| What's eating Big Mac? Last week McDonald's lost a marathon court battle. Julia Day on how companies defend their name Julia Day from: the Guardian Monday December 3, 2001 Everybody knows what McDonald's stands for - burgers, fries, chicken McNuggets and seemingly pointless and exorbitant court cases in defence of its globally omnipresent brand. The fast-food giant made one of the biggest legal mistakes of the century in suing environmentalists Dave Morris and Helen Steel, the McLibel pair, who were celebrated for their plucky David vs Goliath chutzpah. Even though it won overall, the court case cost McDonald's �10m and severely damaged its reputation. None the less the US multinational continues to plough ahead with legal challenges aimed at protecting its trademark and brand against everyone from a greasy spoon cafe in Stourbridge to a kebab house in Cardiff. Last week it lost a landmark ruling in the high court when restaurateur Frank Yuen won a nine-year battle to trademark his McChina fast food outlets. Yuen filed his application in 1992 but by 1995 McDonald's had opposed the mark on the grounds that consumers would be confused, and that it contravened its ownership of the trademark "Mc". Mr Justice Neuberger disagreed and his ruling allows Yuen to realise his dream of building a nationwide chain of Chinese restaurants. The judge also berated McDonald's for "virtually seeking to monopolise all names and words with prefix Mc or Mac". Charles Swan, partner at solicitors The Simpkins Partnership, says: "In the last 15 years brands have become much more important than they used to be. Companies see themselves as selling a brand rather than a product. Brands are the companies business. "It is a necessary part of owning a brand to police it, or it gets diluted. If you let people chip away at your trademark it weakens your trademark protection. You have to do it, but you can take it too far, and McDonald's have made mistakes. Too many companies err on the side of aggression. It's a good policy from a legal point of view but it doesn't do them any favours in terms of PR". John Mahony, chief executive of public relations firm Edelman London, believes that with the right PR strategy companies can protect their brands without facing a backlash from consumers who despise bully-boy tactics. The answer, he says, is to have good social responsibility programmes in place. "When something like this happens to companies that are good corporate citizens there is a swell of positive feeling towards them. Global companies must engage in meaningful dialogue with non-governmental organisations and change the way they behave according to consumers' concerns." But McDonald's does invest in diverse social responsibility programmes covering education, environment and animal welfare, and claims to be "an organisation founded on a heritage of giving back to the communities in which we live and work". So why don't consumers believe in the brand? "When McDonald's defend their brand they behave like a Goliath and are not totally transparent," says Mahony. "Hiding behind a legal framework offends consumers and makes any good work it has done seem artificial. Organisations like Shell have gone back to basics to re-engage with communities and pressure groups and make changes from the grassroots up. McDonald's needs to do that". The strategy will help companies in the PR sense, but does the McChina ruling indicate British judges favour the little guy? Earlier this year Arsenal FC lost a case to stop Essex trader Matthew Reed selling unauthorised merchandise on his stall near its Highbury ground. And in 1999 Elvisly Yours shopkeeper Sid Shaw triumphed in the British courts against American corporation Elvis Presley Enterprises which claimed it alone could exploit the name of the king of rock'n'roll. Alex Ridout, a solicitor specialising in brand protection for Arnander Irvine and Zietman, says British judges are traditionally more anti-monopolistic than those in other countries and, until this summer, the trend went against brand-owners. But increasing use of the European court of justice could change all that. Last month it ruled in favour of attempts by Levi's to stop Tesco selling cut-price denims - a practice the jeans-maker said damaged its brand. But Tesco won consumer sympathy with its PR strategy of placing itself as the consumer champion fighting greedy Levi's. "The Levi's decision surprised a few people and we're in a state of flux now," says Ridout. "But there are a few cases coming up in Europe over the next 12 months that could give us an indication of which way the law is moving". |
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