RE N.V. SUMATRA TOBACCO TRADING CO

HCIP 9/2020

[2023] HKCFI 285

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 9 OF 2020

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JUDGMENT

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1.  This is an appeal against the decision (“the Decision”) of the hearing officer for the Registrar of Trade Marks (“the Registrar”), Mr Frederick Wong (“the Hearing Officer”), dated 27 December 2019 whereby the Hearing Officer allowed the opposition by the Opponent for the registration of the subject mark.

BACKGROUND

2.  On 29 October 2007, the Applicant applied to register the mark “” (“the Subject Mark”) in Hong Kong in Class 34 in respect of “tobacco, cigarettes, cigarette paper, cigars, ashtray, lighters and matches” under Application No 300982350 (“the Subject Application”).

3.  The Opponent opposed the Subject Application.  The substantive hearing took place before the Hearing Officer on 26 and 27 September 2018, 4 and 7 January 2019, and 18, 22 and 25 March 2019.  Mr Chanderson (“Chanderson”), who was the then Coordinator of Sales and Marketing of Agricultural Products (formerly the International Marketing Manager) of the Applicant, was cross-examined at the hearing.

4.  Despite having pleaded a number of grounds in the Grounds of Opposition, the Opponent only relied on ss 12(4) and 63, 11(5)(a) and 12(5)(a), 12(3) and 11(5)(b) of the Trade Marks Ordinance, Cap 559 (“TMO”) at the hearing.

5.  On 27 December 2019, the Hearing Officer handed down the Decision.  He allowed the opposition under both ss 12(3) and 11(5)(b) of the TMO.  In light of such decision, the Hearing Officer did not find it necessary to consider the other grounds of opposition.  I refer the ss 12(3) and 11(5)(b) grounds as “the Likely Confusion Ground” and “the Bad Faith Ground” respectively.

6.  The Applicant now appeals against the Decision.

7.  By a letter dated 12 November 2020, the Registrar indicated that it did not intend to appear in this appeal upon the parties providing certain undertakings.  Both parties have duly provided the undertakings requested.

APPROACH OF THE COURT IN DEALING WITH APPEALS FROM THE REGISTRAR

8.  The approach to be adopted in considering an appeal from the Registrar have been set out by me in Monster Energy Co v. 洪嘉珮[1]. I do not intend to repeat the same principles here, and there is no dispute between the parties about these principles.

EVIDENCE ADDUCED BY THE PARTIES

9.  In the Decision, the Hearing Officer dealt with the Opponent’s evidence in §§8 to 21 which can be summarised as follows:

(i)  The Opponent is a wholly owned subsidiary of Shanghai Industrial Holdings Limited (“SIHL”) which is a listed company in Hong Kong.

(ii)  The controlling shareholder of SIHL is Shanghai Industrial Investments (Holdings) Co Limited which is a company incorporated by the Shanghai Municipal Government in the Mainland in 1981 as a window company in Hong Kong.

(iii)  The Jian brothers founded “Nanyang Brothers Tobacco Company Limited” (“the Old Nanyang”) in the Mainland in around 1905 to carry on the business of manufacturing, distributing and selling cigarettes principally through its Hong Kong branch.

(iv)  Pursuant to an assignment dated 1 January 1995, the business of Old Nanyang, together with its goodwill and trade mark rights, was transferred to the Opponent which was a Hong Kong company incorporated by the Shanghai Municipal Government in 1994 for the purposes of holding and continuing the Old Nanyang’s business.

(v)  he trades marks “DOUBLE HAPPINESS”, “囍” and “”   (collectively referred to as “the Opponent’s Double Happiness Marks”) were launched in Hong Kong by “the Opponent Tobacco Group” (referring to the Opponent and the Old Nanyang) in the first decade of the 20^th century.

(vi)  The Opponent claimed that, apart from the Opponent’s Double Happiness Marks, the Opponent Tobacco Group had also adopted other cigarette brands featuring different combinations of the Chinese characters “喜” including “大喜”, “三喜” and “四喜”, (collectively referred to as “the Happiness Trade Marks”) on the products in Hong Kong since the early 20^th century and had obtained trade mark registrations of these marks in Hong Kong, Macau, Philippines and Taiwan, etc.

(vii)  The Opponent’s Double Happiness Marks have become the most important brand of the Opponent Tobacco Group with substantial sales of the associated products.

(viii)  Products bearing the Opponent’s Double Happiness Marks and such marks have been advertised and promoted extensively in Hong Kong and elsewhere in the world.

(ix)  The Opponent alleged that the Applicant had all along been targeting the Opponent’s Double Happiness Marks in marketing its products and had applied for marks which were very similar if not identical to the Opponent’s Double Happiness Marks in other jurisdictions, all in Class 34 for cigarettes and related products.   The Applicant also had a track record of engaging in systemic piracy of trade marks.  I will deal with this part of the evidence in more details in the latter part of this Judgment under the Bad Faith Ground.

10.  The Hearing Officer then dealt with the evidence of the Applicant in §§22 to 30 of the Decision:

(i)  The Applicant was established in Indonesia in 1952 with one of its main businesses being manufacturing, marketing and sale of cigarettes and tobacco related products.

(ii)  According to the Applicant, it had gained international status and repute and become one of the largest manufacturers and traders in Indonesia.

(iii)  “JET”, “HERO”, “UNITED” and “PANDA” were amongst the trade marks under which the Applicant manufactured and produced its range of tobacco products.

(iv)  The Applicant claimed that the Subject Mark was independently coined by the Applicant by combining three Chinese characters together, all being the character “喜”, “thus giving the meaning of ‘tri happiness’.  The mark as a whole gives the public the impression and meaning of ‘triple good things’ or ‘triple happiness’ (prosperity, wisdom and longevity), which is particularly suitable amongst Chinese people and communities, and which was also why [the Applicant] created [the Subject Mark] in the first place.  The Applicant was not aware of any other trader using similar mark in the industry before”.

(v)  According to the market survey conducted by the Applicant’s agent, there are other “囍” brands of cigarettes marketed by different traders in Hong Kong.

11.  Since the Applicant had marketed cigarettes with the “double happiness” trade name and marks and registered the “double happiness” mark in Indonesia, Chanderson had been cross-examined as to how the Applicant came to use the “囍” logo which is very similar if not identical to the Opponent’s “囍” mark (“the 囍 Mark”).  He said the registration of the “囍” logo was done when he was still working in the research & design laboratory, that was before he was involved in marketing.  He did not know how that logo was being designed because that should have taken place before he joined the Applicant.  He was also cross-examined about the different packagings used by the Applicant at various times.

12.  The Hearing Officer dealt with the oral evidence given by Chanderson extensively in §§35 to 76 of the Decision.  According to the Opponent, the previous registration of the Double Happiness marks by the Applicant in some jurisdictions and the use of such marks on the Applicant’s products (which were only in Japan, South Korea, Vietnam and initially Russia) show that: (i) the Applicant had all along targeted the Opponent’s Double Happiness Marks; and (ii) the Subject Mark (the Tri-Happiness mark) was also derived from the Double Happiness marks.  However, Chanderson maintained that the development of the Tri-Happiness mark and the development of the Applicant’s Double-Happiness mark were separate matters.

