Fried Chicken IP battles: is it relevant that the “average consumer” is intoxicated?

On 14 March 2025, the Court of Appeal handed down their judgment in Morley’s (Fast Foods) Ltd v Nanthakumar & Ors [2025] EWCA Civ 186 (14 March 2025). The decision raised interest in several respects, including identity and attributes of the average consumer and relevant public, and interpretation of settlement agreements involving franchised businesses.

The Claimant (now Respondent) in this claim is the famous South London fried chicken and fast-food establishment, with over 100 outlets, largely by way of franchisees, named Morley’s. Morley’s has a significant reputation, and is known as a South London institution, with South London rappers such as Stormzy referencing it in several tracks.

The Defendants are either the owner of the rival fast-food brand Metro’s (the 7^th Defendant), or one of his franchisees. The parties were in dispute previously, out of which resulted a settlement agreement that was part of the dispute in these proceedings.

What was the case about?

In the first instance, HHJ Melissa Clarke found that the Defendants were infringing all three trade marks of the Claimant, shown below:

1. 
2. 
3. “TRIPLE M” (word mark)

The Defendants were collectively using the following marks, found to be infringing:

• 
• “TRIPLE M” (word sign)
• “MMM” (word sign)

In arriving at a finding of a likelihood of confusion, the Judge found there to be two specific groups that formed the average consumer from the relevant public for these goods and services, fast food and fried chicken. The first group were low income, children and early adults that bought lunch or meals in the daytime and into the early evening. The second group were individuals that visited the stores in the later hours of the evening and into the early hours, including “intoxicated” revellers.

HHJ Clarke also found that the 2018 settlement agreement did not serve as a defence to the Defendants’ trade mark infringement.

The Defendants appealed, on the basis of 8 grounds:

1. the judge wrongly assessed the identity and attributes of the average consumer.
2. the judge erred in the visual comparison between the Morley’s Red and White Mark and Sign 1.
3. the judge erred in the conceptual comparison between the Morley’s Red and White Mark and Sign 1.
4. the judge erred with respect to the context of use of Sign 1.
5. the judge erred as to the effect of the 2018 Agreement upon likelihood of confusion so far as KK is concerned.
6. the judge wrongly interpreted the 2018 Agreement so far as the Franchisee Defendants are concerned.
7. the judge wrongly held that KK had acted in breach of the 2018 Agreement.
8. the judge wrongly assessed the similarity between Sign 2 and the Triple M Mark, and therefore wrongly found a likelihood of confusion in the case of Sign 2.

What did the Court of Appeal decide?

In relation to the first ground the Court of Appeal considered HHJ Clarke’s findings on the average consumer. The Appeal Judge found that whilst the first category is appropriate, the consideration of intoxicated individuals in the second category was not. That being said, LJ Arnold found that the first instance judge would not have arrived at a different conclusion in relation to the likelihood of confusion, even if such a category of persons were discounted. The attention in any case, was ranging from low to low to medium. Thus, a likelihood of confusion was still inevitably going to be found, taking the relevant marks as a whole, and assessing them from all necessary angles, including visual similarity, and conceptual similarity. The goods and services were of course identical, which sets off dissimilarities in the Mark.

On the question of whether the release terms in the 2018 agreement formed a viable defence to the Defendants’ trade mark infringement, the Court of Appeal again decided against the Appellants (the Defendants).

The release had been conditional on the 7^th Defendant using an agreed sign, as specified at Annex A, with what it termed “reasonable modifications thereto” permitted. The table below shows the mark in the 2018 Agreement, as compared to the mark eventually used by the Defendants, and in turn compared to the Claimant’s Red & White Mark.

Claimant’s Red & White Mark	2018 Agreement Annex A Mark	Mark eventually used by Defendants’

The sign that the Defendants eventually used was deemed to have material differences to that of the mark in Annex A, such that it increased the level of a likelihood of confusion. Such a change could not be found to be “reasonable” as per the 2018 agreement, in the eyes of the first instance judge. As such, the 7th Defendant’s use of Sign 1 (the mark it eventually used, after the 2018 Agreement), was a breach of the agreement, and trade mark infringement. The Court of Appeal agreed with this finding.

As to the question of whether the 7^th Defendant’s franchisees were also released by way of the 2018 Agreement and we permitted to use the Annex A Mark shown above, the Court of Appeal decided that it did not. The franchisees were not party to the 2018 agreement, and in several terms, the Agreement expressly excluded rights of any third parties. Further, the definition of “Related Parties” did not include franchisees, and this definition fed into both the “Release” and “Agreement not to sue” terms. Again the Court of Appeal agreed with the first instance judge’s findings in this respect.

What lessons can be learnt for businesses?

There are several takeaways from this decision that are useful for businesses, and particularly franchise businesses, to note.

In the first place, this case is a lesson that simply because the word elements of the trade marks in comparison are different, that does not necessarily mean there is no infringement. In this case, the word elements if considered in isolation are “Morley’s” vs. “Metro’s”. On their own they may appear different, but in trade mark infringement several types of similarity are considered in an overall assessment of likelihood of confusion including visual similarity (e.g. colours of a logo), and conceptual similarity (what message the mark is seeking to convey, for example in a slogan). The fact that the comparison was between two red stylised marks with similar font and positioning, along with a similar slogan relating to the taste of the relative products, pushed this over the line into sufficient similarity.

Businesses should also keep in mind that slogans can be valuable trade marks too. Brand owners should seek to protect these and also be careful to conduct the due diligence and clear any slogans prior to adopting them, in order to mitigate the risk of infringing others.

Settlement agreements, and the contractual drafting that underpins them, including definitions and wording used, are important and can turn a case. In this case, there seemed to be uncertainty between the parties to the 2018 Agreement as to what would constitute a reasonable modification to the agreed mark. It would have either been desirable to agree beforehand what these modifications would be, with examples, or remove that wording altogether and simply agree the mark the later party is permitted to use.

It is also important to ensure in finalising such agreements that all risks are covered. In this situation the Defendants did not ensure that franchising the agreed mark to third parties would be covered. Given this forms a significant part of the 7th Defendant’s model (as with many other takeaway food businesses), this should have been expressly dealt with at the time. Excluding the rights of third parties in a contract is a boiler plate term, so parties need to ensure that if there are third parties that require the benefit of the terms of the contract, this is not included. In the same vein, definitions should be checked (in this case the definition of Related Parties) for certainty and adequate cover.

Finally, it was interesting to see that one subset of “average consumer” for Morley’s products was considered to be intoxicated. This would affect their attention to detail, which would have in turn affected the similarity assessment and whether such a consumer can differentiate between marks as well as an ordinary consumer. The first instance judge arrived at this due to factual evidence provided by the CEO of Morley’s in relation to their customers. However, the Court of Appeal rejected this categorisation, potentially limiting the use of a similar “intoxicated average consumer” argument in cases where the marks in comparison are of a low level of similarity or less.

Edwin Coe’s IP team is full-service and assists client with the protection, commercialisation and enforcement of their IP rights, including filing trade marks, negotiating and drafting franchise agreements and settlement agreements, and bringing and defending IP proceedings at court. Should you have any queries in this regard, please contact Lakmal Walawage or any other member of the IP team at Edwin Coe.

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