Damn Bad Business Decision

A Fort Collins taco shop has made a wicked bad decision.

According to the AP, Dam Good Tacos [DGT] opened sometime in 2006. About the same time, Torchy’s Tacos [TT], a taco franchise in Austin, began using DAMN GOOD TACOS as part of its branding.

TT has three relevant trademark registrations.* TT wrote to DGT asking them to stop using DAM GOOD TACOS. TT offered to help DGT pay for the rebranding. DGT refused. TT is suing.

First, let’s be really clear that trademark law sees no difference between DAM and DAMN. Say them out loud. They sound exactly the same. End of discussion.

So whose rights will prevail?

DGT may have limited common law rights to DAM GOOD TACOS in Fort Collins that will allow it to go on using the name for its existing restaurant. If the court allows that, does it mean that DGT has won?

No. They still lose:

  • DGT will be out tens of thousands of dollars in legal fees. Imagine how else they could have used that money to promote and grow their business.
  • This proud independent taco shop will not be happy when it’s confused with TT some day. And that will happen.
  • DGT won’t be allowed to open a second restaurant using the same name outside its current area.
  • Potential buyers of the restaurant won’t pay as much for the goodwill because of the limitation and the confusion.

It sounds unfair. It may even sound mean. But DGT needs to make a business decision, not an emotional one. Rebrand.

 

*Here are TT’s relevant registrations:

Filed Use started Registered Disclaims
TORCHY’S DAMN GOOD TACOS July 2008 Nov 2006 March 2009 TACOS
DAMN GOOD TACOS Feb 2015 2006 Oct 2015 GOOD TACOS
DAMN GOOD Feb 2015 2006 Oct 2015

 

Photo of tacos by James Willamor used under Creative Commons Attribution-ShareAlike 2.0 Generic license.

 

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