Intellectual Property

Brand Protector Or Bully? 3 Takeaways From The Supermac’s/McDonald’s Trademark Dispute In The EU

Was the McDonald’s ‘Big Mac’ trademark canceled because of the company’s bullying legal tactics?

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I have no problem admitting it — I like a decent hamburger.  Although my preference is for those of the non-franchise variety, I have been known to like a Big Mac or Whataburger (thank you, Texas) when the mood hits.  As you may have heard, McDonald’s recently lost a trademark battle in the EU against the Irish fast food chain Supermac’s regarding McDonald’s ”Big Mac” trademark in the European Union.  In sum, Irish entrepreneur Pat McDonagh (the founder of the Supermac’s restaurant chain) and his legal team successfully persuaded the EU Intellectual Property Office (EUIPO) to cancel McDonald’s “Big Mac” trademark in the EU.  The core of the argument for cancellation stemmed from Supermac’s framing McDonald’s tactics as preventing Supermac’s expansion in the EU that ostensibly went beyond mere policing of its “Big Mac” and other trademarks. Although McDonald’s can (and will) appeal the ruling, this years-long battle is instructive for reasons a lot more juicy than the burgers these franchises sell.

I am no stranger to defending against aggressive trademark policing in my practice, but am always intrigued by the tactics taken by powerful brands when policing their trademarks.  In the present case, I cannot blame McDonald’s for defending its “Big Mac” trademark.  Let’s face it — the “double arches” is an iconic brand in the United States and worldwide, and the company is obliged (indeed compelled) to take the appropriate steps to police its trademarks across the globe, especially when dealing with another’s commercial use.  That said, there comes a point when actions taken by a large, multinational company to protect a brand surpass mere aggressive policing and crossover to the realm of trademark “bullying.”

Policing a trademark involves taking a number of actions to review not only internal use by the company, but by others in the marketplace.  Use by others can take different forms beyond the obvious unlicensed use of the trademark(s) — from use of confusingly similar names by others in promoting similar products and services to improper nominative fair use in comparing products, to name a few.  Make no mistake, protecting against improper uses of a trademark is essential to maintaining trademark rights and protecting the value of a brand.  When it comes to multinational corporations with recognized brands, such policing is no easy task and requires constant vigilance. That said, you can actually have too much of a good thing if you are not careful.

In the Supermac’s/McDonald’s battle, Supermac’s alleged that McDonald’s used tactics designed to impair Supermac’s ability to expand in the UK and the EU under the guise of protecting its trademarks.  For example, McDonald’s obtained a trademark for “Snackbox” (which just so happens to be the identical name used by Supermac’s for its chicken and fries combo), even though there was apparently no evidence of McDonald’s use of that trademark in the EU.  In fact, Supermac’s alleged that this is a common tactic of McDonald’s to sock such names away “in a war chest to use against future competitors.”  Whether this is the case or not remains to be seen, but Supermac’s framed the dispute as a “David vs. Goliath” trademark battle.  In a courageous move to fend off McDonald’s, Supermac’s went to the source of the problem and sought cancellation of the “Big Mac” trademark in the EU based upon lack of genuine use in the EU.  Whether you agree or not, it seems that the EUIPO was persuaded by some of these arguments, with the end result being the cancellation of McDonald’s “Big Mac” trademark in the EU.  Ouch.

The summary above is definitely simplified, but the point here is that policing is more complicated when it comes to multinational brands.  McDonald’s should (and will) absolutely appeal this decision, as it allows Supermac’s to pursue using its “Supermac’s” and “Mighty Mac” trademarks with burgers in the EU. Needless to say, this ongoing battle is instructive. Here are three takeaways when it comes to multinational brands toeing, but not crossing, the “trademark bully” line:

Establish Clear Parameters for Worldwide Trademark Policing. Most multinational companies establish general trademark policing policies, but may not properly conform the policy to each jurisdiction. Every jurisdiction is different, and presents different risks and a different consuming public. Once established, adhere to these policies and guidelines as a foundation for any policing activities in the appropriate jurisdiction, and update them regularly.  These steps will establish parameters for effective policing of the brand.

Weigh the Risks Versus the Rewards. It’s okay to be assertive, but not so much so as to impact not only the mark(s) at issue but brand perception. This doesn’t mean employing a less aggressive strategy, just a more surgical one that weighs the harm created by the allegedly offensive use against the risks presented by addressing it.  Non-commercial offending uses are not the same as commercial uses within the core market. Protecting a brand by necessity includes protecting its image in the eyes of the consuming public. Obtaining trademark registrations for core trademarks?  A good thing.  Trying to register trademarks not yet registered by potential competitors that you don’t (and may not) use? Not so much. Be strong, but never, ever overreach.

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Watch What You Put In Writing, and How You Frame It.  In this age of social media, it never ceases to amaze me how quickly an over-aggressive strategy can impact how the company’s consumers view the brand. You should assume that whatever demands you place in writing can be presented to the public through social media channels in an attempt to shape public opinion (i.e., a David versus Goliath battle).  This is dangerous territory because even the best PR team cannot control the messaging that proliferates through every channel, and you may quickly find your company (or client) on the defensive.  Write firmly, but with an appreciation for how the message may be perceived by others (especially your consumers) should the demand go public.

Don’t get me wrong — I think McDonald’s has every right (if not the obligation) to relentlessly police its brand and leverage the strength of its trademarks, but that right is not unfettered.  Even though I question some aspects of the EUIPO’s basis for the ruling, the point here is that multinational brands need to be surgical in their policing rather than heavy-handed (whether real or perceived).  Enforcement and policing require understanding the playing field, weighing the risks to the brand and perception by the consuming public, and an awareness of messaging in the process.  Now that’s a “special sauce” for trademark protection that everyone can enjoy.

Tom Kulik is an Intellectual Property & Information Technology Partner at the Dallas-based law firm of Scheef & Stone, LLP. In private practice for over 20 years, Tom is a sought-after technology lawyer who uses his industry experience as a former computer systems engineer to creatively counsel and help his clients navigate the complexities of law and technology in their business. News outlets reach out to Tom for his insight, and he has been quoted by national media organizations. Get in touch with Tom on Twitter (@LegalIntangibls) or Facebook (www.facebook.com/technologylawyer), or contact him directly at tom.kulik@solidcounsel.com.

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