Claim No: IP-2022-000066 - [2024] EWHC 1369 (IPEC)

The Claimant’s case is that in the context of an agreement which was intended to settle a trade mark dispute between the parties, and which necessarily required the Claimant’s flexibility and tolerance in relation to a relatively similar logo to the Morley’s Red and White Mark which had been used by the Claimant in the course of trade for decades, the reasonable person with all the background knowledge, including the knowledge of the Claimant’s previous disputes with KK, would have understood the parties to be using the reference to “reasonable modifications” to mean modifications which did not increase the similarity of the Settlement Sign to the Morley’s Red and White Mark, but only which took it further away.

Mr Pearson submits in his skeleton that it is helpful in this regard to look at SS’s intentions at the time of entering into the 2018 Agreement, but this transgresses Lord Neuberger’s warning not to take into account the subjective intentions of a party in [15] (vi) of Arnold v Britton, and also his guidance that the court must only take into account facts or circumstances which were known or reasonably available to both parties at the time of entry into the agreement.

The Defendants accept that the purpose of the 2018 Agreement is to prevent confusion between the brands of the two parties in light of the average consumer. They submit that both the addition of the strapline and the removal of one edge of the blue border are reasonable modifications to the Settlement Sign.

In relation to the strapline, Ms Watkinson submitted for the Defendants that it has no trade significance and so cannot bring the Metro’s sign any closer to the Morley’s Red and White Sign. I found this a difficult submission, particularly given that she accepted that the equivalent strapline in the Morley’s Red and White Sign did have trade significance. I am satisfied that it also does in Sign 1, as I have found it to be an independently distinctive element of that Sign. Ms Watkinson then modified her position to submit that the addition of the strapline to the Settlement Sign did not bring it closer to the Morley’s Red and White Sign, but I do not consider that this is a tenable submission since it clearly does, in my judgment. Next, she submitted that the straplines are completely different, and SS in his evidence did not object to a strapline. On the first part of that point, I have set out the similarities between the straplines in terms of colour, placement, font, stylisation, common words and common ellipses so I do not accept that they are completely different. On the second part of that point, SS said he did not object to a strapline per se, but he did object to one which was so similar.

The Defendants concede, on KK’s change of position in oral evidence, that the blue border was added during the course of negotiation of the 2018 Agreement. However they submit that the removal of one edge of the border is trivial and would barely be noticed by the public, although Ms Watkinson suggested in closing that its removal completely might be an unreasonable modification.