Section 10(2) of the 1994 Act
19.The dispute in relation to s.10(2) was whether there was a likelihood of confusion between the Trade Mark and WLE’s “China Tang” sign.20.With regard to the similarity in the services provided by each side, the defendants made the point that takeaway food services are not the same as any of the services in the Trade Mark’s specification. Restaurants, cafes and cafeterias for the most part, and often exclusively, provide their services on the premises. Catering services involve catering staff going to the customer. Takeaways, on the other hand, always require the customer to collect the food for eating off-premises.21.The claimants conceded that there is not an exact overlap but argued that takeaway services are very similar to those of the Trade Mark’s specification. I agree. Many restaurants offer takeaway services, in particular lower priced restaurants – pizza restaurants for instance. Also, Mr Gu said that WLE offers a delivery service, which has been true of restaurants of many types, particularly during lockdown. In fact, the claimants’ Park Lane restaurant provides what it calls “takeaway food” to the customers of private jet companies, which I think is probably best characterised as a particularly high-end delivery service. Taking all this into account, in my view WLE’s takeaway services are closely similar to “restaurant services” in the Trade Mark specification.22.In law the issue is whether the relevant similarities are such that there is a risk that the average consumer might believe that the WLE’s services come from the same undertaking as those of the claimants or come from an undertaking economically linked to the claimants, see Comic Enterprises Ltd v Twentieth Century Fox Film Corporation [2016] EWCA Civ 41, at [31]-[32], discussed in Urbanbubble Ltd v Urban Evolution Property Management Ltd [2022] EWHC 134 (IPEC) at [53]-[54].23.The dominant and distinctive element of the Trade Mark consists of the words “China Tang”. That element is identical aurally to the sign and is visually similar. If the average consumer would perceive any conceptual meaning in the Trade Mark and the sign, which I doubt, it would be identical.24.The defendants made the following points. First, it is necessary to consider the context in which the sign is used. WLE’s takeaway business has little in common with the claimants’ Park Lane restaurant. Mr Gu said that the claimants’ restaurant provides high-end Cantonese meals to people like Kate Moss, Tony Blair and Naomi Campbell, whereas WLE provides Chinese fast food tailored to the British taste – not, it seems, ever served to Ms Moss, Sir Tony or Ms Campbell.25.Secondly, the defendants submitted, the sign “China Tang” has a low level of distinctiveness. This is because:(a)The word “China” describes the style of the food served;(b)The word “Tang” is a common Chinese surname;(c)“Tang” is also descriptive of the food served: it has a tangy flavour;(d)A restaurant in Torquay, unconnected to either the claimants or the defendants, trades under the “China Tang” name.26.Thirdly, the average consumer would select their food with a high level of attention.27.Fourthly – and although last in the list, this was the defendants’ main point – over the last 12 years in which the claimants’ restaurant and WLE’s takeaway have both traded there have been no instances of confusion. The defendants took me to the judgment of Arnold J in Stichting BDO v BDO Unibank Inc [2013] EWHC 418 (Ch):“[167] As I have said in a number of judgments, absence of evidence of actual confusion is not necessarily fatal to a claim under art.9(1)(b) . The longer the use complained of has gone on in parallel with use of the trade mark without such evidence emerging, however, the more significant it is. In the present case over eight years have elapsed without any such evidence emerging. In my judgment this is an important factor in the present case.”28.The defendants argued, in effect, that if there was any likelihood of confusion then instances of confusion would have emerged by now and their first three points showed why it has not happened and will not happen.29.In Compass Publishing BV v Compass Logistics Ltd [2004] EWHC 520 (Ch) Laddie J considered an allegation of infringement of a trade mark under art.9(1)(b) of Council Regulation 207/2009/EC, equivalent to s.10(2) of the 1994 Act:“[22] It is frequently said by trade mark lawyers that when the proprietor's mark and the defendant's sign have been used in the market-place but no confusion has been caused, then there cannot exist a likelihood of confusion under Art.9.1(b) or the equivalent provision in the Trade Marks Act 1994 (“the 1994 Act”), that is to say s.10(2). So, no confusion in the market-place means no infringement of the registered trade mark. This is, however, no more than a rule of thumb. It must be borne in mind that the provisions in the legislation relating to infringement are not simply reflective of what is happening in the market. It is possible to register a mark which is not being used. Infringement in such a case must involve considering notional use of the registered mark. In such a case there can be no confusion in practice, yet it is possible for there to be a finding of infringement. Similarly, even when the proprietor of a registered mark uses it, he may well not use it throughout the whole width of the registration or he may use it on a scale which is very small compared with the sector of trade in which the mark is registered and the alleged infringer's use may be very limited also. In the former situation, the court must consider notional use extended to the full width of the classification of goods or services. In the latter it must consider notional use on a scale where direct competition between the proprietor and the alleged infringer could take place.