McDonald's outwitted in MCSMART dispute

The District Court of Utrecht has refused to order the cancellation of the Benelux mark MCSMART (Case 161817/HAZA 03-1049). The court held that the registration would not cause confusion with, nor dilute, McDonald Corporation's series of MC trademarks.

The MCSMART Benelux trademark is registered for the type of goods sold in Amsterdam's famous 'Smart' shops, which include articles related to the smoking of cannabis, healing herbs and 'magic' mushrooms. McDonald's demanded cancellation of the registration based on its MC series of trademarks, including MCDONALD'S, MCMENU, MCNUGGETS and MCSNACK. McDonald's stated that MCSMART infringed its trademarks on the grounds of likelihood of confusion and dilution.

The District Court of Utrecht dismissed the cancellation claim. It first held that there was no likelihood of confusion since 'Smart' products and fast food were not similar goods. It also noted that the trade channels used for the goods and the target consumer market differed.

The court also rejected the claim that McDonald's trademarks were diluted by MCSMART. It applied the test set out by the European Court of Justice in adidas Salomon v Fitnessworld Trading Ltd, which indicates that dilution occurs where the relevant section of the public establishes a link between the marks at issue, even if there is no evidence of confusion. According to the district court, only one of McDonald's marks had some level of aural similarity with MCSMART, namely the MCSNACK mark. However, the court found substantial visual differences between the marks because the MCSMART registration featured a chameleon image and different colours. In addition, the trademarks were conceptually dissimilar since MCSNACK related to fast food, while MCSMART was used for materials related to the smoking of cannabis and other 'Smart' products.

The court concluded that the inclusion of the prefix 'Mc' in MCSMART was insufficient to establish dilution, even though the McDonald's trademarks are famous and are part of a series. It based this finding on the fact that there are a large number of trademarks registered in Benelux with the prefix 'Mc' (the actual figure is 1340 of which 128 belong to McDonald's).

Paul Reeskamp, Allen & Overy, Amsterdam