The ruling by a three-member panel of the Federal Court ends all legal avenues for McDonald's to protect its name from what it said was a trademark infringement.
"On the basis of unanimous decision, our view is that" McDonald's plea to carry the case forward has no merit, said chief judge Arifin Zakaria. "It is unfortunate that we have to dismiss the application with costs," he said.
McDonald's will have to pay 10,000 ringgit ($2,900) to McCurry, a popular eatery in Jalan Ipoh on the edge of Kuala Lumpur's downtown. McDonald's lawyers refused to comment, except to say the company will abide by the judgment.
McCurry lawyer Sri Devi Nair said the ruling means McDonald's does not have a monopoly on the prefix 'Mc,' and that other restaurants could also use it as long as they distinguish their food from McDonald's.
"This is a precedent for everyone to follow," he said.
A three-member Appeal Court panel had ruled in favor of McCurry Restaurant in April this year when it overturned a 2006 high court ruling that had upheld McDonald's contention.
Arifin said McDonald's lawyers were unable to point out faults in the Appeal Court judgment, which had said there was no evidence to show that McCurry was passing off McDonald's business as its own. The Appeals Court also said McDonald's cannot claim an exclusive right to the 'Mc' prefix in the country.
McDonald's asked the Federal Court for permission to appeal against that decision but was denied Tuesday.
"We are very much relieved. We hope to expand. This is what we wanted to do from the beginning and we were stalled for eight years," said A.M.S.P. Suppiah, the owner of McCurry.
"I am so happy ... we have nothing in similarity with them at all. That's how we have felt all this while," said his wife, Kanageswary Suppiah.
The Appeal Court said McCurry's signboard has white and gray letters against a red background with a picture of a smiling chicken giving a double thumbs-up, in contrast to McDonald's red and yellow "M" logo. McCurry also serves only Indian food, not competing with McDonald's Western menu, the court said.
McDonald's began operations in Malaysia in 1982 and has 137 outlets in the Southeast Asian country.
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