New rights and responsibilities in trademarks law

MacDonald’s restaurant in Grand Cayman is the subject of an apocryphal tale that has taken on the status of urban legend on these shores and beyond. Cruise ship tourists are frequently told the David and Goliath story of how the little Caribbean restaurant stood up to the American fast-food giant McDonald’s to protect its brand and stop it from getting a foothold in the Cayman Islands.

However, the story of how and why McDonald’s never made it to the islands is more mundane.

“We have never tried to stop them,” said Chris Hew, the current owner of the restaurant, opened by attorney James MacDonald in the 1970s.

“There were a few different efforts to bring McDonald’s franchises here. I think it just didn’t make sense from a business point of view.

“We wouldn’t have made a ruckus about it. Our only concern was that they might try to make us change our name.”

Any such concerns should be alleviated by a new law, which came into force Aug. 1, allowing businesses in the Cayman Islands to protect their names, brands and logos.

McDonald’s has garnered a reputation, in the past, for aggressively protecting its trademarks and logos and the possibility that they could enter the Cayman market and force the local restaurant to change its name remains a nagging worry. The company has been embroiled in legal disputes with other businesses across the globe that use the moniker, most recently Irish burger chain SuperMac.

“McDonald’s has literally registered the McWorld,” Pat McDonough, the CEO of that company complained in a recent interview with the Irish Times.

Mr. Hew said that was his main concern when he sought to gain trademark protection for the MacDonald’s restaurant in the Cayman Islands more than a decade ago.

Ultimately, the process proved difficult and expensive and he abandoned it.

Until Aug. 1 of this year, any business seeking to protect its trademark had to go through the European Union Intellectual Property Office or via the U.K.

Under the new legislation, according to Sophie Davies, an intellectual property attorney with HSM IP, businesses will be able to apply directly in the Cayman Islands to protect their brands. Mr. Hew said he would be looking to do so. His concern is not to block McDonald’s from coming here, but to protect his businesses’ right to use the name.

Ms. Davies advises any business for whom its name and logo are important to register under the new Trademarks and Designs Law.

“We see a lot of disputes involving trademarks,” she said. “This law brings Cayman’s trademarks legislation up to date and in step with international standards.

“Previously you had to go through a more costly and complex process of protecting your trademark in [the] EU or U.K. first before re-registering it in the Cayman Islands. And you couldn’t do that if another company had already registered the same brand name in the EU or U.K. first. Under the new law, you can protect your brand directly in the Cayman Islands so long as you are the first to file for protection.”

“You can now file directly in the Cayman islands to protect your brand. It’s important to do so if your name or your logo is important to your business,” she added.

Mr. Hew has had previous experience with trademarks disputes. Another family business, Pools R Us, changed its name to Pools By Us after a complaint from the toy retailer Toys ‘R’ Us.

He believes the new law will be welcomed in Cayman if it makes it easier and clearer to register and protect business names.

With new rights come new responsibilities, and Ms. Davies cautions that local businesses will also have to be more careful not to impinge on international brands.

Multinational companies will be able to file for trademark protection in Cayman directly and will now also be able to consider obtaining design rights protection via the extension of a U.K./EU registered design.

Anyone selling fake smartphones or designer handbags, for example, has a greater chance of being prosecuted.

“The rights and remedies are much clearer now and easier to enforce,” Ms. Davies said. “I think brands will look at the size and scale of the problem to see if they think it is worth the cost of taking action here.”

Businesses are required to apply for a new trademark through a registered trademarks agent.

Details of registered agents can be found at www.ciipo.ky/e-library/list-of-agents.

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