Is the prefix "Mc" the exclusive intellectual property of McDonald's?
There was some doubt earlier this year when McDonald's lost a battle with Supermac, leading to the partial revocation of one of its European Union ("EU") trade mark registrations for "Mc". However, a recent judgment of the EU General Court indicates that, as one of world's most well-known fast food chains, McDonald's owns rights in the prefix "Mc" beyond the realm of chicken nuggets and meat sandwiches.
The mark at issue was a yellow, white and red logo featuring "McDREAMS HOTELS sweet dreams at low prices" (translated) (the "McDreams Mark") which the applicant, McDreams Hotel GmbH ("McDreams"), had applied to register in respect of "Providing temporary accommodation" in class 43.
Earlier in the proceedings, the Opposition Division of the EU Intellectual Property Office had rejected McDonald's opposition which was based on a number of its marks incorporating the prefix 'Mc', along with its reputation specifically in "McDONALD'S" (the "McDonald's Mark").
However, upon appeal, the Board of Appeal annulled the Opposition Division's decision finding that:
- whilst there was no likelihood of confusion, the conditions for Article 8(5) of Regulation 2017/1001 ("EUTMR") – relating to reputation – had been fulfilled
- McDonald's owned a family of marks in relation to fast food establishments defined by the prefix "Mc", and that prefix had acquired a high degree of distinctive character through use on the fast food market when combined with a generic term denoting a food, e.g. McMUFFIN
- as the main, dominant and most distinctive element of the McDreams Mark was ‘mc dreams’, the McDreams Mark reproduced the structure of, and 'fitted into', McDonald's family of marks
- given the outstanding reputation of the McDonald's Mark and the certain degree of similarity between the marks and the services at issue, the general public in the EU could be attracted by the McDreams Mark, leading the public to purchase the services marketed by McDreams, thereby taking unfair advantage of the reputation of the McDonald's Mark
General Court decision
McDreams appealed the Board of Appeal's decision to the General Court (the "Court"), in which it disputed the existence of:
a) a link between the marks at issue
b) distinctive character of the prefix ‘Mc’ and any likelihood of confusion
c) unfair advantage being taken of the McDonalds Mark's repute.
The Court confirmed that, where a rights-holder relies on an earlier mark's reputation, a lesser degree of similarity may be sufficient to establish a link with the earlier mark when compared with trying to establish a likelihood of confusion or association (where the earlier mark cannot be shown to have such repute). The Court also stated that two marks are similar where they are at least partly identical as regards one or more relevant aspects, e.g. such as the presence of the prefix "Mc". Having undertaken a global assessment – examining the visual, phonetic and conceptual similarities – between the McDreams Mark and the earlier McDonald's Mark, the Court found that there was a low degree of overall similarity.
Further, having dismissed McDreams' contention that the prefix lacked distinctiveness on the basis that businesses other than McDonald's used marks containing "Mc", the Court held that the structure of "mc dreams" was (at least in part) similar to McDonald's family of marks, reinforcing the likelihood of a link in the mind of the relevant public. The Court also found a significant degree of closeness between the services, given that providing temporary accommodation may include providing food and drink services for guests, meaning the services may coincide in the provider and target the same clientele. It was irrelevant that McDreams itself did not offer food and drink to its customers.
In view of the "exceptional" reputation of the McDonald's Mark – which was not disputed by McDreams – combined with the average level of attention of consumers, the degree of similarity between the marks and significant proximity of the services, as well as the existence in the market of McDonald's family of marks, the Court endorsed the Board of Appeal's conclusion that the relevant public would establish a link between the McDonald's Mark and the McDreams Mark, even though McDonald's does not offer any form of accommodation or hotel services.
In relation to unfair advantage, the Court recalled the Board of Appeal's observations that the relevant public would associate the McDreams Mark with the "image of reliability, efficiency, low-cost services" cultivated by McDonald's, thereby riding on its coat-tails and benefitting from the power of attraction of the McDonald's Mark. Further, the McDreams Mark not only used similar colours to those most frequently used by McDonald's, but also used the tagline "sweet dreams at low prices" which, the Court said, was not far removed from the idea of low cost meals conveyed by the McDonald's Mark.
Given the exceptionally high reputation of the McDonald's Mark, the Court reiterated that it was unnecessary for McDonald's to put forward or prove that there may be future, non-hypothetical risk of detriment to or unfair advantage being taken of the McDonald's Mark given such risk was "so obvious".
The findings of the Court regarding the "exceptional" reputation of the McDonald's Mark and the existence of the family of "Mc-" marks have allowed McDonald's to enforce its rights beyond fast food services, meaning McDonald's might still have rights to rely upon even if all of its EU registrations for "Mc" were to be revoked.
However, it is clear that hotel services were seen as adjacent to those covered by McDonald's rights, so – despite arguably being one of the best known brands in the world – McDonald's may not (yet) be able to control exclusively use of the "Mc" prefix across all sectors.