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Trademark Protection Law and Strategy in Hong Kong

Thursday, February 21, 2013

By Barry Yen, So Keung Yip & Sin, Hong Kong; e-mail: barryyen@skys.law.com.hk; Web: www.ipr.hk  

I. Introduction

Although officially part of China since 1997 Hong Kong maintains its own separate (common law based) legal system. Despite the complication, English and in some instances European Community decisions are still referenced and Hong Kong judges are competent and reliable.

II. Infringement

Owners of trade mark registrations in Hong Kong enjoy exclusive rights in their registered trade marks which are infringed by use of such registered mark without consent. This assumes that the other party does not also have a registration for the mark in relation to the goods/services that it uses the mark on.

The relevant provision in relation to trade mark infringement in this case is s 18 of Hong Kong's Trade Marks Ordinance. In essence, a person infringes a registered trade mark if he uses in the course of trade or business, a sign which is:

(1) Identical to the trade mark in relation to the products which are identical to those for which it is registered;

(2) Identical to the trade mark in relation to the products which are similar to those for which it is registered and the use of the sign is likely to cause confusion on the part of the public;

(3) Similar to the trade mark in relation to products which are identical or similar to those for which it is registered and the use of the sign is likely to cause confusion on the part of the public; and

(4) Identical or similar to the trade mark in relation to products which are not identical or similar to those for which the trade mark is registered, the trade mark is entitled to protection as a well-known trade mark and the use of the sign takes unfair advantage of or is detrimental to the distinctive character or repute of the trade mark. No confusion is required under this head.

It should be noted that confusion is not required to establish infringement when an infringer uses the identical mark on identical goods/services claimed in the registration. For that reason, we generally recommend filing for broad claims reasonably related to the scope of the potential business of the applicant. This is different from the approach in the United States where the registry practice requires a much greater degree of specificity and where you generally need to confirm that you have used the mark in commerce before an application will be allowed to mature to registration.

A. Are the Marks Identical or Similar?

This is a critical point because if the mark and the goods are judged to be identical there is no requirement under section s 18(1) -- relating to infringement -- to show confusion in order to establish that the proprietor's statutory rights have been infringed. This is because where there is “double identity” confusion is presumed. The position on when marks are identical in Hong Kong is not clearly settled but the court will have regard to the strict approach taken in the UK1 in British Sugar plc v. James Robertson & Sons Ltd [1996] RPC 281 and Reed Executive plc v. RV Business Information Ltd [2004] RPC 767 (CA). There will be identity where:

 (i) The sign reproduces all the elements of the registered mark without modification or addition; or

(ii) Where any differences between the mark and sign are so insignificant that they would not be noticed by an ordinary consumer.

In assessing whether the marks are “similar”, a court would compare the aural, visual and conceptual impressions.

B. Are the Goods/Services Identical or Similar?

The general guideline applied to assess the similarity of goods/services was laid down by Jacob J in British Sugar plc v. James Robertson & Sons Ltd [1996] RPC 281. Jacob J determined that the phrase “similar goods” embraced the same concept as “goods of the same description” under the old law and that the court must have in mind similar considerations to those advising under the old law; namely:

(a) The respective uses of the respective goods;

(b) The respective end users of the respective goods;

(c) The physical nature of the goods;

(d) The respective trade channels through which the goods reach the market;

(e) In the case of self-serve consumer items, whether in practice they are respectively found or likely to be found on the same or different shelves; and

(f) Whether the respective goods are competitive or complementary. This inquiry may take into account how those in trade classify goods, for instance whether market research companies who act for industry put the goods or services in the same or different sectors.

C. Is There a Likelihood of Confusion?

The definition of trade mark infringement under Hong Kong law requires the existence of a “likelihood of confusion” on the part of the public. English courts, whose decisions have persuasive value in Hong Kong, have interpreted “likelihood of confusion” to include the “likelihood of association” with the trade mark. “Association” in this context refers to “association” as to the origin of the goods or services.

The phrase “likelihood of association” has been the subject of considerable discussion by English courts. In Wagamama Ltd v. City Centre Restaurants,2 Laddie J considered whether the kind of “confusion” required under the old UK law (Trade Marks Act 1938) was applicable to the provisions under the new UK law (Trade Marks Act 1994). Laddie J indicated that it was not appropriate to introduce the Benelux concept of “non-origin association”.

