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McDonalds v. McFest: Boo Freakin' Hoo — Journalists should talk to trademark lawyers before writing whine-pieces

Not as much of a crook as you may think.

Poor Lauren McClusky. She is a 19 year old, civic minded, kind, compassionate kid who founded an organization that puts on charity concerts in the Chicago area to raise money for the Special Olympics. She called the concert series “McFest.” You know where this is going… or do you?

The story being told is one of a big bad corporation attacking the poor little charity for using its famous “Mc” prefix.

You couldn’t blame Lauren McClusky of Chicago if she were a bit squeamish about using her last name in this story without fear of reprisal from Ronald McDonald and his legal posse.

For McClusky, 19, finds herself at the center of a thorny dispute that involves a series of charity concerts she’s put on over the past three years. She dubbed the event “McFest” (more on that in a moment) — but McDonald’s sees that as an infringement on its trademarks, something the McDonaldland lawyers refer to as “the McFamily of brands.” (source)

Good god… you mean… McDonalds, the big multinational corporation, hates retarded children? (Yeah, I said “retarded“).

Oh, it gets worse. Listen to the tale of woe… of poor Ms. McClusky having to spend $5,000 on lawyers, battling the big bad clown who is trying to get her to change the festival’s name. Well that just sounds mean-spirited. It isn’t as if she named it McFest for an ill-intended reason.

Her original co-chair for the first McFest also shared the “Mc” prefix in her surname, so it seemed a natural. And indeed, not a single McDonald’s attorney seemed to object in 2007 and 2008, when McClusky’s McFests raised $30,000 for the Chicago chapter of Special Olympics.

So why, oh why, would McDonalds attack this noble charity?

The fact is, they didn’t, and the howls and cries in McClusky’s corner are coming from uneducated morons who don’t understand the first thing about trademark law — or they hope that their readers don’t. McDonalds did not file a lawsuit against McClusky. McDonalds didn’t even try and stop her from calling her concert series the “McFest,” they merely filed an opposition to McClusky’s attempt to secure a trademark registration for “McFest.”

To understand this case, you need to understand these terms:

  1. Trademark Infringement Lawsuit
  2. Common Law Rights
  3. Trademark Registration
  4. Trademark Opposition

In a trademark infringement lawsuit, you sue the other guy. You try and get money from him. You might try and get a court order that stops the other guy from using a confusingly similar name. If McDonalds had filed one of these against Ms. McClusky and her McFest organization, then McDonalds would get the asshat award this week. They didn’t, ergo they don’t.

McDonalds filed a trademark opposition. That might, to a layperson, sound like six of one, half a dozen of the other. It isn’t. An opposition is a world away from a lawsuit. When you use a trademark, like say “Legal Satyricon,” it becomes yours just through use. The very day you start using the mark, you can use that little “TM” that you see on trademarks. You can threaten other people with trademark infringement lawsuits, if you like. You can even file a lawsuit based on the rights you gain simply by using the mark — these are called “common law rights.”

If you plan on filing a trademark infringement suit based upon your common law rights, you will need to prove (among other things) that you own the trademark and that the mark is valid. But, if you get a trademark registration then you get to go into the lawsuit with those goals already scored in your favor. It becomes the other guy’s job to dis-prove your rights. So there’s one benefit of having a trademark registration.

In addition, a trademark registration is a valuable asset for your business. When I have clients who want to buy up other companies, one of the first things I do is audit the company’s intellectual property assets. A registered trademark, especially one that is more than five years old, adds a lot of value to the company, and it shows that the prior owners had their heads out of their asses. When I audit a company that didn’t even bother to file for a trademark registration, it makes me wonder what other corners they cut, and why they were so penny-wise and pound-foolish.

Another benefit of a registration is that it will block anyone else from registering the same (or a similar) mark, for the same goods and services. The government sorta gives you a free trademark lawyer when you have registered rights, but you have to protect common law rights on your own. So, lets say that you have a common law mark, but someone else files for a similar mark to be registered. You’re out of luck. On the other hand, if you had registered your rights, the USPTO would get in the middle of the fight, and you might not even need to raise a finger to stop the other guy from getting a registration.

Lets move on to the registration process.

When you apply for a trademark, you fill out a form with the United States Patent and Trademark Office. It gets sent to an examiner, and that examiner decides whether the mark is entitled to registration. They question whether it is distinctive enough, whether it is confusingly similar to another mark, or sometimes they get a big fat stick up their ass and question whether the mark is “immoral.” Remember, when the examiner makes her determination about whether the mark is confusingly similar to another mark, she just looks at other registered marks.

If the examiner says “no,” then you can still use the mark, you just don’t get that extra business asset, and you don’t get those two points at the beginning of a trademark infringement lawsuit.

If the examiner decides that the mark is okay, then she lets it move to the next stage. That stage is called “publication.” At that stage, anyone who thinks that the registration might harm their legal interests gets to speak up. Speaking up at this point is done in the form of filing an opposition. THAT is what McDonalds filed. You can’t win money in an opposition. All you get, if you win, is this: You block the other guy from having a registration for their trademark. You don’t even get a court order stopping them from using it.

This isn’t heavy-handed, it is smart business. McDonalds has a strong brand in its “Mc” prefix, and stopping someone from securing a trademark registration inside that turf is not the same thing as stopping them from using the name. If you don’t protect your trademark turf from minor incursions, after a while, the mark can die the death of a thousand paper cuts. McDonalds has some pretty well-established trademark turf, with registrations for McPen, McBurger, McBuddy, McWatch, McDouble, McJobs, McShirt, McPool, McProduct, McShades, McFree, McRuler, McLight, etc. Allowing a McFest to enter the field would cause some ever-so-slight erosion of their McHegemony in that area, and make their trademark worth just a bit less.

Look at it this way, if Ms. McClusky got her registration for McFest, then she could potentially license that trademark to Burger King for a concert festival. Yeah, really. Either that, or she could expand her tiny McFiefdom, and eventually cause some real branding problems for Grimace and the gang. Sure, the likelihood is low, but McDonalds didn’t get where it is by being lackadaisical about its trademark rights.

So lets recap:

MsMcClusky did not get sued, her trademark was opposed. McDonalds is not ordering her to change the name of her concert — they are just trying to stop a registration from creating a legal foothold inside their turf.

I am not sure why McClusky filed for a federal registration in the first place. Is she planning on suing a competitor? Is she going to license the name to other companies? Is she looking to sell her charity? Honestly, why does an annual concert that raises money for the Special Olympics need a trademark registration in the first place? Set that aside for a moment though — because her business plans aren’t any of my concern.

My concern is that this story is being portrayed as if McDonalds is beating up a charity that supports the Special Olympics, and taking their money. That portrayal is complete bunk. All McDonalds is doing is protecting its brand, and if McDonalds prevails, the charity will not (not necessarily) need to change its name, and it won’t need to pay any damages. The fact that the McFest has spent $5,000 fighting this so far is an indication that something greater is at stake — or just that Ms. McClusky is not making rational or informed decisions.

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