Nasir Pasha, Esq.

Ronald McDonald Loves Waffle Tacos?

Apparently so, at least according to a collection of men who share the name with a well-known McDonald’s mascot. The supersized one in the yellow jumpsuit, on the other hand, has nothing to fear from Chihuahuas. Last week, Taco Bell rolled out a new ad campaign, featuring testimonials from real-life Ronald McDonalds to promote its new breakfast menu. McDonald’s responded with a Facebook posting of its own, featuring the more familiar Ronald McDonald patting a Chihuahua and noting that imitation is the sincerest form of flattery. It’s wink-and-a-nod advertising at its best.

Are there violations of trademark law? Maybe. Will litigation ensue? Very unlikely. What if the 38-or-so Ronald McDonalds restyled themselves as “The Ronalds” and sold endorsements to non-Trump casinos in Atlantic City?  Speaking of hair on fire….

Isn’t it Trademark Infringement for Taco Bell to Use Ronald McDonald?

The McDonald’s Corporation first filed for trademark protection of a clown character with puffed-out pant legs in 1967. The goal of federal trademark registration is generally to prohibit the unfair competition that might otherwise result from the use of trademarked names, logos, images and so forth by other businesses. Courts have elaborated some exceptions to this rule. One  — the nominative fair use rule — permits a competitor to use a trademarked item where three conditions are met:

  • The trademark must be necessary to identify the product. Imagine trying to refer to the signature beverage of the Coca-Cola Company without using the words “Coca-Cola,” or “Coke.”
  • The non-owner must not go beyond what is necessary to identify the product, for instance, by imitating appearance or trade dress, and
  • The non-owner must not suggest that there is any sponsorship or endorsement by the competitor.

None of The Ronalds in Taco Bell’s ad looked anything like the clown character.  For good measure, Taco Bell made it clear that that they were paid endorsers of Taco Bell Breakfast, not affiliated with McDonald’s Corporation.

But, who would have laughed were it not for a sly implication of endorsement?

Perception is Everything

McDonald’s response was remarkably deft. With a commanding share of the fast food breakfast market, McDonald’s might have very little to gain through successful litigation. It also might have a lot to lose in terms of negative publicity, especially at a time when it is already dealing with very public minimum wage disputes and a continuing background of healthy eating concerns. This is no time to be the bully.

Contrast this with BlackBerry’s recent scorched-earth legal response to Typo’s introduction of a black keyboard that could be attached to the iPhone 5 and 5s. The difference may be all a matter of relative market position. Having lost market share for years, BlackBerry could hardly afford to be seen as the toothless tiger. As of this writing, BlackBerry has now succeeded in obtaining a temporary injunction blocking Typo from further sales. This is the sort of story that should give your business plenty of caution about trademark infringement. As far as The Donald is concerned, all bets are off.

Let’s turn it around. What about McDonald’s use of the Chihuahua? To the surprise of many, Taco Bell has not used the Chihuahua in its advertising since 2000. It is testimony to the effectiveness of the campaign, which admittedly many found insensitive, that the dog remains a recognizable symbol, even 14 years later. As above, there is probably more to be lost than gained by suing.

A Story from the Land of Irreproducible Results

Without a lawsuit, there is no way to know whether the boundaries of trademark law have shifted.  Lawyers usually deal with clients who want to defend against trademark infringement, not ones who want to get just to the edge of committing it.  In either case, a trademark is only worth what the owner is willing to do to protect it.  Dealing with a relatively secure adversary may have been an essential part of the  strategy behind Taco Bell’s edgy move. It apparently backfired for Typo.

So, the takeway?  If you plan to beard the lion in its den, be advised.  Be very, very advised.

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