was the first to trademark a business name, the latter company or individual to trademark a similar name as the first would be required to look for another name. In this case, however, the two were able to maintain the name but on condition that Burger King does not open a food store within 20 miles from the store in Mattoon in the state of Illinois.
This case is very significant to trademark laws, especially in the US, because it sheds more light on the aspects of fair use. Under the doctrine of fair use, the actions of Burger King would be considered copyright infringement because the company used the name without recognizing Betty and Gene, who trademarked the name first. The fair use doctrine also stipulates the conditions for fair use, which include research and scholarship, criticism, teaching, news reporting, and commenting, none of which Burger King satisfied. Instead of Burger King being compelled to drop the name, they were allowed to maintain it provided; they did not operate a food joint within 20 miles from Betty and Gene’s food joint. This was against the US trademark laws jurisprudence because Betty and Gene had already trademarked the name as theirs before Burger King did.
Product innovations such as business names, business designs, etc. are all subject to imitations (Bigliardi & Galati, 2013, as cited in Yoshioka-Kobayashi et al., 2020). The name Burger King – which was originally trademarked by Betty and Gene, became a target for imitation. But while product innovations can be imitated, process innovations can hardly be imitated because of the secrecy with which firms hide their manufacturing processes (Yoshioka-Kobayashi et al., 2020). Even though the name “Burger King” was originally trademarked by the above two, the popularity of their food restaurant cannot equal the popularity of Burger King. Yoshioka-Kobayashi et al. (2020) proceed to state that while intellectual property rights can grant their innovators certain exclusions, their exclusivity cannot be absolute, and this is evidenced by the Burger King Case. The reason for this is that protected innovations can be intentionally infringed by followers, or they can be avoided through design (Yoshioka-Kobayashi et al., 2020). But despite these risks, the protected innovations can grant their innovators financial returns by diverting competitors and by giving them the first-mover advantage.
Innovations can enhance the competitiveness of companies. Product innovations (which are protected through trademarks) can increase the effectiveness of firms in a changing environment, but they may not increase their competitiveness in the market (Yoshioka-Kobayashi et al., 2020). The reason for this is that product innovations can be imitated. The superiority of firms in a competitive market is rather enhanced by process innovations which are not easy to imitate (Yoshioka-Kobayashi et al., 2020)
References
Yoshioka-Kobayashi, T., Miyanoshita, T., & Kanama, D. (2020). Revisiting incremental product innovations in the food-manufacturing industry: an empirical study on the effect of intellectual property rights. Journal of Economic Structures, 9, 1-19.