McDonald's appeal against MAC registrations fails again

The Singapore Court of Appeal has dismissed McDonald's appeal against the High Court decision to reject McDonald's opposition to the registration of the marks MACNOODLES, MACTEA and MACCHOCOLATE ([2004] SGCA 50, November 3 2004).

Future Enterprises Pte Ltd had applied to register its word and eagle device marks in relation to instant noodles, instant tea mix and instant chocolate mix respectively. McDonald's opposed the applications on the basis of its MC/MAC family of trademarks (eg, MCCHICKEN, MCMUFFIN and MCNUGGETS). Both the principal assistant registrar of trademarks and the Singapore High Court dismissed the opposition (see McDonald's opposition to MAC marks fails). McDonald's appealed.

The Court of Appeal upheld the High Court decision. With regard to the main grounds of appeal under Section 15 of the Trademarks Act 1992, namely that the marks were intended to deceive or cause confusion, the court held that ultimately the question of whether a proposed mark is likely to give rise to confusion on account of some similarity with an existing mark is a question of fact depending on all the circumstances of the case. Besides comparing the marks, it is also relevant to consider:

• the extent of the reputation of the existing mark;
  
  
• how the proposed mark is to be used;
  
  
• the nature of the goods;
  
  
• how the goods are to be sold; and
  
  
• who the target customers are.

The court commented that the High Court judge had been correct to take into account the following considerations in reaching the conclusion that deception or confusion would be unlikely:

• McDonald's is a chain of restaurants selling fast food;
  
  
• McDonald's had not sold any of its food products or beverages in supermarkets nor is it involved in the sale of any unprepared food and beverages; and
  
  
• Future Enterprises' and McDonald's products target different market segments: a customer looking for McDonald's products will head straight to an outlet bearing the golden arches logo whereas Future Enterprises' products have to be taken home to be prepared.

The Court of Appeal also found that there were significant differences between the marks, finding that the fact that they share a common prefix was not conclusive. It commented that it would be far-fetched to say that a person with ordinary common sense would, upon seeing in a supermarket a packet of instant noodles bearing the word mark MACNOODLES and eagle device but not the mark MCDONALD'S, think that the product was associated with McDonald's.

Under the second ground of appeal, McDonald's argued that (i) Future Enterprises' application had been made in bad faith, and (ii) contrary to the High Court ruling, such a ground for opposition under Section 12 of the Trademarks Act 1992 does not require that the marks at issue be identical or substantially identical: bad faith or copying is the only requirement.

The Court of Appeal sided with the High Court. It held that (i) the key ingredient to a successful opposition under Section 12 is misappropriation of a mark, and (ii) substantial identity must be established before bad faith or misappropriation can be inferred.

On the facts, the court held that the marks were neither identical nor substantially similar. It further held that an allegation of bad faith is a serious matter and should not be lightly inferred. There could be no copying or misappropriation where the marks were found not to be substantially identical and hence Future Enterprises could not have acted in bad faith.

Pearleen Loh, Alban Tay Mahtani & De Silva, Singapore