(This post has been co-authored by Pankhuri Agarwal. She has recently completed her LL.M. in IP law from the National University of Singapore)
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In Part I of this post, we had discussed the EU General Court’s recent judgment in Future Enterprises Pte Ltd v. EUIPO & McDonald’s International Property Co. Ltd, which upheld the cancellation of the mark ‘MACCOFFEE’ registered by a Singapore company, Future Enterprises, for its food stuffs and beverages. It was found that use of ‘MACCOFEE’ was without due cause and could take an unfair advantage of the reputation of McDonald’s similar mark ‘McDONALD’S’ used for its restaurant services. In this post, we will run you through some interesting Indian decisions on actions filed by McDonald’s for enforcement of its trademarks. It may be noted at the outset that McDonald’s has been proactive in enforcing its trademarks in India as early as 1994 when it was yet to open a restaurant in the country and has had its fair share of setbacks as well.
Logo ‘M’
In P.C. Mallappa & Co. v. McDonald’s Corporation, the Karnataka High Court was called upon to decide whether the injunction granted by the trial court restraining the defendants from using McDonald’s corporate logo ‘M’, registered in India under the Trade and Merchandise Marks Act, 1958 in 1983, along with the words ‘Mallappa & Co.’ for his sanitary ware business was justified. The defendant contented that there was no question of passing off. According to him, he was a prior bona fide user of the logo as he had been using the logo, containing the first letter of the name of his firm, since 1990 and the plaintiff had not established use in India till then. He further contented that the action was not maintainable as the plaintiff dealt with restaurants and fast food whereas he was carrying on a sanitary ware business.
The court rejected these arguments by relying upon an earlier judgment which held that actual sale of goods is not required to be shown if goodwill and reputation in India could be proved by other material presence of the plaintiffs. It also held that if there is no common field of activity, the possibility of deception, the crux of passing off action, is less but not nil as a rule of law. The injunction was refused to be interfered with by holding that the logo used by the defendant was similar to the well-known and famous logo of the plaintiff and an ordinary customer is likely to believe that there is some connection between the trades of both.
The judgment is not very convincing as the court failed to explain how a customer could draw a connection between McDonald’s restaurant business and defendant’s sanitary ware business by use of logo ‘M’, especially at a time when McDonald’s had not even set up a restaurant in India.
Macgilz Fast Food
The next dispute arose over the use of the prefix ‘MAC’, similar to the one we witnessed in the EU dispute discussed in the Part I of the post. In McDonald’s Corporation v. Macgilz Fast Food, an appeal was filed before the Punjab & Haryana High Court by McDonald’s from the order of the lower court dismissing its application for an injunction against use of the word ‘MAC’ as a prefix to Gilz by the defendant in the name of its restaurant. The defendant opposed the appeal on the following grounds: (a) its restaurant was named ‘MACGILZ FAST FOOD’ after the nickname ‘MAC’ and surname ‘Gill’ of one of its partners, (b) its trademark was different in many respects including pronunciation, (c) it was incurring losses and thus can’t be said to have encashed upon the prefix ‘MAC’, (d) the plaintiff did not run a restaurant in Punjab and thus the residents may not even be aware of its trademarks, (e)‘MACGILZ’ would mean ‘son of Gills’, ‘son of’ being the dictionary meaning of ‘MAC’ and (f) the word ‘MAC’ has not been used by the plaintiff and only projected to be used and is still pending registration.
The court referring to the historical explanation of the word ‘MAC’ in an encyclopedia and a number of names that start with ‘Mc’, held that the examination of the usage of words ‘MAC’ and ‘Mc’ and their effect had to be made in the right perspective based upon the evidence produced by the parties. It considered it to be absolutely premature to form an opinion that there is deceptive similarity between the words ‘McDonald’s’ and ‘MACGILZ’. It thus refused to grant an interim injunction and directed the trial court to decide the suit on the basis of cogent evidence that may be produced by the parties.
It would have been interesting to compare the ruling of the trial court (if at all it has finally disposed of the matter) against the EU General Court judgment as both involved a dispute over the use of the word ‘MAC’ as a prefix. However, we were unable to locate any information regarding what transpired at the trial court in the matter.
Sterling’s Mac Fast Food
Another plea for injunction was made by McDonald’s before a trial court in Bangalore against Sterling’s Mac Fast Food in 1998. The suit was filed as a result of the Defendant’s refusal to comply with the request made by McDonald’s to write the word ‘STERLING’S’ in a bold font equivalent to the font used for ‘MAC Fast Food’ outside their retail outlet. This, according to McDonald’s, would render it equally visible and prevent use of ‘MAC’ from causing confusion or deception among the public with its registered trademarks ‘BIG MAC’ and ‘McDONALD’S’ as well as unregistered ones with prefix/ suffix Mc/Mac. The registration of ‘BIG MAC’ was subject to the condition that it would not give McDonald’s the exclusive right to use the word “BIG’ alone. Since, the word ‘MAC’ was not subjected to such condition, the plaintiff claimed an exclusive right to use it. The defendant prayed for dismissal of the suit on the grounds that (a) it had been using the trademark ‘Sterling’s Mac Fast Food’ since 1982 for its restaurant in Bangalore, (b) the use of ‘MAC’ was bona fide as the firm was named after its founding partner’s son Mac Mathew, (c) its trademark was completely different from that of the plaintiff’s, (d) the plaintiff did not use the word ‘MAC’ alone and the application for its registration was still pending and (e) the suit was filed after a gap of 5 years from serving of the cease and desist notice to the defendant. The trial court dismissed the suit in 2004 and its judgment was appealed against by the plaintiff before the Karnataka High Court in McDonald’s Corporation and McDonald’s India Private Ltd. v. Sterling’s Mac Fast Food.
The high court held that the defendant had not infringed the plaintiff’s registered trademarks. It noted that the plaintiff cannot claim exclusive right to use ‘MAC’ as the defendant had been using it in its trademark since 1983 whereas the plaintiff started using its trademarks in India only since 1996, most of which were registered only during the pendency of the suit. Furthermore, it pointed out that it was clear from the plaintiff’s rejoinder to the notice that it had no objection to use of the word ‘MAC’ if the word ‘STERLING’S’ preceding it was equally visible. It was also noted that the suit ought to have been dismissed on the ground of delay itself of almost five years in filing the suit after sending of the notice. For these reasons the court held that McDonald’s could not claim an exclusive right to use the mark ‘MAC’ as it was not their exclusive registered mark. It dismissed the appeal with costs terming the suit as vexatious and imaginary.
The ruling in this case, unlike in the EU ‘MACCOFFEE’ one, was largely based upon factors such as prior use, initial objection being limited to font size of the prefix Sterling’s as opposed to the use of the word ‘MAC’ and the delay in filing of the suit. Therefore, it is doubtful if this judgment would serve as useful guidance in cases where these factors are absent. The court did not opine on the similarity or dissimilarity between the two marks. However, apart from the above mentioned factors, the court seems to have also taken into account the fact that ‘MAC’ was not a registered mark of McDonald’s in holding that it did not have an exclusive right to use it. Nevertheless, even though ‘MAC’ is not a registered mark of McDonald’s, the courts may rely upon its registered mark ‘McDONALD’S’ in cases involving the use of ‘MAC’ as a prefix (e.g. MACGILZ), as the EU court did, for granting an injunction against use of ‘MAC’.
It would be interesting to see if the courts in India will continue rejecting or start recognising McDonald’s’ monopoly over ‘MAC’ after the EU ‘MACCOFFEE’ decision.
Image from here.