A family united: McDonalds wins ‘McVegan’ Trade Mark case

McDonalds has firmly established itself as a staple of the British high street and is a globally recognised, iconic brand. With its big name, big brand and big presence, McDonalds has had its fair share of intellectual property disputes around the world, from McDreams in the EU to McCurry in Malaysia.

At the heart of many of these disputes has been the significance of the 'Mc' prefix and whether their trade marks with this prefix constitute a family of trade marks. This includes names that are as familiar as the name McDonalds itself, from McFlurry to McNuggets. In a recent UK trade mark decision, the existence of a 'Mc' prefixed family of trade marks was central to the opposition to an application for a 'McVegan' trade mark.

Decision

In March 2019, Childrens Cancer Aid Limited (the "Applicant") applied to register a 'McVegan' trade mark in classes 29, 32 and 33 to use for a range of goods and services including vegan sausages and vegan burgers.

Notably, this was not the first time the Applicant had applied to register a 'Mc' prefixed mark. Previously they had filed a trade mark application for 'McBaileys' to be used for a whiskey and cream based liquor drink. Unsurprisingly, the owners of Baileys Irish Cream (Diageo) were able to successfully challenge this application.

McDonalds do not have a registered 'McVegan' trade mark in the UK, although they do in Finland and Sweden. Instead, they sought to rely on their family of 'Mc' prefixed marks and challenged this application under sections 3(6), 5(2)(b), 5(3), 5(4)(a) of the Trade Marks Act 1994, namely bad faith, confusing similarity, reputation/unfair advantage and passing off respectively.

The opposition was ultimately successful, under sections 5(3) and 3(6), with the hearing officer holding that there was no need to consider any other grounds.

Section 3(6) – Bad Faith

At the heart of the finding in favour of McDonalds was the existence of the 'Mc' prefixed family and the inferred intentions of the Applicant at the time of filing. 

Prior to filing the application, the Applicant had approached McDonalds with the apparent objective of forming a partnership agreement with them where together they would sell vegan goods under the 'McVegan' trade mark.  The desire of the Applicant to engage in a business relationship with McDonalds and their strong belief in the power of a 'Mc' prefixed mark for similar goods and services to do this, showed that the Applicant recognised the existence of the 'Mc' family and sought the extension of that family to include their 'McVegan' mark.

Following McDonalds' rejection of this offer and subsequent threats by the Applicant to open a 'McVegan' outlet next to every McDonalds' store, through a business partnership with one of their competitors, the Applicant then filed to register the 'McVegan' trade mark. When queried on their intended use for this mark, the Applicant responded with a (somewhat random) range of prospective uses, from bespoke whiskey cocktails to children's fiction and tv cartoons. The combination of these factors, plus the previous evidence of bad faith applications (i.e. McBaileys) suggested that the true intention of the Applicant was to induce money from McDonalds. Such an intention renders the application as made in bad faith.

Section 5(3) – Unfair Advantage

To successfully argue section 5(3), the Applicant's trade mark must be identical or similar to another registered trade mark, where the similarity is of such a degree that the applicant's mark would take unfair advantage or be detrimental to the distinctive repute or characteristic of the registered mark.

The hearing officer found that McDonalds' best argument under this ground was the claim that the McVegan mark was similar to their 'Mc' family of trade marks. When relying on a family of trade marks, it must first be proved that a family of marks actually exist. Fundamentally, there must be a group of trade marks that share a common element which triggers an association between the marks in the mind of the public. To establish this, two conditions need to be met (General Court, Case T-194/03, EU:T:2006:65) namely:

• All the marks in the family must have proof of use, be present on the market and be able to constitute a series.

• The applicant's mark which the family of marks is being used to oppose, must be similar to the family of marks and share characteristics capable of associating it with the family.

The hearing officer found the 'Mc' prefixed marks to be well-established and highly present on the market, with McChicken being present since 1989 and other marks such as McNuggets and McCafe having been, and continuing to be, central to different advertising campaigns. Interestingly, the hearing officer noted that the construction of the 'Mc' marks is not uniform, with some being followed with a descriptive word and others unconnected words. However, they deemed that as the use of these marks is so extensive and closely associated with the McDonalds brand, that the public's perception is 'cemented' in the understanding that these marks have a common origin, indicated by the prefix 'Mc'.

On the evidence, given the shared 'Mc' prefix and the goods and services were identical or similar to those covered by the earlier marks, the hearing officer found that the public would be confused into believing that the McVegan mark is an extension of the 'Mc' family of marks. Even where the goods and services were dissimilar, the hearing officer held that the earlier marks would still be brought to mind and the Applicant would take unfair advantage of the earlier marks. In particular, the hearing officer thought that the consumer is likely to assume an economic relationship between the Applicant and McDonalds. The assumption of an economic relationship between the two parties would provide the Applicant with an objective benefit, as they would not incur the usual costs of launching a new brand and so unfairly profit from the reputation of the other 'Mc' prefixed marks.

Costs

Interestingly, the hearing officer thought that McDonalds had submitted far too much evidence and over pleaded the case.  She said there was no need to rely on twelve marks under section 5(2)(b) and nine under section 5(3).  It would have been sufficient to rely on three marks to show a family of marks.

In addition, she indicated that there was duplicate evidence filed and some of the evidence was after the relevant date. This, combined with the fact that the hearing officer could not find adequate reputation for the goods and services for all the trade marks, indicates that what makes a family of marks strong is not the number of marks in the family but the reputation and distinctiveness of the marks included.

Although the over-pleading was to the detriment of McDonalds, with the Applicant being ordered to only pay £1,600 to the Opponent, it is a good sign to others seeking to rely on a family of trade marks. By setting out that only three marks would be needed to show a family and decreeing that McDonalds had filed too much evidence, it leaves the door open for other companies, not as dominant as McDonalds, to utilise and rely on a family of trade marks.

Charlene Nelson, Chartered Trade Mark Attorney said, "In this decision, the establishment of a family of trade marks was crucial to finding in favour of McDonalds, as the hearing officer only found a low level of aural and visual similarity between both sets of marks. In such a case, it is always going to be very difficult to call how much evidence to put in because of the need to show a family of trade marks."