McDonald’s loses court battle against McCurry

PUTRAJAYA: Fast food chain McDonald’s Wednesday lost its exclusivity to the use of the prefix “Mc” when the Court of Appeal here allowed a local Indian food outlet, McCurry Restaurant, to use “Mc” in its business signage.

Appeal Court judges Datuk Gopal Sri Ram (now Federal Court judge), who sat with Justices Datuk Heliliah Mohd Yusof and Datuk Sulong Matjeraie, held that there was no evidence to show that McCurry Restaurant of Jalan Ipoh, Kuala Lumpur, was passing off McDonald’s business as its own.

“Where the learned judge, with respect, erred is to assume that McDonald’s had a monopoly in the use of the prefix ‘Mc’ on a signage or in the conduct of business. “In my judgment, the irresistible inference to be drawn from the totality of the evidence is that McCurry’s Restaurant signboard would not result in reasonable persons associating McCurry with the McDonald’s mark.

“For the reasons given, I would allow McCurry Restaurant’s appeal and reverse the findings of the learned judge,” said Sri Ram in his 18-page written judgement. He said the fact that McCurry Restaurant chose the name “McCurry,” could not, by itself, lead to the inference that it sought to obtain an unfair advantage from the usage of the prefix “Mc.”

“You have to look at the plaintiff’s (McDonald’s) getup or logo as a whole ... it consists of a distinctive golden arched ‘M’ with the word, McDonald’s, against a red background. “The defendant’s (McCurry) signboard carried the words ‘Restoran McCurry’ with the lettering in white and grey on a red background with a picture of a chicken giving a double thumbsup and with the wording, ‘Malaysian Chicken Curry.’

“Thus, the defendant’s presentation of its business is in a style and getup which is distinctly different from that of the plaintiff,” said Sri Ram, adding that none of the food items on the menu card served at McCurry Restaurant carried the prefix ‘Mc’ unlike the items of food available at McDonald’s. “It would have been different if McCurry Restaurant had offered to its customers, items that were labelled either the same as or similar to those sold by McDonald’s, for example McFish or McLamb,” he said.

Sri Ram also said that the type of food available at a McDonald’s outlet was very different as it served fast food whereas McCurry catered only typically Indian food. “There is evidence to show that the type of customers who patronise the defendant’s outlet is very different from those who patronise the plaintiff’s several outlets,” he said, adding that the former was patronised by adults and senior citizens while the latter was mainly by children.

On Sept 7, 2006, the High Court held that the McDonald’s fast food chain, a household name among children, had the exclusive right to the prefix “Mc” and ordered McCurry Restaurant (KL) Sdn Bhd to pay damages to McDonald’s Corporation, the proprietor of the McDonald’s chain of restaurants. In her ruling, Justice Siti Mariah Ahmad said by using the words “McCurry” and employing a signage which featured colours that were distinctive of McDonald’s, McCurry Restaurant was indulging in acts that could give rise to confusion and deception.

McDonald’s, in its statement of claim, said it created the prefix “Mc” as a trademark and that with the usage of the prefix “Mc,” together with the word “Curry,” McCurry Restaurant, which was formerly known as Restoran Penang Curry House (KL) Sdn Bhd, had misrepresented itself as being associated with McDonald’s business.

McCurry Restaurant, in its defence, contended that McDonald’s could not claim monopoly or exclusive rights to the use of the prefix “Mc,” as that prefix was extensively used around the world as surnames, particularly by people of Scottish origin.

McCurry Restaurant said the menu was essentially Malaysian and Indian cuisine consisting of teh tarik, roti canai, nasi lemak, nasi briyani, fish head curry, chicken tandorri, naan bread, tosai, chappati and various chicken and mutton curry dishes, which were totally different from those available in McDonald’s restaurants which comprise food typically found in western food restaurants such as burgers and french fries.