13.  Yet the Hearing Officer found Chanderson to be an evasive and unreliable witness, in particular:

(i)  when he denied the resemblance of the Opponent’s cigarette packaging and the Applicant’s cigarette packaging as referred to in §60 of the Decision;

(ii)  when he could not give satisfactory explanation as to how the Applicant had developed the Double-Happiness packagings for its cigarette products in South Korea and Japan;

(iii)  when he could not give a satisfactory explanation as to how the concept of the 3 gods of "福 祿 壽" resulted in the final design of the Tri-Happiness mark;

(iv)  when he maintained that the development of the Tri-Happiness mark and the development of the Applicant’s Double-Happiness mark were separate matters;

(v)  when he could not explain why the words “紅雙喜” and “百年龍鳳” and the lantern device, which were used by the Opponent in the packagings of its tobacco products, also appeared in the packagings of the Applicant’s tobacco products launched in the Indonesian market; and

(vi)  when he on the one hand denied the distinctiveness of the character “囍” as a trade mark, and yet the Applicant lodged trade mark registration of such mark in several jurisdictions.

14.  As Chanderson’s evidence is mainly relevant in the consideration of the Bad Faith Ground, I will deal with his evidence in more details when I address such ground in the latter part of this Judgment.

APPEAL AGAINST THE FINDINGS ON THE LIKELY CONFUSION GROUND

15.  I first deal with the merits of the appeal against the Likely Confusion Ground.  But before I do so, I would try to summarise the findings of the Hearing Officer on such ground.

(i)  The findings of the Hearing Officer on the Likely Confusion Ground

16.  There is no dispute about the legal principles cited by the Hearing Officer in §§77-80, 83-84, 87-88, 90-92, 104-105 and 141 of the Decision relating to the factors that should be considered under the Likely Confusion Ground.

17.  In comparing the similarity of the marks and considering the question of likelihood of confusion, the Hearing Officer focused on the Opponent’s earlier registered marks “DOUBLE HAPPINESS”, “囍” and “” (“the Opponent’s Registered Marks”).  Out of these marks, the Hearing Officer found that the 囍 Mark is closest to the Subject Mark.[2]

18.  It should be noted that the Opponent’s Registered Marks are part of the Opponent’s Double Happiness Marks.  The latter term has been defined to include all the Double Happiness marks used by the Opponent Tobacco Group both before and after the registration of the Opponent’s Registered Marks.

19.  It is common ground that the subject goods applied for under the Subject Application are identical or similar to the goods covered by the Opponent’s Registered Marks.[3]

20.  The Hearing Officer found that the sign “囍”, being the only element of the 囍 Mark, is also the distinctive and dominant element of the whole mark.  For the Subject Mark, the Hearing Officer found that the Chinese character-like device of “” is the most distinctive and dominant element of the mark.  Though the English words “Tri Happiness” also appear in the composite mark, they are of much reduced prominence.  The Hearing Officer acknowledged that the English words cannot be regarded as totally negligible in the overall impression such that the assessment of similarity can be carried out solely on the basis of the dominant element.[4]

21.  For the visual comparsion of the 囍 Mark and the Subject Mark[5], the Hearing Officer observed that both marks are made up of components with each looks like the Chinese character “喜”. He found that both marks are similar to a high degree visuaully, given that they are 66.6% overlapped in their consitutent components if one is mathematically minded, irrespective of: (i) whether one takes the constituent components as being the Chinese character “喜”; or (ii) whether each of the “囍”and“”is a reconized or recognisable Chinese character, or one is whereas the other is not.  The inclusion of the English words in the Subject Mark does little to diminish the similarity, given its relative size and position.  Moreover, people would tend to ignore it due to the conception they have that “Tri Happiness” serves little purpose other than reinforcing that “” is made up of “three happiness”.

22.  For aural comparison[6], the Hearing Officer found that both marks share a medium level of aural similarity.  Most people would call them by reference to the number of “喜” they each possesses, namely “三喜” and “雙喜”.  In any event, the end parts of both marks are identical irrespective of the beginning parts, and to the Hearing Officer, the first parts, namely “三” and “雙”, sound a bit alike whether in Cantonese or in Putonghua especially when pronounced in haste.

23.  For conceptual comparison[7], the Hearing Officer found that there is a high degree of conceptual similarity between the marks, as both marks allude to the concept of “喜” or “happiness” by the constituent components which are reminiscent of the Chinese character “喜”, meaning “Happiness”.  People would perceive the central message of the marks as multiplicity or abundance of happiness.

24.  On the issue of the distinctiveness of the Opponent’s earlier marks (in particular the 囍 Mark) ^[8], the Hearing Officer did not find that the sign “囍” is descriptive of cigarettes and tobacco products.  He also observed that “the sign ‘囍’ had been used by more than one trader of cigarettes is not much different from the fact that it had also been used by traders of other types of products, say Chinese food stuff.  It merely shows that it is not a very distinctive sign, but it still has inherent distinctiveness to qualify as a trade mark.”[9] Nonetheless, given the laudatory nature of the sign “囍” and the fact that it has been used on a variety of items of daily life, the Hearing Officer held that its distinctiveness vis-à-vis the subject goods is not high.

25.  The Hearing Officer then examined the enhanced distinctiveness of the Opponent’s Double Happiness Marks (which include the Opponent’s Registered Marks) through use.[10]  The Hearing Officer traced the history of the use of the marks by the Opponent Tobacco Group. Further, in view of the substantial sale of the tobacco products using the Opponent’s Double Happiness Marks, the substantial promotion and advertising campaigns and the distribution networks of such products, the Hearing Officer found that the Opponent’s Double Happiness Marks (including the 囍 Mark) have acquired an enhanced degree of distinctive character through use, in particular the products bearing such marks are particularly welcomed by mature-aged customers including local Hong Kong customers, tourists and new emigrants from the Mainland.

