In a case that has drawn a fair amount of media interest, the General Court of the EU has upheld a previous decision of the EUIPO Board of Appeal to declare that the EU word mark MACCOFFEE, owned by Singaporean company Future Enterprises Pte Ltd, is invalid. The decision was based upon a cancellation action previously brought by McDonald’s International Property Co. Ltd wherein it alleged that the contested mark would take unfair advantage of its McDONALD’s mark, including the reputation of its family of marks which share the distinctive element ‘Mc’.
Future Enterprises filed its application for MACCOFFEE on 13 October 2008 in relation to various categories of food and drink. The mark was successfully registered on 29 January 2010. However, McDonald's, having not opposed the application, proceeded to file for an application for a declaration of invalidity on 13 August 2010. The action was based upon their McDONALD’S registrations as well as several other marks containing the prefix ‘Mc’ such as McFISH, McMUFFIN and McFLURRY.
On 27 April 2012, the Cancellation Division of the EUIPO issued a decision in favour of McDonald's, deciding that the MACCOFFEE mark took unfair advantage of the longstanding reputation that existed in the McDONALD’S mark. Future Enterprises appealed this decision to the Board of Appeal (BOA), but to no avail, as the previous decision was upheld in its judgement on 13 June 2013. A further appeal was lodged with the General Court where, after careful consideration of the relevant facts, evidence and arguments, the Court delivered its judgement on 5 July 2016.
The European Union Trade Mark Regulation provides broad protection for marks which have a demonstrable reputation in the EU. To qualify for such protection, the owner of the earlier registered mark must prove that such a reputation exists and that due to the similarity between the marks in question, the relevant public is likely to establish a link, such that use of the later mark is likely, without due cause, to either cause damage to the earlier mark, or take unfair advantage of its distinctive character or repute. The Court found that despite the finding of visual dissimilarity between the marks McDONALD'S and MACCOFFEE, there was sufficient phonetic and conceptual similarity to conclude that the contested mark consisted of elements which could be associated with the McDONALD’S mark and its related ‘Mc’ family of marks.
Turning to the alleged damage, the Court examined the BOA’s finding that use of the MACCOFFEE mark would take unfair advantage and in essence "ride on the coattails" of the MCDONALD’s marks. The BOA concluded that use of MACCOFFEE could entail a "transfer of the image" of the McDONALD’S mark, or of the characteristics it projects, onto the goods covered by the later contested mark. This use, in the view of the BOA, would be without due cause. Unfortunately for Future Enterprises, the General Court was not persuaded by its arguments and wholly agreed with the BOA’s findings dismissing the appeal.
This case serves as a reminder to those businesses that may be seeking to compete with well-established brand names. The Intellectual Property Offices and Courts do not look favourably upon applications for, and uses of, trade marks which although not confusingly similar to the established brand, are nevertheless similar enough to cause members of the public to make a connection with them in their minds. This is because the creation and maintenance of reputed marks requires significant expenditure by the trade mark owner and such an association may be deemed to either damage the mark or take unfair advantage of it. On balance, it seems fair to conclude that MACCOFFEE is indeed a mark that ‘free rides’ on the significant investment that McDonald’s have made in terms of creating an attractive image for its trade marked products. One might claim that such legal protection for the marks of typically large corporations, ultimately stifles competition in the marketplace. Competition in a marketplace is of course highly desirable, as it can increase market efficiency and ultimately lead to lower prices for consumers. Competition, however, that emanates from the exploitation, without expense, of an established trading reputation, is not desirable from an economic point of view. Such competitive practices can, if left unchecked, lead to an unwanted decrease in investment and market efficiency, as a brand owner’s incentive to invest and maintain high quality, reputable products would be significantly diminished. It is therefore appropriate, at least in this writer’s view, for society to deem such practices as an infringement of a reputed brand holder’s rights and interests.