Devising a clever marketing strategy can set your business’ products and services apart from your competitors. However, referencing another business’ trade mark in your advertisements could lead to a potential infringement and consumer law claim. This is clear from the recent Federal Court decision in the high-profile case where fast food giant McDonald’s took action against its competitor, Hungry Jack’s. The Court’s decision has significant implications for business owners regarding brand safety and increased certainty for businesses using contentious trade marks. This article explains the outcome of the case and its implications for your business.
What Claims Did McDonald’s Make?
On 22 June 2020, Hungry Jack’s obtained trade mark registration for the name ‘Big Jack’. A trade mark is any sign you use to distinguish your goods and services from other businesses. McDonald’s failed to oppose the registration of the mark ‘Big Jack’. Consequently, Hungry Jack’s obtained the exclusive right to use the name ‘Big Jack’ in relation to their burgers.
However, McDonald’s claimed that the Hungry Jack’s registration infringed on McDonald’s trade mark rights because the ’Big Jack’ was deceptively similar to its own registered trade mark, ‘Big Mac’.
What Did the Court Decide?
In a 2023 trade mark dispute, Australia’s High Court in Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd confirmed the approach courts should take when determining whether or not two competing trade marks are deceptively similar. The High Court held that the courts should not consider the respective brands’ reputations. This meant that in the McDonald’s trade mark dispute, McDonald’s could not simply argue that consumers would be confused by the Hungry Jack’s trade mark since McDonald’s already has an established reputation in the market. Instead, the Court had to look at the wording of the similar trade marks, ‘Big Jack’ and ‘Big Mac’.
The Court considered that the average consumer would unlikely approach either trade marks with any preconceptions based on their experience with McDonald’s or Hungry Jack’s. Additionally, the Court noted that the word ‘Big’ is commonly used by businesses when marketing their goods.
In the end, the Court decided that ‘Big Jack’ and ‘Mega Jack’:
- are not confusingly similar to ‘Big Mac’ or ‘Mega Mac’; and
- do not infringe on the ‘Big Mac’ or ‘Mega Mac’ trade marks.
How Does the Court’s Decision Affect Your Business?
The case serves as an essential reminder of the importance of being aware of the limits of trade mark protections in the context of increased business competition.
1. Using Clever Marketing
Hungry Jack’s Chief Marketing Officer stated that the company’s use of the name ‘Big Jack’ did not intend to mislead consumers. However, he did clarify that he wanted the public to recall the ‘Big Mac’ brand when they saw ‘Big Jack’ as an invitation to compare and contrast it with McDonald’s products. This kind of marketing can increase consumer awareness by differentiating one business’ products from another.
Additionally, consumers would likely see Hungry Jack’s marketing as a ‘deliberate taunt’ of McDonald’s. This kind of taunt is common in overseas markets and can be widely effective since it highlights to consumers that the business is:
- aware of its market competitors; and
- willing to take certain risks by incorporating an element of cheekiness when naming its products.
Ultimately, the Court held that the Hungry Jack’s trade mark would unlikely deceive the average consumer. As a result, business owners might have a greater appetite to adopt contentious trade marks in the marketplace like the Hungry Jack’s trade mark.
2. Brand Protection
Safeguarding your brand is of utmost importance in today’s competitive business landscape. Establishing a strong brand identity is about creating a recognisable image and securing your intellectual property (IP) rights.
Understanding and protecting your IP rights are crucial steps in ensuring the exclusivity and longevity of your brand. These rights provide legal frameworks that prevent others from using or imitating your:
- brand;
- products; or
- innovations without permission.
Registering a trade mark is an effective way for a business to protect its IP. Trade mark registration provides you with exclusive rights to use and license the trade mark regarding the goods or services you provide. While trade mark registration is somewhat costly, it can help:
- preserve your brand’s uniqueness;
- fortify your business’ position in the market;
- foster consumer trust; and
- create a foundation for long-term success in a dynamic and evolving business environment.
3. Take Immediate Action
The case is a reminder that if you suspect another business is infringing your trade mark rights, you should take prompt legal action. You should begin by documenting evidence of the infringement, such as instances where the other business has used your trade mark. You should then get advice from an experienced trade marks lawyer to:
- assess the strength of your case; and
- discuss potential courses of action.
The first step may involve issuing a cease and desist letter to the infringing party. A cease and desist letter is essentially a request to the other party to stop using your trade mark. If negotiations fail, legal proceedings may be necessary to protect your rights. Ultimately, acting swiftly and seeking professional legal advice are essential steps when addressing trade mark infringement and safeguarding your brand.
This guide explains the essentials of trade marks and the steps required to register a trade mark.
Key Takeaways
The McDonald’s v Hungry Jack’s case is a timely example of the need for business competition and the legal boundaries around branding. The case provides some certainty to business owners who wish to adopt contentious trade marks when marketing their goods and services. However, seeking legal advice before using a similar trade mark to a competitor is important, given it can lead to a costly legal dispute.
If you need help with your business’ trade marks, our experienced intellectual property lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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