26.  The Hearing Officer then considered the question of likelihood of confusion.  Given his findings of similarity at a visual, aural and conceptual level between the marks, a finding of similarity of the goods concerned (which is not disputed), and a finding of enhanced distinctiveness of the Opponent’s Double Happiness Marks, the Hearing Officer found that average consumers recognising the sign “囍” used in relation to cigarettes and tobacco products would upon seeing the Subject Mark being used on the same goods think that they come from the same or economically-linked undertakings as the Opponent’s.[11]

27.  The Hearing Officer then dealt with the 6 arguments advanced by the Applicant with a view to show that there is no risk of confusion:

(i)  The Applicant submitted that there is low level of similarity between the marks, as average consumers would more readily notice that the Chinese character in the Subject Mark is a unique and “invented” character.  The Hearing Officer rejected the argument repeating his findings on the comparison exercise.  He reinstated that people would normally visually perceive the mark as a whole and do not proceed to analyse its various details including its historical origin and linguistics.[12]

(ii)  The Applicant relied on brand loyalty of tobacco products to argue that there is no likelihood of confusion.  The Hearing Officer rejected the argument.  Given the high level of resemblance between the marks, average consumers may be misled to form the view that the Subject Mark originates from the same or linked undertakings, or makes a connection between the marks and confuses them.  Even if there is brand loyalty, consumers of the Opponent’s products may be willing to try the associated products carrying the Subject Mark.  Further, given the moderate aural similarity and the consumers may have to ask the shopkeepers in supermarkets and convenient stores to take the tobacco products from the shelves by names orally, brand loyalty does not help to obviate the possible confusion.[13]

(iii)  The Applicant relied on the co-existence of other “囍” brands of cigarettes in the market in Hong Kong for some time with a view to show that: (a) there is a low level of distinctiveness in the 囍 Mark; (ii) there is no risk of confusion in respect of the use of the Subject Mark in the market. The Hearing Officer stated that he had taken into account such factor in deciding the inherent distinctiveness of the 囍 Mark which is low.  Despite the co-existence of different traders using similar “囍” signs in their products, the Hearing Officer found that the Opponent’s Double Happiness Marks (including the 囍 Mark) have acquired an enhanced degree of distinctive character through use in Hong Kong.  Whilst some customers have been educated to distinguish the different double-happiness products in the market, that does not mean that average consumers would not confuse the Subject Mark with the Opponent’s Double Happiness Marks.  The Hearing Officer maintained that there is likelihood of confusion.[14]

(iv)  The Applicant contended that there is no evidence of any actual confusion, particularly in view of the co-existence of other traders using similar marks in the market.  However, the Hearing Officer held that likelihood of confusion (as opposed to actual confusion), which he found exists in the present case, is sufficient to establish opposition under the Likely Confusion Ground.  Further, there may be a lot of different reasons to explain the absence of reports of actual confusion, and so such factor cannot assist the Applicant’s case.[15]

(v)  The Applicant argued that the sign “囍” is evocative and very commonly used, and so small differences may suffice to avoid confusion. However, the Hearing Officer found that the Opponent’s Double Happiness Marks (including the 囍 Mark) have acquired high distinctiveness and so they should enjoy broader protection than marks with a less distinctive character.[16]

(vi)  The Applicant argued that there is no evidence to suggest that the Opponent Tobacco Group had used a family of the Happiness Trade Marks, and so the Opponent could not rely on the “family of marks” argument to oppose the Subject Application.  The Hearing Officer accepted such contention, but he did not see how this can advance the Applicant’s case in any meaningful way.[17]

28.  The Hearing Officer concluded by saying that: “given the strong similarity between the marks in issue, even though the inherent distinctiveness of the opponent’s sign‘囍’ is low it has been enhanced through historical long and extensive use nevertheless, I think there is high risk that consumers recognizing the opponent’s ‘囍’ used in relation to the cigarettes and tobacco products would upon seeing the subject mark being used on the same kind of goods think that they come from the same or economically-linked undertakings as the opponent’s.”[18]  The Hearing Officer therefore found in favour of the opposition under the Likely Confusion Ground.

(ii)  The Applicant’s grounds of challenge against the findings of the Hearing Officer on the Likely Confusion Ground

29.  Mr Yan, SC, counsel for the Applicant, attacks the Hearing Officer’s findings on the Likely Confusion Ground as follows:

(i)  The Hearing Officer had committed certain errors in comparing the similarity of the marks.

(ii)  The Hearing Officer had erred in his findings about the distinctiveness, both in term of inherent distinctiveness and enhanced distinctiveness, of the Opponent’s Double Happiness Marks.

(iii)  The Hearing Officer had erred in his finding about the likelihood of confusion resulting from the use of the Subject Mark.

30.  I will deal with each ground of challenge in turn.

(iii)  Comparison of the similarity of the marks

31.  Mr Yan submits that the Hearing Officer had committed the following errors in comparing the marks:

(i)     The Hearing Officer had ignored the English words “Tri Happiness” in the Subject Mark in the comparison exercise.  Further, he had wrongly taken into account the conceptual meaning of the English words when conducting visual comparison of the marks (which led to his ignoring of the English element).  His view that there is high degree of visual similarity between the marks must accordingly be erroneous.

(ii)    In coming to his finding that there is a high degree of visual similarity between the marks, the Hearing Officer had erroneously adopted an arithmetic approach and stated that there are “66.6 percent overlapped in their constituent components if one is mathematically minded”[19]. According to “MOVIDA” Trade Mark[20], assessing similarity between signs is rarely made on a simple matter of arithmetic, rather the comparison must be based on the overall impression given by the signs and their perception by the consumer.

(iii)   The Hearing Officer had erred in his finding that the marks share at least a medium level of aural similarity.  He found that the average consumer would naturally refer to the Subject Mark and the 囍 Mark aurally as “三喜” and “雙喜” or “喜喜” respectively.  He then held that “三” and “雙” “sound a bit alike whether in Cantonese or in Putonghua especially when pronounced in haste”[21]. However, “三” and “雙” do not sound alike whether in Cantonese or in Putonghua. The Hearing Officer had also failed to explain the basis on which he could, on one hand, ignore the English-speaking average consumer (who will undoubtedly pronounce the Subject Mark as “Tri Happiness”), and yet proceeded to consider the Putonghua-speaking average consumer on the other, in considering the aural similarity between the marks. In any event, having himself expressly found that the average public may pronounce the囍 Mark naturally as “喜喜”[22], the Hearing Officer completely failed to compare the marks aurally if they are pronounced as “三喜” and “喜喜” respectively.  Had he done so, “三喜” and “喜喜” cannot possibly be said to share a medium level of aural similarity (“三” and “喜” sound completely different, whether in Cantonese or in Putonghua).

(iv)   A newly-invented word has more inherent distinctive character than a common word, as it would be easier to lead the average consumer to associate it as coming from a particular undertaking.[23] The Hearing Officer failed to have sufficient or proper regard to the fact that the Subject Mark consists of an “invented” Chinese character (consisting of a character which looks like the Chinese character “喜” in triplicate and connected).  Coupled with the English element “Tri Happiness”, it is wrong to compare the 囍 Mark (which the Hearing Officer had correctly accepted as being a generally recognized representation of the character “喜”) with the Subject Mark by merely focusing on the Subject Mark being one consisting of three “喜”s and the 囍 Mark being one consisting of two “喜”s.[24]

(v)    The Hearing Officer had erred on conceptual comparison of the marks.  He proceeded on the sole basis that the Subject Mark consists of three “喜”s rather than an invented character.[25] Even then, the Hearing Officer had failed to have proper or sufficient regard to the difference in the idea of the marks: the 囍 Mark has the idea of “double” happiness whilst the Subject Mark has the idea of “triple” happiness.  Instead, the Hearing Officer had unduly focused on the concept of “happiness” alone.[26]  Given the descriptive and evocative meanings and common usage of the words “喜” and “囍”, the Hearing Officer ought to have focused more on the idea of “triplication” rather than “happiness”.  The Hearing Officer had also failed to address the principles set out in Ardath Tobacco Co Ltd v W Sandorides Ltd[27], in the sense that the Opponent is in effect seeking to establish a monopoly in the use of a mark involving repetition of “喜” by its earlier registration of the 囍 Mark.

