In a recent judgment, the UK High Court has found in favour of Morley’s. Morley’s is a South London based fast food chain. The case involved a trade mark infringement dispute against a rival named Metro’s. The decision represents a win for small businesses seeking to prevent rival copycat brands. It will therefore be welcomed by food and beverage companies. The case is also of interest in that it takes account of the average consumer’s circumstances, such as, consumers on a night out. Additionally, it highlights that a director can be personally liable, along with the company for trade mark infringement.
Background
Morley’s is the owner of the following UK registered trade marks:
- The below trade mark in classes 29, 30 and 32 and for food preparation and restaurant/takeaway related services in class 43
- TRIPLE M, TRIPLE-M in class 29 and for food preparation and restaurant/takeaway related services in class 43, and
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in classes 29, 30 and 32 and for food preparation and restaurant/takeaway related services in class 43.
Morley’s claims to have used the above marks since 1985 for the goods and services for which they are now registered. During this time, they operated a substantial network of Morley’s fast-food restaurant franchises throughout the UK.
Morley’s, in 2010, discovered a rival fast-food chain called “Mowley’s”. Mowley’s was set up by an individual named Kunalingam Kunatheeswaran (KK). Morley’s obtained an injunction against KK in the same year. After that, KK began using the name “Metro’s” on his fast-food outlets. The parties ultimately entered into a settlement agreement in December 2018 (the 2018 Agreement). The 2018 Agreement allowed KK to use the Metro’s sign below, and “any reasonable modifications thereto.”
However, when KK and his franchisees began using a different sign (below and referred to as “Sign 1”) as well as MMM (referred to as “Sign 2”) and TRIPLE M/TRIPLE “M” (referred to as “Sign 3”), Morley’s instituted proceedings in the UK High Court claiming trade mark infringement.
High Court decision
The average consumer of Morley’s goods and services
The High Court held that there were two classes of average consumer to consider:
- Children, young people, students and families, who buy at lunch, at teatime and into the evening and have low disposable income. They will choose a chicken fast-food shop by convenience of location and shop front, or from an advert on a delivery website, with a medium to low degree of attention.
- Late-night and early-morning revellers who are likely tired, hungry and a significant subset of which will be intoxicated. They will also choose by convenience of location, shopfront and what is open late and will pay a low degree of attention.
It is enough, the Court said, for one of those classes of average consumer to be confused for there to be a likelihood of confusion arising.
Are the competing signs similar?
Despite the different brand names, the missing “MMM” and varied strapline in Sign 1, the Court found that Sign 1 and the Morley’s red and white registration were visually quite similar. Aurally, the marks were deemed to be dissimilar. However, they were found to be conceptually similar overall due to the similarity of the straplines centred around good taste. On a global appreciation i.e. an overall assessment of the visual, aural and conceptual similarities between the marks, the Court held that Sign 1 is similar to the Morley’s red and white registration to a medium degree.
Is there a likelihood of confusion on the part of the public?
In determining this issue, Judge Melissa Clarke noted that she did “not find this a difficult decision to reach”, due to the combination of the following factors:
- A class of the average consumer is made up of late-night revellers, a subset of whom are intoxicated, and who pay a low degree of attention to their choice of fast-food shop.
- The competing signs are similar to a medium degree.
- The Morley’s red and white registration has a higher level of distinctiveness giving rise to an increased risk of confusion.
- Part of the context of the use of Sign 1 is that it is used inside and on Metro’s shop fronts with a very similar get-up to that of Morley’s shops, some of which is visible from the street outside the stores through the shop windows.
- The Court accepted Morley’s evidence that the similarities between the signs is more apparent when Sign 1 is viewed on a lit-up fascia at night.
The presence of all these factors meant that the Court was satisfied that there is a likelihood of confusion by a substantial part of that class of average consumer. In light of these findings, the Court concluded that Morley’s was entitled to injunctive relief against each of the defendants who were continuing to use the infringing signs.
Take aways
A key takeaway (excuse the pun!) for brand owners involved in trade mark disputes is the importance of compiling and presenting honest and accurate evidence. In this case, the UK High Court was highly critical of KK’s evidence at trial. For example, the Court noted that there were “significant inconsistencies and contradictions” in his evidence, with the Court finding him to be “unreliable and, on some occasions, lacking in credibility or actually untruthful.” As KK was the only defendant who gave evidence before the Court, the defendant’s case was hampered, as the Court treated his evidence overall “with a great deal of caution.”
Another interesting aspect of the decision is the issue of joint and several liability of defendants in trade mark infringement cases. We previously reported on this in a recent article. In this case, due to the history between the parties, including the prior litigation and the 2018 Agreement, the Court was satisfied that KK had reasonable grounds for knowing, and should have appreciated that Sign 1 was infringing the Morley’s red and white registered trade mark. By granting licenses in the franchise agreements, KK knowingly authorised and procured further infringements in a common design with UK franchisees. The Court therefore held that his actions were not immaterial . The Court found that he was personally jointly liable with the franchisees for their acts of infringement. Copycats should take note of this, and that Courts are now prepared to hold individual directors of companies jointly and severally liable with other third parties, where their actions are deemed to give rise to infringement.
For more information and expert advice, contact a member of our Intellectual Property team.
The content of this article is provided for information purposes only and does not constitute legal or other advice.
