The US hamburger giant sued Hungry Jack's in 2020 claiming its sale of the "Big Jack" and "Mega Jack" burgers infringed the Big Mac trademark.
On Thursday, the Federal Court dismissed the allegations, saying neither burger brand was deceptively similar to the Big Mac and Hungry Jack's had not engaged in trademark infringement.
But McDonald's succeeded on a separate consumer law claim with the court finding Hungry Jack's had misled consumers by advertising that its Big Jack burger contained 25 per cent more beef than its Big Mac counterpart.
At trial, Hungry Jack's chief marketing officer Scott Baird told the court there was an "element of cheekiness" in the firm's choice of burger name but said the brands were not chosen because of their similarity with McDonald's burgers.
"I was aware that the name would likely be perceived as a deliberate taunt of McDonald's," he wrote in an affidavit.
These kinds of "taunts" were common in overseas markets where the two fast food chains competed, he said.Â
Justice Stephen Burley found consumers would not be confused about which restaurant sold the Big Jack or Big Mac and said McDonald's had provided no evidence of any deception or confusion.
"I am not persuaded that Hungry Jack's fashioned the name Big Jack for the purpose of misleading consumers," he said.
Hungry Jack's wished to compete with McDonald's through a name which had echoes of the Big Mac brand but was "recognisably different" from it, the judge found.
He made similar findings when comparing the Mega Jack and Mega Mac trade marks.
However, Justice Burley ruled Hungry Jack's had breached consumer law through the marketing campaign about its burger's meat content.
After testing and weighing of the different burger patties by experts, the judge found Hungry Jack's burgers contained "significantly less" than the 25 per cent additional beef advertised.
A separate bid by Hungry Jack's to remove McDonald's "Mega Mac" mark from the register of trademarks was also dismissed by the court.
The matter will now go to a liability hearing, where Hungry Jack's could face financial penalties for its misleading marketing campaign.
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