Sweetgreen Inc. fell sharply after Chipotle Mexican Grill Inc. alleged that its new Chipotle Chicken Burrito Bowl amounts to trademark infringement.
Shares of salad-centric fast-casual chain Sweetgreen Inc. fell sharply after Chipotle Mexican Grill Inc. filed a lawsuit against the company, alleging that its recently-launched Chipotle Chicken Burrito Bowl amounted to trademark infringement.
Shares of Sweetgreen SG slid 11% during mid-afternoon trade. The stock has fallen 79% over the past 12 months. The lawsuit also alleged that Sweetgreen’s advertising for its burrito bowl tried to create a “false association” with Chipotle by using fonts, colors and capitalization similar to those used by the Mexican fast-casual chain. Chipotle also cited a comment in an Instagram post on Thursday that they said tried to piggyback off of Chipotle’s branding.
“Chipotle suggested that Sweetgreen re-name its menu item using ‘chipotle’ in lower-case, in a textual sentence, to accurately describe ingredients of its menu item, such as ‘. . . with chipotle flavoring,'” the lawsuit said. “As one example, Chipotle suggested that ‘chicken bowl with chipotle’ may be a more appropriate name for Sweetgreen’s new menu item.”
In a release announcing the launch of the burrito bowl, Sweetgreen said the new menu item included chipotle powder, blackened chicken, salsa, wild rice, lime cilantro black beans, along with sliced tomatoes and cabbage. It said the item was intended to help the chain evolve beyond salads, and followed efforts to bring heartier items to its menu.
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