McDonald’s was represented by counsel S.F. Wong while counsel Sri Dev Nair appeared for McCurry. -- Bernama

Source: 
http://thestar.com.my/news/story.asp?file=/2009/4/29/nation/20090429182848&sec=nation

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Model Answer [Element (c)]

Indication of connection

The purpose of trade mark is to indicate a trade connection between the proprietor of the mark and his goods. The expression “so as to indicate” makes it clear that it is sufficient if the mark is so used that it will indeed indicate a single trade origin.

Case: Bass v Nicholson [1932] 49 RPC 88

Nicholson marked barrels of beer with a letter “N” in a triangle in order to indicate a particular type of bear which he sold (quality mark). Bass, who owned a registered trade mark consisting of a triangle, sued for infringement. The evidence showed that customers recognised the N mark as indicating beer sold by Nicholson notwithstanding the original intention of the owner that it to be used primarily as a quality mark. The court held that the mark indicated a particular trade connection and was held to be trade mark. No issue of infringement arose since the N mark was used as indication of origin rather than the triangle so as to negate the element of confusion by customers.    

  

Connection in the course of trade

The required connection between the mark and its owner must be one ‘in the course of trade’. The question of whether a mark functions as a trade mark is a question of facts and there can be no trade in goods which are given away free.

Case: “Hospital World” TM [1967] RPC 595.

In this case, free distribution of applicant’s journal which was published as a vehicle for the advertisement of applicant’s products (hospital and medical apparatus) was held not use as trade mark in relation to printed publication, and that “trade” means the trade in which the applicant is engaged.

Case: Aristoc v Rysta [1943] 60 RPC 45.

The House of Lords decided that a mark placed on stockings to indicate that they had been repaired by the owner of the mark was not a trade mark. A trade connection requires that there be an “association with the goods in the course of their production and preparation for the market”.  

Case: “Revenue” TM [1979] RPC 27.

The UK Registrar held that orders for goods to be manufactured for the trade mark owner and his instructions that they bear his trade mark was sufficient to constitute use of the mark ‘in the course of trade’ although no goods actually existed at the relevant time.  

Case: Unilever (Striped Toothpaste) [1980] FSR 280.

In the tube as sold, the toothpaste was white but on extrusion red stripes were added to it by means of a device in the nozzle. The applicant wished to register a visual representation of toothpaste with red stripes. The UK Registrar held that the mark was not used in the course of trade since it did not come into existence until after the purchaser had taken the goods home at which time trade in them had ceased.

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M’sian firm loses trade mark right to use word “Ponni” for rice variant

KUALA LUMPUR: In the first case of its kind, a Malaysian company lost its bid to retain exclusive rights to use the word “Ponni” for a variant of rice as the company’s trade mark. The High Court, in its first case of recognition of Geographical Indication (GI) in Malaysian, ruled Tuesday that Syarikat Faiza Sdn Bhd was not entitled to retain the word “Ponni” exclusively when selling rice.

GI means a protection of particular product coming from particular jurisdiction. Judge Justice Azahar Mohamed said that “Ponni” was a descriptive variety of rice originating from Tamil Nadu and that it was recognisable to consumers in such a manner. In allowing a civil action by six Indian applicants Tuesday, Justice Azahar concluded that Syarikat Faiza was not entitled to register the word “Ponni” as a trade mark.

“I conclude that the entry of Ponni trade mark in the Register of Trade Marks in Malaysia is an entry wrongly made and wrongfully remaining in the register under Section 45 of the Trademark Act 1976,” he said. In elaborating, Justice Azahar said “Ponni” was not a word invented by the respondent and that the word was another name for the Kaveri river in Tamil. That rice variant is grown in that river delta.

He said the use of “Ponni” by respondent as trade mark was bound to cause confusion and that consumers would be misled. Justice Azahar ordered that the “Ponni” trade mark registration by Faiza be expunged and removed from the Malaysian Register of Trade Marks.

The judge also directed the Registrar of Trade Marks to rectify the matter by removing the whole entry relating to the trade mark registration and its removal to be published in the Government Gazette. Speaking to reporters, the applicants’ lead counsel Karen Abraham, said this was the first case on GI protection with the court recognising a variety of rice from a particular place.

