LUEN FAT METAL AND PLASTIC MANUFACTORY CO LTD v FUNKO UK LTD

This dispute sat in the toy and licensed merchandise market. Luen Fat owned registered FUNTIME marks covering Class 28 goods and had sold toys in the UK for many years through its distributor, Padgett.

The evidence of actual use was important. It showed toys aimed mainly at babies and toddlers, including brightly coloured plastic products such as rattles, shape-sorters, pull-along toys and an alphabet train.

Funko UK sold licensed merchandise linked to the Five Nights at Freddy’s franchise. The products in issue were tied to the Sister Location game and used the character names Funtime Freddy and Funtime Foxy.

Luen Fat said that putting those names on packaging infringed its marks. Funko said the names identified game characters and denied that buyers would think the goods came from Luen Fat or a connected business.

The court was dealing with liability only. Validity of the marks was not challenged, but Funko did require Luen Fat to prove the extent of its real market use.

The court had to decide more than whether the same word appeared on both sides. A key early question was what goods Luen Fat had actually proved genuine use for.

That mattered because a defendant can ask a trade mark owner to prove use in an infringement claim. If the evidence only supports a narrower category of goods than the wording on the register, the practical reach of the claim can shrink.

After that, the court worked through the usual trade mark questions. Were Funko’s names identical or similar to FUNTIME? Were the goods identical or similar? Were the names being used in a trade mark sense, or only to identify characters? Would average consumers be confused? And was there enough reputation and harm for the wider claim to succeed?

For business owners, this is a useful reminder that trade mark cases are often evidence-heavy. The court looked at packaging, product type, age suitability, sales channels, branding context and the absence of actual confusion, not just the shared word.

One of the clearest lessons from this case is that proof of use can narrow the practical scope of a registration. Luen Fat’s registrations used broad Class 28 wording, but the evidence before the court showed use mainly on toys for babies and toddlers.

The court accepted that there had been genuine use. But it did not accept that the evidence justified protection across the whole spectrum of toys, games and playthings in the broadest sense.

Instead, the judge settled on a fair specification of “toys, games and playthings for babies and pre-school children”. That narrower category shaped the rest of the infringement analysis. It meant the comparison was made against the goods Luen Fat had actually proved in the market.

This matters commercially. A business may feel protected by wide register wording, but if a dispute arises years later, the court may ask what the brand has really been used for. If your evidence is patchy, your practical protection may be narrower than you expected.

That is especially relevant where goods are sold through distributors, retailers or mixed channels. If your mark appears differently across packaging, invoices and product mouldings, those details can affect how strongly the mark functions as a badge of origin.

Luen Fat argued that consumers would focus on the word Funtime within the names Funtime Freddy and Funtime Foxy. The court did not accept that for the identity claim.

The judge said the relevant signs were the full names as used by Funko. They would not be broken up so that only Funtime counted. Freddy and Foxy were significant parts of the names and played an identifying role.

That meant the names were not identical to the registered marks. So the claim based on identical use failed.

Similarity was different. The court found a medium level of visual and aural similarity because the names contained the whole of FUNTIME in single-word form, even though extra wording had been added.

This is a practical point for businesses choosing product names. A longer name can still be similar to an earlier mark even if it is not identical. Adding another word may help, but it does not end the analysis. The court will still ask what impression the full sign makes on buyers.

In other words, a naming clearance exercise should not stop at exact matches. You also need to consider whether a shared element is likely to matter in the real buying context.

The court then looked at the goods themselves. This was not a simple all-or-nothing comparison.

Because Luen Fat had only proved use for toys, games and playthings for babies and pre-school children, the court compared Funko’s products against that narrower category. It found that Funko’s action figures and Pop! Vinyl figures were not identical to that category. They were seen as toys for older children, even if some might also be described as collectibles.

Even so, those goods were still similar. They were sold in the same kinds of outlets and sat within the broader toy market.

The plush toys were treated differently. The court considered that plush toys could be identical goods to toys for babies and pre-school children. But the labelling evidence for plush products was less clear, and that affected how far the claim could go on those items.