Laddie J said it was necessary to consider the question from first principles. He made clear that what was important was confusion as to the source of the goods or services bearing the offensive mark; that is, whether such goods or services were likely to be derived from or connected with the proprietor of the registered mark. The judge noted that when comparing marks the court should consider the doctrine of imperfect recollection,3 whether the identity4 of the mark is similar and whether an essential feature of the registered mark had been taken.

The judge noted that if the marks were too similar usually infringement would be found even if in the market place the infringer took steps to prevent confusion in fact occurring.

The question of whether there was confusion had to be determined in the light of all the circumstances of each case, including the degree of similarity between the marks, the nature of the marks and the nature of the goods and services. Generally the rules of comparison developed under the UK Trade Mark Act 1938 are a useful guide when interpreting the UK Trade Mark Act 1994 and those principles have been applied in a number of cases. The following test by Parker J in Re Pianotist Co's Application5 still offers useful general guidance in comparing marks:

“You must take the two words. You must judge of them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact, you must consider all the surrounding circumstance; and you must further consider what is likely to happen if each of those trade marks is used in a normal way as a trade mark for the goods of the respective owners of the marks. If, considering all those circumstances, you come to the conclusion that there will be a confusion -- that to say, not necessarily that one man will be injured and the other would gain illicit benefit, but that there will be a confusion in the mind of the public which will lead to confusion in the goods -- then you may refuse the registration, or rather you must refuse the registration in that case”.

Section 7(2) of Hong Kong's Trade Marks Ordinance helpfully states that:

“For greater certainty, in determining for the purposes of this Ordinance whether the use of a sign is likely to cause confusion on the part of the public, the Registrar or the court may take into account all factors relevant in the circumstances, including whether the use is likely to be associated with a registered trade mark”.

D. Relief Available for Trade Mark Infringement

The relief available in a trade mark infringement action and passing off includes:

(a) An injunction to prevent the defendant causing, enabling or assisting others to commit infringement;

(b) Damages or at the option of the plaintiff an account of profits in respect of the acts of trade mark infringement;

(c) Order for delivery up or for forfeiture, destruction, disposal or other dealing of all articles, papers, materials and items in possession, custody, power or control of the defendant the continued retention, use or dealing in or with which by the defendant would offend against the foregoing injunctions;

(d) An order for discovery upon oath by any one of the directors of the defendant of all matters relating to the foregoing; and

(e) An order to pay legal costs (to be taxed if not agreed).

It should be noted that the infringement of a registered trade mark also has criminal implications under s 9 of Hong Kong's Trade Descriptions Ordinance. Where there is an overlap between a civil action and pending criminal proceedings the civil action will not necessarily be stayed pending the outcome of the latter. The court has discretion to stay the civil proceedings if justice so requires, having regard to the concurrent criminal proceedings, and taking into account the right of silence and the reason why that right was available to a defendant in criminal proceedings.

The right of silence does not extend to civil proceedings.6 Hence a plaintiff can proceed with a civil claim in accordance with the normal rules for the conduct of civil actions. The burden is on a defendant to show that it is “just and convenient that the plaintiff's ordinary rights of having his claim processed and heard and decided should be interfered with”.7

III. Non-Use of Mark

Section 52(2)(a) of Hong Kong's Trade Marks Ordinance provides that a registered mark may be revoked for non-use if the mark has not been used for a continuous period of 3 years. Section 52(3) goes on to clarify that use of a mark includes use in a form which differs in elements which do not alter the distinctive character of the registered mark.

Hong Kong courts would likely adopt the test laid out by Simon Thorley QC in BUD and BUDWEISER BUDBRÅU Trade Marks [2002] RPC 38 as follows:

“It is thus necessary for any tribunal seeking to apply [the relevant UK provision] to determine what is the distinctive character of the mark and which are the elements that, in combination, contribute to that distinctive character. Thereafter it must enquire whether any alteration to any of those elements is of sufficient immateriality as not to alter that overall distinctive character.”

The Court of Appeal observed8 that in assessing what is the “distinctive character” of a trade mark, the registrar is to analyse the “visual, sound and conceptual” qualities of a mark and make a “global appreciation” of the likely impact on consumers.

The “overall” aspect of the distinctiveness is what must be weighed. In one case, an applicant for a revocation action9 successfully convinced Hong Kong's Registrar of Trade Marks that the use of a mark was not use of another similar mark even though the only word element in both combination marks -- “REGAL” -- was identical. The registrar determined that the omission of the crown device and the inclusion of a boot device in the former mark altered the distinctive nature of the combination mark.

