McDonald's Corporation holds an unenviable position as the big company that everyone loves to hate. The opprobrium poured on it since the "McLibel" trial (1994-1997) serves only to emphasise this - a clear case of winning the battle but losing the war. And it seems to have done nothing to stifle McDonald's appetite for litigation: the latest in a long line of defendants to attract the attention of the Golden Arches legal department (and the adulation of anti-brand campaigners) is Frank Yuen, proprietor of the "McChina Wok Away" chain of Chinese restaurants.

Mr Yuen came to the UK from China and set up his first restaurant in south London in 1991. He planned to expand his business through franchising and attempted to register "McChina" as a UK trade mark. Unsurprisingly, this was opposed by McDonald's and his application was rejected by the Trade Mark Office. Undaunted, he appealed to the High Court where (so far, at least) he has won. The case raises several important questions but leaves many of them unanswered.

McDonald's is notoriously protective of its trade marks and is especially attached to the "Mc" prefix. From their roots as a Gaelic signifier for "son of", these two letters have become so associated with McDonald's that they are regularly used in popular culture to indicate tile restaurant chain: "McBurger", "McJob" and so on. Partly this can be seen as McDonald's own fault - its insistence on describing nearly everything it sells as "Mc-something-or-other" leaves it wide open to parody on this level - but it is also an excellent example of far-reaching brand penetration.

The flip side of this worldwide success is criticism that McDonald's is seeking to monopolise a slice of Scottish heritage and to claim property rights over what effectively constitutes the name of many millions of individuals. It has been accused of harassing anyone of Scots descent who dares to open a restaurant (it has conducted a twenty-six-year legal battle against one Ronald McDonald whose family restaurant in Illinois has been trading for pretty much as long as the Golden Arches themselves). But some of the other court cases which Ion are held up as instances of corporate bullying seem perfectly rational what - is "McMunchies" alluding to if not McDonald's? And why then should they be allowed to get away with it?

This all goes to the question to of what job a trade mark should actually do. A trade mark is intended to identify the origin of goods or services for the benefit of consumers and, therefore, unauthorised use which would tend to cause confusion is prohibited by trade mark law. But how far should this protection be allowed to extend?

This debate over the exact nature of "confusion" was ignited a few years ago in the wake is of the "Wagamama v Raja Mama" litigation. What was then argued was whether the definition of "confusion" in a trade mark sense should be limited only to cases where consumers are fooled into thinking X is Y, or whether it should be broad enough also to include consumers seeing X and being put in mind of Y.

Quite apart from whether one's sympathies lie with David or Goliath in this case, whether or not you think Mr Yuen deserved to win may depend on which side of this debate you side with. The English High Court in "Wagamama" went for the broad meaning and includes "association" within the meaning of "confusion". The European Court of Justice ("ECJ" - the supreme judicial body of the European Union), in considering the "PUMA" trade mark for sportshoes, limited it to "true confusion".

As much as anything else, Mr Yuen won on a technicality - the Trade Mark Office's first decision against him was based on:

(i) a survey which had actually been submitted in evidence in another case and so was not properly admissible and

(ii) a survey commissioned by McDonald's (suggesting 29% of consumers believed "McChina" was something to do with McDonaId's) which was later held to be structurally flawed. Furthermore, examples of potentially confusing delicacies, such as the "Oriental McRib", which McDonald's were seeking to rely on only appeared after Mr Yuen had commenced trading.

But the Judge, Mr Justice Neuberger (no pun intended), went further than these technical points and pronounced on the breadth of protection McDonaId's were seeking: "They [McDonald's] are virtually seeking to monopolise all names and words with pre-fix Mc or Mac." He decided that Mr Yuen's use of "Mc" was unlikely to cause "substantial confusion" or to deceive the public and so could not be prevented by McDonald's pre-existing trade marks. Mr Justice Neuberger has therefore shown himself to be clearly "on message" with the ECJ. MrYuen's claim that he adopted "Mc" to signify "son or" may be true but is baffling. More compelling would be a claim that he carefully and cleverly identified the grey area between where McDonald's would like to see the line in the sand and where the Court is prepared to draw it.

The case has been popularly hailed as a victory for the little man against the overbearing corporate ogre (see variously, However, for brand owners it has more value (apart from a salient lesson in basic customer PR) in what it has to say about the nature and effect of a trade mark. This case concerned trade mark registration rather than trade mark infringement but both situations are covered by similar rules. It appears that a trade mark will only protect a business and its reputation so far. Beyond that, a claim in "passing off" might give extra protection but still perhaps not as much as the owner of a trade mark might like.

This case may be appealed by McDonald's and so we may not have heard the last of it. Certainly the issues it raises are unlikely to have been heard for the last time, especially while we are still searching for ways to handle them which satisfy both sides.

First published in Brand Strategy in the February 2002 edition.