Israel: Mcdonald´s v. Mcdonald — Use Of Surname Which Constitutes Trademark Infringement

In a decision of the Israeli Supreme Court dated March 30, 2004, in the matter of C.A. 8483/02 Aloniel Ltd. et al. v. Ariel McDonald (not yet published), it was held, inter alia, that Mr. Ariel McDonald’s use of his surname in the framework of televised advertisements in Israel for the fast food chain "Burger King", infringe the trademark rights of the fast food chain, McDonald’s Corporation.

The respondent, Mr. Ariel McDonald, a foreign player in the Israeli basketball team "Maccabi Tel-Aviv", appeared in a televised advertisement for "Burger King", stating, inter alia (in Hebrew): "listen to McDonald—only Burger King!". As a counter-attack, McDonald’s Corporation televised an excerpt from a newspaper interview with Mr. McDonald where he stated that he eats at McDonald’s restaurants. Mr. McDonald filed an action with the Tel-Aviv District Court claiming, inter alia, damage to his privacy rights and unjust enrichment on the part of McDonald’s. McDonald’s filed a counterclaim for infringement of its registered trademark. The District Court accepted Mr. McDonald’s claim and rejected McDonalds’ counterclaim. McDonald’s filed an appeal with the Supreme Court and Mr. McDonald filed a counter-appeal with respect to the compensation awarded to him by the District Court.

The Supreme Court, which reversed the District Court’s decision, held (by a majority opinion) that use of the surname "McDonald", which is almost identical to the trademark "McDonald’s", constitutes trademark infringement. It was emphasised that the question of likelihood of confusion, which affected the District Court’s decision, was irrelevant for establishing trademark infringement.

In his defence, Mr. McDonald claimed genuine use of his own name, pursuant to Section 47 of the Trade Marks Ordinance. Such Section provides that: "Registration under this Ordinance shall not prevent any genuine use by a person of his own name …".

The Supreme Court held that such defence is not absolute, since it provides a weighted balance between conflicting interests, and therefore, is conditional upon bona fide use. In the case at hand, the Supreme Court found that Mr. McDonald’s use of his name constituted shrewd misuse of the "McDonald’s" trademark, in that Mr. McDonald sought to take advantage of the similarity between his name and such trademark by using only his surname in a promotional campaign, even though he knew that such use would result in direct association with the competing fast food chain. The Supreme Court therefore concluded that the aforesaid use was unfair and cannot be protected under Section 47.

Mr. McDonald's claim of damage to his privacy rights was rejected. The Supreme Court also held that although McDonald's was unjustly enriched at Mr. McDonald's expense, the special circumstances of the case justify exempting Mr. McDonald from the restitution obligation.

The Supreme Court’s decision is final and may not be appealed.

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