The Federal Court has found that Sydney’s Hashtag Burgers – which runs CBD diner Down N’ Out and its regular pop-ups – has passed itself off as popular American burger chain In-N-Out. In a ruling that contemplated the often blurry line between inspiration and imitation – and considered evidence such as logos, signs, Facebook posts and press releases – the judge found that “all the [Down N’ Out] marks infringed the applicant’s registered marks because they were deceptively similar to those marks in that they so nearly resembled the applicant’s marks that they were and are likely to cause confusion”.

“What is the line between inspiration and appropriation? That is the question at the heart of the dispute in the present case,” said Justice Anna Katzmann.

Justice Katzmann’s ruling determined that Benjamin Kagan and Andrew Saliba, owners of Hashtag Burgers, knowingly used logos, branding and signage similar to In-N-Out’s, and that their response to a cease and desist – including replacing the “o” in “Down” with a hashtag, and changing their logo – was insufficient.

Supplementing this was evidence showing that Down N’ Out, which started in 2016, purposely compared itself to In-N-Out in promotion of its storefronts and pop-ups, and that its menu items often had similar names to those of the American burger giant’s. The court also considered that In-N-Out has held a number of sell-out pop-ups in Australia, meaning many locals would be familiar with the brand. Social-media comments, in which people asked if the burger company was the same as In-N-Out, were also presented as evidence.

“The only remaining question is whether the respondents achieved what they set out to do. In my opinion, they did. They sailed too close to the wind.”

Even though the court has ruled that Down N’ Out’s owners clearly and knowingly used In-N-Out’s popularity to promote their own business, they maintain it’s “entirely” different.

“If you visit our Down N’ Out bar you’ll see it’s entirely distinguishable from an In-N-Out store, and so is our food offering,” Kagan tells Broadsheet. “Down N’ Out has become known for our excellent customer service, premium burger offerings and our excellent range of craft beers. This will not change and we are looking forward to continuing to improve our product.”

Kagan and Saliba – who are also behind popular annual burger festival Burgapalooza – say that while In-N-Out’s menu offers standard cheeseburgers, hamburgers and the Double Double (a double cheeseburger), their Sydney business serves enormous tiered ‘burgs, with fillings such as fried chicken, bacon bits and mac’n’cheese.

“We have always done our own thing and we are disappointed with the outcome, however we know that our fans will continue to support us regardless of what our name is,” Kagan adds. “We may be down at the moment but we sure as sh#t aren’t out.”

Down N’ Out’s latest creation? A tribute to its lost court case, the Scnhit Happens: a double-chicken schnitzel burger with three cheeses, a cheese sauce and bacon sauce.

The case against Down N’ Out commenced in 2018, and while In-N-Out originally sought damages from Hashtag Burgers, it has since abandoned that claim. Hashtag Burgers and In-N-Out case will return to court next month.