If anyone was in any doubt as to the repute of the McDonald’s family of “Mc” prefixed trade marks, they will be reassured to note that said repute was recently acknowledged by the (European) General Court in Case T-518/13, Future Enterprises v McDonald’s International Property issued on 5 July 2016
In January 2010, a Singapore based company, Future Enterprises (“Future”), obtained an EU trade mark registration for the mark MACCOFFEE in respect of goods in Classes 29, 30 and 32. In August of the same year, McDonald’s applied to invalidate the MACCOFFEE registration based on its earlier EU registrations for McDONALD’S, McFISH, McTOAST, McMUFFIN, McRIB, McFLURRY, CHICKEN McNUGGETS, McCHICKEN, EGG McMUFFIN, McFEAST, BIG MAC, PITAMAC, together with the well-known German trademark McDONALD’S, covering various classes of goods and services, including Classes 29, 30, 32, 42 and 43.
The invalidity action succeeded on the ground of Article 8(5) EUTM Regulation No. 207/2009, namely that, given the long standing reputation acquired by the McDONALD’S trade mark and the establishment, on the part of the relevant public, of a link between the marks McDONALD’S and MACCOFFEE, there was a serious likelihood that use, without due cause, of the MACCOFFEE mark would take unfair advantage of the reputation of the McDONALD’S mark.
In June 2013, Future’s attempt to overcome the decision of the Cancellation Division was thwarted by the Board of Appeal, which upheld the decision in its entirety. Future subsequently took the matter to the General Court which, in turn, upheld the decision of the Board of Appeal.
GROUNDS FOR APPEAL
In order to invalidate the mark MACCOFFEE under Article 8(5) successfully, McDonald’s would have to establish that four specific conditions had been met, namely;
1) The McDONALD’S mark predated the MACCOFFEE registration;
2) The marks McDONALD’S and MACCOFFEE were identical or similar;
3) The McDONALD’S mark was shown to have a reputation in the EU; and
4) The use of MACCOFFEE, without due cause, would lead to the risk that unfair advantage might be taken of the distinctive character or repute of the McDONALD’S mark or might be detrimental to the distinctive character or repute of the McDONALD’S mark. In their appeal to the General Court, Future argued that the second and fourth of these conditions had not been satisfied in the present case.
SIMILARITY OF MARKS
Future claimed that:
• The marks MACCOFFEE and McDONALD’S were visually dissimilar;
• The prefixes “mac” and “mc” were dissimilar in pronunciation; and
• Conceptually, the marks were dissimilar, since McDONALD’S would be understood to be a surname, whereas “mac” in MACCOFFEE would likely be understood to refer to the American slang word used to address a stranger.
Although they admitted that the Board of Appeal was incorrect in stating that there was a degree of visual similarity between the two marks in question, the General Court held that:
• The prefixes “mc” and “mac” were traditionally pronounced in the same way, in particular by the part of the public that perceives them as prefixes of Gaelic names (English-speaking public);
• The marks at issue had a certain degree of conceptual similarity, since the prefixes were perceived by the relevant public as referring to a surname of Gaelic origin and were written interchangeably as such as “mc” or “mac”;
• Further, the Board was correct in finding that the final part of the MACCOFFEE mark would be understood, at least by the English speaking part of the relevant public, to refer to a hot beverage. Therefore, the relevant public would likely perceive the MACCOFFEE mark to be a beverage produced by a person of Scottish or Irish origin;
• Consequently, the overall similarity between the marks was sufficient for the relevant public to establish a link between them, even if it does not confuse them.
Future also contested the Board’s findings that:
a) The existence of the family of “Mc” marks was relevant when assessing whether the relevant public established a link between the marks in question; and
b) There was a certain degree of similarity between the goods and services in question due to the close links between them.
Future claimed that McDonald’s had not provided evidence that the earlier Mcprefixed marks belonging to McDonald’s were perceived by the relevant public as constituting a family of marks. However, the Court held that the evidence submitted by McDonald’s had indeed demonstrated that these earlier Mc- prefixed marks formed a “family of marks” and had been used as such.
