DEFENCE
&
COUNTERCLAIM

SUIT NO. C.L. 1995/M-440

IN THE SUPREME COURT OF JUDICATURE OF JAMAICA
IN COMMON LAW

BETWEEN:

McDONALD'S CORPORATION

PLAINTIFF

A N D

McDONALD'S
CORPORATION LIMITED

1ST DEFENDANT

A N D

VINCENT CHANG

2ND DEFENDANT

1. No admission is made as to paragraph 1 of the Statement of Claim.

2. No admission is made as to paragraph 2 of the Statement of Claim. Further, the Defendants say that all the certificates of registration of the Plaintiff's alleged trademarks referred to in the said paragraph expressly provide that registration of the marks does not give the proprietor thereof any exclusive right to the use of the word "McDonald's" or of the letter "M". At the trial of this action, the Defendants will refer to the said certificates of registration for their full terms, meaning and legal effect.

3. The registration of the Plaintiff's said alleged trade marks is and was at all material times invalid for the reasons appearing in the particulars of objections served herewith.

4. In answer to paragraph 3 of the Statement of Claim, the Defendants:

  • (a) Make no admission as to the matters alleged in relation to countries other than Jamaica;

  • (b) Admit that the name "McDonald's" is well known in Jamaica;

  • (c) Deny that the Plaintiff's style and alleged trade marks are well known in Jamaica;

  • (d) Save in relation to the restaurant referred to in paragraph 7 hereof, deny that the name "McDonald's" is associated with the Plaintiff or that it is distinctive of the Plaintiff's business and the Plaintiff's restaurants;

  • (e) Deny that the Plaintiff has extensive reputation or any goodwill in Jamaica.

  • (f) Deny that the Plaintiff has extensive operations, marketing and advertising in Jamaica.

5. In further answer to paragraph 3 of the Statement of Claim, the Defendants will say that prior to September 28, 1995, the Plaintiff never carried on business in Jamaica, nor had customers here, and prior to that date no other person or company on the Plaintiff's behalf or with its authority carried on business in Jamaica or had customers here.

6. Save that the Defendants admit that the 1st Defendant is a company formed under the Laws of Jamaica on September 16, 1971, that it carries on a restaurant business under the name "McDonald's" at the address alleged and that the 2nd Defendant is presently the principal shareholder and Managing Director of the 1st Defendant, paragraph 4 of the Statement of Claim is denied.

7. Paragraph 5 of the Statement of Claim is denied. A restaurant under the name "McDonald's" has been carried on at 1 Cargill Avenue continuously since 1971, save for a few months in 1984 when the restaurant was closed as a result of a fire, and for almost three years between 1992 and 1995 when the restaurant was closed for repairs and refurbishing. Between 1985 and 1992 a lessee of the 1st Defendant operated the restaurant under the name "McDonald's".

8. Save that the Defendants deny that the Plaintiff has opened a restaurant in Jamaica as alleged or at all, paragraph 6 of the Statement of Claim is not admitted. The Defendants will say that the Plaintiff authorized the opening on or about the 28th day of September 1995, of a restaurant at Ironshore, Montego Bay under the name "McDonald's".

9. In answer to paragraph 7 of the Statement of Claim, the Defendants deny that they or either of them have passed off or attempted to pass off the business and restaurant at 1 Cargill Avenue as being the Plaintiff's business or associated with the Plaintiff, or that they or either of them has infringed the Plaintiff's trade marks as alleged or at all.

10. In further answer to the particulars to paragraph 7 of the Statement of Claim, the Defendants:

  • (A) Deny the allegations in paragraph 7(A) save that they admit that Sandra McDonald was a subscriber to the 1st Defendant's Memorandum & Articles of Association;

  • (B) Deny the allegations in paragraph 7(B) save that they admit that the word "Corporation" forms a part of the 1st Defendant's name. The Defendants deny in particular, that they or either of them attempted to associate their business with the Plaintiff's or to deceive, mislead or confuse the public.

    The Defendants further deny that the word "Corporation" is not commonly utilized as part of the name of companies incorporated in Jamaica.

  • (C) Deny that they commenced to renovate the building at 1 Cargill Avenue after October 1994. The Defendants will say that the 1st Defendant commenced renovations in early 1993 and will further say that at all times since 1971, signs bearing the name "McDonald's" were prominently displayed at 1 Cargill Avenue.

  • (D) Admit that the 1st Defendant's restaurant using the name "McDonald's" was reopened on September 25, 1995, and that the opening on September 28, 1995, of the first restaurant in Jamaica operating under licence from the Plaintiff was publicly announced and advertised in Jamaica. The Defendants will further say that the re-opening of the 1st Defendant's said restaurant was also publicly announced and advertised.

  • (E) Admit that a knife, fork and spoon logo was deleted from one sign, but otherwise deny paragraph 7(E). The Defendants deny in particular that they acted as aforesaid so as to imitate the Plaintiff's signs, logos or get-up, and say that all the other material used in the get up of the Cargill Avenue restaurant still use the said knife, fork, spoon logo and have done so at all times since 1971.

