Sweetgreen renames menu item after Chipotle sues for trademark infringement

Sweetgreen said Thursday it has renamed its newest menu item as part of a tentative agreement with Chipotle Mexican Grill to resolve a lawsuit brought by the burrito chain.

Chipotle filed the lawsuit, which claims that the salad chain’s “Chipotle Chicken Burrito Bowl” infringed on its trademark, in California federal court Tuesday, just days after the salad chain introduced the item.

A Sweetgreen representative said in a statement to CNBC on Thursday that the company decided to rename the bowl as the “Chicken + Chipotle Pepper Bowl” to focus on its business and serve customers without distraction.

“We are looking forward to putting this lawsuit behind us as we continue to connect more people to real food,” Sweetgreen said in a statement.

Chipotle said in a statement that it’s pleased that Sweetgreen chose to change the name in a way that protects its trademarks, so both companies have agreed to resolve the lawsuit. Neither company disclosed more details on the tentative agreement.

It’s unclear when the name change will go into effect. As of midday, Sweetgreen’s website was still using the original name, and some Sweetgreen customers received promotional emails on Thursday offering 50% off the item — under the original name — to celebrate National Burrito Day.

In Chipotle’s original complaint, the company said it sent Sweetgreen a cease-and-desist notice and asked the company to drop “chipotle” from the name when it heard about the Chipotle Chicken Burrito Bowl, but Sweetgreen never responded. (Sweetgreen told CNBC on Wednesday the company responded to the cease-and-desist notice on Tuesday, after the lawsuit was filed.)

Sweetgreen’s stock closed down 6% on Wednesday after the lawsuit was reported, but shares recouped those losses during trading Thursday. The salad chain’s stock has fallen 14% in 2023, giving it a market value of $821 million.

Compared with its fast-casual rival, Chipotle is a giant, with its $46.7 billion market value. The burrito chain’s stock is up 21% this year.