Franchise agreements are essentially fancy trademark license agreements. The heart of the franchise agreement is the licensing by a franchisor to a franchisee of the use of the franchisor’s system, which includes the franchisor’s trademarks. By definition, under both the FTC’s franchise disclosure rule and state franchise registration and sales laws, generally speaking, if there is no trademark license or equivalent, there is no franchise. A franchise arrangement may cover one mark, or it may cover many. Some of the marks may not be critical to the franchise, but when there is only one, or several very important marks, the loss of any of these might spell out disaster to the franchisor and its franchisees, even though the mark might only be licensed for a limited territory.

In these kinds of proceedings McDonald’s would have the burden to show that it has used the mark for a period of at least five years. In Supermac’s (Holdings) Ltd. v. McDonald’s Intellectual Property Company, Ltd., the European Union Intellectual Property Office, Cancellation No. 144788 C (Jan. 11, 2019), the Cancellation Division of the European Union Intellectual Property Office (the Division) ruled that McDonald’s had failed to prove its case. Its evidence of non-abandonment consisted primarily of three affidavits provided by McDonald’s employees. McDonald’s also submitted evidence that the BIG MAC mark was appearing in materials posted on the Wikipedia website. The Division gave little weight to this evidence. The Division also, on its own initiative, looked at evidence of McDonald’s use of this BIG MAC mark and found that it did not support McDonald’s contention that it had made continuous use of the mark for at least five years. The Division ultimately concluded that McDonald’s had abandoned the mark and thus the mark should be cancelled.

This content has been archived. It is available through our partners, LexisNexis® and Bloomberg Law.

To view this content, please continue to their sites.

Not a Lexis Subscriber?
Subscribe Now

Not a Bloomberg Law Subscriber?
Subscribe Now

Why am I seeing this?

LexisNexis® and Bloomberg Law are third party online distributors of the broad collection of current and archived versions of ALM's legal news publications. LexisNexis® and Bloomberg Law customers are able to access and use ALM's content, including content from the National Law Journal, The American Lawyer, Legaltech News, The New York Law Journal, and Corporate Counsel, as well as other sources of legal information.

For questions call 1-877-256-2472 or contact us at [email protected]