  • (F) Admit that the operations of the 1st Defendant's restaurant have been changed from a sit down diner & drive-in restaurant to a fast food restaurant and say that that change was effected in the early 1980's.

  • (G) Deny paragraph 7(G) of the Statement of Claim and, in particular, deny that use of the letter "M" in the sign displayed at the 1st Defendant's restaurant is in any way an imitation of the arched "M" in the Plaintiff's corporate logo or is an infringement of any of the Plaintiff's alleged trade marks.

    (H) Save that the Defendants admit that for a period of a few days in September 1995, some food items on the menus at the 1st Defendant's restaurant were referred to with the prefix "McD" and/or "Mc", paragraph 7(H) of the Statement of Claim is denied.

  • (I) Admit that the name "McDonalds" is used in association with the operations of the 1st Defendant's restaurant but otherwise make no admission as to paragraph 7(I) of the Statement of Claim.


11. Paragraph 8 of the Statement of Claim is denied. The Defendants deny that any of their actions constitute a breach of the Fair Competition Act or that they have misled the public as alleged or at all.

12. The Defendants deny paragraph 9 of the Statement of Claim and further deny that the Plaintiff is entitled to the relief claimed or any relief and save as is hereinbefore expressly admitted, deny each and every allegation in the Statement of Claim as if same were set out herein and traversed seriatim.


Details of Counterclaim

13. By way of Counterclaim, the 1st Defendant repeats paragraphs 2-11 hereof.

14. For at least seven years prior to 1971, Cee Bee's Limited carried on a restaurant at 1 Cargill Avenue known as "Cee Bees" and had extensive reputation and goodwill.

15. By Agreement dated 3rd day of December 1971, the 1st Defendant purchased the shares in Cee Bee's Ltd. and the restaurant business and thereby acquired the goodwill of Cee Bee's Ltd.

16. In 1971 the 1st Defendant changed the name of its said restaurant to "McDonalds" and erected prominent signs bearing that name. Those signs have at all times been prominently displayed at its said restaurant and continue to be prominently displayed.

17. The 1st Defendant has also operated two other restaurants at Port Royal Street in Kingston known as "McDonald's Buttery" and "McDonald's Fast Food".

18. By reason of the aforesaid matters, the 1st Defendant has extensive reputation and goodwill in Jamaica, and in particular, in the Corporate Area.

19. The 1st Defendant repeats paragraph 7 hereof and says that the Plaintiff threatens and intends to open or to authorize to be opened other restaurants under the name "McDonald's" in the Corporate Area and elsewhere in the island of Jamaica.

20. While the Plaintiff may have developed goodwill in the countries in which it has carried on business, it has also developed a very bad reputation in those countries in many respects, including the following:

PARTICULARS

(A) The Plaintiff receives between 1,500 and 2,750 customer complaints of food poisoning each year. It also receives numerous complaints of foreign bodies in food sold by them.

(B) The Plaintiff has been responsible for a number of serious food poisoning outbreaks including one in Preston in the United Kingdom in 1991 when several customers were hospitalized as a result of eating hamburgers contaminated by potentially deadly E.Coli0157H bacteria and for a similar food poisoning outbreak in Oregon and in Michigan in the United States which affected forty-seven (47) people.

(C) The hamburgers sold in the restaurants operated or authorized by the Plaintiff are often cooked at less than the proper internal minimum temperature.

(D) The restaurants operated or authorized by the Plaintiff in the United Kingdom often uses meat which has been characterized as "unsatisfactory" because of having a total colony of more than ten million bacteria per gram.

(E) The Plaintiff has been forced to withdraw advertising campaigns in various countries on the grounds of the advertising being misleading.


21. In the circumstances, the Plaintiff is passing off or attempting to pass off its business as that of the 1st Defendant and is trading on the goodwill of the 1st Defendant.

If the Plaintiff is allowed to open or to authorize the opening of restaurants in the Corporate Area under the name McDonalds, that will constitute a further passing off and trading on the Plaintiff's name and goodwill.

Damage has been and will thereby be caused to the 1st Defendant's reputation and goodwill which could not be readily or easily compensated for by an award of damages to the 1st Defendant.

THE 1ST DEFENDANT THEREFORE COUNTERCLAIMS
AGAINST THE PLAINTIFF FOR:

(a) An Order that the Register of Trade Marks be rectified by the expungment therefrom of the entry in respect of trade marks Nos. B21019, B17398, B16214 and B17849.

(b) An Injunction to restrain the Plaintiff whether by itself, its directors, officers, servants or agents or any of them from opening or causing or allowing the opening of any restaurants in the Corporate Area trading under the name "McDonalds".

(c) An enquiry as to damages and payments of all sums found due upon the taking of such an enquiry.

(d) Such further or other relief as the Court may deem fit.

(e) Costs.

SETTLED:B. ST. MICHAEL HYLTON, Q.C.
Dated:November , 1995
By:MYERS, FLETCHER & GORDON
PER: DEFENDANT'S ATTORNEYS-AT-LAW

Filed by:


MYERS, FLETCHER & GORDON, of 

No. 21 East Street, 

Kingston

Attorneys-at-Law for and on behalf of the Defendants herein.