Gnat and Company Limited & Anor. v West Lake East Limited & Anor.

For s.10(2) of the Trade Marks Act 1994, the comparison is between the particular use of the allegedly infringing sign and the registered mark considered across the relevant specification, including the closest plausible use. Differences between the parties’ actual businesses and an absence of actual confusion do not necessarily defeat a likelihood of confusion. Honest concurrent use is exceptional and requires an assessment of all circumstances, including whether the defendant conducted appropriate searches and acted fairly. For s.10(3), reputation must be established by reference to the relevant public and both geographical and economic criteria. Assertions of free-riding or detriment, unsupported by evidence or analysis, are insufficient. Passing off requires goodwill, misrepresentation and damage.

Gnat owned a series trade mark for, among other services, restaurant and catering services. China Tang London Limited operated an upmarket Cantonese restaurant in London. West Lake East Limited operated a Chinese takeaway in Barrow-in-Furness under the same name, and Honglu Gu was its sole director and shareholder.

The claimants alleged infringement under ss.10(2) and 10(3) of the Trade Marks Act 1994, passing off, and joint liability on the part of Mr Gu. The defendants pleaded honest concurrent use and counterclaimed for partial revocation for non-use. The issues included the fair specification, likelihood of confusion, reputation, unfair advantage, detriment, honest concurrent use, passing off and personal liability.

1. Partial revocation. The specification was amended by deleting “self-service restaurants”, as agreed. “Restaurant services” was not a broad term that should be subdivided into cafes, cafeterias and other subsets. Its ordinary meaning included restaurant services supplied by cafes and cafeterias. The remaining counterclaim was dismissed.
2. Section 10(2). Takeaway services were closely similar to restaurant services because restaurants commonly supplied takeaway and delivery services. The words “China Tang” were the dominant and distinctive element of the claimants’ mark and were aurally identical, and visually similar, to the defendants’ sign. The mark was to be considered as used across the specification, most relevantly for low-cost restaurants capable of offering takeaway services, whereas the sign was assessed in its particular circumstances of use. The upmarket nature and location of the claimants’ restaurant therefore did not prevent confusion. The absence of actual confusion was explained by the limited geographical overlap and different trading styles, but did not determine the notional assessment. There was a likelihood that consumers would believe the businesses were economically linked.
3. Section 10(3). The claimants had not shown that the mark had the necessary reputation in the United Kingdom at the relevant date. In any event, they did not establish unfair advantage or detriment. Assertions that the defendants traded on prestige or would cause consumers to think that the restaurant operated takeaways were unsupported by evidence or analysis of economic behaviour.
4. Honest concurrent use. The defence was unavailable. Honest concurrent use is rare and depends on all the circumstances. Relevant considerations included knowledge of the mark, whether searches should reasonably have been made, the likelihood of confusion, and whether the defendant acted fairly towards the proprietor. Mr Gu had conducted no basic trade mark or internet search and offered no sufficient reason for that failure.
5. Passing off. Although the claimants had goodwill extending beyond London, the evidence did not establish a misrepresentation to the relevant public. The passing-off claim therefore failed.
6. Joint liability. Mr Gu’s evidence that WLE was his company and project, and that he controlled its trading name, together with his position as sole director and shareholder, established his personal involvement and common design. He was jointly liable with WLE for the infringement.

The claim succeeded under s.10(2), failed under s.10(3), and the passing-off claim was dismissed. Mr Gu was jointly liable with WLE for the acts of infringement.

Not stated in the judgment.