Chipotle Sues Sweetgreen for Trademark Infringement over “Bowl” Menu Item, Leading to a Drop in Sweetgreen’s Stock

Sweetgreen has been hit with a lawsuit by Chipotle Mexican Grill, claiming trademark infringement over the salad chain’s “Chipotle Chicken Burrito Bowl.” According to Chipotle, they had previously sent Sweetgreen a cease and desist notice before taking legal action in a California federal court. Apart from seeking an injunction against Sweetgreen, Chipotle is also requesting that the profits Sweetgreen gains from the sale of the Chipotle Chicken Burrito Bowl be turned over to them. This legal action highlights the importance of protecting intellectual property and the potential consequences of infringing on another company’s trademark.

Sweetgreen’s stock took a hit, dropping 10% in morning trading on Wednesday, after Chipotle Mexican Grill filed a lawsuit against the salad chain for alleged trademark infringement regarding their latest menu item, the “Chipotle Chicken Burrito Bowl.” The lawsuit was filed in a California federal court less than a week after Sweetgreen launched the new bowl.

Sweetgreen co-founder and Chief Concept Officer Nic Jammet had said in a statement when the new menu item was announced that the name was inspired by the use of “bold chipotle spices.” However, Chipotle claimed that they had sent a cease and desist notice to Sweetgreen before taking legal action, requesting that “chipotle” be dropped from the name. Sweetgreen allegedly did not respond to the request.

Chipotle’s lawsuit also alleged that Sweetgreen used a font and a shade of red similar to Chipotle’s trademarked Adobo Red in advertisements for the menu item. The complaint further noted that the two companies are competitors in the fast-casual sector.

In addition to an injunction against Sweetgreen, Chipotle is also seeking the profits that Sweetgreen makes from the sale of the Chipotle Chicken Burrito Bowl. Chipotle’s Chief Corporate Affairs Officer, Laurie Schalow, stated that the company is committed to protecting its valuable trademarks and intellectual property and will take appropriate actions whenever necessary to safeguard its rights and its brand.

Sweetgreen has declined to comment on the lawsuit, and its shares have fallen by 23% in 2023, resulting in a market value of $731 million. In contrast, Chipotle has seen strong sales despite macroeconomic concerns, with its stock climbing by 22% in the same period, giving the fast-casual giant a market value of $47.1 billion.