32.  Mr Yan submits that, had the Hearing Officer not made the aforesaid errors, he ought to have come to the conclusion that the marks are not similar or that they are only similar to a low degree.

33.  Despite the able submissions of Mr Yan, I do not accept that the Hearing Officer had committed any errors in the comparison exercise.  As I have pointed out in Monster Energy Company v. 洪嘉珮[28], the nature of trade mark opposition proceedings involves considerable “multi-factorial comparison” and “value judgments”, and the court should “guard against substituting the Registrar’s evaluation of these matters with its own evaluation.”

34.  First, the Hearing Officer had not ignored the English words “Tri Happiness” in comparing the marks.  In examining the Subject Mark which is a composite mark, the Hearing Officer stated that the English words, while much more reduced in prominence compared to the other element, cannot be regarded as totally negligible in the overall impression to be formed of the mark.^[29]  The Hearing Officer was entitled to look at the actual circumstances of the present case, including the positioning and size of the English words, in considering visual similarity and its visual effect as perceived by the average consumer that impacts on the degree of  similarity.  The Hearing Officer was clearly cautious in not neglecting the words “Tri Happiness” in the comparison exercise.  Yet, he was entitled to regard the dominant elements of the marks as being critical in the overall evaluation.^[30]

35.  In assessing similarity of the marks, the tribunal is to consider if there are any striking features of the mark or sign which appear “essential” or “dominant”, but must not disregard the entirety of the mark or sign or stripping it of its context.[31]

36.  That was precisely what was done by the Hearing Officer.   He started by duly acknowledging the presence of the English words, which he did not neglect but gave it the recognition that was due when the mark was taken as a whole.^[32] He then proceeded to compare the various aspects of the two marks by examining the dominant element of the Subject Mark against the 囍 Mark, taking into account the contentions of the Applicant^[33], and came to the view that there is a high degree of similarity between the two.  The Hearing Officer, having expressly considered the effect of the presence of the English words, concluded that the inclusion of the “Tri Happiness” English words in the Subject Mark does little to diminish the visual similarity between the contending marks.[34]  The Hearing Officer gave a number of reasons, one of them being the relative size and position of the English words.  Indeed, the two English words “Tri Happiness” are presented in hardly legible size compared with the graphic element of  in the Subject Mark, and conveniently mirrors “Double Happiness”, the English equivalent of the Opponent’s mark.

37.  The Applicant complains that the Hearing Officer ignored the English element when considering visual similarity, but “erroneously tainted” the consideration of visual similarity by allowing consideration of conceptual similarity to creep in. However, I agree with Ms Tam, SC, counsel for the Opponent, that such criticism is unfair and too pedantic.

38.  The Hearing Officer discussed the visual impact of “Tri Happiness” in §95 of the Decision.  While the paragraph is placed under the heading of “Comparison of Marks”, this is a paragraph that immediately precedes the section “Visual Similarity”, which starts at §97.   The Applicant’s submissions not only require the court to ignore §95 but also the first sentence of §101, where the “relative size and position” of the English words were again raised as the primary reason of why in the judgment of the Hearing Officer the English words would likely be ignored.

39.  The Hearing Officer cannot be faulted for evaluating the visual impact with the nature and effect of the English words in mind.  This is because the mark is to be perceived through the eyes of the average consumer, who sees the English words not as random shapes, but words with discernible meaning.[35]  It was therefore permissible for the Hearing Officer to evaluate the visual similarity from the perspective the average consumer, i.e. that they would view the English words of “Tri Happiness” as serving little purpose.

40.  I also agree with Ms Tam that, even if the additional remark from “Moreover…” were removed from §101 of the Decision, it would not have changed the conclusion on visual similarity.  Again, because of the extremely low level of prominence of the English element, and the meaning of the phrase in the context of the mark as a whole, its absence from §103 (under Conceptual Similarity) would not have changed the conclusion on conceptual similarity.

41.  Indeed, the approach suggested by the Applicant is highly pedantic when the global appreciation test requires various aspects of similarity to be weighed one with another. While typically, tribunals consider each in turn before reaching an overall conclusion and evaluation, trade-offs can occur: visual and conceptual differences can offset aural similarities.[36]  The approach suggested by Mr Yan simply ignores the overriding principle that the comparison must be based on the overall impression given by the marks and their perception by the consumers.

42.  Second, the Applicant picks on the use of the expression of “66.6% overlapped” by the Hearing Officer as his alternative way of expressing the degree of visual similarity, and submits that by doing so, he was in error “both in law and in fact”, the latter by ignoring the presence of the words “Tri Happiness” as part of the Subject Mark.

43.  However, the phrase under objection should be put properly in its context.  Having come to the view that the “ ” element is the “most distinctive and dominant element” in the Subject Mark[37], the Hearing Officer was entitled to compare that element with the 囍 Mark first[38], before revisiting the other visually insignificant elements to assess their overall impact on the question of visual similarity, if any[39].  Hence, in §100 of the Decision, he was expressly comparing the dominant element “ ” with the 囍Mark.  As one is the two-time replication, and the other a three-time replication of what the Hearing Officer perceived as the same pictorial element^[40], his expression cannot be faulted as an error of fact.  As a matter of law, the criticism is likewise unfair.  The Hearing Officer did precede the phrase with the statement that the comparison yields “similarity to a high degree visually”, andhe did go on in the next paragraph to consider and conclude that the presence of the English words does nothing to diminish the visual similarity, a conclusion which he was fully entitled to reach. Put in its context, the reference to “66.6%” has factual basis and does not detract from the finding of “high degree of similarity”.

44.  Ms Tam has referred me to two authorities: (i) La Mer Technology Inc. v. OHIM[41], in which the Court of First Instance of the European Communities (“ECCFI”)(Fifth Chamber) compared the visual similarity quantitatively by counting the exact number of syllables in the two signs; and (ii) Durferrit GmbH v. OHIM[42], in which the ECCFI (Fourth Chamber) took into account the exact number of letters in evaluating visual similarity.  I agree with Ms Tam that converting numbers to percentage in a comparison is just a matter of computation and expression.  There can be no logical taboo against it, as long as the tribunal does not lose sight of the “overall impression” of the marks on the consumers.

45.  Neither can the case of “MOVIDA” Trade Mark^[43] assist the Applicant’s argument.  In that case, the 2^nd Board of Appeal of OHIM upheld the decision of the Opposition Division that “GEODAN MOVIDA” was confusingly similar to “MOVIDA”.  The applicant’s submission based on counting of syllables and letters to conclude that the two marks were dissimilar was rejected.[44]  The Board stated that the comparison should be made on global appreciation of the visual, aural and conceptual similarity of the marks in question based on the overall impression given by the marks and their perception by the consumer.  In this regard, the Hearing Officer in the present case did consider all aspects of visual, aural, and conceptual similarities and all relevant circumstances in his Decision, and he made no error in the comparison exercise.

