MACCOFFE v McDONALD’S: Black sheep of the “McFamily”
Given the notoriety of McDonald´s and their products, it is hard to imagine anyone would challenge their entitlement to the “Mac” and “Mc” prefixes. However, it was only recently that the European General Court (the EGC) confirmed in its decision T‑518/13 dated 5 July 2016 that the contested prefixes are reserved for McDonald´s in the food industry.
Background of the case
In 2010, the Singaporean company Future Enterprises Pte Ltd was granted registration of the wordmark “MACCOFFEE” by European Office for Intellectual Property (EUIPO), under the registration number 007307382. On 13 August 2010 McDonald´s International filed for cancellation, claiming that Future Enterprises is taking unfair advantage of the popularity of the McDonald´s brand and the reputation of the earlier wordmark ‘McDONALD’S (EUTM no. 000062497). Also, a plethora of other “Mc” or “Mac” wordmarks, naming different McDonald´s products (Big Mac, McChicken, McCafe, PitaMac…), should not be disregarded. The Cancellation Division decided in favor of McDonalds, stating that the signs are somewhat similar. However, due to a long-lasting use and high reputation of the “Mac” trademarks, it is likely that the consumers will be led into confusion, thinking that “MACCOFFEE” is another sub-brand of Mcdonald´s.
Future Enterprises appealed to EUIPO´s Board of Appeal. They stated that McDonalds does not have a claim over the prefixes, as they are indistinctive and will more likely be connected to a Scottish last name. Also, the two trademarks have coexisted for years and McDonalds does not have a prevailing reputation in the entire EU. The appellant also claimed that the Cancellation Division erred in deeming that the categories of goods and services and the prefixes “Mc” and “Mac” were similar. Finally, trademarks like “PITA MAC” or “BIG MAC” do not belong to the same group of marks as the “Mc” products.
With their decision of 13 June 2013 (case no. R 1178/2012-1), the Board of Appeal stated that the signs are low in visual, but higher in conceptual and aural similarities, and might cause confusion among customers. In question was also the protectability of the whole “Mc” family of products. The Board deemed that McDonalds did prove genuine use of multiple compatible trademarks and the consumers would connect “MACCOFFEE” to the “McFamily”. When it came to distinctiveness of the “Mc” prefix, it was true that the Scottish and English population might consider it as a prefix of a last name. However, when speaking of the respective goods and services, “McDONALD´S” enjoys a very high reputation and is highly distinctive. Considering their market share and turnover (around 3 billion dollars worldwide), the intensity, geographical extent, duration of its use and investments in promotional activities, the Board decided McDonalds enjoys reputation in a substantial part of the EU territory. Therefore, it is not unreasonable to think that Future Enterprises would benefit from the other trademark, considering they target the same relevant public.
Future Enterprises appealed once again, and took the case to the EGC.
Decision of the Court
The EGC decided on the case on 5 July 2016. The first claim the judges tackled was on the similarity of the trademarks. Future Enterprises claimed that the Board of Appeal misjudged the importance of visual similarity in the food industry. They repeated the connection of the prefixes with the Scottish name and added that the American public would perceive it as slang for addressing a stranger in a friendly manner. However, they did not contest the likelihood of confusion. The EGC accepted the claim that there was no visual similarity, not even on a lower level. However, it agreed with the Board of Appeal´s judgement that there was a phonetic and conceptual similarity, as well as an overall similarity.
The second point they had to decide on was the entire “McFamily”. They cited case law and stated that several marks could be considered as a family if they possess common characteristics like having the same distinctive element with the addition of a graphic or word element differentiating them from one another, or when they are characterized by the repetition of a single prefix or suffix taken from an original mark. Upon examining provided evidence, they decided that there was sufficient proof of use of the other “Mc” and “MAC” trademarks in the fast food industry. Also, McDonald´s ensured that the prefix had its own distinctive character. Therefore, the Board of Appeal did not err in concluding that the conditions for a family of trademarks were fulfilled.
Next, the similarity of the categories of goods and services was weighed. “MACCOFFEE” was registered for “foodstuffs and beverages”, and “McDONALD´S” for “fast food services”. These categories are highly compatible, and should be considered as similar.
Finally, the EGC had to decide whether Future Enterprises was free-riding on McDonald´s reputation. Future Enterprises´ claims that the signs have peacefully co-exited should be disregarded, as the current lawsuit was the exact proof that McDonald´s was not content with their co-existence. Multiple studies have shown the reputation of the “Mc” and “MAC” products, and the strength of the link of the prefixes with the goods. Therefore, consumers´ logical train of thought would be that “MACCOFFEE” belonged to McDonald´s International.
On presented grounds, the EGC dismissed the action in its entirety and ruled in favor of McDonalds, securing their dibs on the “Mc” and “MAC” prefixes.
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