China Tang trade mark dispute – choose your brand name carefully

A recent decision finding that a Chinese takeaway named ‘China Tang’ infringes the trade mark of a high-end Central London restaurant with the same name, is likely to have significant implications for businesses when deciding on their brand name.

Background

The dispute involved two restaurants named China Tang. The 1^st Claimant has been the owner of a registered figurative trade mark ‘China Tang’ in class 43 (restaurant services, catering services, cafes, cafeterias, and self-service restaurants) since 2005, while the 2^nd Claimant operates a high-end restaurant in the Dorchester Hotel in Mayfair, under a licence from the 1^st Claimant. The Defendants (China Tang and its sole director) have operated a Chinese takeaway in Barrow-in-Furness since 2009.

The Claimants alleged that the Defendants infringed their China Tang trade mark and committed the tort of passing off. The Defendants counterclaimed for partial revocation of the Claimant’s trade mark and put forward a defence of honest concurrent use – that is they chose their restaurant name without being aware of the Claimants’ trade mark. They argued that in 12 concurrent years of trading, there had been no instances of confusion amongst consumers.

The decision

A key finding in Judge Hacon’s judgment was that the Defendants’ defence of honest concurrent use failed, and the claimant’s trade mark infringement claim was upheld. However, this was only in respect of s10(2) of the Trade Mark Act 1994 (TMA 1994) and not s10(3). Section 10(2) requires that there is a likelihood of confusion on the part of the public, which includes the likelihood of association with the trade mark.

The Judge stated that the Defendants’ argument that there was no confusion amongst consumers, was not decisive in this situation because the Claimants did not use their trade mark in the category ‘fast food café services’. It was also held that the Defendant’s takeaway services were very similar to categories ‘restaurant or café services’ which the China Tang trade mark protected. When assessing the Defendants’ China Tang sign against the Claimants’ trade mark, it was held to be aurally identical and visually very similar. The passing off argument by the Claimants failed in this case for a lack of deceptiveness.

The 2^nd Defendant was held jointly liable for infringement as the evidence provided by him showed that he had initiated and controlled the actions of the business and he had personally selected the business name.

Comment

The Judge’s ruling that there was no honest concurrent use by the Defendants is likely to impact all businesses going forward. Small businesses, particularly, can no longer rely on the fact they were not aware of a business with a similar/identical brand name who provide similar/identical goods or services. Even 12 concurrent years of using a name will not save a business from trade mark infringement action from a much bigger business or organisation with deeper pockets.

What this means is extra due diligence is required prior to deciding on a name for a business. Conducting internet searches and checking the trade mark register for signs which are similar/identical to the name of a business or proposed business should be a priority. It should also push business owners to register a trade mark for their business name (assuming the name satisfies the criteria for a registered trade mark).

Another interesting aspect of the ruling was that the Claimants did not establish reputation for the purposes of s10(3) TMA 1994. This is surprising given that it has served the likes of Kate Moss, Tony Blair, and Naomi Campbell. The Mayfair restaurant’s share of the restaurant market was ‘tiny’ ‘relative to the UK restaurant business as a whole’ and any single site restaurant would struggle to obtain more than a tiny share according to the Judge.

Written by Saad Khan, Paralegal