McBiscuit succeeds against McDonald's
22/10/2007

McDonald's International Property Co. Ltd vs Dean Desmond Gianni and the Registrar of Trade Marks, an unreported Appeal decision of the Full Bench of the Transvaal Provincial Division of the High Court of South Africa in Case No. 1998/09833 delivered 2 October 2007.

Dean Gianni, the First Respondent on appeal, had registered the trade mark McBiscuit in South Africa in class 30 in respect of foods including biscuits. The trade mark had been used in various label formats for biscuits having a "distinctly Scottish flavour".

McDonald's International Property Co. Ltd, the Appellant, a wholly owned South African subsidiary of McDonald's Corporation, had applied to the Registrar of Trade Marks to cancel the McBiscuit registration in terms of Section 24 read with Sections 10(12) and 10(14) of the Trade Marks Act based on a number of its registered trade marks incorporating the elements "Mc or Mac" and the reputation attaching to them. These included McDonald's, Big Mac, McFeast, MegaMac, McChicken, McRoyal and McNuggets, all registered in class 30 in relation to a variety of goods such as bread, pastry, hamburgers, sandwiches and, in some instances, biscuits.

The main thrust of the First Respondent's defence before the Registrar was that the Appellant could not claim a monopoly in South Africa in the use of the prefix "Mc" or "Mac" for trade marks in the class because of the existence of various other trade marks, both registered and in use, including these prefixes. He also denied that the trade mark McBiscuit was confusingly or deceptively similar to any of the Mc/Mac trade marks of the Appellant and the Registrar agreed with him, dismissing the cancellation application.

On appeal to the Full Bench of the Transvaal Provincial Division of the High Court of South Africa, the appeal court initially dealt with applications by the parties to introduce further evidence relating to trade marks of the Appellant and also to further trade marks on the Register in the names of other parties including McVities, Mac's, Mac, McBeans, McCain, McBean, McBeef and MacMunch. New evidence is not normally allowed on appeal but the Appellant argued that the evidence it sought to place before the appeal court was, in fact, properly before the Registrar of Trade Marks as the custodian of the Register of Trade Marks when he heard the case. Ultimately, the parties agreed to the introduction of all the further evidence.

The Appellant's main arguments on appeal were, again, that McBiscuit was not only confusingly or deceptively similar to "some" of its individual Mc/MAC trade marks, but would also be seen by consumers as a logical extension of, and hence be confused with, the Appellant's series of Mc/Mac marks. In his defence, the First Respondent again relied on the contention that McBiscuit was not confusingly similar to any of the Appellant's trade marks and on the fact that the Appellant did not enjoy a monopoly in South Africa in relation to goods in class 30 for trade marks including the prefixes "Mc" or "Mac".

The appeal court first considered the question of the reputation in South Africa in the Appellant's trade marks. It confirmed that the relevant date for this was 8 June 1998, the date of the McBiscuit trade mark application. The Court reviewed the evidence before it and concluded that, at that date, the Appellant had only established a reputation in the McDonald's trade mark, and none of the others. It then held that the McDonald's and McBiscuit trade marks were not confusingly similar and dismissed the appeal under Section 10(12) of the Trade Marks Act.

As far as the Appellant's reliance on Section 10(14) of the Act was concerned, particularly, its individual Mc/Mac registrations and also the series which they formed; the appeal court held that:

• the Appellant had failed to identify which of its Mc/Mac registered trade marks were, individually, alleged to be confusingly similar to McBiscuit as its deponent had only alleged that there would be confusion in relation to "some" of them. The court held, in any event, that McBiscuit was not confusingly similar to any of the Appellant's trade marks;
• regarding the case based on the series of Mc/MAC registered trade marks and the contention that McBiscuit would be viewed by a significant number of consumers as being another horse from the Mc/MAC stable, the court was bound to follow the approach of the Supreme Court of Appeal in Cowbell AG vs ICS Holdings Limited 2001 (3) (SA) 941 (SCA) in which Harms, JA had stated:

"The series argument might have some merit had the marks been associated. I have in any event a conceptual difficulty. If A does not resemble B, C or D individually, I fail to understand how it can resemble them collectively"
The Appellant tried to get around the Cowbell decision by arguing that the "conceptual difficulty" of the Court in that case was not a finding of law but rather of fact. It argued that the Appellant's Mc/Mac trade marks were inter-associated and formed a distinctive series of marks. However, the appeal court rejected this and related arguments and held that, even if the remarks of the court in the Cowbell case were obiter dictum and not findings of law, it found the logic of the decision "unassailable" and rejected the appeal under Section 10(14) as well.

In the result, the appeal was dismissed with costs.