In McD Asia Pacific LLC v Hungry Jack's Pty Ltd,1 the Federal Court dismissed McDonald's trade mark infringement claim against Hungry Jack's for using BIG JACK and MEGA JACK in relation to hamburgers. However, Hungry Jack's was held liable for engaging in misleading or deceptive conduct.

This is one of the first major decisions to apply and interpret the High Court's ruling in Self Care IP Holdings Pty Ltd v Allergan2 and illustrates several important points for Australian trade mark law and consumer law.

Background

McDonald's is the registered owner of the BIG MAC and MEGA MAC trade marks and has sold the Big Mac burger in Australia since 1971. Since March 2020, Hungry Jack's has promoted and sold the Big Jack and Mega Jack burgers in Australia. Hungry Jack's also ran two television commercials in which it represented that the Big Jack had "25% More Aussie Beef".

McDonald's commenced proceedings against Hungry Jack's, alleging, among other things, trade mark infringement and breach of the Australian Consumer Law ("ACL).

The key issues before the Federal Court were:

  1. whether BIG JACK and MEGA JACK were deceptively similar to BIG MAC and MEGA MAC respectively within the meaning of s 120 of the Trade Marks Act 1995 (Cth) ("TMA");
  2. whether BIG JACK should be cancelled under s 44 (substantially identical or deceptively similar) and/or s 60 (similar to a trade mark that has acquired a reputation in Australia) of the TMA;
  3. whether Hungry Jack's' "25% More Aussie Beef" representation constituted breach of s 18 (misleading or deceptive conduct) of the ACL.

Trade Mark Infringement

Central to the infringement claim was whether Hungry Jack's' impugned trade marks were deceptively similar to McDonald's' trade marks.

A deceptive similarity enquiry must take into account the notional buyer's imperfect recollection of the registered mark and ask whether there is "a real, tangible danger of deception or confusion occurring" as to trade source.3 Importantly, the Federal Court confirmed, following Self Care, that reputation based on actual use of the registered mark is irrelevant to assessing deceptive similarity under s 120(1) of the TMA.4 Accordingly, contrary to Hungry Jack's' argument, any preconceptions about McDonald's and Hungry Jack's, or other aspects of packaging, branding or trade livery that were used in conjunction with the marks cannot be taken into account. Instead, "[e]ach mark must be considered afresh, shorn of knowledge of the reputation".5

Applying the above principles, Justice Burley dismissed McDonald's' infringement claim on the basis that BIG JACK was not deceptively similar to BIG MAC, and reached the same conclusion for MEGA JACK and MEGA MAC for similar reasons.

The following factors were of particular significance:

  • As BIG is a descriptive and laudatory word that is commonly used, the notional buyer will more likely call to MAC and JACK as points of distinction.
  • Despite the similar rhyme ("ack") at the end of the two words, MAC and JACK are visually and aurally different.
  • MAC is an unusual name or abbreviation while JACK is a popular forename. The notional consumer will more likely remember their differences, as people are generally attuned to noticing differences in forenames (e.g. Harry is not Barry, and Ronald is not Donald).
  • The notional consumers are also likely to pay reasonable attention to a mark that denotes what food they will be eating.
  • Furthermore, the intention of Hungry Jack's was an important factor in determining whether there was a reasonable probability of deception or confusion. While evidence from Hungry Jack's' Chief Marketing Officer admitted to a degree of "cheekiness" in the Big Jack name, Justice Burley ultimately accepted that it was fashioned for the purpose of encouraging comparison, as opposed to confusing consumers as to trade origin.

The Validity Challenge to BIG JACK

As McDonald's failed to establish deceptive similarly in the infringement claim, the validity challenge on the s 44 ground also failed. With regards to the s 60 ground, Justice Burley clarified that the notional consumer here is taken to be familiar with the reputation of BIG MAC. The differences between the marks and the (undisputed) enormous reputation attaching to BIG MAC meant that confusion or deception would be unlikely.6

Accordingly, McDonald's' validity challenge to BIG JACK was also dismissed on all grounds.

The ACL Claim – "25% More Aussie Beef"

While McDonald's was unsuccessful in its trade mark claims, it obtained a small victory in the ACL claim.

McDonald's alleged that the "25% More Aussie Beef" representation was misleading because the average cooked weight of the Big Jack beef patties was only 15% greater than the Big Mac. Hungry Jack's defended its position by arguing that the comparison was based on pre-cooked as opposed to cooked meat patties.

The following factors were particularly decisive in the finding of breach:

  • Audiences will unlikely pay attention to the distinction between cooked and pre-cooked weights.
  • Instead, audiences are more likely form a general impression of the message, which is, that they will be eating 25% more Aussie beef than when they eat the competitor's burger.
  • To the extent that audiences do make a distinction between cooked and pre-cooked meat patties, they are more likely to perceive the comparison as being of the cooked meat patties. This is supported by the fact that the commercials depicted the meat patties as being in an advanced stage of cooking, and featured an image of a ready-to-eat burger meal.

Key Takeaways

  1. While the Federal Court acknowledged "a degree of artificiality in the [Self Care] approach",7 it is now definitive that reputation of the trade marks or any other aspects of packaging or branding (however sizeable) are irrelevant to the assessment of deceptive similarity in an infringement analysis.
  2. Caution needs to be exercised when making a comparative advertising claim. In addition to ensuring the representation is accurate and supported by reliable evidence, traders should also consider how the claim might be perceived from the perspective of the audience.

Footnotes

1 (2023) FCA 1412 ('McD Asia Pacific').

2 Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) HCA 8.

3 McD Asia Pacific, 35-36.

4 Ibid 39.

5 Ibid 94.

6 Ibid 147.

7 Ibid 94.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.