46.  Third, the Applicant argues that “三” and “雙” do not sound similar in Cantonese and Putonghua, but I am of the view that the Hearing Officer was entitled to make his “value judgment” relating to the aural similarity between the marks.

47.  As pointed out by Ms Tam, the two Chinese characters, “三” and “雙”, bear the same opening sound or initials (聲母) “s” followed by a similar vowel sound “a” or “e”, and are pronounced in the same tone (聲調): the 1^st tone (第一聲).  They are therefore aurally similar, especially when pronounced in haste as observed by the Hearing Officer at §102 of the Decision.  I agree with Ms Tam that that was a conclusion the Hearing Officer was entitled to come to with his knowledge of how these words would be pronounced by the type of consumers who may speak or hear the speaking of the mark.  The Applicant has not demonstrated any distinct or material error in the Hearing Officer reaching the conclusion that the two marks share at least a “medium level of aural similarity”.

48.  The Applicant also seeks to argue that the Hearing Officer erred in failing to compare the marks aurally in the event “” is pronounced as “三喜” and “囍”as “喜喜”.   I agree with Ms Tam that this is irrelevant, as the Hearing Officer found that the average consumer would also pronounce the 囍 Mark as “雙喜”.  In any event, since the dominant component of the Subject Mark is “”, and only “喜” and “囍” are recognisable Chinese characters, it is likely that consumers would just pronounce the Subject Mark as  “喜” or “囍”.  As such, there is a high degree of aural similarity between the Subject Mark and the 囍 Mark in Cantonese.

49.  On the issue of aural comparison, the Applicant further argues that the Hearing Officer failed to explain the basis on which he could ignore the English-speaking average consumers.  However, since there would be at least a medium level of aural similarity in Cantonese and Putonghua, this would be irrelevant as Cantonese and Putonghua are most commonly used languages in Hong Kong.  In any event, there is also aural similarity in English when the average consumer pronounces “Tri Happiness” and “Double Happiness”, as the word “Happiness” is identical in the two signs.  As pointed out in the case of “MOVIDA” Trade Mark[45], “[two] signs are similar when they are at least partially identical in one or more relevant aspects”.

50.  Fourth, the Applicant contends that the Subject Mark should be viewed as an “invented Chinese word” and not as a predominantly graphic symbol comprising a repetition of a graphic element.  However, the Hearing Officer did give due consideration to the Applicant’s submission in this regard and explained why this “invented word” concept does not assist the Applicant.[46] The Hearing Officer was entitled to make such evaluation and there is no room for interference by the appellate court.  More importantly, this graphic element is extracted from the graphic element that is doubled up to make up the now-accepted Chinese character “囍” and dubbed “紅雙喜”.

51.  Fifth, on the issue of conceptual comparison, the Applicant argues that the Hearing Officer had unduly focused on the concept of “happiness”, failing to give sufficient regard to the concept of “triplication”.  I again have to disagree.  The conceptual comparison involves an evaluation on the part of the Hearing Officer.  He did give sufficient regard to the difference in number of “喜” in the “囍” Mark and the Subject Mark, only to conclude that the central message of the respective marks is multiplicity or abundance of happiness, instead of the exact number of “喜”.[47]  This is a finding that the Hearing Officer was entitled to make.  Indeed, the 囍 Mark predominantly displays the Chinese character “喜” and repetitions thereof, having the meaning of abundance of happiness.  The Opponent’s earlier English mark “DOUBLE HAPPINESS” also shows the conceptual meaning of a multiplicity of happiness.  Similarly, the Subject Mark conceptually embodies the meaning of multiplicity of happiness by laterally positioning 3 “喜” elements leaving the beholder of the mark to read the image as 3 repeated elements, or as combined elements of “喜” and “囍” or “囍” and “囍”. Conceptually, the Subject Mark must be identical to the Opponent’s earlier marks, including the 囍 Mark, the “DOUBLE HAPPINESS” English mark,   , , , ,  .

52.  For these reasons, I do not accept that the Hearing Officer had committed any errors in comparing the marks whether as alleged or at all.

(iv)  Distinctiveness of the Opponent’s earlier marks

53.  I then turn to the second line of attack which focuses on the Hearing Officer’s findings on the distinctiveness of the Opponent’s earlier marks which include the Opponent’s Double Happiness Marks and the Opponent’s Registered Marks.

54.  According to Mr Yan, the evidence of the case shows that the “囍” sign has been used by different entities as part of their trade marks in relation to cigarettes and tobacco products for a lengthy period of time in Hong Kong:

(i)     A third party tobacco company, China Tobacco Guangdong Industrial Co Ltd (“China Tobacco”), has been marketing in Hong Kong cigarettes under the mark “囍” or mark incorporating the character “囍” for the past decades.  Such cigarettes of China Tobacco have been co-existing in the market with the Opponent’s cigarettes, and in some cases both being available at the same retail outlets, for up to 25 years.

(ii)    Another tobacco company, Shanghai Tobacco (Group) Corporation (“Shanghai Tobacco”), has also marketed in Hong Kong cigarettes bearing the mark “囍” or mark incorporating the character “囍” since the 1990s.

55.  Mr Yan submits that, in assessing both the inherent distinctiveness and the enhanced distinctiveness of the Opponent’s earlier marks, the Hearing Officer had failed to take this into account, or had failed to have sufficient or proper regard,of the co-existence of such different “囍” brands of cigarettes in the market for such lengthy period of time.  In particular, when the Hearing Officer dealt with this particular issue, he was wrong to say that the use of the marks by different traders “is not much different from the fact that it had also been used by traders of other types of products, say Chinese food stuff”[48].  Inherent distinctiveness should only be assessed by reference to the goods and services in question and not by reference to other types of goods.

56.  According to Mr Yan, since the very definition of a trade mark is that it is “sign which is capable of distinguishing the goods or services of one undertaking from those of other undertakings”[49], in determining the inherent distinctiveness of a mark, it is necessary to make an assessment of the greater or lesser capacity of the mark to identify the goods or services for which it has been registered as coming from a particular undertaking, and so to distinguish those goods or services from those of other undertakings.  Mr Yan submits that the 囍 Mark lacks such quality as a trade mark.

57.  I cannot agree with Mr Yan’s submissions.

58.  First, Ms Tam’s initial observations on the issue of distinctiveness are valid ones:

(i)  One should not overlook the relevance of distinctiveness in these proceedings: it is not an action to invalidate the Opponent’s Registered Marks, and therefore validity of the Opponent’s Registered Marks is presumed.  Distinctiveness of these marks, in particular the 囍Mark, comes into play when considering likelihood of confusion: the more distinctive an earlier mark, the greater will be the likelihood of confusion.  The upshot of this is that distinctiveness of the Opponent’s earlier marks is one of the many considerations in the global appreciation and multi-factorial assessment of likelihood of confusion.  Therefore, a different conclusion on distinctiveness of the Opponent’s earlier marks would not necessarily alter the conclusion that a likelihood of confusion exists between the Subject Mark and the earlier marks.  In other words, there can still be likelihood of confusion between a sign and a not so distinctive earlier mark.  Hence, even if the earlier marks’ distinctiveness is lower than that the Hearing Officer had found, the other considerations would still outweigh this one factor and still lead to the same conclusion on likelihood of confusion.

