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Identical Trademarks: McDonald's Corporation v. Sterling's Mac Fast Food (2007)
Date of Judgement: 18/06/2007
Court: High Court of Karnataka
Coram: Justice V. Gopala Gowda
Facts:
McDonald's Corporation (Plaintiff) is a Multinational Corporation originating from the USA, whose trademark "Big Mac" has been registered in the USA in 1968. In India, the trademarks of Big Mac, McDonald's Corporation & the signature brand logo "M" were applied for registration in 1996, and they were granted an exclusive right over the use of the word "Mac."
Sterling's Mac Fast Food (Defendant) is a partnership firm based in Bangalore and was established in 1983. The name "Mac" as a result of one of the founding partner's son's name is "Mac Mathew." In September 1993, the plaintiff came to know about the prefixing of the word Mac to fast food by the defendants and alleged the misuse of their goodwill and reputation. A notice was sent to the defendants to change their name, to which it was reverted, that the name employed was "Sterling's Mac Fast Food" and not "Mac Fast Food." The plaintiff further pointed out that the name "Sterling's" was not visible on some of the items and requested them to use the name in bold letters. However, the request was turned down as the defendants held that they were using it since 1983 and refused to incorporate any changes.
In 1998, a suit was filed against the defendants seeking an injunction against the use of the trademark "Mac," "Big Mac," and pay amounts due on account of the illegal use of their trademark.
The defendant had already registered the impugned word under the Trade & Merchandise Marks Act, 1858, whereas the plaintiff applied for its registration only on 27/9/1996. The Trial Court, in its verdict, established that the defendants were not illegally using the trademark, had not illegally accrued profits from the same and that the plaintiff corporation was not entitled to any remedy. The present matter is a Regular First Appeal against the verdict of the Trial Court dated 15-10-2004.
Issues:
Whether the Trial Court incorrectly applied section 29 of the Trade & Merchandise Marks Act, 1958.
Whether the defendant infringed the plaintiff's trademark.
Whether the gap of 5 years in instituting suit after knowledge essentially constitutes waiving of the right.
The Trade and Merchandise Marks Act, 1958.
According to section 2(i)(v), the use of the false name or initials amounts to a false trade description. A trademark is also deemed to be deceptively similar under section 2(1)(d) if it resembles another mark or is likely to deceive or cause confusion in relation to another trademark. Section 29 pertains to infringement of trademark but contains that a suit for an injunction will not be granted if the defendant can prove that the use of the mark cannot cause deception or confusion.
Judgment:
The plaintiff entered the Indian Market in 1996, whereas the defendant firm was in existence much prior to that. It is also pertinent to mention that the plaintiff had knowledge of the use since 1993 but initiated proceedings after a period of 5 years and was thus subject to laches. The learned judges relied on section 29 of the Act and opined that for the infringement of the trademark, the replication had to be deceptively similar or confusing. The plaintiff's trademarks were Big Mac, McDonald's & the corporate logo M whereas the defendant's marks were "Sterling's Mac Fast Food" & "Mac Fast Food." The Court also looked into the registered logos of the two parties, and despite both resembling the letter M, they were different in terms of styling and could not have caused confusion.
On reading of the plaintiff's memorandum of appeal, it was recognized that the plaintiff corporation was registered in India in February 1993 itself. However, the defendant's fast food restaurant was set up in 1983. It was thus held that the plaintiff corporation could not find faults with the defendant's logo as they were already in existence and had registered much earlier. In addition to that, the request by McDonald's to use the name Sterling's Mac made it clear that they had no problem with the use of the term "Mac," which they claimed to be protected by trademark if the prefix of Sterling's was added in bold.
The Hon'ble judge also observed that the instituting of the suit after a long gap of 5 years was wrongful conduct by the plaintiff itself, and the suit should not have been entertained by the Trial Court while adding that the Court was right in dismissing the suit.
There is no straitjacket formula to decide what can amount to deception or confusion with regard to a trademark. Emphasis was placed on Justice Parker's view in Re Pianotist Co's Application, i.e., the words had to be judged by their look, sound, the goods they would be applied to, the kind of customers likely to buy them, and the consequences of their use. [1] Reference was also made to the Supreme Court case of Amritdhara Pharmacy v. Satya Deo Gupta [3] that held issues of deceptive trademarks had to be decided on a case to case basis. The case also involved the question of acquiescence (submitting to use) for an extended period and held the right to complain to be partially waived under the frame of limitation.
The defendant raised the view of the Supreme Court in 1963 wherein the relevant factor for consideration would be "honest and Concurrent use" of the trademark due to the inability to determine the volume of use. [2] This implies that even a small trader who uses a particular trademark is entitled to that protection irrespective of its corresponding monetary value as long as it contains a business value and that business is continuous and not merely stray.
The plaintiff's issue was pertaining to the use of the word "Mac," but in the given circumstances of the case, they were using it only since October 1996, much later than that of the defendants, and could not claim exclusive rights over the word Mac. The Court regarded the plaintiff's suit to be imaginary and vexatious.
It was held that the plaintiff's grievance against the use of the term "Mac" could not be claimed as they had no exclusive right due to their inaction and late registration in India and upheld the decision of the Trial Court. Moreover, the plaintiff's request to furnish the account of illegal profits made by the defendant was also dismissed as the prayer was worded in a way that asked the Court to furnish the accounts of the defendant. The plaintiff's player asking the defendant to deliver all goods for destruction was also dismissed on the grounds that the plaintiff had no rights over the same.
Conclusion:
The learned single judge bench at Bangalore concurred with the findings of the impugned order of the Trial Court and deemed the plaintiff's suit to be devoid of any merits. They were not entitled to an injunction and were not granted any exclusive rights over the word "Mac" in this matter as it was registered by the defendant about 13 years earlier. This judgment enunciated that emphasis in matters of trademarks would not be the volume of trade but rather the honest and concurrent use of the intellectual property that granted the owner business value. However, the same right cannot be claimed for instances where the use is not bona fide or for stray and occasional purposes. The owner of a trademark waives his right to an extent when he is aware of the use and does not interfere. Moreover, the use of the name is prohibited only when it is deceptively similar and can cause confusion to customers. The matter was analyzed by virtue of provisions contained in the Act of 1958 despite its repeal in 1999 by the Trade Marks Act, 1999, as the issue arose during the existence of the former and was thus to be adjudicated on the same.
[1] (1906) 23 RPC 774.
[2] AIR 1963 SC 1882.
[3] AIR 1963 SC 449.
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