McMonopoly? Don’t Underestimate McDonald’s Brand Power
August 2, 2016 (IP Flow) — ‘MACCOFFEE’ – if you see a coffee with this name in a supermarket (importantly, not in a restaurant), would you think that the coffee is somewhat linked to McDonald’s?
According to a judgment handed down by the General Court of the European Union on July 5, 2016, the reputation of McDonald’s trade marks for restaurant services makes it possible to prevent the registration, of trade marks for foods or beverages, combining the prefix ‘Mac’ or ‘Mc’ with the name of a foodstuff or beverage. The registration of the EU trade mark ‘MACCOFFEE’ for foodstuffs and beverages was applied for by the company Future Enterprises of Singapore and granted in 2010 by EUIPO (European Union Intellectual Property Office, formerly OHIM).
The decision relies in particular on the following article of the EU Trade Mark Regulation.
Article 8 Relative grounds for refusal
- Upon opposition by the proprietor of an earlier trade mark, the trade mark applied for shall not be registered:
(a) if it is identical with the earlier trade mark and the goods or services for which registration is applied for are identical with the goods or services for which the earlier trade mark is protected;
(b) if because of its identity with, or similarity to, the earlier trade mark and the identity or similarity of the goods or services covered by the trade marks there exists a likelihood of confusion on the part of the public in the territory in which the earlier trade mark is protected; the likelihood of confusion includes the likelihood of association with the earlier trade mark.
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Furthermore, upon opposition by the proprietor of an earlier trade mark within the meaning of paragraph 2, the trade mark applied for shall not be registered where it is identical with, or similar to, the earlier trade mark and is to be registered for goods or services which are not similar to those for which the earlier trade mark is registered, where, in the case of an earlier Community trade mark, the trade mark has a reputation in the Community and, in the case of an earlier national trade mark, the trade mark has a reputation in the Member State concerned and where the use without due cause of the trade mark applied for would take unfair advantage of, or be detrimental to, the distinctive character or the repute of the earlier trade mark.
The General Court notes, at the outset, that the trade mark MACCOFFEE and the McDonald’s protected trade marks (e.g. McFISH, McTOAST, McFLURRY), have a certain degree of phonetic and conceptual similarity, resulting from their respective initial part, namely the ‘mac’ and ‘mc’ elements.
Moreover, the General Court takes the view that, because of the combination of the element ‘mac’ with the name of a drink in the MACCOFFEE trade mark, in particular, the relevant public can associate that trade mark with the McDonald’s ‘Mc’ family of trade marks and mentally establish a link between the trade marks at issue. The element ‘mac’ in MACCOFFEE is perceived as identical or equivalent to the initial element ‘mc’ of the McDonald’s trade marks.
In addition, the General Court considers that, despite the difference of the goods and services covered by the trade marks at issue (namely the foodstuffs and beverages for MACCOFFEE and the fast food restaurant services for McDonald’s), there is nevertheless a certain similarity owing to the close links existing between them: thus, the foodstuffs covered by MACCOFFEE may be used and offered in the context of the fast food restaurant services provided by McDonald’s. Some of the foodstuffs designated by MACCOFFEE, such as ice cream, muffins, filled sandwiches and toasted sandwiches, are not simple ingredients serving as the basis for dishes served in fast-food restaurants, but correspond to the goods offered, as such, on the menu of those establishments.
Lastly, the General Court held that the use of MACCOFFEE without due cause takes unfair advantage of the repute of McDonald’s trade marks. Indeed, it is highly probable that MACCOFFEE rides on the coat-tails of McDonald’s in order to benefit from its power of attraction, its reputation and its prestige, and exploits, without paying any financial compensation, the marketing effort made by McDonald’s in order to create and maintain its image. Thus, upon seeing the MACCOFFEE trade mark affixed to goods closely linked to those of McDonald’s, the relevant public could mentally establish a link between the trade marks at issue and could transfer the image of the McDonald’s trade marks to the goods covered by MACCOFFEE.
Interestingly, this case was not the first court battle between McDonald’s and Future Enterprises. They fought a legal battle in Singapore over the same issue almost a decade ago and the resulting decision was in favor of Future Enterprises.
The decision in Singapore put emphasis on the fact that McDonald’s had not ventured into convenience food or retailing such products in supermarkets and its products were always sold within its restaurants all in a state immediately consumable by the purchaser. While noting that McDonald’s had established a reputation in the business of fast-food restaurants, The Court of Appeal considered that there was nothing inherently distinctive about the McDonald’s marks once one looked outside that area of business. Therefore, the court held that the proposed mark MACCOFFEE would be unlikely to give rise to confusion among consumers as to the link to McDonald’s existing trade marks.
I have some concerns. The EU’s decision could reinforce the power of established brands in all areas. For instance, if a new blog was established with the name of “iPflow”, one might unexpectedly be brought to court by the IT giant Apple, based on its famous trade marks such as iPhone and iPad.
