Franchising · 18 January 2019

What small businesses can learn from the McDonald’s “Big Mac” trademark battle

McDonald's
What does this decision mean for small UK businesses

After McDonald’s lost a high profile legal battle for it’s “Big Mac” trademark, Grid Law founder David Walker explains the implications for small business owners in the UK.

It’s being hailed as a “landmark” decision and headlines say that McDonald’s has lost its rights to the “Big Mac” trademark across Europe. Now, whilst these headlines really grab our attention, the true story of Supermac’s trademark victory is a little different.

I’m not for one moment putting a downer on the decision, it’s a great result for Supermac’s. It also shows that small businesses really can stand up for their rights in these “David v Goliath” battles.

What I want to do is add some perspective to this story. In my view, this isn’t a “landmark decision” but it does show that a little knowledge of trademark law can help small businesses protect and defend their own brands.

There’s no doubt that trademarks are powerful when it comes to defending brands. They can protect the name of a business, names of products, logos, shapes of packaging and many other elements of a brand.

There are 45 different classes of products and services and when you apply to register a trademark you choose the class or classes that are most appropriate for your business. Then, when registered, you have the exclusive right to use the trademark in relation to those products and services.

This means you can use your trademark to prevent other businesses from using the same or a confusingly similar brand in their business for the same or similar products and services.

However, a trademark is granted on the strict condition that you actually use it.

If you don’t, or you don’t have a genuine intention to use it, your trademark can be cancelled and you will lose your rights to it.

Big businesses are sometimes criticised for registering hundreds, if not thousands of trademarks with no intention of using them for their own products or services. They register them simply as a defence mechanism against the competition (often small independent businesses).

In essence, this is what happened in the Supermac’s versus McDonald’s dispute.

McDonald’s have registered many different trademarks which include the words “Big Mac”. The trademark at the centre of this dispute was registered in three classes, including class 42, which covered the operation of restaurants.

McDonald’s claimed that the name “Supermac’s” was confusingly similar to “Big Mac” and was therefore an infringement of its trademark. It tried to use this argument to block Supermac’s (a much smaller Irish company) from opening their new restaurants.

Supermac’s fought back.

Proving (or disproving) the likelihood of confusion can be difficult so they looked at this dispute from an alternative angle. In their defence, they claimed that McDonald’s hadn’t used its “Big Mac” trademark for, amongst other things, “restaurants” and so it should be cancelled.

The European Intellectual Property Office (EUIPO) agreed and cancelled McDonald’s trademark. This cleared the way for Supermac’s to expand their chain of restaurants, which is a great result for them.

Take a look at these other David v Goliath cases:

Why isn’t this a landmark decision and what can small businesses learn from it?

The most interesting thing I can glean from it, is that the EUIPO made their decision based on the evidence submitted. McDonald’s, despite its huge reputation, didn’t submit sufficient evidence to support its arguments.

It seems that McDonald’s didn’t (or were unable) to prove use of this particular trademark in all three of the classes for which it was registered. Without evidence of use, the whole trademark was cancelled.

The lesson here is that you must follow the rules. They are clear and apply to all trademark owners equally. If you don’t follow the rules, you expose yourself to unnecessary risks. As a small business, you can often find technicalities such as this to counter groundless threats of trademark infringement from big businesses.

Next, I always advise business owners to register their brand in as many trademark classes as possible to give themselves maximum protection. But they mustn’t go too far. If you register a trademark in a wide range of classes but don’t use it for all of them, you increase the chances of it being cancelled.

This is what happened here and this case shows that you won’t just lose the unused classes, you will lose the whole trademark.

Clearly, if a small business only has one trademark, a decision such as this could be devastating for them. So, it’s always a good idea to take professional advice on the scope of any trademark before making an application.

Once registered, you should keep records of how you use your trademarks. This could be samples of packaging, marketing materials, photographs or whatever else you think is appropriate. This evidence should then be supported by sales records.

To keep the trademark alive, and prove you are using it, you must be able to show that you’re making more than just nominal sales. A sample of an unsold product sat on a shelf would not be considered as trademark use.

Standing up for your rights

Finally, the most important lesson of all is that small businesses can stand up for their rights and defend themselves from the threats of big businesses. Businesses such as McDonald’s have deep pockets to fight battles such as this, but there’s absolutely no need to match them on spending power.

As I have said, the law applies equally to all trademark owners. If one business is abusing their position and using unfair tactics, don’t be scared off by their threats. With a little bit of knowledge, you can often prove them wrong without getting dragged into a long, drawn out legal battle.

So, what does this decision mean for McDonald’s?

Has it lost its rights to the “Big Mac” trademark in Europe? Not at all.

This dispute cancelled only one trademark and McDonald’s still have a very extensive portfolio of other “Big Mac” trademarks protecting their brand.

Small businesses should not, therefore, be rushing out thinking they’re free to use the “Big Mac” brand as one article I read implied they could.

If you would like more information about protecting your brand or defending it against a big business, please feel free to get in touch by emailing me at editors@businessadvice.co.uk.

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ABOUT THE EXPERT

David Walker is the founder of Grid Law, a firm which first targeted the motorsport industry – advising on sponsorship deals, new contracts and building of personal brands. He has now expanded his remit to include entrepreneurs, aiding with contract law, dispute resolution and protecting and defending intellectual property rights.

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