6 David & Goliath Trademark Disputes
Every businessperson would agree that trademark infringement is a serious issue. But when a multi-million dollar corporation goes after a mom-and-pop store, you can't help but root for the underdog. Most of the time, David doesn't stand a chance against a Goliath of the industry, but here are a handful of cases where the little guy fought back and didn't end up empty-handed. And sometimes, against all odds, he even wins.
1. Microsoft v. MikeRoweSoft
At 17 years old, Michael Rowe started his own website design company. Looking for a catchy name for the business, he decided to create a parody of computer software giant Microsoft using a variation of his own name. Rowe purchased the URL mikerowesoft.com.
The Bill Gates empire caught wind of the site and threatened to sue for trademark infringement. To avoid litigation, they graciously offered Rowe $10 to reimburse the expenses incurred in buying the web address. When the story started hitting online news sources, the outcry from average web surfers was intense. A defense fund was set up in Rowe's name and people donated around $6,000 to help him fight the power.
After the online commotion died down, Rowe began to realize just how much was at stake if he saw this case through. His measly $6,000 was nothing compared to the billions Microsoft had at its disposal. And should he lose, Rowe would be responsible for the court costs of a team of Microsoft lawyers, a fee he'd be struggling to pay for the rest of his life. He began to wonder if he should just take his $10 and throw in the towel.
However, the bad press Microsoft received was enough to make them sweeten the deal. In the end, Rowe handed over the website in exchange for Microsoft Certification training, a trip for his family to a tech conference in Redmond, Washington, assistance to set up a new website, and an Xbox videogame system.
2. Burger King v. Burger King
Back in the early 1950s, Gene and Betty Hoots bought the Frigid Queen ice cream stand in Mattoon, Illinois. A few years later, they expanded to a new building, where they sold burgers and fries. When looking for a name for this new venture, it was suggested that a queen needs a king, so they called the business "Burger King." They registered the name with the State of Illinois in 1959, giving them exclusive rights to the moniker in the Land of Lincoln.
However, there was another Burger King you might have heard of that was busy building three dozen burger joints all across the South. Thanks to this success, they expanded into the Midwest and, in 1961, opened a restaurant in Skokie, Illinois, followed shortly by another in Champaign, Illinois, just an hour north of Mattoon. By 1967, Burger King Corporation had opened 50 locations across the state.
After years of legal back-and-forth between the companies, Gene and Betty Hoots finally sued the Burger King Corporation in an effort to stop them from using the name Burger King in Illinois. However, because the Home of the Whopper was by then a nationwide chain, the corporate giant was allowed to keep the name.
But that didn't mean the Hootses had to change the signs on their building. The courts ruled that they owned the exclusive rights to the name Burger King within their business region, legally defined as a 20-mile radius around town. To this day, if the other Burger King wants to open a location there, they have to pay the Hootses to use the name.
3. The North Face v. The South Butt
A few years ago, while walking the halls of his St. Louis-area high school, Jimmy Winkelmann noticed a disturbing trend—every kid in his class was wearing the same fleece jackets from popular clothing company The North Face. Frustrated by their conformity, Jimmy came up with a parody clothing line, The South Butt, and began selling sweatshirts out of a local drugstore. Whereas The North Face's logo is an abstract drawing of Half Dome, the famous granite feature at Yosemite Park, The South Butt's logo is based on the famous feature we all have. And while North Face's ads suggest you "Never Stop Exploring," the South Butt encourages you to instead "Never Stop Relaxing."
While some might think Winkelmann's idea is good for a laugh, not everyone finds it so funny. In August 2009, The North Face sent The South Butt a cease and desist letter in an attempt to stop the parody clothes from being produced. Undeterred, Winkelmann and his lawyer are planning to file for a declaratory judgment, which they hope will give them the right to move forward and get The South Butt products into retail stores in time for Spring.
The actions taken by The North Face have actually drawn more attention to The South Butt and its website, thesouthbutt.com. During the first few years he was in business, Winkelmann sold a total of around two hundred pieces of South Butt merchandise. Thanks to The North Face, though, sales for this November alone have reached over $100,000.
4, 5 & 6. McDonald's v. McEverybody
If you want to use the name Mc-anything for your business, think again. There's a good chance Ronald and his lawyers will be on you like barbecue sauce on a McNugget. Here are just a few of the many trademark infringement cases McDonald's has brought against small businesses that dared use some variation of "Mc" in their name:
"¢ Back in 1996, if you were looking for a quick lunch in Buckinghamshire, England, you might have stopped at Mary Blair's McMunchies, a small corner deli whose name combined slang for snack food and the owner's Scottish heritage. McDonald's threatened to sue her, saying the "Mc" prefix was a registered trademark. To the rescue came Lord Godfrey MacDonald, head of the MacDonald Clan of Scotland, who started a campaign against the corporation's harassment of businesses using the Mc prefix. McDonald's received enough bad press that they eventually dropped the case against McMunchies as well as many other small McBusinesses in the UK.
"¢ Danish business owner Allan Pedersen tried MacAllan whiskey while visiting Scotland. He liked it so much he decided to name his hot dog shop after it and even got permission from the distillery to do so. McDonald's, though, felt the name was a little too similar to their own, so they sued. After repeated trials and appeals, the case wound up in Denmark's Supreme Court, which ruled that Pedersen could keep the name, citing that no one would mistake the one-man hot dog shop with a multi-national hamburger franchise.
"¢ In 2001, an Indian restaurant in Malaysia opened, calling itself McCurry. The owners said they chose the name as an acronym of sorts for one of their signature dishes, Malaysian Chicken Curry. Shortly after, McDonald's sued, citing not only the Mc-name, but also that the restaurant's red sign with white block lettering was a little too close for comfort. After eight years in court, in September 2009, the Malaysian Court of Appeal declared that the two businesses were diverse enough that customers would not confuse them, allowing McCurry to keep its name. Now that the owners of McCurry's have won their case, they're thinking about starting up a franchise.