Mighty McDonald’s — with some 16 000 restaurants in 84 countries — has been outwitted by a crafty South African who this week won a court battle for the right to use one of the world’s best-known brand names. At the end of the first stage of the hamburger war, there’s ketchup on the floor — but all the wailing and crying would lead you to believe that it’s real blood.
The US embassy said it was “surprised, dismayed and concerned” about the court verdict. McDonald’s itself said it was disappointed and would appeal. The Department of Trade and Industry (DTI) is so concerned with the “implications which it (the court decision) holds for South African trade relations with the US” that the minister intends to arrange for an early hearing of the appeal.
One might be tempted to hail the victor, George Sombonos, as a lone guardian of local culture against MacOnslaught. A culinary judge, after all, would likely have been much harsher than the good Mr Justice B Southwood. But the suggestion that this case is a major threat to trade and to South Africa’s relations with the US is laughable.
The DTI seems to be concerned that the case sends a message to big-name potential investors that trademarks are not safe in South Africa. In fact, all it really signals is they have to be careful not to be outwitted.
Washington and McDonald’s may not be used to being outsmarted by a opportunistic local entrepreneur, but then Sombonos is no ordinary businessman. He has built Chicken Licken into a R100-million enterprise. More than 60 percent of his franchises are black-owned and 14 of the 15 he himself owns are managed by black women. Against this, McDonald’s would have done better not to pretend that they were great anti-apartheid campaigners, now suffering as a result of their support for sanctions. As the judge pointed out, the “simple reason (they were not here) was that McDonald’s had decided in terms of its orderly international expansion programme that the time had not yet arrived to extend its business to South Africa”.
Commendably, the judge ignored all the hype and made a firm and clear legal decision, unlikely to be changed on appeal. Neither Washington, nor Pretoria, nor Mac would have wanted the judge to offer anything other than a strict interpretation of the law, though the howling suggests otherwise.
There is no international trademark crisis, and there is no political problem. There is simply a short-term business impediment which should be tackled like any other. Ironically, the South African government faces a similar situation with charges against Armscor in the US. Instead of whingeing about injustice, they would do better to admit they had been caught out and work out how much it will cost them to get rid of the problem.
* Full Story in Business