Karen said the ruling was also favourable to Malaysian consumers as they would have more access to “Ponni” rice as it could be distributed more extensively. The ruling was made in relation to a civil action filed by the Agricultural and Processed Food Products Export Development Authority of India (APEDA), Tamil Nadu Agricultural University (TNAU), Indian farmers and two exporters on Jan 22 this year.

APEDA is an administrative body that is empowered to safeguard and enforce the rights of Indian agriculture on behalf of Indian Government. TNAU was responsible for developing the “Ponni” rice variety in 1971 and is the author of the “Ponni” mark.

The Indian farmers and exporters are all stakeholders in the “Ponni” mark and claimed that the exclusive rights over the usage of word as a trade mark granted to the respondent would affect their ability to trade in “Ponni” rice.

In the court documents, six applicants claimed that “Ponni” rice was named after and in tribute to the Kaveri Delta region in India. They claimed that trade mark for “Ponni” was wrongly entered in the Malaysian Trade Marks Register under the name of the Faiza as the respondent was neither the proprietor of “Ponni” as a trade mark, nor the author of the name.

In the March 15 affidavit, Faiza’s sales and marketing manager Fazaruddin Ibrahim said the company was the valid holder and registered owner of “Ponni” trademark and handled their rice business in the name and style of “Beras Taj Mahal” and/or “Beras Faiza Herba Ponni”.

On June 6, 2000, Faiza filed an application for the registration of the name “Ponni” as a trade mark in relation to “rice”. The trademark was subsequently advertised in the Government Gazette on Oct 27, 2005 and was entered in the Trade Mark Registers on Jan 20, 2006.

Source: http://thestar.com.my/news/story.asp?file=/2010/8/17/nation/20100817161149&sec=nation

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Registrability of Trade Mark [2.0]

Registrability of Trade Mark – Geographical Name

There is strong precedent derived from decided cases that a geographical name is prima facie unregisterable due to lack of inherent distinctiveness. Further, no one should be able to monopolise a geographical name since this may impose unreasonable restraints on other traders who may also wish to use that name in their course of trade.

However, such preposition of law is not exhaustive and is subjected to several exceptional circumstances.

Case: Yorkshire Copper Works Appn (1954) 71 RPC 150

“For just as a manufacturer is not entitled to a monopoly of a laudatory or descriptive epithet, so he is not to claim for his territory whether country or town, which may be in the future, if it is not now, the seat of the manufacturer of goods similar to his own.”

This case indicates that geographical names can only be registered if they are distinctive of the goods or in other words, the name possesses some inherent ability to distinguish. The distinctiveness here means until and unless no other traders would honestly think of using that geographical name in relation to similar goods in the course of their trade, then the geographical name may be registered.

Further, the significant of the above case lies on the principles that a geographical name may be registered if it is not known for the goods or services for which it is used.  

The above preposition supports the registration of ‘Arctic’ and ‘North Pole’ for bananas.

Statutory provisions in Trade Mark Act 1976

Section 10(1)(d) provides that

In order for a trade mark to be registered, it shall contain or consist of at least one of the following particular: (d) a word having no direct reference to the character or quality of the goods or services not being, according to its ordinary meaning, a geographical name or surname.  

The phrase ‘according to its ordinary meaning’ cited in the above statutory provision illustrates the requirement of inherent distinctiveness for a geographical name to be registered as trade mark.

There is another statutory provision worth mentioning as far as the geographical name is concerned. Upon this effect, section 14(1)(a) is equally relevant.

A mark or part of a mark shall not be registered as a trade mark (a) if the use of which is likely to deceive or cause confusion to the public or would be contrary to law.  

Thus, in a situation, for example, where there is a mark called “Chinese White Porcelain” for porcelain not made in China, the geographical name used as the trade mark is deemed to be deceptive since China is known for porcelain and any reasonable man upon looking to the mark might believe that the porcelain is actually originated from China.  

