McDonald’s, Russia, and the Territoriality of IP Rights
Written By Guest Author, Marks Gray Associate Logan McEwen
On March 9, 2022, McDonald's announced it would be temporarily closing over 800 locations in Russia. Three days later, a trademark application was submitted to the Russian Federal Service for Intellectual Property for a logo with familiar arches and recognizable color scheme:
The text beneath the logo reads “Uncle Vanya,” the name of a Russian fast-food restaurant. Given the timing and rapidity of the application, the trademark application appears to be a form of retaliation (either private or state-sanctioned) for McDonald's pausing operations.?
It is unknown whether the application will result in registration. However, the mere possibility of McDonald's losing their trademark rights in Russia after 30 years of investment serves as a reminder that intellectual property rights are territorial – meaning your intellectual property rights solely exist in the jurisdictions which recognize them. Though the concept is simple, it can be easy to forget in an increasingly globalized economy.??
How Intellectual Property Rights Work in a Global Marketplace
Most countries and jurisdictions have established intellectual property regimes where you can register copyrights, trademarks, and patents for the purposes of securing your rights and preventing others from exploiting your art, goodwill, or inventions. But a registered trademark in the United States is only enforceable in the United States. That same registered trademark is up for grabs in other jurisdictions where no registration is held.?
This territoriality principle is a basic tenet of intellectual property law. It is why international treaties enabling reciprocity and streamlined registrations are a focus of international trade agreements. The “Uncle Vaya” trademark application highlights that intellectual property rights holders are only afforded the protection a jurisdiction is willing to provide.?
To be clear, we do not practice nor have a working knowledge of the Russian trademark regime beyond its adherence as a party to the Madrid International Trademark System. It is entirely possible that, by ceasing operations for an indeterminate period, McDonald's has opened itself up to a waiver or abandonment claim in relation to its registered trademarks in Russia. This would provide a basis for the “Uncle Vanya” trademark to be the proper subject of a registration.?
This discussion is not concerned with why McDonald's could lose its trademark rights in Russia – only that it is a possible outcome, because those rights solely exist within the borders of the jurisdictions where they are registered. Bottom line? Even a brand as famous and globally recognized as McDonald's can be on the losing end of the territoriality principle.?
Some solace may lie in the Madrid International Registration system if McDonald's pursued its registrations there. That would bring limited input from the World Intellectual Property Organization (WIPO) to any determinative proceedings by the Russian government as to whether McDonald's has abandoned or relinquished its trademark rights in that territory.?
While international trademark registrations are often touted for their efficiency over individual filings, the involvement of WIPO in otherwise two-party registrant/registrar determinations is an often-overlooked feature of the system.?
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McDonald’s Has (Sort Of) Been Here Before
Strangely enough, this is not the first time McDonald's has been on the losing side of that principle. In 1978, Supermac’s was founded in Ireland and grew over the following decades to become one of the largest Irish-owned fast-food restaurants in the Republic of Ireland.?
More than 30 years after its founding, Supermac’s sought to expand into the United Kingdom and European Union, but was immediately met with trademark claims by McDonald's. McDonald's argued that consumers would be confused as to whether Supermac’s was a new version of McDonald's and its registered trademark BIG MAC.?
Supermac’s took the dispute to the European Union Intellectual Property Office which, in January 2019, ruled that McDonald's had not established use of the BIG MAC mark as a burger or restaurant name in the EU. McDonald's BIG MAC trademark registration in the EU was revoked as a result of the ruling. The lack of a registered trademark led to use of the BIG MAC mark by competitors like Burger King in ways that give intellectual property attorneys fever dreams.
McDonald's and its misadventures in IP rights abroad serves as an excellent reminder that your intellectual property rights have jurisdictional borders. In an increasingly globalized economy, those borders are important to keep in mind – both in terms of current protection and whether to seek registration in other jurisdictions.??