Case Study - Malaysia: McCurry vs McDonald’s: Passing Off, the Common Law and Procrustean Beds.

For Mr. Suppiah, the troubles began in 1999. He runs a local mom-and-pop roadside diner in Kuala Lumpur that sells Malay and South Indian food, such as roti canai, curries and nasi briyani. His staff does not wear uniforms, and his restaurant is cooled by ceiling fans, not air conditioning. He called his restaurant McCurry, which, he claims, was an abbreviation for Malaysian Chicken Curry.

McDonald’s Corporation sued Mr. Suppiah for the English common law tort of passing off. The case has been closely followed by both local and international media, which have billed it as a battle between David and Goliath.

In 2006, the trial court held in favor of McDonald’s, applying the classic “holy trinity” test for passing off—goodwill, misrepresentation and damage. McDonald’s had created a family of marks under the “Mc-” prefix by selling various food items (e.g., McChicken, McNuggets) and providing restaurant services (e.g., McDonald’s, McCafe). Consequently, consumers would associate McCurry with the plaintiff, thus causing damage to McDonald’s. Although the word “dilution” was not used, it seems to be the implicit reason for the trial court’s conclusion. Mr. Suppiah duly removed the lowercase “c” from his signboard and began trading as M Curry.

However, McDonald’s victory was short-lived, as the trial court’s decision was overturned by the Court of Appeal in April 2009. Justice of Appeal Gopal Sri Ram (who has since been elevated to the Federal Court) delivered a scathing 18-page judgment, saying that there had been “a serious misdirection which ha[d] resulted in a miscarriage of justice.”

The Court of Appeal felt that it was not bound by strictures of the “holy trinity” test because the common law “does not rest upon a Procrustean bed.” In any event, it went on to discuss the essential features of the tort—that is, goodwill, misrepresentation, damage—and found that there was no misrepresentation. McDonald’s get-up (trade dress) consists of a distinctive golden-arched “M” with the word “McDonald’s” against a red background. In contrast, the defendant’s signboard says “Restoran McCurry,” with the lettering in white and gray on a red background and with a drawing of a cartoon chicken giving a double thumbs up and the words “Malaysian Chicken Curry.” None of the items on McCurry’s menu carried the “Mc-” prefix. The type of food sold and the customer base were “very different.” Following the reasoning of the London High Court in Yuen Yu Kwan Frank v. McDonald’s Corp. (the McCHINA case), Justice Sri Ram said: “Where the learned judge, with respect, erred is to assume that McDonald’s had a monopoly in the use of the prefix ‘Mc’ on signage or in the conduct of business.”

It was not clear whether McDonald’s customers were lost to McCurry because they were actually misled, or whether this was likely in the future. The damage, presumably, was confined to the detrimental association with and dilution of the McDonald’s brand. McDonald’s is widely expected to appeal to the Federal Court, which is the final court of appeal in Malaysia.


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Case Study - In the river crocodiles will fight each other for supremacy. In business it's much the same.

HONG KONG, China (CNN) -- In the river crocodiles will fight each other for supremacy. In business it's much the same.

Now, two of the world's largest crocodiles have called a truce in an historic battle that's lasted nearly a quarter of a century.

French fashion giant Lacoste and a Hong Kong sportswear company called Crocodile Garments nearly tore each apart in a bitter trademark dispute.

Lacoste's right-facing logo and Crocodile's left-facing logo are so similar it's taken a generation and hundreds of thousands of dollars in legal fees to establish which croc has the edge over the other.

In the 1920s, French tennis legend Rene Lacoste became known as the "crocodile" because he once promised to win a crucial match in exchange for a crocodile-skin briefcase.

Later, in 1933, he put a reptile emblem on his own line of sports clothing -- the polo shirt that he designed to replace the stiffer collared shirts used by tennis players at the time.


Fashion icon

So popular was the concept, the brand Lacoste was born and the familiar crocodile crest became a fashion icon. By the early 1980s, Lacoste had a $400 million business in the U.S. alone, according to Forbes magazine.

Though a downturn in popularity followed, Lacoste has made a remarkable resurgence in recent years.

Rene's son Bernard -- who is chairman at Lacoste -- says the croc symbol has been crucial to the Lacoste success.

"I think it has become something mythical and that it represents for the consumer a more quality product," he says.

But that hasn't slowed down sales at Crocodile Garments, which in Hong Kong boldly operates one of its stores right next door to a Lacoste outlet.

Crocodile Garments had a reptile trademark as early as the 1950s and in the 1990s tried to register a similar motif in China.

Lacoste did everything it could to stop Crocodile from registering in China. And it's only very recently that the crocs settled their differences.


Commercial compromise

Crocodile Garments has agreed to change its logo as part of the settlement. The new logo will have a croc with a tail which rises more or less vertically and it has skin which is much more scaly. It also has bigger eyes.

"They have litigated each other to a standstill and come to a commercial compromise," explains Nigel Francis of law firm Herbert Smith

That compromise allows Crocodile Garments to compete legally against Lacoste in China.

As well as competing against Lacoste, Crocodile has another battle on the mainland. It will soon register its brand with Chinese authorities and ask officials to protect it against the growing piracy of the Crocodile brand.

"I think it's a very good thing to do to fight the counterfeits," says Crocodile's Vanessa Lam.

While these two crocodiles now appear happy to be swimming in the same water zoologists are still scratching their heads at the logos.

They question whether real-life crocs lift their tails like the one created by Crocodile Garments.

But does it really matter?

Many people think Lacoste's age-old croc has a red tongue. When in fact, as Bernard Lacoste says, "Crocodiles don't have tongues."