On July 5, 2016, the European General Court rendered an interesting decision illustrating the broad protection enjoyed by those trademarks with “a reputation in the EU.” The full text of the decision is available in English here and in French here.
The case involved a Singapore company called Future Enterprises, which filed an EU trademark for MACCOFFEE on October 13, 2008 for a wide variety of food products and beverages in classes 29, 30 and 32. Future Enterprises used this trademark for a line of instant coffee, which was launched in the 1990s and is mainly distributed in Eastern Europe.
McDonald’s did not file an opposition but, in August 2010 (a few months after the EU trademark was registered), it initiated a cancellation action based on 13 of its trademarks, including an EU trademark registration for MCDONALD’S filed in 1996, and other EU trademarks for goods and/or services comprising the prefix “Mc,” usually placed before the name of a food (such as MCFISH, MCMUFFIN, MCRIB, MCCHICKEN, etc.). Interestingly, McDonalds did not base its challenge on its registered MCCAFE mark, perhaps a strategic choice in order to seek broader protection for its entire family of marks.
In 2012, the Cancellation Division held that the MACCOFFEE trademark was invalid due to the longstanding reputation of the MCDONALD’S mark. Future Enterprises appealed, but the Board of Appeal affirmed the earlier decision, finding that the MCDONALD’S trademark had a reputation in the EU and it was highly likely that the contested mark rode on the coat-tails of that reputation. Future Enterprises appealed again, but the General Court re-confirmed that its trademark was invalid.
“Reputation” and EU Trademarks
European trademarks that are considered to have a longstanding or considerable “reputation” in the EU (somewhat like “famous” marks in the U.S.) receive certain advantages in European trademark law:
1. First of all, their owners can obtain the cancellation of subsequent identical or similar trademarks even though the goods and services covered are not similar (article 8(5) of Regulation No 207/2009). The trademarks filed by McDonald’s cover essentially fast-food goods and/or services, whereas the MACCOFFEE trademark covered a wide range of food products and beverages (including beer and mineral water).
2. Secondly, trademarks with a “reputation” enjoy broader protection in that only a minimal degree of similarity between the marks is required. Future Enterprises pointed out that the trademarks of the parties in this case were very different visually. In fact, this was the only issue on which it won: the General Court held that the Board of Appeal was wrong in finding that there was a visual similarity between the marks. However, a mere lack of visual similarity wasn’t enough to carry the day.
Future Enterprises also claimed that the trademarks of the parties were conceptually different because the element ‘mac’ in MACCOFFEE is understood as referring to an American slang word used to address a stranger in a friendly manner, as in the phrase “Hey Mac, you want a coffee?” However, the General Court disagreed and held that, although the trademarks were not similar from a visual point of view, the phonetic and conceptual similarities were sufficient:
The elements ‘mc’ and ‘mac’ in the marks at issue are associated by the relevant public with the same idea, namely the prefix of a Gaelic surname, which the English speaking part of the relevant public even identifies as meaning ‘son of’ and which carries no particular meaning for the rest of the relevant public.
As a consequence, the trademarks were globally sufficiently similar. As to the alleged slang, my American colleagues assure me that they have not heard anyone in the U.S. use “Hey Mac” for about fifty years, and in any event the relevant audience is the average modern European consumer.
3. Thirdly, trademarks with a “reputation” enjoy broader protection because it is not necessary for their owners to establish a risk of confusion, but rather only that the relevant public makes an associational link between the marks at issue and that there is a risk the junior user will take unfair advantage of (or be detrimental to) that reputation. The associational link must be assessed globally, taking into account all relevant factors. In this case, the General Court found a likely associational link between the MACCOFFEE mark and the McDonald’s family of marks, as well as a risk that Future Enterprises would be taking advantage of the reputation of that family of marks.
A “family of trademarks” exists when a group of trademarks possess common distinctive visual or textual elements – such as McDonald’s “Mc” prefix. The marks forming part of the family must be present on the market and their owner must provide evidence of actual use which is sufficient so that the common element has acquired its own distinctive character in relation to the relevant products and/or services. McDonald’s had submitted menus, reports of independent surveys and decisions rendered by national courts in several member States (Germany, Spain, Sweden and the UK), which had found that the suffix “Mc” had acquired a distinctive character in relation to fast-food restaurant services and to the products appearing on the menu of fast-food establishments. Future Enterprises objected that these national decisions were not binding upon the EU authorities. The General Court agreed, but said that those decisions may nevertheless be taken into consideration in assessing the facts of the case.
Future Enterprises has two months to file an appeal with the European Court of Justice, and the future of MACCOFFEE as an EU trademark seems quite uncertain.