(ii)  The Hearing Officer held that inherent distinctiveness of the 囍 Mark vis-à-vis the subject goods “cannot be said to be high” or “could be said to be low”.[50]  Therefore, the complaint by the Applicant on the alleged errors made by the Hearing Officer in relation to inherent distinctiveness cannot take its case any further.

59.  On the issue of the inherent distinctiveness of the 囍 Mark, the Hearing Officer rightly found that, even though the word “囍” may be generic or descriptive to some products (such as wedding products), it should not be regarded as having any descriptive properties in relation to tobacco or cigarettes.  Just as “Apple” is descriptive of apple the fruit, it is not descriptive of computers and jeans.^[51] Given the laudatory nature of the “囍”  sign and that it has been used by different traders in the Hong Kong market, the Hearing Officer found that the inherent distinctiveness cannot be said to be high.  Nevertheless, he held that it “still has inherent distinctiveness to qualify as a trade mark.”  The analysis shows that the Hearing Office has correctly identified the nature of trade mark as stated in s 3(1) of the TMO, and there is no room for the appellate court to disturb such evaluation made by the Hearing Officer.

60.  In challenging the finding of the Hearing Officer that the Opponent’s Double Happiness Marks (including the 囍Mark) have acquired enhanced distinctiveness through use, the Applicant complains that the Hearing Officer had failed to take into account the co-existence of the cigarettes of China Tobacco and Shanghai Tobacco in making such finding.

61.  Mr Yan submits that enhanced distinctiveness can only be established “if a significant proportion of the relevant class of persons perceives the relevant goods or services as originating from a particular undertaking”.   With 3 different undertakings making use of the mark “囍” on and in relation to cigarettes, it is fundamentally implausible, indeed even impossible, that a significant proportion of consumers of cigarette products would perceive cigarettes sold under the mark “囍” originate from only one undertaking, i.e. the Opponent.  The Hearing Officer did not explain why average consumer would more readily perceive cigarettes bearing the mark “囍” as originating from the Opponent but not other traders.

62.  Further, when considering whether the distinctiveness of the 囍Mark has been enhanced, the Hearing Officer erred by confusing the 囍Mark with the Opponent’s Double Happiness Marks which is defined in §12 of the Decision as denoting the marks “DOUBLE HAPPINESS”, “囍” and “紅雙喜”.  Such confusion is material because the 囍Mark was often used in conjunction with the other Opponent’s Double Happiness Marks including “紅雙喜”, and the evidence adduced by the Opponent does not necessarily support the enhanced use of the 囍Mark per se which is the main subject for the comparison exercise.  Finally, Mr Yan argues that in considering the question of enhanced distinctiveness through use, the Hearing Officer had failed to have regard to his earlier finding that the inherent distinctiveness of the 囍 Mark is not high.

63.  Again I have to reject Mr Yan’s submissions.

64.  Given his own finding that inherent distinctiveness of the 囍Mark is low but not non-existent, the Hearing Officer had carefully considered the evidence in the present case and concluded that “in particular, the ways in which any of the [Opponent’s] various marks have been presented to and likely seen by the public”, the Opponent’s “Double Happiness Signs have acquired an enhanced degree of distinctive character through use”.[52]

65.  In §130 of the Decision, the Hearing Officer made it clear that in the overall assessment of inherent distinctiveness and enhanced distinctiveness, he had “already given due and sufficient consideration to the fact of co-existence of different traders all using the same sign ‘囍’ in their products”.  Further, the Hearing Officer elaborated on the analysis of inherent distinctiveness, acquired distinctiveness, and the concept of distinctiveness as a whole at §§104-112 of the Decision under the heading of “Distinctiveness of the Respondent’s marks”.  In discussing acquired distinctiveness, the Hearing Officer made it clear that he had considered the evidence set out at §§8-21 of the Decision, which includes the three statutory declarations filed by the Opponent.  That would include the Opponent’s evidence mentioned above, such as that cigarettes bearing the Opponent’s Double Happiness Marks have the longest history of sale in Hong Kong and the extent of sale and marketing is much more significant than that of China Tobacco and Shanghai Tobacco, and that no actions had been taken against Shanghai Tobacco (which is a licensee) and China Tobacco (because of internal considerations).

66.  Though China Tobacco and Shanghai Tobacco also marketed in Hong Kong cigarettes bearing the mark “囍”, it is the Opponent’s evidence that these products are available for sale in Hong Kong restrictively in small quantities only^[53], whereas the Opponent’s products bearing the Opponent’s Double Happiness Marks have the longest history of sale in Hong Kong and the extent of sale and marketing is much more significant than that of China Tobacco and Shanghai Tobacco.^[54]  Further, there is also nothing to show that the other traders had made any or any significant effort to promote their products or their “囍” marks.  The Hearing Officer was therefore fully entitled to find that the Opponent’s Double Happiness Marks including the 囍 Mark have acquired an enhanced degree of distinctiveness in Hong Kong if not elsewhere.

67.  In fact, the 囍 Mark has always been used, and has been predominantly displayed in the centre of the Opponent’s double happiness cigarette packagings since at least 1966.  Hence, the Hearing Officer was entitled to make an evaluation that upon “the ways in which any of the [Opponent’s] various marks have been presented to and likely seen by the public”[55], the 囍 Mark by itself must have acquired enhanced distinctiveness.

68.  This finding is in line, a fortiori, with the English Court of Appeal decision in Société des Produits Nestlé SA v. Cadbury UK Ltd (“KitKat”), where Floyd LJ concluded at §102 as follows:

“The test for whether a mark which has no inherent distinctiveness has nevertheless acquired a distinctive character must now be regarded as settled. It is that a significant proportion of the relevant class of consumers perceive goods designated by the mark applied for as originating from a particular undertaking. … But there is no requirement that the use should be of the mark on its own: the use may be in conjunction with another mark or marks.”

69.  The above proposition is further supported by the earlier decision in Société des Produits Nestlé SA v. Mars UK Ltd[56], in which the court held that the “distinctive character of a mark could be acquired in consequence of the use of that mark as part of or in conjunction with a registered trade mark”.

70.  It is most often that more than one marks are used together to market a particular product, for example the word “Apple” is often used together with the “Apple” logo in marketing the computer products. In these scenarios, the court or tribunal may be asked to make a determination of the enhanced distinctiveness of one particular mark despite its use with other marks, and the judge or hearing officer would then have to make an evaluation based on the evidence.

