BURBERRY LTD AND ANOTHER v. POLO SANTA ROBERTA HOLDING HONGKONG LTD

HCMP 965/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO965 OF 2014

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	IN THE MATTER of Hong Kong Trade Mark Registration No 301528065 for “” registered in Class 18 in the name of Polo Santa Roberta Holding Hongkong Limited (保羅國際集團有限公司)
	and
	IN THE MATTER of an application by the 1st and 2nd plaintiffs for the revocation and/or a declaration of invalidity of Hong Kong Trade Mark No 301528065 in Class 18
	and
	IN THE MATTER of section 52 and 53 of the Trade Marks Ordinance (Cap 559)

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BETWEEN
	BURBERRY LIMITED	1st Plaintiff
	BURBERRY ASIA LIMITED	2nd Plaintiff
and
	POLO SANTA ROBERTA HOLDING HONGKONG LIMITED (保羅國際集團有限公司)	Defendant

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D E C I S I O N

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1. This is an application by the plaintiffs by originating summons for an order that the registration of the Trade Mark no 301528065 in the name of the defendant (“the Registered Mark”) be revoked pursuant to s 52(2)(a) of the Trade Marks Ordinance (Cap 559) (“the Ordinance”) or a declaration that the Registered Mark is invalid pursuant to ss 53(3) and 53(5) of the Ordinance. The Registered Mark is shown in the Annex to this decision.

2. The 1^st plaintiff is an English company with the business of designing, manufacturing and distributing high-end garments, bags and accessories.  A subsidiary of the 1^st plaintiff, the 2^nd plaintiff is a Hong Kong company that carries on business in the distribution of the 1^st plaintiff’s products in the Asia Pacific market including Hong Kong.  The 1^st plaintiff is the registered proprietor of a trade mark in Hong Kong which I shall refer to as the “Burberry Check” and is also shown in the Annex to this decision.  The plaintiffs complain that companies and individuals related to the defendant have been infringing the Burberry Check and have passed off goods bearing a sign or pattern substantially similar to the Burberry Check as the plaintiffs’ products.

3. The Registered Mark is registered in Class 18 in respect of “Leather and imitations of leather, and goods made of these materials and not included in other classes; animal skins, hides; trunks and travelling bags; umbrellas, parasols and walking sticks; whips, harness and saddler”.

4. The defendant is a company incorporated in Hong Kong on 30 August 2010 with its registered office at G/F, 114 Fuk Wah Street, Shamshuipo, Kowloon, Hong Kong.  Ms Tong Tit Wai (“Ms Tong”) has from the outset been the sole shareholder of the defendant.  She was also at all material times the sole director of the defendant, except for a brief period between 3 July and 23 August 2013 when her husband, Mr Cheung Ko Ming (“Mr Cheung”), was sole director.

5. The Registered Mark was registered on the application not of the defendant but of Polo Santa Roberta Limited (“PSRL”). PSRL is a company incorporated in Hong Kong in 2004.  Its sole shareholder and director was until 2010 Mr Cheung and thereafter has been Ms Tong.  PSRL applied on about 21 January 2010 for the registration of the Registered Mark in Hong Kong in respect of goods of the above description, which was obtained on 29 November 2010.  PSRL’s address according to the Trade Marks Registry records for the Registered Mark is the same address as the defendant’s registered office. 

6. PSRL assigned the Registered Mark to the defendant on 2 January 2012.

7. The plaintiffs makes the application in this case on the following four grounds:

(1)   there was no genuine use of the Registered Mark for more than three years: s 52(2)(a) of the Ordinance;

(2)   the application for registration was made in bad faith: s 53(3) read with s 11(5)(b);

(3)   the Registered Mark is similar to an earlier registered mark: s 53(5)(b) read with s 12(3); and

(4)   the use of the Registered Mark would be prevented by the law of passing off: s 53(3) read with s 11(5)(a).

8. The first ground, if established, would entitle the plaintiffs to an order for revocation of the Registered Mark under s 52, whereas the other grounds, if established, would entitle the plaintiffs to a declaration of invalidity of the registration under s 53.

9. The first ground of the plaintiffs’ application is that the registration of the Registered Mark should be revoked because of non-use for at least three years prior to the date of the commencement of these proceedings (ie 16 April 2014).  S 52(2)(a) of the Ordinance provides:

“(2) The registration of a trade mark may be revoked on any of the following grounds, namely-

(a)      that the trade mark has not been genuinely used in Hong Kong by the owner or with his consent, in relation to the goods or services for which it is registered, for a continuous period of at least 3 years, and there are no valid reasons for non-use (such as import restrictions on, or other governmental requirements for, goods or services protected by the trade mark).”

