• The defendants appealed the High Court decision that they had infringed Morley’s marks and that one of the defendants had breached the terms of a settlement agreement
• The Court of Appeal noted that the High Court had erred in its assessment of the ‘average consumer’ 
• However, these errors were not material and the Court of Appeal dismissed the appeal in its entirety
   

On 14 March 2025 the Court of Appeal handed down its judgment for the appeal in Morley’s (Fast Foods) Ltd v Nanthakumar ([2025] EWCA Civ 186). The court dismissed the appeal brought by Nanthakumar and others against Morley’s successful claim for trade mark infringement and breach of a settlement agreement. It noted that, while the judge in the High Court erred in her assessment of the ‘average consumer’, this did not make a material difference to the decision.

Background

Morley’s, a fast-food franchise, owns the following trade marks in relation to food and beverages in Classes 29, 30 and 32, and restaurant and takeaway services in Class 43:

It also has a trade mark for the series of two words TRIPLE M, TRIPLE-M in relation to food in Class 29 and restaurant and takeaway services in Class 43 (‘the triple M mark’).

One of the defendants, Kunalingam Kunatheeswaran (‘KK’), also operates a fast-food franchise focused on fried chicken under the name Metro’s. KK and Morley’s had entered into a settlement agreement (‘the 2018 agreement’) relating to a previous claim by Morley’s. This agreement required KK to rebrand from Mowleys to Metro’s, and to use the below sign (subject to reasonable modifications):

In this claim, Morley’s complained about the use of certain signs by KK and his franchisees:

The sign above (‘sign 1’) was used by each of the defendants on the front of their restaurants. Morley’s also complained about the use of the signs MMM (‘sign 2’) and TRIPLE M/TRIPLE M by certain defendants.

The High Court held that:

• the defendants had infringed one or more of Morley’s trade marks;
• KK was jointly and severally liable with the franchisees for their infringement of the red-and-white MORLEY’S mark by use of sign 1; and
• KK had acted in breach of the 2018 agreement.

The defendants appealed against the decision on several grounds. The Court of Appeal (Arnold LJ giving the principal judgment) dismissed the appeal.

Decision

The ‘average consumer’

The court considered the defendants’ criticisms of the judge’s assessment of the ‘average consumer’ as follows:

• The High Court had not wrongly focused on Morley’s actual consumers as described in the evidence. The judge had merely used this evidence to inform herself as to the kinds of consumers who would frequent fast-food outlets such as Morley’s or Metro’s.
• However, the judge had erred in splitting the average consumer into two classes, one class being made up of “children, young people, students and families, who buy at lunch, at teatime and into the evening and have low disposable income”, the second class being “the late-night and early-morning revellers” who are “likely tired, hungry and a significant subset of which will be intoxicated”. The Court of Appeal considered that there was a single class of consumers made up of those who frequent such establishments, noting that consumers who attend late at night are not necessarily more tired or hungry than those attending earlier in the day.
• Further, in focusing on a subset of consumers who were intoxicated, the judge had erred in her assessment of the likelihood of confusion, which must be assessed from the perspective of the average consumer. The average consumer is “reasonably well informed and reasonably observant and circumspect” (Lidl Great Britain Limited v Tesco Stores Limited ([2024] EWCA Civ 262)). Intoxicated consumers clearly do not fall within this common-law definition.

The Court of Appeal, however, did not consider these errors to be material and, on a correct re-assessment of the likelihood of confusion, would have reached the same conclusion as the judge.

Visual and conceptual comparison

The defendants also argued that the judge had erred in her assessment of the visual and conceptual comparison between sign 1 and the red-and-white MORLEY’S mark. The Court of Appeal dismissed this, noting that the judge’s assessment was “well within the bounds of rationality”.

Context of use

The defendants contended that the judge had treated the context of use of sign 1 as establishing a likelihood of confusion which would not otherwise arise. The Court of Appeal dismissed this on the basis that it was not properly argued. Whilst the judge had taken the context of use into account to support that there was a likelihood of confusion, it was not determinative.

Similarity between sign 2 and the triple M mark

The Court of Appeal did not accept that the defendants sign was ‘MMM burger’, as opposed to ‘MMM’, noting that ‘burger’ was clearly descriptive of the product on offer with ‘MMM’ differentiating it from other burgers on offer by the relevant defendants. The judge’s finding of similarity between sign 2 and the triple M mark was rationally supportable.

The 2018 agreement

The Court of Appeal agreed with the High Court decision that the parties could not have intended that the wording in the 2018 agreement about “reasonable modifications” would have allowed KK to use modifications to the permitted sign which would have increased the likelihood of confusion with Morley’s red-and-white mark. Therefore, the 2018 agreement did not permit KK to use sign 1.

It also considered that the judge was correct in concluding that the 2018 agreement did not allow KK to sub-license use of the permitted signs to the franchisees.

Comment

Although the appeal was dismissed, this decision reinforces that, when assessing the likelihood of confusion, the ‘average consumer’ is hypothetical and the nature of this consumer is clearly defined in the case law as “reasonably well informed” and “observant”. By this very definition, the notional, average consumer cannot be intoxicated.

It also highlights that courts will be unwilling to imply a right to sub-license as between parties where it is not expressly included, confirming that the power to grant such a right lies in the hands of the licensors. 

This article first appeared in WTR Daily, part of World Trademark Review, in April 2025. For further information, please go to www.worldtrademarkreview.com