McDonald’s nearly lost the right to use its own name in South Africa

When McDonald’s entered South Africa and launched its first store in 1995, a legal battle nearly prevented it from using its own name and branding in the country.

McDonald’s opened its first restaurant in South Africa in November 1995. It was located in Blackheath, Johannesburg, and was an instant hit.

The arrival of the United States hamburger giant was seen as a symbol of the “new South Africa” following the end of Apartheid.

South Africans loved getting the iconic fast-food brand, and there were long queues at the Blackheath McDonald’s to get a Big Mac and other classic burgers.

However, behind the scenes, a fierce legal battle was underway between McDonald’s and Joburgers Drive-Inn Restaurant.

Joburgers Drive-Inn Restaurant was controlled by George Sombonos, who is best known as the founder of the fast-food chain Chicken Licken.

Sombonos’ company applied to register the McDonald’s name, Big Mac, and the Golden Arches design for himself in 1993.

McDonald’s had registered its trademarks in South Africa as early as 1968 and continuously re-registered them.

However, due to international economic sanctions imposed against South Africa during the apartheid era, McDonald’s was prevented from operating in the country.

McDonald’s was, therefore, unable to officially open a business or use the marks for a continuous period of over five years.

Joburgers Drive-Inn Restaurant used this lapse under the old South African Trade Marks Act of 1963 to apply for the cancellation of McDonald’s trademarks.

In 1995, a judge ruled that the American firm had fallen foul of the law requiring the use of the trademark or its cancellation.

Simply put, the ruling could have prevented McDonald’s from using its own name in South Africa and may have required it to refer to itself by a different name in the country.

This ruling threw South African trademark law into turmoil and drew international concern about intellectual property protection in the new democracy.

McDonald’s appealed the ruling and won

The initial ruling allowed one South African hamburger restaurant chain to use the name McDonald’s and another to use symbols similar to McDonald’s.

The company said local entrepreneurs tried to capitalise on the publicity by claiming ownership of the McDonald’s trademark.

These entrepreneurs, they said, opened restaurants in South Africa with similar symbols and names to McDonald’s.

McDonald’s appealed the ruling and obtained a temporary court order barring the copycat restaurants until the appellate ruling.

The appeal focused on the new Trade Marks Act 194 of 1993, which came into operation on 1 May 1995.

The new Act included an important provision that protected well-known foreign trademarks, even if they were not registered or in local use.

The Appellate Division of the Supreme Court, now known as the Supreme Court of Appeal, ruled in McDonald’s favour.

The appeal court reversed the earlier decision, arguing that the trademark McDonald’s was a ‘well-known international trade mark’ in South Africa under the new law.

This ruling meant that South African competitors were prohibited from using the McDonald’s name and golden arches symbol.

“The fast-food restaurant chain McDonald’s won’t have to worry about copycat competitors in South Africa anymore,” the company said in a press statement.

Clifford Green, attorney for McDonald’s in the case, stated that the judgment brought South Africa in line with international intellectual property protection.

This ruling helped McDonald’s to invest in South Africa and rapidly expand its footprint across the country.

Today, the fast food franchise operates around 400 restaurants in all nine provinces of South Africa.

It has trained and employed over 12,000 South Africans at various levels, including franchisees, restaurant managers and crew.