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Singapore courts reject “Mc” “Mac” monopoly by McDonalds

A U.S. based fast food giant, McDonald’s Corp has failed in a series of legal battles to stop a Singaporean company, Future Enterprises Pte Ltd (“FE”) from using the marks “Mc” and “Mac” in their products. The Singapore Court of Appeal in the case of McDonald’s Corp v Future Enterprises Pte Ltd [2005] 1 SLR 177 dismissed Mc Donald’s appeal against the High Court decision to reject McDonald’s opposition to the registration of the trade marks “MacTea”, “MacChocolate” and “MacNoodles”.

McDonald’s has been operating in Singapore since the mid-seventies. In Singapore alone, there are more than 100 McDonald’s restaurants. On a worldwide basis, it has numerous trademark registrations in respect of various marks that use “Mc” and “Mac” as prefix or suffix including:

• McDonalds

• McFries

• McChicken

• McRib

• McNuggets

• McDonald’s

• McBurger

• Big Mac

• Egg McMuffin

• SUPERMAC

• Mc

The device of the golden arches forming the letter “M”

Their corporate logo which had the word McDonalds superimposed on the golden arches

(Hereinafter referred to as the “McDonald’s family of marks”)

McDonald’s claimed that it had built an extensive reputation in its family of marks as far as food and beverages were concerned, which consumers have come to recognize and identify based on their extensive use and advertising. Therefore any use of the prefix or suffix “Mc” or “Mac” would cause confusion or deception, as the public will assume that the products may originate from McDonald’s, as these marks had become synonymous with McDonald’s.

FE had applied to register its “Mac” marks for instant noodle, instant tea mix and instant cocoa mix respectively. FE sold its products overseas under the brand name “MacCoffee”, “MacTea”, “MacChocolate” and “MacNoodles” before introducing them in the Singapore market in December 1994. In 1995, FE applied to register “MacTea”, “MacChocolate” and “MacNoodles” in Class 30, in each case with the eagle device as follows:

McDonald’s opposed the above applications by FE on the basis of its “Mc” and “Mac” family of marks. Both the principal assistant registrar of trademarks and the Singapore High Court had earlier dismissed the opposition.

Before the Court of Appeal, McDonald’s appealed against the decision of the High Court and argued that registration of the three marks was likely to deceive or cause confusion to the public under Section 15 of the Trademarks Act 1992 based on the following grounds:

McDonald’s has acquired a reputation in the field of fast food by the use of the prefix “Mac” or “Mc”, followed by a fast-food descriptive, such as “McNugget”, “McChicken”, etc.

FE had used a similar concept in its application marks, by using prefix “Mac” or “Mc” followed by a food descriptive referring to fast food or convenience products. The fact that marks such as “McChicken” and “McNuggets” appeared only in McDonald’s restaurants’ menu should be immaterial.

Furthermore, McDonald’s argued that the manner in which the prefix “Mac” was used in those marks would cause confusion as the public would think that the products originated from the same source.

McDonald’s also contended that the trial judge was wrong in holding that the feature which the public would associate most with McDonald’s family of marks is not “Mc” but the golden arches.

McDonald’s further argued that FE’s claim to proprietorship of the three marks was not made in good faith as FE had copied the common prefix of McDonald’s family of marks, “Mc” and therefore would be ground for opposition under Section 12 of the Trademarks Act 1992. McDonald’s also claimed that even if their marks and FE’s marks were not substantially similar, McDonald’s should succeed since it had shown that there was bad faith and copying.

FE’s defense was that their marks “MacTea”, “MacChocolate” and “MacNoodles” that they applied for have no resemblance to those of McDonald’s as they were used with an eagle device and are distributed in supermarkets and convenience stores.

Court’s decision:

In dismissing the appeal, the Singapore Court of Appeal held that McDonald’s marks and FE’s marks were neither visually nor aurally similar. McDonald’s marks were usually displayed together with the golden arches or sold in packaging bearing the golden arches. The word components of FE’s marks were different in terms of colour, font and typeface. Applying the decision in Re Application by Hardings Manufactures Pty Ltd (“Hardings Manufactures”), it was decided that although FE was required to disclaim the eagle device, which is common to the trade, it did not mean that the eagle device can play no part in determining whether the application mark is deceptively similar to another mark.

Reputation is just one of the factors to be taken into account, as it will be looked at together with the similarity of the marks, the goods to which they are applied for, and the packaging of the goods in the overall assessment of the likelihood of confusion or deception for the average consumer of the goods or services in question, following the Singapore decision of: Kellogg Co v Pacific Food Products Sdn Bhd [1999] 2 SLR 651.

In this regard, the Court stated the common “Mac” prefix should not be viewed in isolation but in the light of all the surrounding circumstances including the extent of the reputation of the existing mark; how the proposed mark is to be used; the nature of the goods; how the goods are to be sold; and who the target customers are.

Furthermore, FE’s products were sold in supermarkets, whereas McDonald’s products were always menu items sold for immediate consumption within its restaurants and were identified by the “golden arches” logo and the main “McDonald’s” mark. McDonald’s had not sold any of its food products or beverages in supermarkets nor is it involved in the sale of any unprepared food and beverages. Therefore, deception or confusion would be unlikely. Moreover, the customers of today are reasonably well-informed, observant and reasonably cautious and so are not easily tricked into believing that FE’s products are associated with McDonald’s. The very success of the appellant, which was inseparable from its “golden arches” logo, was also the very reason why confusion was unlikely to result.

As for McDonald’s second claim under Section 12, the Court held that the key ingredient to a successful opposition under Section 12 is misappropriation of a mark and substantial identity must be established before bad faith or misappropriation can be inferred. On the facts, the court held that the marks were neither identical nor substantially similar. This itself was a strong indication there could be no copying or misappropriation. Therefore, FE could not have acted in bad faith.

Conclusion

This case demonstrated that use of a distinctive essential feature of a well-known series of mark will not in itself be the single determining factor in the assessment of likelihood of confusion or deception.

In this case, McDonald’s attempt to retain exclusive use of the prefix “Mc” or “Mac” for food and beverages based solely on its worldwide reputation was rejected. Ultimately, the question whether a proposed mark will likely give rise to confusion on account of some similarity with an existing mark is a question of fact depending on all other circumstances.

The decision is part of an international saga of cases testing the ambit of the monopoly of the “Mc” and “Mac” marks by McDonalds.

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