71.  In light of the Opponent’s evidence of the lengthy and very substantial use of the Opponent’s Double Happiness Marks including the 囍 Mark, compared with the insignificant market share and short history of the varied use of “囍” logos by China Tobacco and Shanghai Tobacco, the Hearing Officer was entitled to consider it likely that a significant proportion of the relevant class of consumers would perceive cigarettes designated by “囍”, which was predominantly displayed in the centre of the packagings of the Opponent’s products for a lengthy period of time, as originating from the Opponent in particular.  There is no room for the appellate court to interfere with such evaluation made by the Hearing Officer.

(v)  Likelihood of confusion

72.  Mr Yan’s third ground of attack relates to the Hearing Officer’s finding on likelihood of confusion.  The Hearing Officer, in assessing the likelihood of confusion, had inevitably relied on his analysis on the comparison of the marks and the alleged inherent and enhanced distinctiveness of the 囍 Mark.  Mr Yan submits that, since the Hearing Officer had committed the errors as mentioned above, his finding on the likelihood of confusion must be tainted and faulty.

73.  Further, Mr Yan argues that the Hearing Officer had made the following errors in making the assessment on likelihood of confusion:

(i)  The Hearing Officer erred in not properly taking into account the co-existence of other “囍” brands of cigarettes in Hong Kong for decades when considering the question of likelihood of confusion.  According to the authorities[57], the fact that there existed other entities using the same or similar marks in the market for a long time is a factor which may considerably assist the Applicant, and this is one of the factors which the Hearing Officer was required to take into account when considering the question of likelihood of confusion. Further, there is no evidence of any confusion or association, whether direct or indirect, between the Opponent’s goods and those of China Tobacco and Shanghai Tobacco.  Under such circumstances, consumers of cigarettes have become accustomed to distinguishing, and being able to distinguish, between cigarettes from 3 different undertakings all using the mark “囍”. If a totally different brand of cigarettes marketed and sold under the Subject Mark were to be launched in the market, such consumers (who are generally very attentive and brand loyal) must also be able to distinguish between the Applicant’s cigarettes marketed and sold under the Subject Mark and those of the Opponent marketed and sold under the 囍Mark.

(ii)  The Hearing Officer erred in failing to take into account, or have sufficient or proper regard to the fact that the respective packagings of the Applicant’s and the Opponent’s products are unlikely to be similar.

(iii)  Having rejected the Opponent’s “family of marks” argument, there is simply no sufficient basis for the Hearing Officer to find that the average consumer would consider cigarettes bearing the Subject Mark to be an associated product of the Opponent’s cigarettes, in particular in view of the brand loyalty of consumers of tobacco products.

(iv)  In holding that brand loyalty may not be able to obviate possible confusion, the Hearing Officer had failed to consider the fact that consumers would be able to see the products handed to them by shopkeepers in supermarkets and convenient stores. In particular, purchasers of tobacco products are generally very attentive and brand loyal, and the level of attention of such consumers is deemed to be high.

74.  Since I do not accept that the Hearing Officer had made any errors in comparing the marks or assessing the distinctiveness of the marks, the first ground of challenge fails.

75.  It is also wrong for Mr Yan to say that the Hearing Officer erred in failing to consider the co-existence of the two other products when evaluating likelihood of confusion.

76.  In §129 of the Decision, the Hearing Officer correctly identified the Applicant’s submission on the impact of the co-existence of “囍” cigarettes being two-fold: (i)the 囍 Mark having a low level of distinctiveness; and (ii)the unlikelihood of confusion because the average consumers have been accustomed to the “囍” signs used by different traders in the same market.  The Hearing Officer then dealt with these two points one by one.  At §130, the Hearing Officer first addressed the distinctiveness issue.  As discussed above[58], the Hearing Officer took into account the co-existence of other “囍” signs in evaluating both inherent distinctiveness and acquired distinctiveness of the Opponent’s earlier marks.  Thereafter at §§131-132, the Hearing Officer addressed the second point in relation to unlikelihood of confusion.  The Hearing Officer found that, though the public may have been educated to distinguish the different “囍” products in the market, average consumers would still confuse the Subject Mark with the Opponent’s Double Happiness Marks including the 囍 Mark.  Given the evidence on the substantial sale of the Opponent’s products bearing the Opponent’s Double Happiness Marks, the wide distribution of its products and the substantial costs involved in promoting its products, the Hearing Officer was entitled to make such evaluation.

77.  The Applicant rehashes its argument advanced before the Hearing Officer that there is an absence of evidence of confusion or association despite the co-existence of other “囍” brands of cigarettes.  However, the Hearing Officer had properly considered and discussed this argument and rightly rejected it.[59]

78.  The Applicant argues that the Hearing Officer erred in failing to take into account the fact that the respective packagings of the Applicant’s and the Opponent’s products are unlikely to be similar.  However, it is trite that, in considering likelihood of confusion, the court looks only at the conflicting marks and signs in question, but not other matters such as the packagings, and one cannot deny confusion by showing that by something outside the sign itself it has distinguished its goods or services from those of the registered proprietor.[60]

79.  The Applicant also argues that, in rejecting the “family of marks” argument, there is no basis to find that the average consumer would consider cigarettes bearing the Subject Mark to be associated products of the Opponent.  This cannot be right.

80.  It is well-established that the following two types of association would give rise to a likelihood of direct or indirect confusion for the purposes of infringement:[61]

(i)  where the public confuses the sign and the mark in question (i.e. likelihood of direct confusion); and

(ii)  where the public makes a connection between the proprietors of the sign and those of the mark and confuses them (i.e. likelihood of indirect confusion and association).  This would include where a person incorrectly assumes that there is some broader kind of economic connection between the users of marks, for example that the goods are being authorised or provided by a subsidiary or licensee of the trade mark owner.

81.  The existence of a “family of mark” has never been a pre-condition of finding indirect confusion and association.  The existence of a “family of marks”, as submitted by the Opponent before the Hearing Officer, simply enables the marks to reinforce each other and gain a broader scope of protection than what each individual mark may gain.  In rejecting the “family of marks” argument, the Opponent cannot rely on such “broader scope of protection”, but it does not follow that the Subject Mark cannot lead to indirect confusion.  There is therefore no basis in such challenge.

82.  Finally, The Applicant complains that the Hearing Officer failed to give sufficient regard to brand loyalty of consumers of cigarettes.  The argument of brand loyalty is again another point made before and duly considered by the Hearing Officer.  He dedicated a section titled “Brand loyalty of tobacco products” on the subject.[62]   The Hearing Officer did accept that brand loyalty does exist in respect of cigarettes which may also lead to high level of attentiveness, but cautiously guarded against accepting it as a sweeping statement of law by emphasising that “how it plays out in the real life situation like the present one is another matter”. In applying the correct legal principles on indirect confusion and association and the emphasis on aural similarity, the Hearing Officer was entitled to make an evaluation that brand loyalty does not assist the Applicant.

83.  For these reasons, I do not accept that the Hearing Officer had made any errors in his evaluation about likelihood of confusion.

(vi)  The claim that the Opponent is seeking a monopoly in the use of a mark with repetition of the character “喜”

84.  The Applicant also seeks to rely on Ardath Tobacco Co Ltd v W Sandorides Ltd^[63], “7 Device” Trade Mark[64] and “AA” Trade Mark[65] to argue that the Opponent is in effect seeking to gain a monopoly in the use of a mark in the repetition of “喜”.  However, one has to view the dicta in these cases with some caution.

