International expansion offers global brands immense opportunities, but it also brings legal complexities that, if overlooked, can enable local businesses to assert their rights with lasting consequences. A striking example is the long-standing dispute between Burger King and Hungry Jack’s in Australia, which highlights the strength of local trade mark rights and the critical need for pre-entry due diligence.

Background: A Name Already Taken

When Burger King planned its entry into Australia in 1971, it discovered that the trade mark “Burger King” had already been registered by a small local business. Rather than securing rights through acquisition, the company launched its Australian operations under the name Hungry Jack’s, a substitute inspired by the Pillsbury pancake mix—Pillsbury being Burger King’s parent company at the time.

The franchise agreement allowed Hungry Jack’s to operate using Burger King’s core menu and systems, but under the local name. Over time, Hungry Jack’s built local brand equity and developed an independent market identity.

Legal Conflict and Local Victory

Years later, Burger King moved to reclaim its original name and terminate the agreement, which was reportedly unsuccessful. Hungry Jack’s counterclaimed for breach of contract, arguing that Burger King acted in bad faith by trying to undermine the franchise.

The Australian courts sided with Hungry Jack’s, affirming the franchisee’s rights and awarding substantial damages. The decision reinforced national IP rights against global reputation.

Key Take-Aways for Global Brands:

• Local trade mark rights might take precedence in certain circumstances - registration in one jurisdiction does not automatically grant rights in another. In Australia, a prior local registration prevented Burger King from using its name entirely.

• A global strategy demands local action. Each country has its own IP laws and failing to secure trade mark rights in advance can leave brands vulnerable or even excluded.

• Contracts can be binding, and franchise or licensing agreements should be drafted with local considerations in mind. For example, in contractual disputes in the Middle East, fairness and good faith are often important considerations.

• Local businesses might hold senior rights.

The Burger King vs. Hungry Jack’s dispute serves as a cautionary tale, highlighting the need to account for local business interests in IP planning.