"MC" + CURRY = MCDONALD

Joanna Loy explains why the Court of Appeal says "No" in the McCurry Case

 

 

The Court of Appeal had recently in McCurry Restaurant (KL) Sdn Bhd v McDonald Corporation [2009] 1 LNS 309 unanimously allowed McCurry’s appeal to use the prefix “Mc” in its business name.

 

 

BACKGROUND

The plaintiff, McDonald's Corporation, is a renown international fast food chain. The defendant sold Indian food and other Malaysian cuisine under the name and style of "McCurry Restaurant" or "Restoran McCurry".

 

The plaintiff sought an injunction to restrain the defendant from using the pre-fix "Mc", claiming that the defendant had passed off the plaintiff's business as its own.

 

At the conclusion of the trial, the High Court Judge ruled in favour of the plaintiff, holding that it had the exclusive right to use the prefix “Mc” in conjunction with food items.

 

The defendant appealed against the decision of the High Court.

 

 

EXTENDED TORT OF PASSING-OFF?

His Lordship, Gopal Sri Ram, JCA (as he then was) delivered the grounds of judgment of the Court of Appeal.

 

Before considering the merits of the appeal, His Lordship considered the defendant’s contention that the plaintiff had succeeded in the High Court based on the concept of “extended tort of passing off” without having pleaded it. The defendant had submitted that Lord Fraser who originated this concept in Erven Warnick BV v Townend & Sons (Hull) Ltd [1979] 2 All ER 927 had erred in holding that a plaintiff could succeed without proof of misrepresentation when the issue is injury to goodwill.

 

His Lordship referred to the following passage of Lord Fraser's judgment in the Erven Warnick Case :

 

It is essential for the plaintiff in a passing-off action to show at least the following facts: (1) that his business consists of, or includes, selling in England a class of goods to which the particular trade name applies; (2) that the class of goods is clearly defined, and that in the minds of the public, or a section of the public, in England, the trade name distinguishes that class from other similar goods; (3) that because of the reputation of the goods there is goodwill attached to the name; (4) that he, the plaintiff, as a member of the class of those who sell the goods, is the owner of goodwill in England which is of substantial value; (5) that he has suffered, or is really likely to suffer, substantial damage to his property in the goodwill by reason of the defendants selling goods which are falsely described by the trade name to which the goodwill is attached.

 

His Lordship was of the view that Lord Fraser had not, in the above-referred passage of his judgment, made any pronouncement which dispensed with the requirement for the plaintiff to prove misrepresentation.

 

Contrary to the defendant's contention, Gopal Sri Ram, JCA held that it was manifestly clear from the use of the phrase "falsely described" by Lord Fraser that misrepresentation by the defendant of his goods or business as that of the plaintiff's is an essential element of the tort. Hence, His Lordship concluded that the so-called extended tort is nothing more than the common law adapting the tort of passing off to new and different circumstances.

 

His Lordship then rejected the defendant's contention that the plaintiff had succeeded in the High Court without proving misrepresentation without having pleaded it. His Lordship further held it was sufficient that the plaintiff had pleaded all the facts that go to constitute the element of the tort and that there was no requirement for the plaintiff to plead law.

 

 

THE NUB OF THE CASE

Sri Ram, JCA then proceeded to consider what His Lordship described as the "nub of the case", that is whether the learned judge had judicially appreciated the evidence before her in determining whether the defendant had represented his business to be that of the plaintiff's.

 

His Lordship then considered the evidence. First, the marks of the plaintiff and defendant were examined as a whole. The plaintiff's get-up, which consists of a distinctive golden arched “M” with the word “McDonalds” against a red background, was distinctly different from the defendant's signboard which carries the words “Restoran McCurry” with the lettering in white and grey on a red background with a picture of a chicken giving a double thumbs up and with the wording “Malaysian Chicken Curry”.

 

Secondly, the food items available at the plaintiff’s outlets all carried the prefix “Mc” contrary to the defendant’s menu card which showed that none of the food items served at the defendant's restaurant carries the prefix "Mc". This was an important consideration.

