Can a fast-food business register the trademark HFC for their fried chicken product without infringing on the famous KFC mark? In a win for Grill’d, the Australian Trade Marks Office has said yes, they can.

Grill’d is an Australian burger chain that markets itself as providing a healthier fast-food product than its competitors. ‘HFC’ stands for ‘Healthy Fried Chicken’ and was used by Grill’d to market its fried (but ‘healthier’) chicken products. KFC, which stands for ‘Kentucky Fried Chicken’, is a fast-food chain of fried chicken products with an established international reputation. Arguably, the mark KFC is instantly recognizable and associated with fried chicken products in the minds of millions of consumers across the globe. 

It would be reasonable to anticipate that KFC would be eager to protect its brand. When Grill’d applied for registration of its HFC mark, KFC opposed the application (KFC THC V Ltd v. Grill’d IP Pty Ltd [2023] ATMO 192, KFC THC V Ltd (KFC)). In its opposition, KFC argued that the HFC mark was substantially identical or deceptively similar to their registered KFC trademark. KFC’s position was that the marks were substantially identical and created an overall impression of similarity when compared visually and audibly. KFC also made a further submission that Grill’d had registered a deceptively similar mark to leverage off KFC’s strong reputation in the fried chicken industry. 

In defense, Grill’d submitted that it was unlikely that consumers would be confused between the marks because the first letter of each mark represented a completely different word (‘Healthy’ v. ‘Kentucky’). Consumers would pronounce each letter individually and the difference in that first letter meant that the mark did not sound deceptively similar. In other words, consumers would be able to tell the difference between the two marks with relative ease. Grill’d further submitted that the remaining two letters of the mark, FC, obviously represented ‘fried chicken’ which is merely a descriptor of the product.

In response to KFC’s deceptive argument, Grill’d submitted that it had merely engaged in comparative advertising to market its products as being healthier than other fast-food businesses and this strategy is part and parcel of the fast-food industry. Interestingly, KFC itself had previously engaged in similar comparative advertising strategies including adopting McDonald’s trademark, I’M LOVIN’ IT, to market a bucket of KFC chicken. Naturally, Grill’d pointed to KFC’s past behavior to defend itself against the deceptive claim.

Overall, the Trade Marks Office agreed with Grill’d and decided that the marks were not substantially identical nor deceptively similar (but did not agree that ‘FC’ was an obvious contraction of fried chicken). In reaching this decision, the Hearing Officer cited Australian Meat Group Pty Ltd v. JBS Australia Pty Ltd [2018] FCAFC 207, which is quite a similar case in which each party had a three-letter abbreviation trademark with only one letter difference (AMG and AMH). In this case, the court held that the marks were not substantially identical or deceptively similar. Specifically, they were undeniably different because of the distinguishing letter following AM which was likely to be understood by consumers in the relevant industry (the meat industry) as meaning ‘Australian Meat’. This is clearly different in the current case, where the Hearing Officer did not accept that ‘FC’ was an obvious contraction of fried chicken.

The takeaway message is that even a small difference may make a world of difference when registering an abbreviation as a trademark. However, avoiding substantial identicality is only one consideration. Business owners must still be careful not to act deceptively. In Australia, there are also consumer law considerations whereby individuals must not ‘pass off’ on another’s reputation in breach of the misleading and deceptive provisions in Australian Consumer Law. On the flip side, the Trade Marks Office will consider the past behavior of the parties in considering if a trademark is deceptively similar. As KFC discovered, it is difficult to argue that another party has deceptively registered their mark to leverage off your mark, if you have previously engaged in similar behavior.