• IN THE UK OFFICE

    McMonopoly Goes West

    The McDonald's Corporation is well-known for its fast-food restaurants and its main trade marks McDonald's, MacDonald's and Mac used in connection with this business. It has a range of food products offered under various "Mc" names, such as Chicken McNuggets. The McDonalds range of foods has grown from the traditional burger and chicken dishes to include a wider range such as oriental dishes, again sold under "Mc" names. With such a massive investment in its "Mc" prefix naming strategy, McDonald's has tried on occasions to prevent others from using "Mc" prefixed marks. However, trying to prove a monopoly in a common prefix to family names is not easy and a recent trade mark opposition, appealed to the High Court illustrates this.

    The case involved the mark McChina used in connection with Chinese style food and restaurants in the UK since 1991 by Mr Frank Yuen. Mr Yuen's evidence indicated that he came to the UK in 1967 and developed plans to sell a "new generation" of Chinese food under the marks McChina and Wok Away. He claimed to have adopted the "Mc" prefix to indicate "son of" reflecting his "new generation" of Chinese food. His first McChina take-away restaurant opened in 1991 and the signage for the McChina Wok Away restaurant depicted the letters "M" and "W" as four crossed chopsticks. In June 1992 Mr Yuen filed four trade mark applications to register McChina for food products in Classes 29, 30 and 31 and restaurant services in Class 42. He indicated that by 1995 he had a business plan to expand the McChina restaurant concept to be a national chain of fast food establishments.

    In May 1995 opposition to these applications was filed by McDonald's. Their oppositions were principally based on their extensive use and earlier registrations for McDonald's Mac and other "Mc" trade marks in the area of food products and restaurant services.

    The opposition was determined under s.11 of the old 1938 Act (that registration of McChina would be likely to deceive or cause confusion) in view of McDonald's earlier use of their trade marks), and Section 12(1) of that Act (that McChina was barred from registration by virtue of McDonald's earlier registrations). The Registry decided that the opposition failed under Section 12(1) but succeeded under Section 11 resulting in refusal of the applications. This decision was appealed to the High Court by both parties. Mr Yuen appealed against the s.11 finding and McDonald's appealed against the s.12(1) finding.

    In their appeal, McDonald's relied principally on its registrations for MacDonald's and Mac for restaurant services in Class 42. The appeal judge (Mr Justice Neuberger) found that, despite having the same prefix, the mark McChina was prima facie distinct from the McDonald's registered marks. As regards the goods and services of the parties, although McDonald's were not offering a range of Chinese style foods at the time the McChina applications were filed (1992), their registrations were sufficiently broadly worded to cover Chinese style food and Chinese style restaurants and it was not unreasonable to expect that a business such as theirs might expand to include Chinese style products for which their registrations could be used. However, despite this, the judge felt that the most that could be said about the possibility of confusion or deception arising through use of McChina was that people might notice Mr Yuen was carrying on a fast-food business under a name beginning with "Mc", as does McDonald's, but use of that "Mc" prefix for a mark in a specific and limited area of the same business as McDonalds was unlikely to deceive or confuse a substantial number of persons. They may have cause to wonder whether there was any connection between the two entities but that alone was not enough for a finding of a "real and tangible danger of confusion" on which the court would need to be satisfied to find in favour of the Opponent. The judge therefore agreed with the Registry decision that on this ground the Section 12 opposition failed.

    Turning to the Section 11 objection, the Court felt that McDonald's were attempting to monopolise the "Mc" and "Mac" prefixes in relation to food or restaurant services and, whilst he accepted in principle that it is possible for someone to build up sufficient reputation in marks of this nature to prevent others using such marks for the same goods or services, any tribunal "would have to be particularly careful before upholding an objection on such a very wide ground".

    McDonald's had filed evidence of sales figures, numbers of restaurants, advertising/promotional spend, etc. for its business together with some evidence of use of its "Mc" prefixed marks. However, the most relevant evidence they had filed to indicate a connection in the minds of the public of use of "Mc" prefixed marks with McDonald's was a survey of the UK public. The survey involved three questions. These were

     

    1. "What would be your immediate reaction or first thought, on hearing that a restaurant had recently opened in your area called McChina?"

    2. "If a restaurant called McChina was to open in your areas would you see it as being part of an existing chain of restaurants?"

    3. "Which existing chain of restaurants do you see it as being part of?" [Of the four possible answers put to the respondents, "McDonald's" was one


    The survey was criticised for the very leading nature of the second and third questions. The second question sowed the seed in the respondent's mind that the restaurant could be part of a chain and, having done that, given the market penetration and high volume advertising of the Opponent's business, it would be surprising if the respondent did not, in the circumstances, select "McDonald's" as the answer to the third question. The first question was not objectionable in itself but the answers did not in any way establish such a significant association of the "Mc" prefix with McDonald's that use of McChina would be likely to cause the requisite deception and confusion. Furthermore the survey took place in 1996, some four years after the McChina applications were filed.

    Taking into account all of the evidence available to the UK Office at the Opposition hearing, the judge found that the opposition under Section 11 should not succeed. The decision was arrived at primarily having regard to the lack of prima facie similarity of the marks, the lack of any real evidence of the McDonald's marks being associated by the public with oriental foods and restaurants and the absence of any real confusion being shown despite Mr Yuen having traded in close proximity to two McDonald's restaurants under his McChina mark for almost ten years by the time the case was heard. The appeal against the UK Office's Section 11 decision therefore succeeded and Mr Yuen's mark was allowed to proceed.

     

    Comment

    McDonald's loss of this opposition can be explained by the lack of evidence to support the claim that they enjoyed a de facto monopoly in "Mc" prefixed marks in the marketplace. The decision is the correct one if it is accepted that confusion should be judged from the position in the relevant market rather than the state of the Register. This case also illustrates the problems that survey evidence can encounter, particularly surveys that contain clearly leading questions.