Sued by Mcdonald's, a Santa Cruz Eatery Refuses to Cowtow
updated 05/02/1988 AT 01:00 AM EDT
•originally published 05/02/1988 AT 01:00 AM EDT
This isn't the first time these small fries have sparred with the giant. When the two former yoga teachers opened the restaurant in 1982, their idea was to pair convenience with healthy food, so they combined the "Mc" of fast-food fame with dharma, Sanskrit for "virtue." Seeing it more as a vice, McDonald's blocked the use of McDharma's as a legal trademark in 1984 and threatened suit in 1986. Prather and Shapiro settled out of court in February 1987, accepting an undisclosed sum from McDonald's ("It was enough," says Shapiro, "for a couple of burgers, some fries and a shake") to change their name. The partners listed the beanery as Dharma's in the phone book and painted the international symbol for "forbidden"—a red circle with a diagonal slash—over the "Mc" on their sign. "It was just a joke," says Shapiro.
McDonald's isn't laughing. According to its 1987 agreement with the two owners, "McDonald's is the exclusive owner of the 'Mc' mark for restaurant services." Adds John Onoda, McDonald's director of media relations: "McDharma's has breached the agreement." Prather and Shapiro, who must answer the complaint by May 3, disagree. They vow to defend themselves in court on grounds of freedom of speech. Just in case they lose, however, they're considering new names. "How about Dharma King?" suggests Shapiro. "Or Dharma-in-a-Box?"