There are several factors that need to be taken into consideration in examining or assessing the distinctiveness of a particular geographical name before it is to be admitted in the register.

a)     The question on whether the trade mark is a  geographical name of the goods’ origin;

b)     The question on whether a reasonable man viewing the marks may actually believed that the goods concerned come from the geographical name used; and

c)     Whether the geographical name used is noted for the goods concerned, need to be satisfied.

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General principles [1.2]

Case: Coca-Cola Trade Marks [1986] R.P.C 472

The House of Lords rejected an appeal against an application to register the coca-cola bottle as a trademark and held that

“the word ‘mark’ both in its normal meaning and its statutory definition is apt only to describe something which distinguishes goods rather than the goods themselves. A bottle is a container, not a mark”.

According to Lord Templeman, such an application if allowed, may lead to the perpetual monopoly on the design of containers.

“A rival manufacturer should be free to sell any container or article of a similar shape provided it was labelled or packaged differently in such a way as to avoid confusion as to the origin of the goods on the container”.

Lord Templeman’s decision in Coca-Cola has been reversed in the UK by legislation implementing the European Union trade mark directive, the first shape-based registration application under the new UK law included the coca-cola bottle.  

Case: Smith, Kline and French \laboratories Ltd v Sterling – Winthrop Group Ltd [1976] 93 R.P.C 511

It this case, there was an application to register coloured capsules for drugs. The capsules were made in two halves, one coloured, the other half was transparent through which the tiny multi-coloured pellets could be seen. The applicants attempted to register the whole external appearance of the capsules. An argument was raised in the court that colour combination could not be considered a trade mark.

The House of Lords held that there was nothing in the Trade Mark Act 1938 which excluded a mark which covers the whole surface of the goods, nor was there anything to prevent a three dimensional mark being a trademark. The distinctiveness of the capsules was important as the capsules were inherently adapted to distinguish the goods of the applicants from other traders. 

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General Principles [1.1 ]

In Malaysia, the traditional concept of ‘mark’ as opposed to the wider concept of ‘signs’, as provided under TRIPS and statutory provision of other countries such as UK, is still retained.

Registrability of a single colour

Case: BP Amoco Plc v John Kelly Limited and Glenshane Tourist Services Limited [2000] NIEHC 18

The plaintiff is a well-known multinational corporation which is concerned in exploration for and production of oils, fuels and gas. It brings this action against the first defendant, a Northern Ireland registered company also involved in the sale and distribution of oils, fuels and lubricants though on a much smaller scale.

BP contended that the defendant are infringing BP’s UK registered trademark by using the colour green on the whole or a substantial part of the exterior of the TOP (the trade name of defendants’ petrol filing station in Northern Ireland) and that they are thereby committing the tort of passing off their TOP branded filling stations as BP or as otherwise connected with BP’s business. Therefore, BP seeks injunctive relief and other remedies arising out of the alleged infringement of rights.

Under section 1(1) of the UK Trade Mark Act 1994, “trade mark” means

“any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings”.

The court considered the ruling in William Wrigley Junior Company’s Application [1999] ETMR 219 that:

“A colour per se without an associated shape as in the present case is protectable as a trade mark since it falls within the meaning of the word ‘any sign’. That wording must be interpreted as a very broad open and general tem encompassing all conceivable types of marks. To restrict the protection of colour marks to a specific presentation would be contrary to the spirit of community trade mark”.

On the issue as to whether the colour alone signifies BP when the logo was removed, the court accepted the finding of the fact that confusion was likely when drivers travelling at speed first saw a service station, where they would only be able to see its green colour but no other distinguishing character. Further, the court ruled in negative on the issue of whether defendant could escape liability by adding other element to distinguish between their mark and that of BP’s.

