This is a case where the fast food giant McDonald’s sued a small Indian restaurant and loses the legal battle on the exclusivity to use ‘Mc’ prefix.
Facts of the Case
The respondent is a well-known fast-food franchisor and has outlets around the world. The appellant runs a fast food outlet called ‘Restoran McCurry’ or ‘McCurry Restaurant’ which serves Indian and other Malaysian cuisine only. The respondent complaint that the appellant has passed off the respondent’s business as its own by adopting and conducting business under the distinctive ‘Mc’ identifier for its own food and beverage restaurant. The High Court ruled in favour of the respondent and held that customers familiar with the McDonald’s trademark would logically assume that the ‘Mc’ in the defendant ‘McCurry restaurant’ was associated in some way to the respondent or was an extension of the respondent’s current range of products and services. Appellant appealed to the Court of Appeal.
Issue of the Case
Whether the trial judge had judicially appreciated the evidence when she held that the use of the word ‘McCurry’ by the defendant amounted to a passing off by it of the plaintiff’s trade name to which goodwill is attached?
Judgment of the Case
Learned counsel on both sides referred to the ingredients of the tort. They said that the tort comprises of five elements which are as follows:
There must be a misrepresentation by the defendant;
It must be made in the course of trade;
It must be made to prospective or ultimate customers;
It must be calculated to injure the goodwill and reputation of the plaintiff;
The plaintiff must suffer resultant damage.
In brief, the defendant is liable if he injures the plaintiff by either passing off his goods or mark or business as that of the plaintiff’s. To be able to pass off his goods or mark as the plaintiff’s, it certainly involves the creation of a false impression which is referred to as the element of misrepresentation in the tort. The Court referred to the judgment of Mohamed Azmi J (later FCJ) in Mun Loong Co Sdn Bhd v Chai Tuck Kin [1982] 1 MLJ 356:
“At common law, it is an actionable tort for one person to represent his business to be that of another, or to mislead the public into believing that it is, because the person guilty of the deception thereby profits illegitimately from the goodwill which attaches to the other business. The commonest means by which this deception is practised is by the adoption of a business name which is calculated to cause the public to confuse the spurious business with the genuine one. If the spurious business is conducted by a company incorporated with a name likely to cause such confusion, the owner of the genuine business may obtain an injunction to restrain the company from trading in its own name or even continuing to have its own name. If the injunction takes the latter form, the company must either change its name or be wound up.”
The defendant relied on Erven Warnink BV & Ors v Townend & Sons (Hull) Ltd & Ors [1979] 2 All ER 927 and submitted that the tort of passing off could be established without proof of a misrepresentation. The Court held did not agreed with defendant’s submission and said that what was held in that case was that it is essential for the plaintiff in a passing-off action to show at least the following facts:
that his business consists of, or includes, selling in England a class of goods to which the particular trade name applies;
that the class of goods is clearly defined, and that in the minds of the public, or a section of the public, in England, the trade name distinguishes that class from other similar goods;
that because of the reputation of the goods there is goodwill attached to the name;
that he, the plaintiff, as a member of the class of those who sell the goods, is the owner of goodwill in England which is of substantial value;
that he has suffered, or is really likely to suffer, substantial damage to his property in the goodwill by reason of the defendants selling goods which are falsely described by the trade name to which the goodwill is attached.
The element of misrepresentation was still required to be proved by the plaintiff in a passing-off action.
The Court held that the use by the defendant of the word ‘McCurry’ did not amounts to a passing off by it of the plaintiff ’s trade name to which goodwill is attached. Put differently, the defendant did not represent his business to be that of the plaintiff. The Court have come to this conclusion based on the following reasons.
First, you have to look at the plaintiff ’s mark or get-up or logo as a whole and not merely one element in it. The plaintiff ’s get-up consists of a distinctive golden arched ‘M’ with the word ‘McDonalds’ against a red background. The defendant’s signboard carries the words ‘Restoran McCurry’ with the lettering in white and grey on a red background with a picture of a chicken giving a double thumbs up and with the wording ‘Malaysian Chicken Curry’. Thus, the defendant’s presentation of its business is in a style and get up which is distinctively different from that of the plaintiff.
Second, as I have already said, the items of food available at the plaintiff ’s outlets all carry the prefix ‘Mc’. However, as evident from the defendant’s menu card none of the food items served carries the prefix Mc. This is an important consideration.
Third, it is beyond dispute that the type of food available at the plaintiff ’s outlets is very different from that served at the defendant’s sole outlet. The latter caters only typically Indian food whereas the former serves fast food like burgers and fries.
In the Matter of an English case, McIndian, Application No 1412458 to register the Mark “McIndian”, the hearing officer found that the mark “McIndian” could be confusingly similar to the McDonald’s family of marks by using the prefix ‘Mc’. However, what the learned trial judge in the present instance appears to have overlooked is the fact that McIndian not only sold Indian food, but also Southern fried chicken, cheeseburgers, French fries and shakes which are the very items that McDonalds also sell. This point is pointed out by the Singapore Court of Appeal in McDonald’s Corp v Future Enterprises Pte Ltd [2005] 1 SLR 177 when distinguishing the McIndian case from Yuen Yu Kwan Frank v McDonald’s Corporation (2001) WL 1422899 where the court allowed the registration of the mark ‘McChina’. If in Yuen Yu Kwan Frank v McDonald’s Corporation, a restaurant could carry on a restaurant named ‘McChina’ selling only Chinese food, it is not difficult to apply the same logic to the current appeal where the appellant only sells Indian food under the signage ‘McCurry’.
The fourth reason is that there is evidence to show that the type of customers who patronise the appellant’s outlet is very different from those who patronise the respondent’s several outlets. The appellant’s customers are mainly adults and senior citizens while the respondent’s customers are mainly children.
Based on the reasons mentioned above, the Court held that the appellant’s signboard would not result in a reasonable person associating McCurry with the respondent’s mark. McCurry’ cannot by itself lead to the inference that it sought to obtain an unfair advantage from the usage of the prefix ‘Mc’. It would have been different if the appellant had offered to its customers items that were labelled either the same as or similar to those sold by the respondent, for example, Mcfish or Mclamb.
Hence, this appeal was allowed with cost and the findings of the learned judge is reversed.