 

Thirdly, another important point in the defendant's favour was that the type of food offered at the plaintiff’s outlets was very different from that served at the defendant’s sole outlet which offered only Indian food. The Court of Appeal referred to In the Matter of Application No. 1412458 where the United Kingdom Trade Mark Registry declined to register the "McIndian" trademark as it could be confusingly similar to the McDonald’s family of marks which employed the prefix “Mc”.

 

The Court observed that in the "McIndian" case, McIndian not only sold Indian food but also Southern fried chicken, cheeseburgers, French fries and shakes; items which were also sold by McDonald’s. The Court of Appeal Judge opined that the High Court judge’s failure to distinguish the facts of the McIndian case from those in the present case constituted a serious misdirection of facts which had resulted in a miscarriage of justice.

 

Fourthly, the Court held that the evidence showed that the type of customers who patronize the defendant’s outlet was very different from those who patronize the plaintiff’s several outlets. The former was patronized mainly by adults and senior citizens whereas the latter was patronized mainly by children. Taking the evidence as a whole, the Court of Appeal held that the defendant’s signboard would not result in reasonable persons associating McCurry with the plaintiff’s mark.

 

The Court of Appeal also noted that the learned trial judge had observed that:

 

"When 'Mc' is used in conjunction with a food item, the first impression or the first thing that comes to mind is McDonald's and the plaintiff. Any unauthorized use of the prefix 'Mc' could lead to the conclusion that the products sold and the services offered with reference to the said prefix are an extension of the plaintiff's family of mark consequently creating an association with the plaintiff."

 

The Court of Appeal observed that contrary to the learned trial judge's postulation, the facts showed that the defendant did not use the prefix 'Mc' in conjunction with any food item.

 

The Court held that the learned trial judge had erred in assuming that the plaintiff had a monopoly in the use of the prefix 'Mc' on a signage or in the conduct of business. His Lordship held that if a restaurant which sold only Chinese food could be allowed to carry on business under the name "McChina", as was the case in Yuen Yu Kwan Frank v McDonald's Corporation (2001) WL 1422899, there was no logic in restraining the defendant from selling only Indian food under the signage "McCurry".

 

The Court also ruled that the fact that the defendant chose the name “McCurry” could not, by itself, lead to the inference that it sought to obtain an unfair advantage from the usage of the prefix “Mc”. The Court acknowledged that the position would have been different if the defendant had offered to its customers items that were labelled either the same as or similar to those sold by the plaintiff.

 

The Court was satisfied that there was no proof of the tort of passing off and that there had been no judicial appreciation of the most important pieces of the evidence presented at the trial.  Accordingly the Court allowed the defendant's appeal and reversed the findings of the learned trial judge.

 

 

JOANNA LOY ( This e-mail address is being protected from spambots. You need JavaScript enabled to view it )

 

 
ACCOLADES & AWARDS

Skrine Retains Who’s Who Legal Accolade for Malaysia

On 15th May 2017, the Who’s Who Global Awards was held in London, United Kingdom and Skrine was conferred the Award:

Malaysia Law Firm of the Year 2017

Skrine previously received this Award in 2013, 2014, 2015 and 2016.

>> READ MORE

SKRINE Clinches Top Honours at ALB Malaysia Law Awards 2017

On 6th April 2017, the Asian Legal Business Malaysia Law Awards was held and SKRINE was named

Malaysia Law Firm of the Year 2017

SKRINE also bagged 5 other awards

>> READ MORE

Asialaw Profiles 2017

The Asialaw Profiles has ranked Skrine as Outstanding Firm and particularly highlighting the following practice areas:

Outstanding Firm

  • Competition & Antitrust
  • Corporate/M&A
  • Dispute Resolution
  • Energy & Natural Resources
  • Intellectual Property
  • IT, Telco & Media
  • Project & Infrastructure

>> READ MORE

PDPA NOTICE

English | Bahasa Malaysia