Morley's (Fast Foods) Limited v Thurairasa Nanthankumar & Ors

This was a Court of Appeal trade mark dispute between Morley’s and Metro’s, two fried chicken takeaway chains using franchise models. Morley’s said Metro’s branding and menu signs infringed its registered trade marks and that one defendant had also breached a 2018 settlement agreement.

The appeal mostly failed. The court upheld the key findings that the challenged signs created infringement risks and that the 2018 agreement did not give the seventh defendant freedom to use the disputed fascia sign or to let franchisees use the Metro’s signs more broadly. For business owners, the case is a strong reminder that branding risk is judged by overall customer impression and by the exact wording of any licence or settlement.

Morley’s had a long-established fried chicken brand with registered trade marks covering food and restaurant or takeaway services. Metro’s was a newer chain founded by KK, who later expanded through franchisees. Morley’s objected to three signs used by Metro’s operators: a fascia sign, the sign “MMM”, and the sign “TRIPLE M” or “TRIPLE ‘M’”.

The first-instance judge found infringement and also found that KK had breached a 2018 agreement settling an earlier dispute. On appeal, the defendants argued that the judge had got the average consumer wrong, overstated the visual and conceptual similarity of the fascia sign, wrongly relied on context, and misread the 2018 agreement. They also challenged the finding that “MMM” was similar enough to the TRIPLE M mark.

The Court of Appeal did identify some errors in the judge’s description of the average consumer. In particular, it said confusion should not be assessed by reference to intoxicated consumers, and it preferred a single class of consumers rather than splitting them into separate groups. But those errors did not change the result. The court held that the overall conclusion on confusion still stood.

The appeal raised two linked business questions. First, when customers see a takeaway’s branding in the real world, was the Metro’s signage close enough to Morley’s registered marks to create a likelihood of confusion? That required the court to consider the average consumer, the similarity of the signs, the distinctiveness of Morley’s marks, and the context in which the signs were used.

Second, even if the signs would otherwise infringe, did the 2018 settlement agreement protect KK or the franchisees? The agreement allowed KK to use certain “Metro’s Signs” and referred to “reasonable modifications”. The court had to decide whether that wording covered the sign actually used and whether it also let KK sub-license the branding to franchisees who were not already using the earlier signs when the agreement was made.

The Court of Appeal dismissed the appeal. It accepted that the first-instance judge had made limited errors when describing the average consumer, but held those errors were not material. The court said the relevant consumers of these fast-food outlets would still choose by convenience of location and shopfront and would pay a medium-to-low degree of attention. On that basis, the confusion finding remained sound.

On Sign 1, the court upheld the judge’s view that the sign and Morley’s red-and-white mark were visually quite similar and conceptually similar overall, even though the brand names differed. The court accepted that the judge was entitled to take into account the stylised letter, the layout, the strapline placement, and the white-on-red presentation. It also accepted that context mattered, including use on lit fasciae and with similar visible shop get-up.

On the 2018 agreement, the court held that the modifications to the agreed sign were not protected where they increased confusion with Morley’s mark. It also held that the agreement licensed KK’s own use of the Metro’s signs but did not permit him to sub-license those signs to franchisees who were not already using the earlier signs at the date of the agreement.

On Sign 2, the court upheld the finding that “MMM” in the burger-name context could naturally be pronounced “Triple M”, supporting similarity and confusion.

If you run a restaurant, takeaway or franchise network, this case is a warning against making branding decisions in pieces. A business may think it is safe because the main word is different, the border colour changed, or the strapline is not identical. But a court can still find that the overall impression is too close, especially where the goods and services are identical and the earlier mark is distinctive.

The decision is also important for businesses that settle disputes informally or with short agreements. A permission to use one sign is not the same as a broad right to evolve the brand however you like. If the agreement refers to a specific logo and “reasonable modifications”, later changes may fall outside the permission if they move the branding closer to the other party’s mark. And if you plan to franchise, you need express wording on whether franchisees can use the sign.

Before opening a new site, refreshing signage or onboarding franchisees, treat brand clearance as an operational task rather than a one-off legal formality. The closer your business is to a crowded market like fried chicken, pizza or burgers, the more important it is to test how the branding appears in the real world.

That means checking the fascia, menus, delivery-app listings, packaging and in-store visuals together. It also means pulling out any old settlement, coexistence or licence documents before approving a redesign. A small wording point can decide whether a rollout is permitted or becomes a breach.

The contract part of this case matters beyond trade marks. The Court of Appeal treated the 2018 agreement as a document with defined limits. It allowed KK to use certain Metro’s signs, but the court would not read in a wider right to let new franchisees use them. The court also refused to imply a sub-licensing power just because trade mark law can recognise use by a licensee in some contexts.

For franchisors, the message is direct: if you want franchisees to use a brand, the contract should say so clearly. It should also define the approved artwork, who can change it, what counts as a permitted modification, and what happens if a third party challenges the branding. If your business has settled an earlier dispute, your franchise documents should be checked against that settlement before any expansion.