Friday, July 8, 2016

MACCOFFEE? We're not lovin' it, says General Court

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On 5 July 2016, the General Court of the CJEU issued a ruling which suggests that the repute of the McDONALD'S trade mark will usually make it possible to prevent others from registering food or beverage trade marks which combine the prefix 'Mac' or 'Mc' with the name of a food or beverage.
How far do the McDonald's rights in the prefix 'Mc' extend?
Quite far, says General Court.

In 2008, Singapore-based company Future Enterprises applied to register an EU trade mark for 'MACCOFFEE' in respect of Nice classes 29, 30 and 32. It appears that the mark was only ever used on coffee and coffee packaging.

The application was registered, and although they did not oppose the registration, McDonald's later applied to have the trade mark declared invalid on the basis of its earlier EU trade mark McDONALD'S as well as 12 other trade marks which it held for fast food restaurant services and which included the words elements 'Mc' or 'Mac' as prefixes (McRIB, McMUFFIN and McCHICKEN to name three).

In 2012, the MACCOFFEE registration was declared invalid in its entirety and the registration was cancelled. The First Board of Appeal upheld the cancellation decision, at which point Future Enterprises appealed to the General Court.

The Appeal

The decision to cancel the MACCOFFEE mark was based on Article 8(5) of the EU trade mark regulation. In broad terms, a cancellation application under Article 8(5) would need to prove the following points:

1. That the McDONALD'S mark predated the MACCOFFEE mark;
2. That the marks were identical or similar;
3. That the McDONALD'S mark had a reputation in the European Union; and
4. That the use without due cause of the MACCOFFEE mark would take unfair advantage of, or be detrimental to the distinctive character or repute of the earlier trade mark. (See the case law cited in  Nimei La Perla Modern Classic )

Future Enterprise's appeal was based on point 2 (whether the marks were similar) and point 4 (whether the use of MACCOFFEE was without due cause & took unfair advantage/caused detriment).

(a) Were the McDONALD'S and MACCOFFEE marks identical or similar?

Under Article 8(5) the there must be a sufficient degree of similarity between the marks for the relevant public to establish a link between one and the other (See judgment of 6 July 2012 in ROYAL SHAKESPEARE, T-60/10, not published). It is not necessary to  prove likelihood of confusion.

  -   Was there a sufficient degree of similarity?

The General Court upheld the Board's decision that there was a sufficient overall degree of similarity between the marks to establish a link in the mind of the relevant public.

It was said that while the Board had been wrong to find that the marks were visually similar, they had been right to find a degree of phonetic and conceptual similarity - despite two ingenious arguments to the contrary from Future Enterprises:
  • The double c in MACCOFFEE would be pronounced very differently to the single c McDONALDS  - 'mac coffi' vs. 'me don alds.' (The IPKat wonders if the Court meant to characterise the second pronunciation as 'mec don alds', but the decision says 'me'. In any event, the Court found that any difference in emphasis on the vowel sound in Mac/Mc was negligible.)
  • The 'mac' element in the contested mark would be understood as the friendly slang term used by Americans, as in: 'Hey Mac, you want a coffee?'
  -   Were the marks similar enough to establish a link in the mind of the relevant public?

Future Enterprises said the Board of Appeal had erred in finding that the earlier McDonald's marks formed part of a 'family of marks' and were used as such.

The General Court rejected this argument. The evidence showed that the McDonald's marks for 'McFLURRY', McMUFFIN, McRIB, CHICKEN McNUGGETS, McCHICKEN and EGG McMUFFIN were used in Germany and/or the UK during the relevant period. In short, McDonald's had enough marks sharing the same 'mc' prefix to prove the existence of a family of marks.
 
On this basis, the General Court concluded that the relevant EU public would establish a link between MACCOFFEE and the pre-existing family of McDonald's marks.

(b) Did the MACCOFFEE mark take unfair advantage of, or was it detrimental to, the distinctive character or repute of the McDONALDS trade mark?

Riding on the coat tails of the earlier mark,
said the General Court
Having taken the view that the MACCOFFEE and McDONALD'S trade marks were similar enough to establish a link in the minds of the relevant public, and given the undoubted reputation that McDonald's enjoys it was more or less inevitable that the General Court would uphold the Board of Appeal's decision on the detriment point.

The decision focused on unfair advantage. The General Court said it was "highly likely that the contested mark rode on the coat-tails of the McDONALD'S trade mark."

There was a risk that the image and characteristics of the McDONALD'S trade mark would be transferred to Future Enterprise's MACOFFEE products.

Future Enterprises pointed to the fact that the MACCOFFEE marks had been used without challenge in some EU countries (Bulgaria, Estonia, Cyprus, Latvia, Hungary and Poland) since 1994, but the General Court pointed out that this did not mean that McDonald's had acquiesced to the mark's use throughout the EU market.

Comment

Will this decision encourage Apple to take a more robust approach to enforcing its iPHONE, iPAD, iPOD, iMAC and iTUNES trade marks? The iPKat hopes it does not get any nasty letters...


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