The Battle for the ‘Big Mac’

The Philippine Supreme Court finally put an end to the long-standing battle between fast food pioneer, McDonald’s Corp. ("McDonald’s) and local mobile fast food establishment, L Big Mak Burger, Inc. ("L Big Mak") when it rendered a Decision in the case entitled"McDonald’s Corporation and McGeorge Food Industries, Inc. v. L Big Mak Burger, Inc., Francis B. Dy, et. al" (the "Big Mac" case"). Early this year, or on 16 February 2005, McDonald’s received a copy of the Entry of Judgment rendering the High Court’s Decision final and executory.

In a long drawn-out legal battle spanning over 15 years, the Supreme Court declared that L Big Mak’s "Big Mak" mark is confusingly similar to McDonald’s own "Big Mac" mark, which is likewise used on hamburger sandwiches. Ultimately, the High Court found L Big Mak liable for infringement and unfair competition. In its decision, the Supreme Court also reiterated its preference for the Dominancy Test over the Holistic Test as the benchmark to be used in determining the existence of confusing similarity between two competing marks.

The case began in the early 1990’s when McDonald’s received information that L Big Mak had been using the mark "Big Mak" to designate its hamburger sandwiches, which were being sold to the public through its mobile fast food vans which also used "Big Mak" as part of their signages. As L Big Mak failed to heed written demands to cease and desist from using the "Big Mak" mark in its business, McDonald’s Corp. and its local franchisee, McGeorge Food Industries, Inc., filed a suit for infringement and unfair competition before the Regional Trial Court of Makati, through their local counsel, the Angara Abello Concepcion Regala and Cruz Law Offices or ACCRALAW.

For its part, L Big Mak admitted to using the "Big Mak" mark in its fast food business. However, it claimed that McDonald’s did not have an exclusive right over the "Big Mac" mark or to any other similar mark considering that two other registrations for the same mark in the name of different entities existed prior to McDonald’s registration for the "Big Mac" mark in the Philippines. McDonald’s argued that the first registration was only in the Supplemental Register, while the second had already been assigned to it as early as 1981.

In 1994, the Regional Trial Court of Makati, Branch 137, then presided by Judge (now Justice) Santiago J. Ranada Jr. found L Big Mak liable for trademark infringement and unfair competition, recognizing McDonald’s exclusive right over the use of its registered mark "Big Mak". Relying upon the Dominancy Test, the court ruled that L Big Mak was liable for infringement when it used the name "Big Mak" on its signages, wrappers, and containers in connection with a food business similar to that of McDonald’s. The court also found that the sale by L Big Mak of its burgers and other sandwiches constituted unfair competition since the choice of the mark "Big Mak" as a trade name was not merely for sentimental reasons but was clearly made to take advantage of the reputation, popularity and established goodwill of McDonald’s.

The Court of Appeals, however, was of a different opinion. Upon its review of the case, the appellate court reversed the trial court’s decision and clarified that no colorable imitation exists between the marks "Big Mac" and "Big Mak". The Court of Appeals ruled that there appears a vast difference in the appearance of the products and the manner that the trade name "Big Mak" is being presented to the public. Likewise, it found no sufficient evidence to show that L Big Mak deliberately tried to pass off its goods for those of McDonald’s, as there was no malice nor bad faith on the part of L Big Mak.

Consequently, McDonald’s brought its case before the Supreme Court praying that the decision of the Court of Appeals be set aside. In a 28-page decision penned by Justice Antonio Carpio, the Supreme Court reversed the decision of the Court of Appeals and reinstated the original decision of the Regional Trial Court, finding L Big Mak liable for both infringement and unfair competition.

Initially, the High Court emphasized that McDonald’s, as registered owner of the "Big Mac" mark, has the right to use the said mark on the same or similar products, in different segments of the market, and at different price levels depending on variations of the products for specific segments of the market. The Supreme Court recognized that McDonald’s enjoys protection in product and market areas that are within the normal potential expansion of its business.

Applying the Dominancy Test, the Supreme Court found that L Big Mak’s "Big Mak" mark imitates the dominant feature of McDonald’s own "Big Mac" trademark and, hence, would likely result in confusion among consumers. The High Court observed that the marks "Big Mac" and "Big Mak" are almost identical, both from an aural and visual point of view. The Court even made special mention of the fact that the letter "c" when uttered in the Filipino language produces the same sound as the letter "k".

Applied to the same kind of food products (i.e., hamburger sandwiches), the Supreme Court held that the two marks will likely result in confusion in the public mind. Since L Big Mak chose to apply the "Big Mak" mark on hamburger sandwiches, it obviously clothed its goods with the general appearance of McDonald’s own products. The finding of unfair competition against L Big Mak was further bolstered by the fact that there was actually no notice to the public that "Big Mak" hamburger sandwiches are products of L Big Mak and not of McDonald’s which, according to the Supreme Court, clearly shows the former’s intention to deceive the public and ride upon the reputation and goodwill of McDonald’s and its products.

The Big Mac case is interesting as it again involved the question of which test (i.e., the Dominancy Test or Holistic Test) is to be applied in determining the existence of confusing similarity between two competing marks. In several cases, the Supreme Court has stated that the applicability of either test is dependent on the peculiar circumstances attendant to each case. Still, there are other cases where the High Court seemed to apply both tests in ruling upon the issue of confusing similarity. In the Big Mac case, the Supreme Court chose to apply the Dominancy Test and even went so far as to state that the Holistic Test runs counter to the basic principles underlying trademarks and unfair competition. Following the Big Mac case, it is apparent that the Supreme Court is slowly veering towards the Dominancy Test as the yardstick to be used in determining the existence of confusing similarity. On this point, it is interesting to note that Republic Act 8293, otherwise known as the Intellectual Property Code ("IP Code"), seems to adhere to the Dominancy Test insofar as a particular mark’s registrability is concerned. Under Section 155.1 of the IP Code, the "use in commerce of any reproduction, counterfeit copy, or colorable imitation of a registered mark or the same container or the dominant feature thereof xxx which such use is likely to cause confusion, or to cause mistake, or to deceive," shall constitute "trademark infringement."

All said, the Big Mac case is a prime example of the country’s commitment to uphold and enforce the rights of intellectual property owners. It sends a message that, while local enterprises are encouraged to expand their businesses, they must rely on their own creativity and resourcefulness and take care not to infringe on others’ established rights.

So the next time you feel the urge to eat a hamburger, and you order a "Big Mac", thank the Supreme Court for ensuring that you are eating the real "McCoy".

(The authors are Associates of the Angara Abello Concepcion Regala & Cruz Law Offices. They can be contacted at tel. no.830-8000; fax no. 816-0119; or emails: [email protected] or [email protected])