10. In its defence, the defendant accepts that it has not itself used the Registered Mark for trading as such, but avers that it has licensed two persons or entities to use it.  First, the defendant has licensed the Registered Mark to a firm in Hong Kong run by Ms Tong in the name of Far East Euroasia (“Far East”) for its use from 12 June 2012 to 20 January 2020.  Secondly, the defendant has licensed the Registered Mark to a Mainland company by the Chinese name of 路必達馬球皮具制品有限公司 (Lubida Polo Leather Products Co Ltd) (“Lubida”) for its use from 1 June 2012 to 17 January 2017.  It is said that Lubida has been carrying on business in the sale and distribution of leather goods and handbags in the Mainland. 

11. It is not in dispute that to resist revocation on the ground of non-use, the genuine use must have occurred in Hong Kong.  Any use in any other jurisdiction, such as in Mainland China, would not be relevant for present purposes.

12. S 82(1) of the Ordinance provides:

“If, in any civil proceedings under this Ordinance in which the owner of a registered trade mark is a party, a question arises as to the use to which the trade mark has been put, the burden of proving that use shall lie with the owner.”

It is not in dispute that, accordingly, the burden of proving there was genuine use lies on the defendant.[1]  The standard of proof is the ordinary civil standard of proof on the balance of probabilities: see Pan World Brands Ltd v Tripp Ltd (Extreme Trade Mark) [2008] RPC 2 at §§29-30, a decision on similar provisions in the (UK) Trade Marks Act 1994.

13. Despite that the onus rests on the defendant, the plaintiffs have in this case adduced evidence of the following matters suggesting the lack of any genuine use. 

(1)   Private investigators had been engaged by the plaintiffs to make numerous visits to the various offices and shops of the defendant, PSRL, Far East and related entities over a number of years.  The investigators did not notice any products on display that bore the Registered Mark.

(2)   No use of the Registered Mark could be found upon internet searches conducted into the Polo Santa Roberta group.

(3)   None of the 961 products seized by Hong Kong Customs in a raid in August 2010 from a shop in Sham Shui Po, which was a place of business of Far East and later the registered office of the defendant, bore the Registered Mark.

(4)   In another action, HCA 1103 of 2013, brought by the plaintiffs against, among others, Ms Tong and Far East, the plaintiffs obtained an Anton Piller order on 21 August 2013 for the search of the premises at Sham Shui Po, which was the address of Ms Tong and Far East at the time and became the defendant’s registered office address shortly afterwards.  No use of the Registered Mark was observed on any of the products and documents or otherwise by persons that attended the execution of the Anton Piller order.

(5)   Polo Santa Roberta catalogues and photographs of goods sold at the Sham Shui Po address were exhibited by one of the defendants to HCA 1103 of 2013, namely, Cheung Mary in the context of that action.  There is no sign of any use of the Registered Mark in any of the catalogues or photographs.

14. In response, the defendant filed an affirmation of Ms Tong in which she made the following statement at paragraph 21 (in translation):

“As a matter of fact, KWH[2], PSRL, Fast East or other authorised retail shops or distributors have always and up to now been selling and promoting goods bearing the [Registered] Mark, whether before or after the formal registration. A series of photos showing products on which the [Registered] Mark is applied and relevant promotion materials are attached for reference. There are now produced and shown to me marked ‘TTW-3’ copies of the relevant photos and promotion materials.”

(The original reads: “事實上，KWH、PSRL、Far East或其他授權門市或經銷商不論是在正式註冊前或註冊後直到現在都有銷售及推廣印有該商標的產品。現附上一系列印有應用該商標產品的相片及宣傳單張作參考，現向本人出示及展示標明為證物“TTW-3”的有關相片及宣傳單張。”)

15. The exhibit “TTW-3” consists of (i) what appear to be copies of a 4-page catalogue or brochure, with a sparsely printed front page and back page and two pages containing the pictures of a few ladies’ handbags; and (ii) 8 pages of photographs of handbags.  Each of those handbags has affixed to its surface what seems to be a small metallic badge bearing the Registered Mark except that, in contrast to the Registered Mark, the cross on the badge is made up of symmetrical lines parallel to those in the 3-lined check pattern.

16. The photographs are undated.  The catalogue is surprisingly sparse in content.  The words “Polo Santa Roberta” appear but it contains no name, address, telephone number, email address or any other contact details of the defendant or any other entity.  Apart from the pictures, there is no information provided about the products except a model number for each product.

17. The plaintiffs have, in reply, filed evidence from the investigators and solicitors’ firm executing the Anton Piller order confirming that they had neither seen the products whose photographs appear in the catalogue nor the photographs and catalogue exhibited in “TTW-3”.

