SC junks McDonald’s contempt case vs. local burger joint

The Supreme Court has ruled in favor of a local burger company and threw out a contempt case filed by fast food giant McDonald’s Corporation in connection with a trademark infringement suit over the “Big Mac” brand.

The SC’s First Division reversed on February 14 and set aside a 2017 Court of Appeals (CA) ruling that found L.C. Big Mak Burger Inc. (Big Mak) guilty of indirect contempt for allegedly disobeying a 1994 court order directing it to stop using the words “Big Mak” in its fast food business.

The First Division also reinstated a 2014 Makati Regional Trial Court (RTC) decision that dismissed a petition for contempt against Big Mak and ordered McDonald’s to pay P1.2 million in moral and exemplary damages.

The decision wraps up a 28-year legal wrangling that stems from a 1990 civil case filed by McDonald’s for trademark infringement and unfair competition, which was decided in favor of the fast food giant by the Makati RTC’s Branch 137 in the same year.

The local chain’s “Big Mak” burger, for which it sought a patent registration, was, according to McDonald’s, a “colorable imitation” of its “Big Mac” brand.

The decision was overturned by the appellate court in 1999 and reinstated by the SC in 2004.

In 2008, McDonald’s lodged a petition for contempt against Big Mak and its president, alleging that the firm continued to use the name “Big Mak” as part of its business and business operations by using the corporate name, “L.C. Big Mak Burger Inc.”

In 2014, the Makati RTC’s Branch 59 dismissed the petition for lack of merit. McDonald’s appealed, and in 2017, the CA reversed the Branch 59 ruling and found Big Mak guilty of indirect contempt.

Big Mak took the case to the SC, which ruled in its favor this year. The decision was obtained by reporters on Tuesday.

A corporate communications officer for McDonald's Philippines said the firm has no comment on the matter at present.

According to the SC’s First Division, Big Mak complied with the ruling on the trademark infringement case, in view of photographs cited in a judicial affidavit that show that by early 2009, the company was already using the “Super Mak.”

“These circumstances belie the imputation of disobedience, much less contemptuous acts, against the petitioner,” the SC said.

The SC also disagreed with the CA in sustaining McDonald’s argument that Big Mak defied the trial court’s injunction order by using its corporate name, which also includes "“Big Mak.”

The SC said that just the use of the corporate name instead of solely “Big Mak” showed the company heeded the Makati court’s order.

Big Mak acted in good faith when it obeyed the RTC’s order, the SC said, noting that the issue was never whether or not heeding the directive was proper.

“A person should not be condemned for contempt where he contends for what he believes to be right and in good faith however erroneous may be his conclusion as to his rights,” it said.

“To constitute contempt, the act must be done willfully and for an illegitimate or improper purpose,” it said.

The SC found no reason to reject Big Mak’s explanation or doubt its good faith in using its corporate name.

“It was also not unreasonable for the petitioner, through its officers, to think that the stalls and products bearing its corporate name would send the message to the public that the products were the petitioner’s (Big Mak) and not those of the respondent’s (McDonald’s), the very evil sought to be prevented and/or eradicated by the decision in the infringement/unfair competition case,” the SC said.

The decision was penned by Associate Justice Noel Tijam, while Chief Justice Maria Lourdes Sereno and Associate Justices Teresita de-Castro, Mariano del Castillo, and Francis Jardeleza concurred with it. — VDS/BAP, GMA News