China Tang – leaves a bad taste for the defendant

14th April 2022

A recent judgment from the Intellectual Property Enterprise Court (IPEC) has provided a useful reminder of the limitations of the honest concurrent use defence as well as highlighting the importance of clearance searches and promptly registering your trade mark.

The claimants in the case were GNAT and China Tang, London (CTL) who together run a restaurant in central London under the name China Tang. GNAT own a UK registered trade mark for CHINA TANG, dating back to 2005, covering restaurant services in class 43 including cafeterias, self service restaurants, catering services etc

The defendant, Mr. Gu runs a Chinese takeaway restaurant in Burrow-in-Furness, under the name China Tang and has been using that name since 2009.

The claimants brought proceedings for infringement of their trade mark under Sections 10(2) and 10(3) of the Trade Marks Action 1994 (TMA) as well as passing off. The Judge found:

  • As for the Section 10(2) claims of infringement based on identical marks used for similar or identical goods and services, the Judge observed that despite the claimants’ trade mark being a stylised word mark (rather than a word only mark) the words are aurally identical with the respective goods being highly similar. Therefore, the distinctive element of the trade marks i.e. the word CHINA TANG creates an association in the relevant customer’s mind and thus the defendant infringed the trade mark pursuant to Section 10(2).
  • However, in respect to the claim of infringement under Section 10(3), the Judge found that the claimants had failed to demonstrate a sufficient reputation. That was because the claimants’ opined that claimant does not sufficiently establish reputation because the claimant’s market share, and marketing reach, were insufficient given the size of the restaurant industry in the UK. Whilst the evidence submitted including press coverage/awards and turnover figures of £5-6 million per year (2006-2009) the Judge found the evidence to be “patchy” and, in the circumstances, deemed that the defendant’s mark did not take unfair advantage of, nor was it otherwise detrimental to the distinctive element of the trade mark.
  • The passing off claim were also rejected because the claimants’ were deemed to only enjoy localised goodwill and the sheer distance between the claimants and defendant meant that there would be no misrepresentation (essentially their respective customer bases did not cross).
  • The defendant had sought to run an honest concurrent use defence to the infringement claims, that is that the parties have used the marks concurrently without issue and this should be able to continue. However, to succeed with a defence of honest concurrent use the Judge made clear that the defendant should have conducted suitable due diligence into earlier trade marks (and other unregistered users) i.e. it should have conducted trade mark searches. The evidence showed that it did not and accordingly the defence failed.

The case is an important reminder for all businesses to conduct clearance searches prior to adopting any new mark and, furthermore, to ensure prompt registration of trade marks. If, in this case, the defendant had registered its mark in 2009 (assuming that the claimants didn’t oppose at the time) then, by the time the claim was issued (in 2021) the mark would have been registered for more than 5 years and would, in effect, have acted as a shield against infringement. This, combined with the failed passing off claim, would have allowed the defendants to continue with their business under CHINA TANG.

As happens they were not so prudent, to ensure you are being prudent with your brands, or to ask any other intellectual property questions please contact our specialist team of intellectual property lawyers.

You can read the full judgment here.

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