A unit of Singapore food and beverage maker Food Empire Holdings has lost yet another battle with McDonald's over its "MacCoffee" trademark.
Europe's second-highest court has ruled that the American fast-food giant has exclusive rights to use "Mc" or "Mac" for foodstuffs and beverages in the European Union (EU).
A court in Luxembourg upheld the EU Intellectual Property Office's rejection of an application by Food Empire unit Future Enterprises to register "MacCoffee" as an EU trademark for foodstuffs and beverages.
Food Empire's directors said they were "disappointed" with the latest defeat but said the firm plans to appeal.
In 2007, the Singapore Court of Appeal upheld a lower court's decision to block Future Enterprises from dropping an eagle design from its MacCoffee mark.
McDonald's had objected when Future Enterprises attempted to change it, saying the MacCoffee trademark would become too similar to McCafe, the name of its coffee and dessert bar, if the eagle was dropped.
Food Empire said it sells very little MacCoffee products in the EU.
"Definitely the potential is there, but we are not relying solely on this mark as our biggest sales in the EU is frozen food," Mr Tan Wang Cheow, Food Empire's executive chairman, told The Straits Times yesterday.
RIDING ON COAT-TAILS
It is highly probable that MacCoffee rides on the coat-tails of McDonald's in order to benefit from its power of attraction... and exploits without paying any financial compensation, the marketing effort made by McDonald's to maintain its image.
EUROPE'S SECOND-HIGHEST COURT, explained in its ruling on Tuesday.
The group had challenged the EU Intellectual Property office's decision because it wanted its mark to be protected there.
"MacCoffee instant beverages are sold in retail markets and our packaging design is unique. Consumers of MacCoffee have to purchase and prepare the beverages themselves so there is no confusion with McDonald's restaurants, where consumers are served with ready-to- consume food," Mr Tan said.
The group's flagship MacCoffee is a leading three-in-one instant coffee brand in its core markets of Russia, Ukraine and Kazakhstan. Its products are also sold in Central Asia, China, the Middle East, and the United States.
But the Luxembourg court ruled on Tuesday that the MacCoffee and McDonald's trademarks have "a certain degree of phonetic and conceptual similarity".
"The structure of the MacCoffee trade mark is very similar to that of the Mc family of trade marks, which combines the prefix 'Mc' with the name of a foodstuff," it said in the decision. "It is highly probable that MacCoffee rides on the coat-tails of McDonald's in order to benefit from its power of attraction... and exploits without paying any financial compensation, the marketing effort made by McDonald's to maintain its image."
Food Empire said the decision will have no material impact on its performance this financial year.
Mr Tan said it has "very strong positions in many key markets, and in most of these countries, it already has its trademarks registered".