For a business owner, the lesson is that product category arguments can be surprisingly fine-grained. A court may distinguish between baby toys, older children’s toys, collectibles and soft toys, even where all of them sit somewhere inside the wider toy sector.

That is why product descriptions, age guidance, packaging and retail placement can all matter in a dispute.

Another important issue was whether Funko was using the names as trade marks at all. Funko said the names were descriptive because they identified characters from the game. Luen Fat said the names also worked like sub-brands.

The court took a balanced view. It accepted that Funko intended the names to identify the game characters. Consumers familiar with Five Nights at Freddy’s or Sister Location might well understand the names in that way.

But the court did not go so far as to say the names were purely descriptive in every setting. Some consumers, especially those unfamiliar with the game, might also see the names as indicating origin. In that sense, the names could perform a trade mark function for at least some buyers.

That point is useful for businesses selling licensed or themed products. A character name, collection name or range name can sometimes do two jobs at once. It may describe the content of the product, but it may also help buyers distinguish one product line from another.

So if you are relying on a descriptive explanation for a product name, do not assume that ends the matter. The court may still ask how ordinary buyers would read the wording in the real sales environment.

The confusion analysis was where context really mattered. The court looked at the full buying environment, not just the shared word Funtime.

Funko’s packaging prominently used other branding, including Funko and references to the Five Nights at Freddy’s game. The names were likely to be seen as names of figures or characters. The court also considered the differences between Luen Fat’s baby and pre-school toys and Funko’s figures and collectibles.

Luen Fat mainly argued for indirect confusion. In other words, buyers might think there was a licence or commercial link between the businesses because the same word appeared in the names.

The court rejected that argument. It thought consumers who recognised the goods as licensed merchandise were more likely to connect them with the game franchise than with Luen Fat. Even consumers unfamiliar with the game were not likely, in context, to assume a licence from Luen Fat just because Funtime appeared in the names.

The court also placed weight on the absence of actual confusion after years of side-by-side sales in major stores and online. Actual confusion is not required, but where products have co-existed for a long time, the lack of complaints or mix-ups can support a finding that confusion is unlikely.

Luen Fat also relied on the wider form of infringement that can apply where a mark has a reputation. The court accepted that the UK mark had some enhanced distinctiveness and enough reputation for this part of the claim to be considered.

But that did not carry the claim very far on its own. The court said there still needed to be a link in the average consumer’s mind between the names and the mark.

On the facts, the court found no sufficient link. Consumers familiar with the game would see Funtime as a reference to the game characters. Consumers familiar with Luen Fat’s products were unlikely to connect its mark with Funko’s different figures and merchandise.

The court also rejected arguments about detriment, tarnishment and unfair advantage. Evidence about the frightening nature of the game did not show that the merchandise itself damaged the trade mark or changed customer behaviour toward Luen Fat’s goods. The court also found no evidence that any commercial advantage came from a link to Luen Fat’s mark rather than from the popularity of the game franchise itself.

For businesses, the message is simple: a reputation claim still needs evidence of a real consumer connection and real likely harm. Reputation alone is not enough.

If you sell under your own brand, this case is a reminder to build evidence before a dispute starts. The court examined how the mark appeared on goods, whether retailer branding overshadowed it, and whether the owner had shown meaningful market recognition.

If your products are often sold under a retailer’s own packaging, that can affect how strongly your mark functions as a badge of origin. That does not make your mark worthless, but it can make enforcement harder if the court is not persuaded that buyers rely on your mark when purchasing.

If you sell licensed products, the case does not give a free pass to use shared wording. But it does show that courts will look carefully at whether the wording is part of a character name, how the packaging presents the product, and whether buyers are likely to think there is a trade connection.

In practice, businesses should treat naming, packaging and channel strategy as part of IP risk management. A product title that looks acceptable in isolation may create a different impression once it sits beside logos, franchise references, age labels and retailer presentation.

A sensible clearance review before launch is still the safest route, especially where a proposed name borrows a recognisable word already used in the same broad market.