INTELLECTUAL PROPERTY MAY BE INTANGIBLE, BUT IT IS STILL PROPERTY: CHARITIES BEWARE

DATELINE:  January 29, 2010, Chicago

Chicago’s venerable Sun-Times recently carried a story regarding a lawsuit filed by McDonald’s against a student who conducted a fundraiser for the Special Olympics under the name McFest.  Cheryl V. Jackson, McDonald’s in Beef Over Trademark with Chicago Teen (January 26, 2010).  The student, Lauren McClusky, filed for a trademark on the name.  McDonald’s...

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challenged the application.  Both sides have lawyered up and the matter will go to trial unless they reach a settlement.

We suspect most people will side with McClusky—after all who doesn’t like someone with the initiative to raise money for a worthy cause.   But McDonald’s has legal rights and the use of “Mc” as a prefix to a word carries clear connotations for many that McDonald’s is behind the venture.  It has a right to protect its name and the goodwill that come with decades of investing in brand loyalty.

Just because you are doing good does not give you the right to expropriate goodwill or other intangible property from someone else.  Therein lies the lesson for charities.  Everyone knows that they cannot take someone’s tangible property without asking permission first.  The need to obtain consents and permissions is less clear to many people when the property is intangible.  However, copyrights and patents must be respected or a charity may find itself in legal trouble.  When using slogans to fundraise, charities should consider undertaking a search to determine whether someone else has legal claims to the phrase or slogan.  At a minimum, the charity should perform the search using Google, Bing, or another search engine.  If big dollars are involved, the charity should retain a lawyer or appropriate search firm to undertake a full search of appropriate databases.

We are sympathetic to McClusky.  Her name begins with "Mc" so we suspect she thought she could couple the first two letters of her name with fest.  Maybe a court will agree with her, but we suspect not.  We understand that several courts have considered that question (Mc and McDonald's), including one in Southeast Asia that apparently ruled in favor of a local curry restaurant--we are confident that we will not be seeing the Big McCurry in the U.S. anytime soon.

McClusky sounds like a clever, good spirited person.  The ultimate solution to the dispute might be for McDonald’s to enlist her in its charitable activities.  We would wholly support such an effort, but we recognize that McDonald’s might not want to set a precedent that other more calculating individuals might try to exploit.  Nevertheless, we hope the parties can settle this matter without incurring additional legal costs.  We suspect both sides would rather see the money go to Special Olympics.