Sweetgreen, Chipotle has resolved a trademark infringement lawsuit over the menu item

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

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

Sweetgreen’s representative said in a statement to CNBC Thursday that the company has decided to rename the bowl to the “Chicken + Chipotle Pepper Bowl” to focus on its business and customer service without distraction.

“We look forward to putting this lawsuit behind us as we continue to connect more people with real food,” Sweet Green said in a statement.

Chipotle said in a statement that it’s pleased Sweetgreen chose to change the name in a way that protects its brands, so the two companies agreed to resolve the lawsuit.

It is not clear when the name change will take effect. As of midday, Sweetgreen’s website was still using the original name, and some Sweetgreen customers received promotional emails 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 that the company responded to a cease and desist action on Tuesday, after the lawsuit was filed.)

Sweetgreen shares closed down 6 percent on Wednesday after the lawsuit was filed, but the shares made up for those losses during Thursday’s trading. The salad chain’s stock fell 14% in 2023, giving it a market value of $821 million.

Compared to its fast-paced competitor, Chipotle is a behemoth with a market capitalization of $46.7 billion. The burrito chain’s stock is up 21% this year.