IV. Rights in Unregistered Marks

Where a trade mark is unregistered, or has been so altered from its original registered form such that the earlier registration has now been revoked for non-use, it may still be possible in Hong Kong to pursue infringers for passing off.

A. Passing Off

To make out a case of passing off, the “classic trinity” of elements must be established, namely:

  (i) The plaintiff's goods have acquired a goodwill in the market and are known by some distinguishing feature;

 (ii) There is a misrepresentation by the defendant leading or likely to lead the public to believe that the defendant's goods are the plaintiff;

(iii) The plaintiff has suffered or is likely to suffer damage as a result of the misrepresentation.

The second limb in passing off is a requirement to establish “misrepresentation”.

On misrepresentation, in AG Spalding & Bros v. AW Gamage Ltd (1915) 32 RPC 273 (HL), Lord Parker said at 286-287:

“[T]here can be no doubt that in a passing-off action the question whether the matter complained of is calculated to deceive, in other words, whether it amounts to a misrepresentation, is a matter for the Judge, who, looking at the documents and evidence before him, comes to his own conclusion, and, to use the words of Lord Macnaghten in Payton & Co Ltd v. Snelling, Lampard & Co Ltd (17 RPC 635), 'must not surrender his own independent judgment to any witness whatever’.”

Further, in Annabel's (Berkeley Square) Ltd v. G Schock (t/a Annabel's Escort Agency) [1972] FSR 261 (CA) Russell LJ said at 269:

“Very often a court is faced with the situation in which it has got to make up its mind as to the probabilities of confusion without any evidence of actual confusion. It is rare that a court is faced with actual examples of actual confusion.”

Where goods are counterfeits, the sellers are misrepresenting that the goods are those of the plaintiff. In fact, for “Grade A” counterfeits, which are virtually indistinguishable from the genuine product, the public believes that it is in fact buying the genuine product. Whilst “Grade C” counterfeits, which customers are aware are counterfeit and bought them precisely as such, it is submitted that this alone would not be accepted as a defence to defeat a passing off action.

On the question of damage, Laddie J in Kimberley-Clark Ltd v. Fort Sterling Ltd [1997] FSR 877, 890, said that if there is a likelihood of deception, damage is almost bound to follow:

“The plaintiff has persuaded me that, on balance, it is likely to lose sales to the defendant accordingly. In addition, the owner of a valuable reputation in a trade mark is entitled to protection not only from losing his own sales directly by reason of deception of the public but also from the more insidious long term commercial damage which will be caused by his competitor strengthening his own position by taking the benefit of the owner's mark and reputation.”

Generally, in a counterfeit scenario the damage claimed would be loss of sales because customers have been diverted to buy the counterfeit goods. The point about the grades of counterfeits would only possible go to the quantum of damage as distinct from whether there was an actionable passing off.

Again, the remedies available to a successful plaintiff are the same as for trade mark infringement.

V. Well-Known Marks

Section 18(4) of the Trade Marks Ordinance provides for protection of well-known trade marks where the mark is already registered in relation to some goods or services. This is important when the mark complained of is identical or similar to the trade mark in relation to products which are not identical or similar to those for which the trade mark is registered. In addition the use of the sign must take unfair advantage of or be detrimental to the distinctive character or repute of the registered trade mark.

VI. Conclusion

Hong Kong is an important trading hub where goods from China transit to global markets. Companies also establish buying, quality control and procurement centres here. The rule of law -- particularly intellectual property law and contract law -- prevails so it will remain a convenient and reliable place to conduct business for another generation.

Notes

1 Although it is noted that where a registered mark is a word mark and the defendant's sign includes other words the UK decisions are unclear.

2 [1995] FSR 713.

3 Aristoc Ltd v. Rysta Ltd (1945) 62 RPC 65.

4 De Cordova v. Vicks Chemical Co (1951) 68 RPC 103.

5 (1906) 23 RPC 774 at 777. This approach has also been applied in relation to devices in Celine SA's Trade Mark Applications [1985] RPC 381.

6 Burberry Ltd v. Polo Santa Roberta Ltd [2011] 3 HKC 466.

7 See Petroliam Nasional Berhad v. Tan Soon Gin [1990] 1 HKLR 4 (CA), at 8.

8 [2003] RPC 477 at 490.

9 Registrar's decision of March 20, 2006 in relation to the revocation of Trade Mark No. 19781623. The successful applicant was represented by So Keung Yip & Sin.

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