18. Genuine use must be an actual use of the mark. It entails use of the mark on the market for the goods protected by that mark and not just internal use by the undertaking concerned: Ansul BV v Ajax Brandbeveiliging BV [2003] RPC 40 at §§35-37; Pan World Brands Ltd, supra, at §§21-23.

19. In Brands Inc Ltd vKabushiki Kaisha Regal Corporation [2007] 2 HKC 110, Barma J (as he then was) held at §18:

“…what is essential (leaving aside section 52(3)(b) of the Ordinance) is that the Mark should have been used by being exposed to third parties (other than the Owner or his licensees or agents) on a market in Hong Kong for goods of a type in respect of which the Mark was registered. The need for exposure on such a market follows from the fact that to be used as a trade mark, the mark must be used in such a way as to act as a badge of origin, or a guarantee of the source or origin of the goods to which it is affixed. The Owner of the Mark, and his licensees and agents, would not rely on the Mark for this purpose, and thus, the utilisation of the Mark on goods which are seen by them only, and not by any third party purchaser or potential purchaser, whether wholesale or retail, cannot constitute a use of the Mark as a trade mark. …”

20. Citing the case of Engelhorn KGaA v Office for Harmonisation in the Internal Market (Trade Marks and Designs) T‑30/09, 8/7/2010, Mr Gary Leung submits on behalf of the defendant that catalogues are sufficient evidence of genuine use.  The case must in my view be read in context.  In that case the applicant filed an application for registration of a trade mark.  The intervener objected on the ground of an earlier mark.  The question in issue was whether the intervener had proved by sufficient evidence genuine use of the earlier mark.  What the General Court there said was this:

“41 By filing those catalogues the intervener proved, to the requisite legal standard, that the earlier mark was used for the purposes of creating or preserving an outlet for the goods at issue, even if, contrary to what the Board of Appeal stated in paragraph 15 of the contested decision, the company M. was not a third party in relation to the intervener because, in actual fact, the intervener was its parent company.

42 It is clear from those catalogues of the United Kingdom retailer M., which also contain items offered under other trade marks, that the trade mark PETER STORM was used in the United Kingdom in respect of items of clothing for a significant part of the relevant period, namely the autumn/winter 2002 and spring/summer 2004 seasons. The mark was affixed to a large number of goods which could be ordered by mail or purchased in certain shops. Those catalogues, which were intended for end consumers, contained specific information concerning the goods offered for sale under that trade mark, their prices and the way in which they were marketed in the United Kingdom. In the light of the telephone and fax numbers and postal and Internet addresses given for mail order purchasing and the specific information relating to a very large number of shops offering the goods at issue in the United Kingdom, it is clear that items of clothing were offered for sale under the trade mark PETER STORM to end consumers.

43    As to the extent of use of the earlier mark, it is true that those catalogues provide no information on the quantity of goods actually sold by the intervener under the trade mark PETER STORM. However, it is necessary to take into account, in that regard, the fact that a large number of items designated by the trade mark PETER STORM were offered in the catalogues and that those items were available in more than 240 shops in the United Kingdom for a significant part of the relevant period. Those factors support the conclusion, in the context of a global assessment of whether the use to which the earlier mark was put was genuine, that the extent of its use was fairly significant. In that regard, it must also be remembered that the purpose of the requirement for genuine use of the earlier mark is not to assess commercial success of the undertaking in question …”

21. In my view, the case does not assist the defendant here.  I do not doubt that catalogues or brochures can in an appropriate case be evidence of genuine commercial activities involving the marketing of the goods using the mark in question.  The questions whether the evidence adduced is credible and, if so, whether it is sufficient to prove genuine use, depends on the facts of each case.  In Engelhorn, the General Court emphasised, at §29, that

“Genuine use of a trade mark cannot be proved by means of probabilities or suppositions, but must be demonstrated by solid and objective evidence of actual and sufficient use of the trade mark on the market concerned …”

22. As Mr Clark points out, the “catalogue” here, unlike that in Engelhorn which contained “telephone and fax numbers and postal and Internet addresses”, has no contact information.  There is no evidence that it has been sent or made available to any customer or potential purchaser.  The defendant has notably not produced in evidence a single document evidencing the actual manufacture, marketing or sale of the products such as manufacturing records, commercial invoices, advertisements, retail invoices or receipts relating to those products.  There is not even any internal document produced such as the defendant’s own sales records, vouchers and ledgers.  There is no explanation of the absence of these documents, other than an assertion by Mr Leung from the Bar table that the practice of the shops in question was not to record the product number on sales invoices or receipts.  There is not even a statement from a shop assistant that the products had actually been put on display for sale in any shop premises or were otherwise offered for sale. 

