In a Federal Court judgment handed down in November, Justice Stephen Burley found that fast-food giants McDonald’s and Hungry Jack’s each had a measure of success in their dispute.
The case relates to Hungry Jack’s BIG JACK and MEGA JACK burgers that Hungry Jacks began selling in early 2020, which McDonald’s alleged infringed its BIG MAC and MEGA MAC trade marks. McDonald’s also alleged that Hungry Jack’s made representations in television advertisements that the BIG JACK contained ‘25% more Aussie beef than the BIG MAC’ were misleading or deceptive in breach of the Australian Consumer Law (ACL).
Hungry Jack’s successfully defended against McDonald’s trade mark infringement claims but the Court found that Hungry Jack’s engaged in misleading or deceptive conduct under the ACL.
McDonald’s unsuccessfully argued that BIG JACK and MEGA JACK were deceptively similar to the registered BIG MAC and MEGA MAC trade marks and as a result Hungry Jack’s in breach of section 120 of the Trade Marks Act 1995 (Cth) (TMA).
As part of its judgment, the Court clarified the legal test of deceptive similarity. The Court confirmed that the likelihood of consumer confusion must be assessed by comparing the notional use of the registered trade mark against the actual use of the allegedly infringing mark. The Court applied the recent High Court judgment of Self Care IP Holdings Pty Ltd v Allergan Australia Pty Ltd (2023) 408 ALR 195 (Self Care) in determining that any reputation McDonald’s had accrued in its BIG MAC and MEGA MAC trade marks could not to be considered for the purposes of assessing deceptive similarity. The Court also confirmed that the broader context in which Hungry Jack’s used its ‘BIG JACK’ and ‘MEGA JACK’ trade marks could not be taken into account for the assessment of deceptive similarity. This meant that the Court could not consider Hungry Jack’s conduct that may have mitigated the risk of consumers being confused, such as the presence of the HUNGRY JACK’S trade mark on Hungry Jack’s restaurants where the burgers were sold. Instead, the Court held that the correct approach was to assess the likelihood of consumer confusion from the perspective of a notional buyer, without any knowledge of either fast-food chain’s reputation.
Accordingly, the Court found the term ‘BIG’ was a descriptive and possibly laudatory term that would have a smaller impact on the imperfect recollection of a consumer compared to ‘MAC’ or ‘JACK’. Justice Burley concluded that typical consumers would be unlikely to confuse ‘MAC’ for ‘JACK’ or wonder whether hamburgers sold under those names would come from the same source.
The Court confirmed that a party’s intention to mislead consumers is relevant to the question of deceptive similarity. However, the Court found that Hungry Jack’s did not adopt the BIG JACK name to intentionally mislead consumers. Among other reasons, the Court found that:
The Court applied similar reasoning to the assessment of McDonald’s allegations about the MEGA JACK to reach the same conclusion: that the Hungry Jack’s MEGA JACK trade mark was not deceptively similar to McDonald’s MEGA MAC.
McDonald’s also sought to cancel the registration of Hungry Jack’s BIG JACK trade mark, including on grounds pursuant to section 60 of the TMA. McDonald’s argued that the BIG MAC mark had acquired a reputation in Australia and because of that reputation the use of the BIG JACK mark would be likely to deceive or cause confusion. Unlike section 120 of the TMA, the reputation of the BIG MAC does come into play when considering section 60 of the TMA. Here, the Court decided that a notional person familiar with the BIG MAC’s reputation would remember the BIG MAC mark and would not wonder whether products sold under the BIG JACK mark have a common source to products sold under the BIG MAC mark. The Court found that the differences between the marks and the strong reputation attaching to the BIG MAC mark meant that consumers would not be likely to be confused or deceived.
Hungry Jack’s had partial success in its cross-claim to cancel the MEGA MAC trade mark registration pursuant to subsection 92(4)(b) of the TMA for non-use. The MEGA MAC trade mark was registered for both hamburgers and non-hamburger items. The full list was:
Edible sandwiches, meat sandwiches, pork sandwiches, fish sandwiches, chicken sandwiches, biscuits, bread, cakes, cookies, chocolate, coffee, coffee substitutes, tea, mustard, oatmeal, pastries, sauces, seasonings, sugar.
The Court found that McDonald’s had used the MEGA MAC trade mark for hamburgers and so the registration should be maintained for ‘edible sandwiches’ and ‘meat sandwiches’.
McDonald’s tried to argue that the Court should exercise its discretion to maintain the registration for the rest of the goods. The Court did so in respect of ‘pork sandwiches, fish sandwiches and chicken sandwiches’ because these items were a subset of ‘edible sandwiches’ and were sufficiently similar to ‘hamburgers’.
However, the Court declined to exercise its discretion to retain the remaining goods: ‘biscuits, cakes, cookies, chocolate, coffee, coffee substitutes, tea, mustard, oatmeal, pastries, sauces, seasonings, sugar’. In doing so, the Court dismissed McDonald’s argument that certain items should be retained because they were the ingredients of the MEGA MAC burger (mustard, sauces, sugar and seasonings). The Court found these items did not have a sufficient connection with the final product.
McDonald’s further alleged that two Hungry Jack’s television commercials amounted to misleading or deceptive conduct, in contravention of section 18 of the ACL, by representing that the BIG JACK contained ‘25% more Aussie Beef’ than an unnamed competitor (confirmed by Hungry Jack’s to be the BIG MAC).
Here, the Court viewed that the advertisements would likely be viewed outside of a Hungry Jack’s restaurant and would be forced upon the viewer as a commercial or via social media. The advertisements would give the overall impression that consuming the BIG JACK would be consuming 25% more Aussie beef than when eating the BIG MAC, when in fact the average cooked weight was found to be only 15% greater than the BIG MAC. In making this finding, the Court had regard to extensive expert evidence about the weight of the burgers. It was determined that the 25% claim was only accurate with respect to the weight of uncooked meat.
The Court inferred that consumers would tend to assume that any statistics about weight would relate to post-cooked weight and accordingly ruled that McDonald’s misrepresentation case was made out.
This decision has illustrated several important points in trade mark and consumer law.
Firstly, this case confirms the relevance (or more accurately, the irrelevance) of the reputation of a registered trade mark such as BIG MAC in determining when a trade mark is deceptively similar and infringes another mark under section 120 of the TMA. This case also confirms that the broader context of use of the impugned mark is disregarded in the assessment of deceptive similarity.
Second, it is permissible for businesses to adopt a similar trade mark to their competitor’s trade mark in order to invite comparison and contrast, without deceiving or misleading consumers. However, this is a fine line to walk and the consequences can be costly. Even if a business is on the right side of the law, it might run up costs in defending a claim.
Third, businesses need to take care to ensure that any advertising claims are accurate, backed-up with evidence, and accord with the perspective of the consumer. This is particularly important for comparative advertising where an irked competitor might have the impetus and funds to run a case.
Savannah Hardingham, Partner
Olivia Coburn, Senior Associate
Raymond Huang, Lawyer