Ultimately, what mattered was that the MACCOFFEE mark reproduced the common characteristics that connected the earlier marks of the “Mc” family of marks and that differentiated them from the McDONALD’S trade mark, namely the use of “Mc” (or, in the case of the Future Enterprises owned mark, “Mac”) together with the name of an item of food found on a fast-food menu.
With regard to the issue of similarity between the goods and services in question, the Court confirmed the Board’s finding that the foodstuffs and restaurant services in question were intended for the same consumers and that those goods and services were therefore complementary. Further, the goods covered by the MACCOFFEE registration could be offered at, and consumed on the spot in, the establishments where McDonald’s offered their fast-food restaurant services. Finally, the Court confirmed that McDonald’s fast-food restaurant services were available on a take-away basis and the consumer tended to establish a link between the mark affixed to the packaging of the take-way goods and the commercial origin of those goods. Consequently, the Board was right to conclude that the relevant public could establish a mental link between the marks McDONALD’S and MACCOFFEE.
RISK OF UNFAIR ADVANTAGE
Article 8(5) can only be relied upon if the proprietor of the earlier mark can prove that the use without due cause of the later mark takes unfair advantage of or is detrimental to the distinctive character or repute of the earlier EUTM. The establishment of a mere link between the marks is not sufficient to establish protection under Article 8(5).
In the present case, Future disputed the Board’s finding that they would take unfair advantage of the reputation of McDONALD’S through use without due cause of the MACCOFFEE mark. The Board’s decision was based on the following assessments:
1) The considerable reputation of the McDONALD’S trade mark;
2) The distinctive character acquired by the prefix “mc” combined with the name of a menu item or foodstuff, for fastfood restaurant services and goods on the menu of fast-food establishments;
3) The fact that the MACCOFFEE mark reproduced the same structure as the “Mc” family of marks; and
4) The fact that the goods and services in question had a certain degree of similarity because of the close links between them.
Future did not dispute the reputation of the McDONALD’S mark in respect of fastfood restaurant services, but did challenge the rest of these criteria. However, the Court held that the assessments made by the Board were indeed correct and those factors combined led to the right conclusion that it was highly likely that the MACCOFFEE mark “rode on the coattails” of the McDONALD’S mark due to the possible transfer, by the relevant public, of the image of the McDONALD’S mark or of its characteristics to the goods covered by the MACCOFFEE mark.
Future also complained that the Board failed to take into consideration the coexistence in the market of the McDONALD’S and MACCOFFEE marks in Bulgaria, Estonia, Cyprus, Latvia, Hungary and Poland since 1994, claiming that McDonald’s had acquiesced with their mark in these territories. This argument was immediately rejected, since the fact that McDonald’s had brought the cancellation action before the EUIPO less than seven months after the registration of the MACCOFFEE mark meant that Future could not claim acquiescence under Article 54(1) of the Regulation in the present case.
The Court held that the “peaceful coexistence” to which the applicant referred was in relation to the coexistence of the McDONALD’S mark with a number of the applicant’s national MACCOFFEE marks, but this did not amount to evidence that the coexistence was general and related to all of those national marks. Further, in the Court’s opinion, there could have been many reasons for an absence of a challenge against these national marks, which were not necessarily related to the perception of the relevant public in those territories. The Court also pointed out that McDonald’s evidence submitted in relation to the present case revealed that some of Future’s national MACCOFFEE marks had been the subject of actions by McDonald’s before the courts in Germany, Spain, Sweden and the UK, which demonstrated a lack of “peaceful coexistence”.
As mentioned above, Future already uses the MACCOFFEE trade mark in a number of European territories. Indeed, they claim to have been using this brand in Russia in relation to their coffee products since the early 1990s. The writer notes that the MACCOFFEE brand also has a presence in Africa, the Middle East and Asia and is therefore clearly an important brand for Future.
The fast-food goliath McDonald’s, on the other hand, operates in over a hundred countries worldwide and is fiercely protective of its lucrative McDONALD’S brand and any fast food related brand containing either the prefix Mc- or its close relation Mac-. Therefore, it is probably safe to say that this is unlikely to be the last dispute to arise between these two parties or indeed any other third party daring to “ride on the coat-tails” of the well-known McDONALD’S brand. This decision certainly counts as an important victory for team McDonald’s and will no doubt be relied upon as evidence of their strong reputation in future actions.