Federal Court puts an end to battle over 'Mc' prefix

In McDonald's Corporation v McCurry Restaurant (KL) Sdn Bhd (September 8 2009), the Federal Court of Malaysia has refused to grant US fast food giant McDonald’s Corporation leave to appeal against a decision of the Court of Appeal in which the latter had held that a Malaysian restaurant could use the trade name McCurry. The Federal Court's decision puts an end to the eight-year battle between McDonald's and the McCurry restaurant.

On September 7 2009 the Federal Court adjourned McDonald's application for leave to appeal to enable its counsel to rephrase its questions based on the findings of the Court of Appeal. The court was of the view that some of the questions posed by McDonald’s counsel had not been raised before the Court of Appeal.

On April 29 2009 a three-member Court of Appeal panel ruled in favour of McCurry (for further details please see "McDonald’s loses eight-year battle over 'Mc' prefix"), reversing an earlier decision of the High Court in McDonald’s favour (for further details please see "McDonald's turns up the heat on MCCURRY"). The Court of Appeal found that the High Court had erred in assuming that McDonald’s had a monopoly in the use of the prefix 'Mc'. It further held that the average consumer would not associate McCurry with McDonald’s.

The Court of Appeal was also of the opinion that the owner of the restaurant, by adopting the trade name McCurry, did not intend to take unfair advantage of McDonald’s reputation. It considered, among other things, that:
  • the parties’ get-up and logo had to be assessed as a whole;
  • none of the food items served at the McCurry restaurant had the prefix ‘Mc’;
  • McCurry serves Indian food, while McDonald’s serves fast food; and
  • the customers of the parties were different (McCurry's customers were mainly adults, while McDonald’s customers were mainly families with children).
The battle between McDonald’s and McCurry highlights the difficulty faced by the owners of well-known marks in establishing passing off in the absence of actual confusion. The reputation and distinctiveness of a mark may play against the interests of the trademark owner, as it will be more difficult to prove that consumers are confused. In the absence of the legal concept of dilution, as found in the United States, the Malaysian courts were not prepared to stretch the tort of passing off to confer the wide scope of protection sought by McDonald’s.
Sri Sarguna Raj, Skrine, Kuala Lumpur

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