The long held view that a single colour is not registrable has been reversed in this case

3D marks

In Malaysia, there appears to be no specific provision allowing 3D trademarks. In practise, however, representation of a 3D marks has been accepted by the Malaysian Trade Mark Registrar (section 6.26 Manual of Trade Mark Law & Practice in Malaysia (WIPO Geneva 1989). The positive view in support of 3D marks in Malaysia is that the word “device” under section 3(1) of our Trade Mark Act 1976 is sufficiently wide to cover such marks and on the basis of persuasive authority, the English case of Smith, Kline and French Laboratories Ltd v sterling – Winthrop Group Ltd [1976] 93 RPC 511 and Coca-Cola Trade Marks [1986] R.P.C 472 serve as source of assistance.

There have been many instances of three–dimensional marks being successfully registered in Malaysia. Among the best-known examples of this are the registrations of the triangular three-dimensional configuration of the TOBLREONE chocolate bar as well as the three–dimensional mark of Mercedes Benz.

To be continued..

[next post deals with the facts and court rulings of the aforementioned 3D marks cases]

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General principles [1.0]

Click the above slide presentation for clear minute details

Functions of a trade mark

A trade mark serves as an indication of origin as well as indication of the quality of goods. To the purchasing public, trademarks allow product differentiation, assure them of the quality of the goods and even imply its user’s prestige and social standing. To the producers of the goods, the name implies reputation, quality and goodwill of the goods. Recognised trademark build consumer loyalty and allow the products to fetch premium prices.

Case: Mishawaka Rubber & Woolen Mfg Co v SS Kresge Co 316 US 203 [1942]

A trademark is a merchandising short cut which induces a purchaser to select what he wants, or what he has been led to believe he wants. Whatever the means employed, the aim is the same; to convey through the mark, in the minds of potential customers, the desirability of the commodity upon which it appears. Once this is attained, the trade mark owner has something of value. If another poaches upon the commercial magnetism of the symbol he has created, the owner can attain legal redress.

Case: Scandia Down Corp v Euroquilt, Inc 475 US 1147 [1986]

Trademarks help consumers to select goods. By indentifying the source of the goods, they convey valuable information to consumers at lower costs. Easily identified trademarks reduce the costs consumers incur in searching for what they desire, and the lower the cost of search the more competitive the market. A trade mark also may induce the supplier of goods t make higher quality products and to adhere to a consistent level of quality.

Statutory Definition of Trade Mark

Section 3(1) of the Trade Marks Act 1976 defines “mark” as to include

“a device, brand, heading, label, ticket, name, signature, word, letter, numeral or any combination thereof”

The same section defines “trade mark” as

“except in relation to Part XI, a mark used or proposed to be used in relation to goods or services for the purpose of indicating or so as to indicate a connection in the course of trade between the goods or services and a person having the right either as proprietor or as registered user to use the mark whether with or without an indication of the identity of that person, and means, in relation to Part XI, a mark registrable or registered under the said Part XI”

It can be concluded that a trade mark consist of the relevant elements:

a)     A mark;

b)     Used in relation to goods and services; and

c)     An indication of a connection between the goods and the proprietor of the goods, either as an indication of origin or an indication of quality.

Non-conventional trademark

A non-conventional trademark refers to trademarks which does not belong to a pre-existing category of trade mark. The term encompasses marks which do not fall into the conventional set of marks (eg. those consisting of letters, numerals, words, logos, pictures, symbols, or combinations of one or more of these elements).

Non-conventional trademarks may be divided into visible signs (eg. colors, shapes, moving images, holograms, positions), or non-visible signs (eg. sounds, scents, tastes, textures). Certain types of non-conventional trademarks have become more widely accepted in recent times as a result of legislative changes which expand the definition of 'trademark'. Such developments are the result of international treaties dealing with intellectual property, such as the Agreement on Trade-Related Aspects of Intellectual Property Rights, which sets down a standardised, inclusive legal definition.

Examples of non-conventional trademark include single colour trademarks, motion trademarks, hologram trademarks, shape trademarks (also known as three dimensional trademarks or 3D trademarks), and sound trademarks (also known as aural trademarks).

Points to ponder

The above statutory definition provides that only ‘Mark’ is registerable as trade mark in Malaysia. What is our legal position as regards to other distinguishable signs adopted to differentiate one goods from another such as 3D trademarks and colour trademarks?  

