McDonald's fails in bid to overturn Hungry Jacks' BIG JACK trade mark.

McDonald's has failed in its Federal Court of Australia bid to overturn rival Hungry Jack’s registered trade mark for BIG JACK.

Summary

The Court held that Hungry Jack's BIG JACK trade mark registration should not be cancelled, and that Hungry Jack's use of the trade mark did not infringe McDonald's registered BIG MAC trade mark. Similarly, Hungry Jack's use of MEGA JACK did not infringe the MEGA MAC trade mark.

Hungry Jack's was unsuccessful in its counter-claim for removal of the MEGA MAC trade mark, although it did succeed in having some unused goods removed from the registration.

On a technical point, Hungry Jack's was found to have engaged in misleading and deceptive conduct in relation to comparative advertising claims that the BIG JACK had "25% more Aussie beef" than their competitor's product.

Take-aways (No pun intended?)

The decision has several take-aways for businesses:

• Achieving trade mark registration provides a significant defensive advantage. Hungry Jack's was able to rely upon its registered trade mark for BIG JACK in defence to the allegations it infringed the BIG MAC trade mark.
• The strategy in devising a trade mark can be useful in supporting and defending claims for cancellation of a registration. McDonald's unsuccessfully tried to suggest an improper motive for the adoption of the BIG JACK trade mark, however, this was countered in part by Hungry Jack's evidence as to how it derived and decided upon the BIG JACK trade mark.
• The threat of Non-Use Removal remains an important consideration when issuing a demand or commencing procedings for alleged infringement, or when defending against such allegations. A common strategy for the respondent/defendant facing an infringement proceeding is to attack the trade mark for non-use. In this case, McDonald's was successful in defending part of its MEGA MAC trade mark — however registration was cancelled for an unused portion of the registered goods.
• Comparative advertising claims must be considered from the perspective of the audience receiving the claims. Further, such claims must be accurate and supported by reliable evidence. Here, Hungry Jack's approach to use the uncooked weight as a basis for product comparison was held to be in contravention of the ACL, because consumers were likely to perceive the comparison as being of the cooked product.

Read on for further detailed analysis of the Decision...

Background

Hungry Jack’s applied for the BIG JACK trade mark in November 2019. Registration was granted unopposed on 22 June 2020. It also applied for registration of the trade mark MEGA JACK, which McDonald's opposed. (The Opposition proceeding was suspended pending the outcome of these proceedings.)

In August 2020, McDonald’s commenced Federal Court of Australia proceedings seeking orders to have the BIG JACK trade mark registration revoked and a finding that the Hungry Jack's use of BIG JACK and MEGA JACK had infringed its registered trade marks for BIG MAC and MEGA MAC. McDonald's also alleged Hungry Jack’s use of comparative advertising concerning the weight of its meat patties contravened the misleading and deceptive conduct provisions of the Australian Consumer Law (ACL) (Reasons, at [4]).

McDonald's alleged that Hungry Jack's deliberately adopted the BIG JACK and MEGA JACK names "for the purpose of promoting in the mind of consumers a connection or affiliation between BIG MAC and MEGA MAC hamburgers and those (respectively) marked BIG JACK and MEGA MAC." (Reasons, at [28]).

Hungry Jack’s cross-claimed for revocation of McDonald’s MEGA MAC trade mark on the grounds of non-use (Reasons, at [5]).

The matter proceeded to trial in December 2022, with final submissions by the parties made in May 2023.

On 16 November 2023, Burley J handed down a decision in favour of Hungry Jack’s on the BIG JACK trade mark. However, Hungry Jack’s was found to contravene the ACL in its comparative advertising. Hungry Jack's also failed in its cross-claim to fully remove McDonald’s MEGA MAC trade mark for non-use.

The Decision

In summary, the Court held in favour of Hungry Jack's as follows:

1. BIG JACK is not deceptively similar to BIG MAC;
2. MEGA JACK is not deceptively similar to MEGA MAC;
3. Hungry Jack's has therefore not infringed the McDonald's trade marks;
4. The BIG JACK trade mark should not be removed from the trade marks register;

The Court also declined to remove McDonald's MEGA MAC trade mark for non-use — although the trade mark was removed for some goods.

Finally, the Court found that Hungry Jack's had engaged in misleading and deceptive conduct in making comparative advertising claims.

