Fans of the Eddie Murphy movie
Coming to America will remember an investigation of McDowell’s restaurant by burger chain McDonald’s for trademark infringement.
“They use a sesame seed bun. My buns have no seeds,” explains the owner of McDowell’s in an attempt to prove he isn’t exploiting his industry competitor. “They got the golden arches, mine the golden arcs,” he adds.
In reality, it’s unlikely this line of argument would have been successful as a long-fought case involving McDonald’s demonstrates.
In
Cheah v. McDonald’s Corp., Justice Roger Hughes dismissed a Federal Court challenge launched by Tong Cheah, who had spent six years fighting to trademark the word MacDimSum.
Cheah had tried to register the trademark for “a vast number of food and drink items,” all “of the sort that one might find in a Chinese or other oriental restaurant,” according to Hughes’ written decision released on July 10, 2013.
The application was “simply for a word, MacDimSum, and not for that word in any particular type style; nor for that word in combination with any other word or design,” wrote Hughes.
McDonald’s successfully argued there would be confusion between MacDimSum and its own “family” of trademarks and that the public didn’t distinguish between Mc and Mac.
“The case underscores the importance of a brand owner like McDonald’s policing its trademark rights,” says lawyer John Simpson of Shift Law.
With the company having established its own family of trademarks and aggressively pursuing individuals threatening to dilute its brand, “it’s at a point where you can’t use Mac or Mc for any food services,” says Simpson.
There are examples of McDonald’s failing to prevent convenience store owners and coffee shops from using the prefix Mac. But in
Cheah, the court found the appellant had failed to provide any evidence of the use of the disputed prefix in any food-related goods or services in Canada.
Hughes stressed in his decision that “the evidence as to use or intended use is critical to any decision such as this.”
If the appellant had provided examples of businesses with Mc or Mac in their titles that served food, even if it was only candy or condiments, the court may have offered some analysis of whether dim sum is distinct from the type of products served by McDonald’s, says Simpson.
To a large degree, the outcome of the case rested on the failure of Cheah to provide “any meaningful evidence,” agrees Scot Patriquin, a partner at Brauti Thorning Zibarras LLP.
The case also “underlines the fact that the more famous or distinctive a trademark is, the more likely it is protected,” he adds.
“It’s important, when starting up a brand strategy, to ensure that you’re staying away from the scope of a famous mark in an industry. . . . You really should be trying to come up with distinctive names.”
Any business serving coffee would do well to avoid the words “star” or “bucks” and using the Starbucks name or logo could even be problematic in an unrelated industry such as clothing, he says.
In contrast, using a less distinctive name such as “Bell” is less likely to lead to a trademark dispute.
A number of Canadian companies have made claims for a family of marks. For example, Molson has fought several applications for trademarks that include the word “golden” in relation to beer. Loblaw Co. Ltd. has also asserted its trademark rights for “President’s Choice.”
But McDonald is a common name; a
411.ca search pulls up nearly 10,000 results in Canada and there are a further 22,000 MacDonalds. Does the ruling suggest that if one of these McDonalds or MacDonalds wished to open a restaurant, they would be unable to trade under their family name?
No, says Simpson, explaining that a registered trademark doesn’t prevent people from making a
bona fide use of their name as a trade name under s. 20(1)(a) of the Trade-marks Act.
More generally, a person can’t register a surname unless it has already acquired a secondary meaning or become distinctive as a trade source under s. 12 of the act.
In
Cheah, McDonald’s also used survey evidence to show that “a statistically significant proportion of consumers would identify McDonald’s as the source of certain listed food products with the name MacDimSum,” wrote Hughes in his decision.
He continued: “The court has been suspect as to the growing use of and reliance upon surveys in proceedings such as this.”
However, the way MacDonald’s used this evidence “cannot be faulted,” Hughes wrote.
The decision refers to the 2011 case,
Masterpiece Inc. v. Alavida Lifestyle Inc. A survey used by Masterpiece was “unhelpful,” the Supreme Court of Canada said, because it “attempted to simulate consumers with an imperfect recollection when none was available.”
It added: “Courts must fulfil their gatekeeper role to ensure that unnecessary, irrelevant, and potentially distracting expert and survey evidence is not allowed to extend and complicate court proceedings.” This was particularly true for trademark cases, it said.
Patriquin says the general concern among judges that surveys can be too “anecdotal” doesn’t mean people should avoid them as long as lawyers have “sufficient evidence in relation to the reliability and accuracy of the questions.”
In weighing whether McDonald’s was bullying Cheah, the judge also took into account a letter sent from the appellant to the restaurant chain on March 17, 2008.
The letter stated, “we can together perhaps explore the possibilities of a global MacDimSum partnership.” This provides a “hint of the appellant’s true motivations in seeking to register MacDimSum,” noted Hughes, adding McDonald’s hadn’t bullied Cheah but “behaved extremely properly and courteously.”
The finding seems to have dealt a final, fatal blow to Cheah’s appeal.
“Most of the time when people come this close to a trademark, it’s intentional,” says Patriquin. “In this case, it wasn’t just possibly intentional, it was explicitly intentional.”