To be continued...

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Trade Marks Law in Malaysia – An Overview

Trademarks law is one of important components in Intellectual Property course. Recent development in statutory provisions and international conventions has embarked a new dimension in trademark law in Malaysia. It is not within the ambit of this post to discuss the very details of sub-components thereof. Nevertheless, this post serves as an introductory remark in providing the scope and parameter of the relevant subject matter.

1.     Predominantly, the crux of discussion lay within the current provisions and international obligation of

a)     Trade Marks Act 1976;

b)     Trade Marks Regulation 1997;

c)     Manual of Trade Mark Law & Practice in Malaysia (WIPO, Geneva 1989);

d)     TRIPs Agreement; and

e)     Paris Convention.

Subject to the contrary, students are only permitted to enter the examination hall with the first two documents of authorities.

2.     As far as method of statutory interpretation and various tests adopted where infringements are concerned, local cases as well as cases from common law and non-common law countries are material.

3.     The relevant topics and angle of discussion, amongst other, includes

a)     The general principles of trade marks.

Under this heading, topic such as functions of trade mark, statutory definition of trade mark, and statutory provisions regarding the usage and tenure of trade mark are discussed.

b)     Resistibility of trade marks

Under this heading, the nature and criteria of a registered trademark is examined. Often, most of court litigations and civil disputes are concerned with this area of discussion. It concerns with issues such as

i.      Whether numbers or technical words or foreign language can be registered as trademark? 

ii.     Whether the appellant’s and respondent’s marks are identical as to cause deception or confusion among the purchasing public (i.e the consumer)?

iii.    Whether the disputed mark is scandalous or contrary to public morality?

iv.    Whether the mark is too descriptive or common as to prevent other trades using the same mark (as far as word trade mark is concerned)?

v.     What is the position and exclusive protection for well-known or famous marks, be it local or international mark, as distinct to ordinary or newly created mark that has yet bore any reputation? What is the criteria that need to be fulfilled for a mark to be regarded as a well-known mark?

c)     Trade mark application and registration

Under this heading, issues regarding who are to be recognised as the proprietor of the mark and whether an importer is a registered proprietor will be discussed. Further, assignment of mark and the position of licences are also to be examined. Similarly, the opposition proceedings between the contesting applicant of new trade mark and the registered proprietor of a trade mark is discussed. In return, question on what are grounds of refusal for a mark to be registered, during the opposition proceedings, is an important sub-element.

d)     Infringement and Exceptions

Under this heading, various tests adopted from myriad of decided cases in proving infringement are analysed. Different tests are used for different trademarks, its usage, the nature of the goods, the circumstances in which the mark was used and the potential customer of the goods. Our statutory provisions have underlined several statutory defences where certain act will not be deemed or constituted an act of infringement. This includes, among other, used in good faith, honest concurrent user, parallel importation and other.

e)     Grounds for the removal of marks

Under this heading, numbers of statutory provisions that give effect to the removal of marks that are already remained in the register are examined. The ground of removal, among other, includes non-use of trade mark, non distinctive trade mark, deceptive and fraudulent mark. The interests of aggrieved parties are also discussed under this respective heading.   

f)      Passing off

Passing off deals with the preservation of business goodwill and confer protection over business reputation. It is another creature of intellectual property that has overlapping area with trademarks and copyright. Under this heading, issues such as elements of passing off, similarity of business names, common field of activities and locus of reputation are extensively discussed. 

4.     If the time permits, there will be ample discussion and summary cases accompanying the progress of this blog throughout the semester. Above others, this piece of writing is intended only to serve as a mere guidance of immature discussion prior to the weekly lecture thus, shall not be seen as an attempt to compete nor even replace the lecture itself.

5.     Feel free to rise any comments or personal criticism for the betterment of this academic arena. For everything good, all praise be to Allah, and the rest that remains comes from my personal defect as the join-author of Chamber of Knowledge intelligence platform; Kyle Fahkrurazzi©

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