It's official. McDharma's Natural Fast Foods is no longer McDharma's. The little vegetarian cafe on the outskirts of Santa Cruz, subject of media attention from Toronto, Canada, to Melbourne, Australia, has agreed to drop the "Mc" from its name.

The signs and menus at the popular restaurant still carry the logo "McDharma's," but there is one of those international "no" symbols - a vivid circle with a diagonal red line - slashed through the "Mc" in the name.

Why? Because McDonald's, the multi-billion-burger Goliath, chose to fight the tofuteria's attempt to register its name as a legal trademark.

According to Bernie Shapiro, 38, co-owner with Daniel Prather, 34, of the vegetarian cafe, the idea behind the name McDharma's was to combine elements from the Eastern and Western worlds without compromising either. "Mc" was intended to convey the idea of fast service, while "Dharma" means "virtue or right action." The name McDharma's came to be associated with "natural, fast food."

In 1986 McDonald's generated $3.7 billion in revenues from 8,901 restaurants in 41 countries; over the years, it has sold more than 50 billion hamburgers. Even so, say hamburger insiders, that fat, rich clown Ronald McDonald could not stomach the idea of McDharma's fifteen employees turning out Brahma Burgers (more than 100,000 sold), Dharma Dogs and Nuclear Subs (a large sub roll with baked tofu, guacamole, cheese, lettuce, olives, pickle and secret Link Sauce) for vegetarians and non-vegetarians alike.

Ronald McDonald has eaten junk food all his life and has the looks to prove it. The idea of loyal American citizens eating Brahma Burgers made with beans, nuts, seeds, grains and soy product apparently was more than the pasty-faced wimp in the clown suit could take.

It was for just such an emergency that McDonald's retains a battery of lawyers, says Shapiro. Somewhere in Washington, D.C., he insists, is a lawyer whose job it is to make regular visits to the trademark office to see what new businesses are being listed under the prefix "Mc."

McDharma's was discovered, and it wasn't long before Ronald McDonald found out he was dealing with upstart rivals, Shapiro and Prather, two funky northern California vegetarians. Small fries. But threats to the Big Mac. Dangerous interlopers on the corporate McDonald's ranch.

Hence the food fight. And McDharma's lost in court on a technicality.

McDonald's claims it has to protect its customers. Terri Capatosto, media relations manager for McDonald's at its Oak Brook, Illinois, headquarters, a year ago told Mother Jones magazine her firm's concern was "that there might be some confusion on the part of McDonald's customers or the public.

"We have a relationship with our customers," Capatosto said. "They expect a certain quality. We have to protect our reputation."

Shapiro's customers also have certain expectations. "We have customers come in now and say, 'I'll have anything that doesn't begin with a 'Mc,'" he says.

"We may have lost the battle, but we haven't lost the war," Shapiro says with a laugh. "We're not infringing on anybody. We're just a small business doing something different from the normal fast-food operation."

Lacking $100,000 to continue to fight McDonald's in court, he and Prather agreed to drop "Mc," but "we didn't say how we'd spell it. We're continuing to fight in our own way. We can't call it McDharma's, so we are McDharma's with a silent 'Mc.' What we've done is to create a new addition to the alphabet.

"Our plan is to stay in business and continue providing an alternative to unhealthy fast foods," adds Shapiro, who defines a true vegetarian as someone who "won't eat anything that had a mother."