McDonald's considers McChina appeal

By CNN's Tom Bogdanowicz

FARNBOROUGH, England (CNN) -- McDonald's is considering another legal battle with McChina, a tiny British chain of Chinese take-away restaurants.

McChina won its latest struggle with the fast-food giant, but McDonald's has the right to appeal.

When Frank Yuen tried to register the McChina brand for his four take-aways, McDonald's -- the world's biggest fast-food operation with $40 billion in sales -- objected.

"They don't like the idea of using 'Mc' in front of China," says Yuen.

McDonalds argues that using the "Mc" prefix is an attempt to associate with its business and reputation.

McDonald's won a case against the registration of the McIndian's brand on the grounds of possible customer confusion.

But after six years of legal battles with McChina, a British High Court judge ruled for Yuen.

"It appears to me on analysis that McDonald's are virtually seeking to monopolise all names and words with the prefix 'Mc' or 'Mac,'" Judge David Neuberger said.

Yuen, who moved to England from China in 1967, said he adopted the "Mc" prefix to signify "son of," as in Scottish names. After the ruling, Yuen told The (London) Times he was "as happy as a drunken prawn."

"The color scheme is different, and all Chinese decor is different, and there is wok cooking; you cannot see any (wok) cooking in McDonalds," Yuen says. "It is different, of course it is better!"

McDonald's said it feared that customers would think it owned the Chinese restaurants if they were called McChina.

But the essence of Yuen's case was that consumers could not possibly confuse his chain of take-aways with the golden arches of McDonald's -- one of the most famous brands on the planet with 29,000 outlets.

McDonald's declines to talk as it considers its next legal steps. It's likely to appeal against the High Court ruling.

For the Illinois-based company, more is at stake than the rivalry of four Chinese take-aways. They fear McChina could be followed by McTurkish or McDutch.

"The issue for them is, does this open the floodgates, is this the thin end of the wedge?" says Shireen Peermohamed of Willoughby & Partners, a UK intellectual property law firm.

"Does this mean that there will be hundreds of McSomething restaurants? To me it does mean that there will be some things that they can't stop, such as many people trading different things under a McHungry name or something like that."

Yuen, who opened the first McChina restaurant in Wimbledon in 1991, has dreams of McChina becoming as big as McDonalds. But he and his partner are taking it slowly.

They are planning two more take-aways for next year -- while McDonald's plans to open more than 1,000.