China Tang trademark dispute leaves bitter taste for Barrow-based takeout

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A restaurant’s claim of trademark infringement and passing off (partially) prevailed in a recent decision by His Honor Mr Justice Hacon in the UK Intellectual Property Tribunal (IPEC) (GNAT and Company Ltd and China Tang Limited v West Lake East Ltd and Honglu Gu [2022] EWHC 319 (IPEC), February 16, 2022).

Key points

  • The owner and manager of “China Tang”, an “opulent” Cantonese restaurant based at the Dorchester Hotel, whose trademark the plaintiffs own, brought an action against a take-out restaurant operating under the same name on the ground trademark infringement and stoppage overrun.
  • Defendants denied the claim, including on the grounds that there was no evidence that a consumer confused the two businesses during 12 years of concurrent trade.
  • IPEC concluded that there was nonetheless infringement – ​​the mark and the sign were identical (except for the figurative element of the mark) and the respective services closely similar, indicating a clear likelihood of confusion ( regardless of whether any actual confusion had taken place by now).

Background

“China Tang” is an upscale Cantonese restaurant located in the famous Dorchester Hotel, and has been in business since 2005. The plaintiffs collectively own and operate this restaurant and own the rights to UK Trademark No. 2,415,093 – a design mark bearing the words “China Tang” – registered for Class 43 (including for restaurant and catering services) (the “Mark”).

Since 2009, the defendants have owned and operated a takeaway restaurant in Barrow-in-Furness which also operates under the name “China Tang” (the “sign”).

The plaintiffs brought an action for trade mark infringement under section 10(2) and section 10(3) of the Trade Marks Act 1994 (“TMA”) and for deception in regarding the use of the sign by the defendants.

Legal issue

If, given that during the defendants’ 12 years of trade, there had been no instance of confusion between their business and that of the plaintiffs, there was nevertheless a likelihood of confusion under Article 10( 2) LMC.

Whether the plaintiffs’ restaurant had a sufficient reputation, at the time the sign was first used, to give rise to a possible infringement under Article 10(3) CMA.

Whether the defendants’ shift to accepting online orders from 2016 constituted a materially different way of using the sign, so as to establish a new later date from which to measure the plaintiffs’ reputation with respect to Article 10(3) LMT claim.

Decision

The plaintiffs were successful in their action in violation of Article 10(2) of the LMT. While HHJ Hacon admitted that (i) no confusion had arisen in 12 years of concurrent exchanges and that (ii) there was geographic separation between those who would be aware of the plaintiffs’ activity and those who would be aware of the defendants, none of these factors excluded a likelihood of confusion under Article 10(2) CMA. The phonetic identity (and close visual similarity) between the Mark and the Sign, and the similarity between the respective restaurants and take-out services, rendered any potential mitigating factors immaterial. The judge rejected the defendants’ “fair concurrent use” argument, since even a simple online search by the defendants when they set up their business would likely have revealed the plaintiffs’ website or a reference to it. this.

The absence of confusion and the geographical distinction between the undertakings was, however, relevant to the claim of deceptive marketing: (i) the absence of confusion demonstrated the absence of deception among the relevant public concerning a link between the respective undertakings, which which undermined a finding of misrepresentation, and (ii) the London-based plaintiffs’ goodwill was not found to extend to Barrow-in-Furness (where the defendants were based). As such, the deceptive marketing claim failed.

The plaintiffs’ application under Article 10(3) of the LMT was also unsuccessful; their evidence did not show sufficient awareness of their business among the relevant public (which, for catering services, was “nearly all adults and children in the UK”) to afford the required status of a trade mark renamed under Article 10(3) TMA. The judge found that the defendants had not materially changed their use of the sign by allowing locals to view their menu and order online from 2016, and therefore there was no reason to reassess the reputation of the plaintiffs’ mark at that later date. .

Comment

This decision underscores that the relevance of actual confusion to a claim under Article 10(2) CMA is highly dependent on the facts – where the marks are sufficiently similar to create an objective likelihood of confusion, this outweighs the absence of any evidence of actual confusion.

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