McDonald’s Loses Trademark Battle Against Malaysia’s McCurry
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Facts
McDonald’s has been in business in
McCurry Restaurant commenced trading in
In 2001, McDonald’s commenced the action at the High Court of Malaya at
McCurry Restaurant submitted that McDonald’s does not have monopoly over the use of the word “McCurry,” and denied that McDonald’s has any exclusive right to the “Mc” prefix. The name “McCurry” was created based on the abbreviation of “Malaysia Chicken” and “Curry.” McCurry Restaurant contended that its business and range of food and drinks are totally distinct from that sold by McDonald’s, selling typical Malaysian and Indian food such as fish head curry, briyani rice, roti canai, nasi lemak and teh tarik while McDonald’s sells burgers, fries, shakes, pies, etc. Thus, McCurry Restaurant denied that its business style and the get-up of its restaurant causes confusion and deception in the minds of the public, and that it did not amount to passing-off, either in the traditional or extended sense. McCurry Restaurant further submitted that there was no evidence that proved passing-off.
The issue for determination before the court was whether McCurry Restaurant has passed off McDonald’s goods and services as its own, by its use of the “Mc” prefix and the colour scheme it used in its restaurant, in both the traditional and extended form of passing-off.
During the course of the trial, McDonald’s tendered evidence to show that McDonald’s has been using the red and white colour scheme on its signage and that it has since become distinctive of McDonald’s. While McDonald’s does not claim proprietary rights on the colours, it does claim rights for the combination and presentation of the colour scheme, and that McCurry Restaurant has used signage that was confusingly similar.
McCurry Restaurant put forward evidence on the fact that its restaurant sells typical Indian curries and the word “McCurry” is solely the name of the restaurant and that the food items offered its menu do not have the “Mc” prefix. It further emphasized the contrast in the signages: the “McCurry” lettering is white and gray on a red background, using the Arial font, with the “M” in “McCurry” upright, while “McDonald’s” is a Century Gothic font with a slanted “M” and no shading used. The décor and layout of McCurry Restaurant, and the manner in which its staff is attired, could only mean that there was no way in which the public could have been confused between the McCurry Restaurant and that of McDonald’s.
Both parties put forward consumer witnesses on the issue of whether there had been any confusion between the McCurry Restaurant and a McDonald’s restaurant.
The learned High Court judge held that McDonald’s had proven all elements to show the existence of the act of passing-off both under the traditional and extended form of passing-off. It found that McDonald’s owned the goodwill and reputation developed out of the usage of the “Mc” prefix, and McCurry Restaurant should not be allowed to take unfair advantage of the goodwill and reputation of McDonald’s, as the distinctiveness of “Mc” to McDonald’s would be lost if the defendant was allowed to continue to use “Mc.” As the first impression created in the minds of the public when they see the red-and-white-coloured McCurry signage was to associate it with McDonald’s, the misrepresentation by McCurry Restaurant in its attempts at creating an association derived unfair benefit detrimental to the rights of McDonald’s.
McCurry Restaurant appealed the High Court’s decision.
On
It was held that both businesses differed in terms of presentation of their style, get-up and targeted market, and McCurry Restaurant’s signboard would not result in reasonable persons associating McCurry Restaurant with McDonald’s.
The food items McCurry offered to its customers were wholly different from those offered by McDonald’s. The facts showed that McCurry did not use the “Mc” prefix to name the food items served in its outlet, contrary to what was held by the learned judge.
Accordingly, the Court of Appeal stated that there was no proof of the tort of passing off, and there had been no judicial appreciation of the most important pieces of the evidence presented at the trial.
McDonalds filed an application for leave to appeal to the Federal Court. The Federal Court dismissed McDonald’s application for leave and awarded McCurry Restaurant costs of RM10,000 (US$3,000).
Comment
It must be noted that the Federal Court had dismissed the application for leave to appeal on a procedural ground, i.e., that the appeal did not fall under Section 96 of the Court of Judicature Act 1964, which sets out conditions of an appeal before the Federal Court.
Unfortunately, the issue of extended passing off had not been dealt with at the Court of Appeal level, since the Court found there not to have been any passing-off at all. The concept of extended passing off was first developed in 1979 in the case of Erven Warnick BV v. J Townsend & Sons (Hull) Ltd. In a traditional action for passing off, goodwill, misrepresentation leading to confusion, and deception resulting in damage must be proven. Extended passing off applies in any situation where goodwill is likely to be injured by a misrepresentation, and there is no need to prove confusion.
This case does not bring any developments in the law of passing-off, although it does set interesting precedent for future like cases – the iPod and iPhone trademarks owned by Apple Computer especially come to mind.
Also, the outcome of this case would be very different in a jurisdiction, unlike in
The Court of Appeal had referred to the 2001 case of Yuen Yu Kwan Frank v. McDonald’s Corporation, where the High Court of Justice, Chancery Division, in
While the Court of Appeal had stated that the McIndian case must be distinguished on the facts, since the McIndian restaurant in that case sold fried chicken, french fries and shakes, it must also be noted that both the “McChina” and “McIndian” cases are hearings before the United Kingdom Trade Mark Registry concerning registrability of a mark. The cases would have been decided based on an examination of the facts and circumstances surrounding the marks, with how the McDonald’s marks were being used, the classifications and specifications of goods and services involved, and the likelihood of the proposed mark being mistaken as that of McDonald’s. They were not actions in passing off where the elements of goodwill, misrepresentation and damages are to be proved.
Interestingly, McDonald’s Corporation had opposed the registration of two marks at the Australian Trade Mark Office cases, Opposition by McDonald’s Corporation to the Registration of the Trade Mark McMint and Opposition by McDonald’s Corporation to the Registration of the Trade Mark McVeg; both matters failed, as the hearing officer decided there had been no confusion or deception. These two Australian cases were referred to in
This article first appeared in the November/December 2009 issue of Asia IP and is reproduced with permission. For further information on the magazine, or to obtain a copy of the complete issue, please call +852 8120 3119, or visit www.asiaiplaw.com.