[23] … the question of infringement has to be answered by assessing the likelihood of confusion were the claimant to use the mark “COMPASS” in a normal way in respect of all services covered by the registration, including … the same specialist field the defendant operates in.”30.The defendants’ point that WLE’s modest takeaway has little in common with the claimants’ opulent Park Lane restaurant largely fades away if the relevant comparison includes, on the side of the Trade Mark, its use as the trading name of a low price restaurant, such as a pizza restaurant or indeed a low price Chinese restaurant, as would be the case following the principle of law explained in Compass.31.In Rousselon Frères et Cie v Horwood Homewares Limited [2008] EWHC 881 (Ch), it was argued that Laddie J’s statement of the law in Compass was wrong and inconsistent with what the Court of Appeal had said in O2 Holdings Limited v Hutchinson 3G Limited [2006] EWCA Civ 1656. Warren J dismissed the argument, but on the ground that in Rousselon he was concerned with validity, not infringement (at [99]).32.O2 Holdings was considered by the Court of Appeal in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] EWCA Civ 24. In his analysis of infringement under art.9(1)(b) of Council Regulation 207/2009/EC (equivalent to s.10(2) of the 1994 Act) Kitchin LJ began with some historical background:“[78] There can be no doubt that under the Trade Marks Act 1938 the statutory protection conferred by a registration was absolute. As the Court of Appeal explained in Saville Perfumery Ltd v June Perfect Ltd (1941) 58 R.P.C. 147 at p.161, once a mark had been shown to offend, the user of it could not escape by showing that by something outside the mark itself he had distinguished his goods from those of the registered proprietor. No doubt influenced by this long standing interpretation of domestic law, the same conclusion was reached by different judges in many cases under the Trade Marks Act 1994, for example by Jacob J. in British Sugar Plc v James Robertson & Sons Ltd [1997] E.T.M.R. 118; [1996] R.P.C. 281; by Neuberger J. in Premier Brands UK Ltd v Typhoon Europe Ltd [2000] E.T.M.R. 1071; [2000] F.S.R. 767; by Pumfrey J. in Decon Laboratories Ltd v Fred Baker Scientific Ltd [2001] R.P.C. 17; [2001] E.T.M.R. 46; and, indeed, by me in Julius Sämann Ltd v Tetrosyl Ltd [2006] EWHC 529 (Ch); [2006] F.S.R. 42.[79] The Court of Justice was not constrained in the same way, however, and in a number of cases, including LTJ Diffusion v Sadas Vertbaudet SA (C-291/00) [2003] E.C.R. I-2799; [2003] E.T.M.R. 83 and Anheuser-Busch Inc v Budějovický Budvar, Národní Podnik [2002] EWCA Civ 1534; [2003] R.P.C. 25, indicated that the court must take account of the specific circumstances of the use of the offending sign.”33.Kitchin LJ went on to discuss O2 Holdings both in the Court of Appeal and the CJEU and referred in particular to this passage from the judgment of the CJEU (O2 Holdings Ltd v Hutchison 3G UK Ltd (Case C-533/06) EU:C:2008:339):“[65] It is true that the notion of likelihood of confusion is the same in Arts 4(1)(b) and 5(1)(b) of Directive 89/104 (see, to that effect, Marca Mode CV v Adidas AG (C-425/98) [2000] E.C.R. I-4861 at [25]–[28]).[66] Article 4(1)(b) of Directive 89/104, however, concerns the application for registration of a mark. Once a mark has been registered its proprietor has the right to use it as he sees fit so that, for the purposes of assessing whether the application for registration falls within the ground for refusal laid down in that provision, it is necessary to ascertain whether there is a likelihood of confusion with the opponent's earlier mark in all the circumstances in which the mark applied for might be used if it were to be registered.[67] By contrast, in the case provided for in Art.5(1)(b) of Directive 89/104, the third party user of a sign identical with, or similar to, a registered mark does not assert any trade mark rights over that sign but is using it on an ad hoc basis. In those circumstances, in order to assess whether the proprietor of the registered mark is entitled to oppose that specific use, the assessment must be limited to the circumstances characterising that use, without there being any need to investigate whether another use of the same sign in different circumstances would also be likely to give rise to a likelihood of confusion.”34.Assessment is limited to the specific circumstances of the use of the sign; there is no mention of the specific circumstances of the use of the trade mark. Although Compass was decided in the era of English courts overestimating the statutory protection afforded by a registered trade mark identified by Kitchin LJ, in my judgment the principle in Compass remains good law for the reasons given by Laddie J. The comparison between trade mark and sign in the context of s.10(2) requires consideration of the sign only in the particular circumstances of the alleged infringement, but consideration of the trade mark as used across any part of its specification, most relevantly as used for the type of product or service closest to that of the alleged infringement.35.One consequence of this is that where a trade mark is used by its owner in respect of goods or services which fall into a part of the specification different from that part closest to the alleged infringing use, the difference may explain a lack of confusion in the real world. This assumes that the approach to assessing a fair specification of goods and/or services in the light of proved genuine use of the trade mark is not the same as the test for a likelihood of confusion under s.10(2). I think that it is not the same, see Decon and Stichtung BDO discussed above.36.In the present case, the likelihood of confusion is to be approached by considering the perception of the average consumer who is aware of both (a) low price restaurants trading under the Trade Mark and (b) WLE’s takeaway using the “China Tang” trading name. It is to be assumed that the average consumer is also aware that low price