MCBISCUIT takes the biscuit against McDonald's

South Africa

In McDonald's International Property Co Ltd v Gianni (Case 1998/09833, unreported, October 2 2007), the Transvaal Provincial Division of the High Court of South Africa has dismissed an appeal against the decision of the registrar refusing the cancellation of the trademark MCBISCUIT.

Dean Gianni registered the trademark MCBISCUIT in South Africa in Class 30 of the Nice Classification for foods including biscuits. The trademark has been used in various label formats for biscuits having a "distinctly Scottish flavour".

McDonald's International Property Co Ltd, a wholly-owned South African subsidiary of McDonald's Corporation, applied to the registrar of trademarks to cancel the registration of MCBISCUIT under Section 24 of the Trademarks Act, read with Sections 10(12) and 10(14). The application was based on a number of its registered trademarks incorporating the elements 'Mc' or 'Mac' and the reputation attaching to them (eg, MCDONALD'S, BIG MAC, MCFEAST, MEGAMAC, MCCHICKEN, MCROYAL and MCNUGGETS), all registered in Class 30 in relation to a variety of goods such as bread, pastry, hamburgers, sandwiches and, in some instances, biscuits.

The main thrust of Gianni's defence before the registrar was that McDonald's International Property could not claim a monopoly in South Africa in the use of the prefix 'Mc' or 'Mac' for trademarks in this class because of the existence of various other trademarks, both registered and in use, including these prefixes. He also denied that the trademark MCBISCUIT was confusingly or deceptively similar to any of the 'Mc' or 'Mac'-prefixed trademarks. The registrar agreed and dismissed the cancellation application.

On appeal, the Full Bench of the Transvaal Provincial Division of the High Court of South Africa initially dealt with applications by the parties to introduce further evidence relating to:

  • trademarks of McDonald's International Property; and

  • further trademarks on the Register of Trademarks in the names of other parties, including MCVITIES, MAC'S, MAC, MCBEANS, MCCAIN, MCBEAN, MCBEEF and MACMUNCH.

New evidence is not normally allowed on appeal; however, McDonald's International Property argued that the evidence that it sought to place before the court was, in fact, properly before the registrar of trademarks as the custodian of the Register of Trademarks when he heard the case. Ultimately, the parties agreed to the introduction of all the further evidence.

McDonald's International Property's main argument was that MCBISCUIT was not only confusingly or deceptively similar to some of the individual 'Mc' or 'Mac'-prefixed trademarks, but would also be seen by consumers as a logical extension of, and hence be confused with, McDonald's International Property's series of 'Mc' or 'Mac'-prefixed marks. In his defence, Gianni again relied on:

  • the contention that MCBISCUIT was not confusingly similar to any of McDonald's International Property's trademarks; and

  • the fact that McDonald's International Property did not enjoy a monopoly in South Africa in relation to goods in Class 30 for trademarks including the prefixes 'Mc' or 'Mac'.

The court first considered the issue of the reputation in South Africa of McDonald's International Property's trademarks. It confirmed that the relevant date for this assessment was June 8 1998, the date of the MCBISCUIT trademark application. In light of the evidence before it, the court concluded that, at that date, McDonald's International Property had established a reputation only in the MCDONALD'S trademark, and none of the others. It thus held that the MCDONALD'S and MCBISCUIT trademarks were not confusingly similar and dismissed the appeal under Section 10(12) of the Trademarks Act.

As far as McDonald's International Property's reliance on Section 10(14) of the act was concerned (in particular, its individual 'Mc' or 'Mac' registrations and the series which they formed), the court held that McDonald's International Property had failed to identify which of its 'Mc' or 'Mac'-prefixed registered trademarks were alleged to be confusingly similar to MCBISCUIT, as its deponent had alleged only that there would be confusion in relation to 'some' of them. In any event, the court held that MCBISCUIT was not confusingly similar to any of McDonald's International Property's trademarks. With regard to the case based on the series of 'Mc' or 'Mac'-prefixed trademarks and the contention that MCBISCUIT would be viewed by a significant number of consumers as being another horse from the 'Mc' or 'Mac' stable, the court was bound to follow the approach of the Supreme Court of Appeal in Cowbell AG v ICS Holdings Limited (2001 (3) (SA) 941 (SCA)), in which Justice Harms stated:

"The series argument might have some merit had the marks been associated. I have in any event a conceptual difficulty. If A does not resemble B, C or D individually, I fail to understand how it can resemble them collectively."

McDonald's International Property tried to distinguish the Cowbell decision by arguing that the "conceptual difficulty" of the court in that case was not a finding of law but rather of fact. It argued that McDonald's International Property's 'Mc' or 'Mac'-prefixed trademarks were inter-associated and formed a distinctive series of marks. However, the court rejected this and related arguments and held that, even if the remarks of the court in the Cowbell Case were obiter dictum and not findings of law, it found the logic of the decision "unassailable" and rejected the appeal under Section 10(14) as well.

The appeal was thus dismissed with costs.

Chris Job, Adams & Adams, Pretoria

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