High steaks: McDonald’s loses trade mark beef against Hungry Jack’s, but “25% more beef” claim is misleading

In one of the first judgments to interpret the High Court of Australia’s recent decision in Self Care, Hungry Jack’s BIG JACK was found not to infringe McDonald’s BIG MAC trade mark. However, the claim that the Big Jack had “25% more Aussie beef” than the Big Mac was found to be misleading or deceptive, emphasising the caution required with comparative advertising claims.

Key takeaways

• This is one of the first judgments to apply and interpret the High Court’s recent decision in Self Care IP Holdings v Allergan Australia Pty Ltd [2023] HCA 8 (Self Care), which we reported on earlier this year.¹
• While admittedly artificial, following the decision in Self Care, whether trade marks are deceptively similar must be assessed without considering any reputation in either mark, or any other branding or surrounding livery that is used on or in relation to the products along with the allegedly infringing trade mark.
• In assessing whether a representation is misleading or deceptive, it is the impression given to customers by the representation itself that is relevant, even if the same statement, in relation to the same or similar products, would be interpreted differently in other purchasing circumstances.

Background

In early 2020, Hungry Jack’s introduced the Big Jack and Mega Jack burgers to its Australian menu. McDonald’s claimed that the use of these names respectively infringed its BIG MAC and MEGA MAC trade marks, and that Hungry Jack’s own trade mark registration for BIG JACK should be cancelled for the same reason.

Hungry Jack’s also ran two ad campaigns for the Big Jack, one of which poked fun at the proceedings brought by McDonald’s. The ads claimed that the Big Jack had “25% more Aussie beef” than the Big Mac. McDonald’s argued that these advertisements were misleading and deceptive, in breach of the Australian Consumer Law because, although Hungry Jack’s argued that the uncooked weight of the burger patties was 25% greater in the Big Jack than the Big Mac, this was not the case in the cooked burgers.

The case was heard before Justice Burley before the High Court’s decision in Self Care (which we reported on here). However, one of the major issues was whether reputation was relevant to the question of whether the trade marks were deceptively similar to one another, which the High Court was to consider in that case. The parties therefore agreed to delay judgment until the High Court issued its decision in Self Care.

Decision of the Federal Court

In a judgment handed down on 16 November 2023 (McD Asia Pacific LLC v Hungry Jack’s Pty Ltd [2023] FCA 1412) Justice Burley found that BIG JACK and MEGA JACK were not deceptively similar to BIG MAC and MEGA MAC, and so there was no trade mark infringement.

However, Burley J found that Hungry Jack’s had breached the Australian Consumer Law by representing that the Big Jack contained 25% more beef than the Big Mac.

Trade marks and deceptive similarity

Deceptive similarity is assessed by considering whether the similarity between trade marks means that a consumer would have a reasonable doubt as to whether the products came from the same source, or “whether there is a real, tangible danger of deception or confusion occurring”.²

Importantly, in Self Care the High Court confirmed, resolving a “long-standing controversy”, that any reputation that either trader had developed in either mark must be disregarded when assessing whether there is any risk of confusion. In addition, His Honour rejected Hungry Jack’s’ argument that the decision in Self Care required the Court to consider the “usage of other aspects of packaging” such as other trade marks, branding, livery or disclaimers on or in relation to the allegedly infringing goods.³ This meant that the question of deceptive similarity was to be assessed from the perspective of a notional consumer who “would not approach either of the trade marks with preconceptions based on their experience with either McDonald’s or Hungry Jack’s or any of their branding”.⁴ His Honour accepted that there “is, of course, a degree of artificiality in the approach, but that is for the good reasons set out in the case law.”

Without considering surrounding branding or livery, his Honour found that BIG MAC and BIG JACK were not deceptively similar. Although this kind of assessment inherently involves an element of judgment and so some may take a different view, his Honour’s conclusion was based on the considerations that:

• “BIG” was descriptive, so should be afforded less weight in the comparison; and
• the words MAC and JACK were both phonetically different and semantically different, JACK being a well-known first name whereas MAC was an unusual name or abbreviation.⁵ His Honour observed that consumers are more likely to recall differences in first names, considering that “Harry” and “Barry”, “Ryan” and “Brian” and “Ronald” and “Donald” are not likely to be confused.

McDonald’s had also argued that Hungry Jack’s had deliberately set out to take advantage of the similarity between BIG MAC and BIG JACK in the minds of consumers to sell a “copycat” product, which is accepted to be relevant to the assessment of deceptive similarity.⁶ However, Burley J agreed with Hungry Jack’s submission that while there was an element of “cheekiness” to its branding, its intention was for customers to compare the products, not to confuse them.⁷

Burley J reached the same conclusion in relation to the MEGA MAC and MEGA JACK marks, and concluded that both the BIG JACK nor MEGA MAC marks were valid and should not be removed from the Register (save for certain goods in relation to which MEGA MAC had been registered, but not used for a period of 3 years).

Misleading and deceptive conduct

McDonald’s argued that Hungry Jack’s advertising, claiming that the Big Jack had “25% more Aussie beef” than the Big Mac, was misleading and deceptive and therefore in breach of the Australian Consumer Law. The primary issue in dispute between the parties on this claim was whether the advertisements represented to consumers that the Big Jack contained 25% more beef by cooked weight or uncooked weight.

Hungry Jack’s submitted that the advertisement referred to the raw meat patty, and argued that consumers would be aware of this since the practice of the food industry is to sell meat by reference to its uncooked weight. It pointed to menus from various restaurants in support of this argument, and to regulations that required meat to be sold by uncooked weight since the cooking method used can vary the cooked weight.

Burley J considered that “a not insignificant number of reasonable customers in the class likely to see the advertisements” would consider the 25% bigger claim to relate to the cooked weight of the hamburger, not the uncooked weight. His Honour considered this was the case since:

• the advertisements were most likely not to be viewed at the time of making a purchase but at a time beforehand;
• the advertisements would most likely be “forced upon the viewer” via various media, and would “possibly be an uninvited distraction”, such that the viewer is “unlikely to pay close attention to every aspect of it, but will form a general impression of its message”;
• since the advertisements showed patties “at an advanced stage of cooking” and a “concluding image of a ready to eat hamburger meal”, to the extent that the consumer did pay attention to the distinction between cooked and uncooked weight, they were likely to assume the advertisement was referring to the former; and
• viewers would not consider the Big Jack advertisements in the same way they would consider an a la carte menu at a hotel, but in any case many of the menus in evidence, and an advertisement by McDonald’s for its Quarter Pounder, included express disclaimers that the weight given was pre-cooked weight.⁸

By contrast, “detailed and extensive” expert evidence indicated that the weight of cooked beef in Big Jack burgers was in the order of 12-15% more than in Big Mac burgers. Although Hungry Jack’s disputed the veracity of this evidence (including arguing that removing condiments “violated the integrity of the hamburgers”⁹), his Honour concluded the cooked weight of the Big Jack patties was clearly less than 25% greater than that of the Big Mac. Accordingly, McDonald’s was successful in the ACL claim.