restaurants often provide takeaway services.37.Before assessing the likelihood of confusion on that basis, the defendants’ arguments must be taken into account. The second of them was that “China Tang” lacks distinctiveness. The word “China” is not, as the defendants suggest, commonly used as an adjective in relation to food, but I agree that it alludes to a type of food. There was no evidential support for “Tang” being a common Chinese name, beyond an assertion to that effect in the Defence and Counterclaim. I have no idea whether it is the equivalent of Smith or Jones and cannot assume anything in that regard. I think the submission that the average consumer would take “Tang” to mean that the food is tangy has an air of desperation. I doubt that it would be so interpreted. In cross-examination Mr Gu said that “Tang” means China. It is not clear that many in Barrow would know that – there was no evidence of the size of the Chinese community and which Chinese language they spoke. Finally, Mr Gu exhibited a Google Maps image during the trial which shows a Chinese Restaurant in Torquay called “China Tang” in support of the argument that the name is not distinctive. It may or may not be the case that the owners of the Torquay restaurant are infringing the claimants’ Trade Mark but either way, that has no relevance to this case.38.The main point about the defendants’ allegation that its sign lacks distinctiveness is that both words of the sign must be considered as a composite whole: “China Tang”. I do not accept that it lacks distinctiveness when used for a takeaway business.39.The defendants’ third point was that the average consumer would select their eating houses and takeaways with particular care. I think that the amount of care taken is likely to vary hugely and I can make no assumptions. I do not believe it matters. The most likely form of confusion is a belief that WLE’s takeaway is economically linked with a restaurant trading under the Trade Mark – part of the same chain. Care in selecting your takeaway or restaurant has no real bearing on that form of confusion.40.The final submission by the defendants under this head was that there was no evidence of confusion over the course of 12 years simultaneous trading. I return to Compass and the rule of thumb referred to in Laddie J’s paragraph 22, quoted above. In that case the defendants had, like here, relied on a lack of evidence of confusion in support of the submission that there was no likelihood of confusion. Laddie J said:“[26] The reason why the rule of thumb referred to above does not give a safe indication of whether there is infringement in this case is because of the nature of the parties' respective presences in the market. They are not in competition with each other. The business consultancy field is enormous. Indeed, on the basis of the evidence before me, the logistics section of the business consultancy field is enormous. The claimant's core activities are not in the logistics field, the defendant's are. Furthermore, even within that field, the defendant is a very small player, as will be explained below. In those circumstances it is not surprising that there has been no confusion in the market-place. To date the claimant and the defendant trade in different parts of the market. This does not come close to imitating the notional world used for determining likelihood of confusion under Art.9.1(b).”41.Thus, it is important not to generalise the observation of Arnold J in para. 167 of Stichting BDO quoted above into a principle of law that he did not intend to formulate, and without having regard to the facts of each case.42.The differences in location and style between an upmarket restaurant in Park Lane and a modest takeaway in Barrow could well have militated against there being confusion in the real world. The section of the public who know of WLE’s takeaway is likely to be confined geographically to those who live close to WLE’s premises in Barrow. Mr Gu said that the delivery service extended to 2 miles from the premises, rarely 3 miles, which gives some guide, although it is not to be assumed that every person in Barrow within a 3 mile radius has heard of WLE’s China Tang takeaway. Mr Gu said that WLE has a website and advertises on Facebook, but added that these are only viewed or searched by the locals, which evidence I accept. The knowledge of WLE generated by the website and Facebook are also confined to the 2-3 mile radius. It may well be that those who know of WLE have not had occasion to see the claimants’ Park Lane restaurant or to seek out information about it or to read about it. 43.It seems to me likely that the reputation of the claimants’ restaurant, though certainly extending beyond Park Lane, has not extended to those who know of WLE. Similarly, the reputation of WLE has probably not reached those who know about the claimants’ restaurant. That alone would explain why there has been no confusion. Even supposing there has been any overlap in knowledge about the two businesses, the difference in trading style may also have prevented confusion in the real world.44.However, this does not mean that there is no likelihood of confusion according to a correct application of s.10(2). Because of the aural identicality of the Trade Mark and the sign, the close visual similarity between them and the close similarity between WLE’s services and the restaurant services of the Trade Mark specification, in particular the services of low cost restaurants which typically offer takeaway services, I take the view that there is a likelihood of confusion.45.Subject to the argument on honest concurrent use, the Trade Mark has been infringed under s.10(2). Honest concurrent use may better be viewed as a consideration bound up in the analysis of infringement under s.10(2), see W3 Ltd v EasyGroup Ltd [2018] EWHC 7 (Ch), at [287], but it is convenient to consider honest concurrent use separately and I will do so below.