McDonald’s loses eight-year battle over 'Mc' prefix

In McCurry Restaurant (KL) Sdn Bhd v McDonald’s Corporation (April 29 2009), McDonald’s Corporation has lost an eight-year legal battle over the use of the prefix 'Mc' as part of the name of a restaurant. 
In 1999 P Suppiah set up a restaurant in Kuala Lumpur and shortened its name from Malaysian Chicken Curry Restaurant to the McCurry Restaurant. McDonald’s filed an action for passing off against McCurry Restaurant (KL) Sdn Bhd.
The High Court found in favour of McDonald’s, holding that the prefix 'Mc' used in relation to food was associated with McDonald’s in the mind of consumers. The court ruled that McCurry's use of the name McCurry on signage in a style similar to that employed by McDonald’s amounted to misrepresentation. The court further held that use of the name McCurry would erode McDonald’s exclusivity over the prefix 'Mc', causing McDonald’s to suffer serious loss and damage (for further details please see "McDonald's turns up the heat on MCCURRY").
The decision of the High Court was overturned by the Court of Appeal. The Court of Appeal found that the High Court had erred in assuming that McDonald’s had a monopoly over the use of the prefix ‘Mc’. The court was of the opinion that the average consumer would not associate McCurry with McDonald’s. The court concluded that Suppiah, by adopting the trade name McCurry, did not intend to take unfair advantage of the reputation of McDonald’s trademarks. The Court of Appeal considered, among other things, that:
  • the parties’ get-up and logo had to be assessed as a whole;
  • none of the food items listed on McCurry's menu had the prefix ‘Mc’;
  • McCurry serves Indian food, while McDonald’s offers fast food; and
  • the customers of both parties were different.
The decision shows how difficult it is for owners of famous brands to establish passing off in the absence of actual confusion. The reputation of a mark is often a double-edged sword, as consumers are unlikely to be confused or deceived if a small-scale business adopts the recognizable elements of a famous brand. In the absence of the legal concept of dilution, as found in the United States, the Court of Appeal was clearly not prepared to allow the tort of passing off to be used to confer the wide scope of protection sought by McDonald’s.
McDonald’s may appeal to the Federal Court.

Joshinae Wong, Skrine, Kuala Lumpur

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