Steak 'n Shake loses lawsuit over phrase

ST. LOUIS -- Steak 'n Shake may be "Famous for Steakburgers," as its slogan claims, but a judge says a mediator will help determine if a competitor also may call its sandwich a "steak burger."

For now, Burger King apparently may continue marketing its "Angus Steak Burger." U.S. District Judge Catherine Perry, in a ruling Wednesday, declined Steak 'n Shake's request for an injunction blocking the rival's use of the phrase.

Perry ordered the two chains to meet with a mediator by September to resolve the dispute.

"We're disappointed," said David Milne, general counsel for Steak 'n Shake.

"We thought we had a compelling case. We'll take a couple days to review our options and move forward."

He said the company could ask the Eighth Circuit Court of Appeals to review Perry's decision, or proceed with a trial on the merits of the case.

Officials from Burger King did not return a phone message seeking comment.

Indianapolis-based Steak 'n Shake filed suit here in May over Burger King's marketing of the "Angus Steak Burger" that went on sale in some locations; Miami-based Burger King countered that "steak" and "burger" are generic terms.

Steak 'n Shake filed the case in St. Louis because its research found that 73 percent of local residents made a strong connection between steak burger and the company name, Milne said. Steak 'n Shake also has filed a state law claim for dilution of trademark under Missouri law, which it found favorable to its case, he said.

Steak 'n Shake's own burgers aren't really steak. Still, the company has for more than 70 years used the steak reference in its slogan and advertisements.

Steak 'n Shake president Peter Dunn sent a letter to Burger King president Bob Nilsen in December, asking that Burger King not infringe on the "steakburger" trademark.

In April, a Steak 'n Shake employee called 20 Burger King restaurants in the St. Louis area and was told the new "steakburger" sandwiches would be available later that week, according to a court statement from Steak 'n Shake.

Steak 'n Shake filed suit on May 3, about two days after the sandwiches made their debut.

"Steakburger has for a long time been identified with Steak 'n Shake," Ethan Horwitz, an attorney for Steak 'n Shake, told the St. Louis Post-Dispatch last month. "It's a trademark everyone knows. You want a Steakburger? Go to Steak 'n Shake."

Steak 'n Shake has 418 restaurants in 18 states. Burger King is the No. 2 fast-food chain after McDonald's with more than 11,000 restaurants worldwide.