23. Seen in the context of the defendant’s pleaded case, the plaintiffs’ evidence filed before the defendant’s affirmation as described in paragraph 13 above, and the history of the matter, the absence of these materials is in my view highly significant.  The defendant’s pleaded case is that Far East and Lubida have since at least 12 June 2012 been offering for sale, selling, advertising and promoting products such as leather goods, handbags, travelling bags and other merchandise bearing the Registered Mark in Hong Kong and the Mainland.  The defendant also avers that PSRL and its licensees have, both in Hong Kong and in the Mainland, sold “large quantities” of products bearing the Registered Mark.  If, as the defendant alleges, its related entities have been selling the products shown in the catalogue and photographs in “TTW-3” with the regularity and in the scale suggested in its pleadings, it is quite remarkable that the only evidence that it was able to file is that in paragraph 21 of Ms Tong’s affirmation.

24. The relevant history of the matter includes in particular the following.  In HCA 1617 of 2010, an action brought by the plaintiffs herein against (i) PSRL, (ii) Pak Hung International Trading Company Limited, and (iii) Hui Chi Kwan, the defendants were alleged to have sold products, namely, bags and other accessories made of fabric with a checked pattern that infringed the Burberry Check.  On 17 January 2012, Deputy Judge Mimmie Chan (as she then was) entered summary judgment against all three defendants (PSRL being absent and the other two defendants submitting to judgment) for injunctions and damages or, at the plaintiffs’ option, an account of profits.  It is to be noted that just days before, on 2 January 2012, PSRL assigned the Registered Mark to the defendant in the present action.

25. Further, the plaintiffs herein have brought another action, HCA 1103 of 2013, against, among others, the defendant herein, Ms Tong and Far East, to complain of infringing products actually sold by the defendant’s related entities or licensees, namely, bags and other accessories made of fabric with a checked pattern that allegedly infringed the Burberry Check.  In that action, Ms Tong and other alleged infringers have taken the position and stated expressly that the Registered Mark was the basis for producing such products (see Ms Tong’s affirmation and Mr Ng Wai’s affirmation both made in HCA 1103 of 2013 and dated 11 October 2013). 

26. The position is thus that products made of fabric with a checked pattern which look at least superficially similar to the plaintiffs’ products have actually been sold by the defendant’s related entities.  Ms Tong has, in that context, stated that the products were protected by the Registered Mark.  In this action, however, Mr Gary Leung has made clear that the defendant does not rely on the manufacture and sale of those products as evidence of genuine use of the Registered Mark.  Reliance is placed instead only on the products shown in the catalogue and photographs in “TTW-3”.  Yet none of those products has been encountered by anyone investigating on the plaintiffs’ behalves.  No receipt or invoice or indeed any commercial document has been produced by the defendant relating to such products.

27. Against this background, a close reading of Ms Tong’s evidence in paragraph 21 of her affirmation herein, quoted in paragraph 14 above, reveals that it is vague and equivocal.  It is not clear that the goods bearing the Registered Mark that PSRL and related entities have allegedly “always and up to now been selling and promoting” are the products bearing a metallic badge shown in the brochure in “TTW-3” or rather products made of fabric with a checked pattern said to be based on the Registered Mark.  If Ms Tong meant the latter, then it does not avail the defendant since Mr Leung has expressly disclaimed reliance on it.  If she meant the former, then for the reasons already stated I find it incredible.  In any event, the statement seems to me to be a bald assertion insufficient to discharge the defendant’s burden of proof.  It is unclear to whom and where the alleged sales had taken place.

28. I conclude therefore that the defendant has failed to show any genuine use of the Registered Mark on any goods after its registration.  The registration falls, therefore, to be revoked.  By reason of s 52(7) of the Ordinance, the rights of the defendant as owner cease as from the date of the plaintiffs’ application for revocation (ie 16 April 2014) or, if the court is satisfied that the grounds for revocation existed at an earlier date, that earlier date.  By reason of s 52(8), the 3-year period under s 52(2)(a) may begin at any time on or after the actual date on which particulars of the trade mark were entered in the register.  On the facts, therefore, the ground of non-use existed as at 29 November 2013 (being three years after registration of the Registered Mark). 

29. Accordingly I order that the registration of the Registered Mark for the specified goods be revoked pursuant to s 52(2)(a) of the Ordinance and that the rights of the defendant shall be deemed to have ceased to that extent as from 29 November 2013.

30. Mr Clark has confirmed at the hearing that if I decide to revoke the registration of the Registered Mark on Ground 1, the plaintiffs do not press for a declaration of invalidity on the other grounds. It is therefore unnecessary for me to deal with the other grounds relied on by the plaintiffs.

31. I also make an order nisi that the defendant do pay the plaintiffs the costs of these proceedings to be taxed if not agreed.

Registered Mark

Burberry Check