Deceptive Similarity — MAC vs JACK

When assessing deceptive similarity, the Court noted the approach in the recent High Court decision of Self Care to ignore all reputational elements of teh trade marks. That is, the trade marks' similarity must be considered from the perspective of a hypothetical consumer without exposure to, or recollection or knowledge of, the trading history or reputation of the relevant brands. (The Court acknowledged that the idea of a consumer without this knowledge is somewhat artificial.)

The Court considered that the words BIG and MEGA in each trade mark were obviously descriptive of the size of the products (Reasons at[96]). In comparing the words JACK and MAC, the Court held that typical consumers were unlikely to confuse those two words (Reasons, at [105], [124]).

The Court also noted that McDonald's had not produced evidence of actual consumer confusion, although this is not strictly required to establish infringement. (Reasons, at [107], [125]).

While the Court agreed Hungry Jack's adoption of the BIG JACK and MEGA JACK marks was "cheeky", the Court was not persuaded that it was done with the deliberate intention to deceive consumers (Reasons, at [110], [115]).

Claim for Revocation — BIG JACK registration

McDonald's sought cancellation of Hungry Jack's BIG JACK registration on the following grounds:

1. that BIG JACK was deceptively similar to McDonald's existing registrations (under Section 44 of the Trade Marks Act (TMA) — This claim failed on the basis of the above finding that the trade mark was not deceptively similar. (Reasons, at [129])
2. that use of the BIG JACK trade mark would likely cause deception or confusion with McDonald's existing trade marks (under TMA Sections 60 and 88) — This claim failed on the basis that the Court considered the enormity of McDonald's reputation in the BIG MAC mark would make it "most unlikely that consumers would be likely to be confused or deceived." (Reasons, at [147], [150]).

The Court therefore declined to cancel the BIG JACK trade mark registration.

Infringement

On the basis that the claims for Deceptive Similarity and Revocation failed, the Court found that Hungry Jack's use of the BIG JACK trade mark does not infringe the McDonald's BIG MAC trade mark.

Hungry Jack's was also able to rely upon the trade mark registration as a defence to infringement (TMA, Section 122(1)(e)) (Reasons, at [151]).

Non-Use Removal of MEGA MAC

Hungry Jack's sought removal of the MEGA MAC trade mark on the grounds that it had not been used.

Under the Trade Marks Act, a registered trade mark may be removed from the register if it is not used for the registered goods or services within a 3-year period. The onus is on the registered owner to prove that such use has occured, however, the Trade Marks Registrar (or in this case, the Court) has a discretion not to remove the trade mark even if no use is established.

McDonald's conceded that the MEGA MAC trade mark had not been used within the relevant period (2017-2020) in relation to a range of registered goods other than edible sandwiches and meat sandwiches. Various submissions were made regarding the exercise of discretion not to remove the trade mark for goods on which use was not established (Reasons, at [154]).

On the evidence, McDonald's was able to successfully establish use of the MEGA MAC trade mark in relation to hamburgers (Reasons, at [172]). However, it was unsuccessful in persuading the Court to exercise the discretion to allow the other unused, 'non-hamburger' goods to remain in the registration. (Reasons, at [181])

Misleading and Deceptive Conduct Claim

The misleading and deceptive conduct claim centres on two television commercials aired by Hungry Jack's, with the marketing claim that the BIG JACK burger had "25% more Aussie beef" than a competitor's product. There was dispute as to whether the "25% more" claim related to the uncooked or cooked weight of the compared products, and which measurement should be preferred in assessing the claim. (Reasons, at [187])

The evidence before the Court was that:

• if cooked weight was used, the "25% more" claim was false (on average the difference cooked weight was only 15%); whereas
• if uncooked weight was used, then the "25% more" claim was accurate.

The Court held that a typical consumer would consider the advertising from the perpective of the finished product, rather than a pre-cooked product (Reasons, at [207]). It was also noted that McDonald's uses a disclaimer in relation to its QUARTER POUNDER product, which specifically identifies that the quarter-pound weight refers to the uncooked product (Reasons, at [203]).

Accordingly, the misleading and deceptive conduct claim was made out in favour of McDonald's (Reasons, at [217]).

Subject to appeal and further orders

It is anticipated that further orders will be made in light of the outcome of the proceedings.

It should be noted that the decision may be subject to further appeal to the Full Court.

Further Information

McD Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412 — Decision; FCA Case File.