Peruvian trademark wins intellectual property battle against McDonald’s

Peruvian trademark wins intellectual property battle against McDonald’s

The case between McDonald’s and the Peruvian entrepreneur who attempted to register the trademark «MC HAPPY BAR» before the National Institute for the Defense of Competition and the Protection of Intellectual Property (hereinafter, «Indecopi») serves as a relevant example of how large multinational corporations aggressively defend their intellectual property rights against local trademarks.

In this case, the applicant sought to register a trademark related to the gastronomic service industry, consisting of the prefix «MC» and the term «HAPPY BAR». At first glance, these terms could evoke positive connotations related to food consumption, but they also prompted an immediate reaction from McDonald’s, given that «MC» and «HAPPY» are key elements in several of its registered trademarks, such as McDonald’s, McCafé, and the well-known Happy Meal.

Thus, the registration raised a controversy regarding the potential clash between the local applicant’s rights and McDonald’s pre-existing rights.

McDonald’s opposition to the trademark registration

McDonald’s, through its legal team, filed a formal opposition to the registration of the «MC HAPPY BAR» trademark, primarily arguing the following:

• Risk of confusion: the use of the prefix «MC» and the term «HAPPY» could cause confusion among consumers, leading them to mistakenly believe that the Peruvian business was affiliated with the multinational chain.
• Prestige of its trademarks: McDonald’s provided its trademark portfolio, which enjoys global recognition, granting it the status of “well-known trademarks” according to international legal standards.
• Unfair advantage of another’s goodwill: the registration of «MC HAPPY BAR» could constitute an attempt to capitalize on McDonald’s reputation and commercial value.

These arguments are not new in McDonald’s legal strategy, which has historically defended the «MC» and «MAC» prefixes as distinctive elements both in Latin America and Europe.

Indecopi’s resolution

The resolution, issued on October 4, 2024, emphasized that the services offered by «MC HAPPY BAR», focused on bartending activities, are clearly different from the fast-food services associated with McDonald’s. Specifically, Indecopi based its decision on the following key points:

1. Possible coexistence: Indecopi concluded that there was no significant likelihood of confusion between «MC HAPPY BAR» and McDonald’s trademarks, arguing that local consumers would be able to differentiate between the two businesses.
2. Absence of unfair advantage of another’s goodwill: it was not conclusively proven that the applicant sought to benefit from McDonald’s prestige.
3. Balance in trademark protection: the resolution highlighted the importance of not allowing large multinationals to limit the market access of local brands through disproportionate oppositions.

This resolution has been a milestone in the defence of local brands against large multinationals, highlighting the importance of the balance between protecting intellectual property and encouraging local creativity and entrepreneurship. 

However, it is likely that this case would have been different if it had been analysed by the EUIPO, as European regulations grant a stricter level of protection to well-known brands, which significantly increases the risk of losing legal disputes against large companies such as McDonald’s. Therefore, in order to avoid this type of conflict with pre-existing trademarks, it is of vital importance to carry out a thorough analysis prior to registering a trademark.