Emilee Wentland
In June, headlines circulated about McDonald’s losing its Big Mac trademark in the European Union—not for its legendary two all-beef patties, special sauce, lettuce, cheese, pickles, onions on a sesame seed bun, but for poultry products and brand names.
McDonald’s couldn’t prove it was using the trademark for chicken and other purposes for a continuous five years, the length of time required before the EU could revoke a mark, according to a release from the Court of Justice of the European Union. The EU’s General Court also ruled that other chains could use “Mac” in brand names.
McDonald’s—which last year did $129.5 billion in global systemwide sales with nearly 42,000 units, earning it the No. 1 spot again in the Franchise Times Top 400—held the Big Mac trademark in the EU since 1996 for meat, poultry and services.
Ireland-based Supermac’s, which sells Irish cuisine and is a Papa Johns franchisee, tried to register its name in the EU so it could expand, but McDonald’s objected, saying customers could think the chains are related because of its Big Mac sandwich, according to the Associated Press. In 2017, Supermac’s filed to revoke McDonald’s trademark, to no avail.
The Irish company challenged the decision, which McDonald’s argued against, and the EU’s General Court ultimately ruled in favor of Supermac’s. McDonald’s continues to sell its Big Mac sandwiches in Europe.
“The evidence submitted by McDonald’s does not serve to prove that the contested mark has been used in connection with ‘services rendered or associated with operating restaurants and other establishments or facilities engaged in providing food and drink prepared for consumption and for drive-through facilities; preparation of carryout foods,’” the European court said.
'Mac' name up for grabs
The win allows Supermac’s to expand in Europe with its original name. The company doesn’t sell anything called a Big Mac, but the usage of “Mac” in its name was the issue.
“It’s very much the little guy versus Goliath to be in a protracted battle with McDonald’s over trademark rights,” DLA Piper attorney Alexander Tuneski said. “It’s not a new concept. When it came down to it, they weren’t using the mark. … It’s quite possible they’re gonna appeal it anyways, so we’ll see.”
In the case of Supermac’s, filing for the Mac trademark when it wanted to expand internationally would’ve been quite hard, as McDonald’s first opened in Europe in 1971 and Supermac’s wasn’t founded until 1978. But in the case of other companies looking to expand outside their home country, Tuneski said filing early is the way to go—if they can afford it.
“If I knew I was going to Japan for whatever reason, then it’s certainly an incentive to get that done. The reality is that for a lot of franchisors, especially start-up franchisors, the last thing they have money for is an international trademark,” he said. “A lot of them are lucky to get their U.S. trademark. There’s not extra cash lying around to think big when they’re still trying to get their first 10 U.S. franchises.”
It’s not a quick process by any means, either. That said, it’s probably a better idea to file and then not use the mark than vice versa.
In the United States, it takes about a year before the government looks at an application. In Canada, it can take even longer. So it’s best to file early, “long before they look to put together a franchise disclosure document” in a new country, said Andrae Marrocco, an attorney at Canadian law firm McMillan.
Managing global marks
In the United States, trademarks are based on use and intent to use, while in most international markets it’s based on first to file. There’s no universal trademark system where a franchisor can file and apply it to every country.
The U.S., Canada and the EU, however, are part of what’s called the Madrid Protocol, which essentially means brands can file in their home countries, and then file in one of the other entities using the basis of that home application, said Kaleigh Zimmerman, an attorney at McMillan.
“There’s a lot of benefits to that because there’s ease of registration across various jurisdictions,” Zimmerman said. “But just because you have a registration in the U.S. doesn’t mean that you can enforce those rights in other jurisdictions.”
But what if, like in the case of Supermac’s, there’s an existing trademark in the country preventing a brand from filing their own mark? If one of Zimmerman’s clients is looking to go international, the firm will hire a trademark attorney in that jurisdiction to do a “clearance search,” in which they investigate to find out if anyone is using the same trademark, or something that’s similar, she said.
If there is a potentially confusing trademark already registered, Zimmerman said then it comes down to how that mark is being used.
“McDonald’s had a much wider scope of protection for the trademark than they were actually using,” she said. But if, say, Burger King wanted to expand into China and there was already a brand with that name, it might be in BK’s best interest to rebrand, Zimmerman said. “You may want to consider having a different brand strategy for varying jurisdictions,” she said.
Avoid language goofs
Consideration must also be given to the language differences from country to country. So, an English-speaking company might need to trademark a Japanese phrase, rather than it’s English variant.
That can lead to some mishaps, however. When KFC looked to use its famous “Finger Lickin’ Good” slogan in China in the 1980s, the Chinese translation used actually meant “Eat Your Fingers Off”—which is probably not the message KFC was trying to convey.
“You want to make sure you’re doing your due diligence when you are entering a new market in order to make sure that you’re not stepping on anyone’s toes, but you’re also not offending the public,” Zimmerman said.
Franchisors looking to expand outside their home countries have a lot to do before opening that first store—whether that’s securing a trademark, going up against a fast-food giant or hiring a native speaker to review your translated slogans and avoid any (albeit quite funny) language faux pas.
Emilee Wentland is managing editor of Franchise Times, and writes the Continental Franchise Review® column in each issue. Send interesting legal and public policy cases to [email protected].