What's the issue?

The Court of Appeal has agreed with the High Court –  use of the Metro's sign for a chicken restaurant infringes the Morley's UK trade mark registration, also registered for chicken restaurants.

The decision covers interesting issues about who is the average consumer, similarity of marks and the interpretation of settlement agreements.  

Morley's registration	Metro's infringing uses

Who is the average consumer?

The Court of Appeal held that the trial judge was wrong to "salami slice" the relevant population into two groups of average consumer: (a) low income and (b) late night revellers. Rather, there is a single class of consumers consisting of those who patronise chicken shops. 

To be fair, the trial judge had identified the two groups so as to avoid falling into the trap of "averaging" the average consumer. The Court of Appeal held that this approach went too far, not least because the same person could be part of both groups. Clearly, in other cases it will be appropriate to find different groups of average consumer (such as the general public and specialists).

What characteristics do they possess?

At first instance, the judge held that a small but significant proportion of late night revellers would be intoxicated when purchasing chicken and therefore pay a relatively low degree of attention (such that they would be more likely to be confused).

The Court of Appeal held that it is not appropriate to take account of the fact that a proportion of average consumers might be intoxicated, although gave no reasoning for its conclusion. Presumably, the Court of Appeal felt that taking this factor into account could open the door to arguments that the average consumer possesses all manner of characteristics which could detract from the issues.

What level of attention do they pay?

Given that possible intoxication was not a relevant factor, the average consumer was held to have a medium to low as opposed to a low degree of attention.

Are the marks visually and conceptually similar?

The Court of Appeal endorsed the trial judge's findings: it was permissible to find the marks visually similar (despite the different brand names) and conceptually similar (due to the straplines alone).

This shows that even marks that consist of different word elements can be deemed visually similar overall. It also illustrates that minor elements of marks (such as straplines) can be sufficient for a finding of conceptual similarity.

Was there a likelihood of confusion?

The trial judge was right to find a likelihood of confusion between the marks. The errors as to the average consumer were not material.

Had the judge relied on context to establish infringement?

The claimant's and defendants' chicken shops both had similar interiors and the Metro's and Morley's logos were held to be more closely similar when they were lit up at night on a fascia.

The question arose as to what extent these contextual factors were relevant to establishing a likelihood of confusion. The Court of Appeal considered that the trial judge had merely used these factors to support her finding of a likelihood of confusion (and not to establish such a likelihood in the first place). She was entitled to do that.

The Court of Appeal also commented that the extent to which context is relevant to establishing infringement is uncertain and is ripe for further consideration by the courts.

Did the settlement agreement between the parties change anything?

The parties had previously entered into a settlement agreement governing the defendant's use of its Metro's mark which required it to change its mark to make it less similar to the claimant's but also allowed the defendant to make "reasonable modifications" to its mark in future.

The question was whether recent changes by the defendant to its mark (including changes to the border around the mark and the addition of the strapline) were "reasonable modifications". The trial judge had held that they were not since they brought the defendant's mark closer to the claimant's. The Court of Appeal agreed.

A separate issue was whether the settlement agreement could be construed as extending to franchisees and licensees of the defendant. The trial judge held that it could not and so did the Court of Appeal. Presumably, this means that franchisees and licensees would not be protected from an infringement claim by the claimant even as regards use of the original Metro's logo.

What does this mean for you?

• There are interesting issues here on the nature and characteristics of the average consumer. Some commentators believe that the average consumer in trade mark law does not reflect real life. This decision will do nothing to appease them.

• The decision also illustrates that even marks that consist of different word elements can be deemed visually similar overall. It also illustrates that minor elements of marks (such as straplines) can be sufficient for a finding of conceptual similarity.

• There is a lesson here about carefully drafting settlement agreements to ensure that further litigation does not result and that all relevant parties are not only bound but can benefit from the agreement. 

• The first instance decision is well worth reading in this case as it also covers issues around accessory liability for trade mark infringement and the new knowledge requirement set out by the Supreme Court in the Lifestyle Equities v Ahmed case.