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September 8, 2009 6:37 PM

The Little Indian Restaurant that Could

Posted by Zach Lowe

On Tuesday, we awoke to the news that McCurry, a solo Indian restaurant in Kuala Lumpur, successfully defeated a trademark infringement claim brought by McDonald's. The fast food giant had asserted that the McCurry name created such confusion against consumers as to amount to trademark infringement, according to Bloomberg and the AP. A lower court had ruled for McDonald's in 2006, but two courts have since overturned that ruling, including Malaysia's highest judicial body, which issued its decision on Tuesday.

McDonald's has had a mixed record in overseas Mc-related cases in the last half-decade, according to Bloomberg. In 2004 courts in Singapore ruled that a company there could distribute "MacTea" over McDonald's objections. But McDonald's won a similar case in the Philippines that year involving a company called L.C. Big Mak Burger, Bloomberg says.

We wanted to know: How big a deal was the Malaysia case to McDonald's? And what would have happened had McCurry opened in the U.S.? So we called David Jacoby and Judith Roth of Schiff Hardin, two intellectual property lawyers with experience in cases involving everything from handbags to restaurant decor. They most famously represented the owner of Pearl Oyster Bar in a high-profile case in which Pearl accused one of its former sous-chefs of stealing recipes, interior designs, and other IP and using them at a new downtown Manhattan restaurant. The case settled last year.

Hello David and Judith. This case makes for a good story, but does it matter to McDonald's?

Roth: When you're in an industry where your mark represents an enormous asset to your corporation, you have to be aggressive both nationally and internationally to protect that mark. And in the case of McDonald's, they have been appropriately persistent in protecting that mark all over the world.

This case took ten years, so obviously McDonald's cared about it. But does one little place in Malaysia really constitute a threat?

Roth: What's lurking in the background of this case is that the owners of McCurry have been waiting to open five or six additional restaurants, according to interviews they've given. So now they have the opportunity to open five or six or 20 McCurrys.

How would this case have turned out in the U.S.?

Jacoby: I think McDonald's would have cited a couple of cases they had already won and probably would have summary judgment. McDonald's has sort of won this issue in the U.S. This case [in Malaysia] is the outlier.

What are the key cases in McDonald's favor here?

Roth: McDonald's has already won similar cases involving places called McBagel and McDental.

There was a dentist place called McDental?

Jacoby: That was actually a very interesting decision, because McDental was obviously outside the product group you'd normally associate with McDonald's. But when you have a client who has particular marks associated with a franchise system, you have to be very vigilant in defending them.

How would you win a case like the McBagel matter [which McDonald's won in federal court in Manhattan in 1986]?

Jacoby: You'd commission surveys asking consumers that, if they saw a place called McBagel, who would you think operated it? And a significant number of respondents in the national pool and in New York thought it was McDonald's. It all goes to show the likelihood of confusion, which is always the key standard for trademark infringement cases.

You could also bring in evidence of how much you've spent on advertising promoting your mark. The court in McBagel had hundreds of pages of documents with information on radio ads and TV ads, and even evidence that some of the publicity surrounding the case used the Mc prefix. I remember one headline in the dentist case was something like, "McDonald's McHastles McDentist."

Roth: You could also bring in managers and counter guys who would say customers had ordered bagels.

Let me ask you a dumb question. Let's say I lived in Kentucky and I opened a restaurant specializing in fried duck. Could I name my restaurant Kentucky Fried Duck? I mean, all of the information in that name is factually true and descriptive.

Roth: Your first step would be to try to register the mark for Kentucky Fried Duck, but that would be difficult to secure.

Jacoby: And it would be trumped if Kentucky Fried Chicken already had a federal registration for their name.

Oh well. Another career dream dies. Last thing: This Malaysian case obviously has no impact here, right?

Jacoby: That's right. None at all. And Malaysia isn't a party to the Madrid agreement, which allows companies to apply for multiple registration agreements at once in countries that have signed the Madrid agreement.

Has the U.S. signed that agreement?

Jacoby: Only in the last five or six years.

Do companies use it? Or is it inconvenient to file all of that paperwork at once?

Jacoby: Oh, they use it, yes. It's sort of like filling out one application that goes to six or seven colleges. You may not necessarily get into all of them, but you'll get into some.

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"McDonald's has already won similar cases involving places called McBagel and McDental."

Is McDonalds likely to sue Baker & McKenzie sometime soon?

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