85.  In Ardath Tobacco[66], the court held that the registered trade mark “999” was not infringed or passed-off by the use of the mark “99”.  There was evidence of provenance of “99” mark: as inverted “66” which was used by the appellant.  The numbers 99 and 999 may very well bear very different meanings, as they are different numbers indeed.  In the present case, the repeated element, whether standing alone, doubled or tripled, communicates the same general meaning of an abundance of happiness.  The fact that “” is an alleged made-up character does not change that fact.

86.  Further, one of the decisive facts in that decision was that the plaintiff’s cigarettes were usually asked for as “State Express” cigarettes with a reference to the number “999”.  There was no short term without any reference to “State Express” by which those cigarettes were generally known to the public.  It followed that likelihood of confusion at the point of sale was non-existent, and the claim failed on that point alone.  Another decisive fact was that neither the figures “99” nor the words “double nine” were ever used or claimed to have been used by the defendant company except in conjunction with the word “Lucana” and with the name of the defendant company, for the purpose of indicating a cheap Turkish cigarette made up in packets or boxes.  Hence, the facts in Ardath Tobacco are very different and such case is of limited assistance here.

87.  Neither can the cases of “7 Device” Trade Mark^[67] and “AA” Trade Mark^[68] assist the Applicant.  The marks were not similar in those cases and, unlike the character “喜” in the present case, numerals do not revert to a particular concept.  These decisions are therefore confined to their facts and the nature of the contending marks, and no general principles can be distilled that is applicable to the present case.

88.  As the Hearing Officer was entitled to make his evaluation in respect of the similarity of the marks, the respective distinctiveness of the marks and the risk of likelihood of confusion arising from the use of the Subject Mark, there is no room for interference by the appellate court.  In fact, the Applicant has simply repeated the submissions it made before the Hearing Officer, and I agree with Ms Tam that the Hearing Officer did give sufficient and proper regard to all of these points and reached a correct conclusion.

APPEAL AGAINST THE FINDING OF BAD FAITH

89.  I then turn to the appeal under the Bad Faith Ground.  But before I do so, I will first try to summarise the findings of the Hearing Officer on such ground.

(i)  The findings of the Hearing Officer on the Bad Faith Ground

90.  In §154 of the Decision, the Hearing Officer understood that the Opponent’s case on bad faith was premised upon the allegation that the Applicant engaged in “copying” or “trade mark squatting” of the Opponent’s marks in devising the Subject Mark.  Hence, the Hearing Officer considered Chanderson’s evidence and determined whether the allegation that the Applicant had regard to the Opponent’s marks in the process of devising the Subject Mark could stand.

91.  According to Chanderson, the creation of the Subject Mark commenced with the Branding Team which comprised personnel from International Marketing Department, Legal Department and Creative Designer. After a few meetings in the brainstorming sessions, they got the idea of creating a brand that contained 3 elements to reflect the 3 gods, namely “福祿壽” (prosperity, wisdom and longevity).  That idea was passed to the Creative Designer to create the very symbol that reflected the 3 gods.  The Creative Designer then came back with a logo that did not expressly mention “福祿壽”, instead it was a unitary symbol with 3 Chinese characters “喜” as element.  The explanation for such a design was that the idea of the 3 gods would all lead to happiness in the end, and so each happiness was represented by a “喜” element.

92.  However, the Applicant also started to develop the Double-Happiness mark at around the same time in 2006, and Chanderson had been cross-examined extensively as to the relationship between the development of these two marks, i.e. the Tri-Happiness mark and the Double Happiness mark. Chanderson insisted that they were two separate matters.  In 2006, the development of the Tri-Happiness mark was only at the initial discussion stage with the final result of creation of the mark in 2007, whereas the Double-Happiness mark was finalised and launched in South Korea and Japan in 2006.

93.  Despite such explanation, the evidence shows that the Applicant had been using the Double-Happiness mark much earlier: both in the packagings of the Applicant’s tobacco products and the trade mark registrations in Indonesia in 1990 and 1996 and the trade mark registration in Korea in 1991.  The Hearing Officer found that the earlier packagings of the Applicant’s Double-Happiness tobacco products were directly derived from the Opponent’s packagings (in particular with the same colour tone and similar get-ups), and the Applicant was targeting the Opponent’s Double Happiness Marks in making the trade mark registrations of the Applicant’s Double-Happiness marks.  The Hearing Officer noted that the registrations of the Applicant’s earlier Double-Happiness marks or packagings might not amount to bad faith or were in breach of the intellectual property law in Indonesia at that time, but he found the act of targeting as a matter of fact.

94.  The Hearing Officer rejected the alleged explanation of the designer of the Subject Mark, which had not been called to give evidence, that he made no reference to the Applicant’s earlier Double-Happiness logo in devising the Subject Mark.  As mentioned above[69], the Hearing Officer found Chanderson to be an evasive witness.  He was not able to give any coherent explanation on a number of issues including the idea and the creation of the Subject Mark, in particular how the design and idea of the Subject Mark were so close to those of the Double Happiness logo that the Applicant had registered and used in Indonesia, South Korea and Japan in the early 1990s, which, the Hearing Officer found as a fact, had derived from the Opponent’s earlier marks and packagings.

95.  The Hearing Officer then posed the question: “in the light of the knowledge the Applicant had in 2007 in respect of the Opponent’s Double-Happiness [Marks], did the Applicant’s conduct in filing [the Subject Application] fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the tobacco industry in Hong Kong?”

96.  The Hearing Officer answered the question in the affirmative.  The Applicant had all along been targeting the Opponent’s “囍” sign, adopting and carrying out various strategies and acts in various jurisdictions including Hong Kong.  Given the strong similarity with the Subject Mark, there is high risk that consumers recognising the 囍 Mark in relation to cigarettes and tobacco products would upon seeing the Subject Mark being used on the same kind of goods think that they come from the same or economically-linked undertakings as the Opponent’s. Such a risk was what the Applicant had in mind when it made the Subject Application, and how that would have affected or benefitted the Applicant was not something that the Hearing Officer was concerned about. The Hearing Officer emphasised that, even if the opposition based on the Likely Confusion Ground were not made out, he would still find in favour of the Opponent on the Bad Faith Ground because that finding was based on the intention on the part of the Applicant in causing confusing similarity between the marks in issue.

(ii)  The Applicant’s grounds of appeal against the finding of bad faith

97.  The Applicant appeals against the Hearing Officer’s finding on bad faith on three grounds:

(i)  The Opponent’s case on bad faith is premised on the alleged similarity between the Opponent’s Double Happiness Marks (in particular the 囍 Mark) and the Subject Mark, and so the Opponent’s case on bad faith must fall away when the marks are not confusingly similar.

(ii)  The Hearing Officer had made errors when he found that: (a) the “provenance” of the Subject Mark can be traced back to the Opponent’s Double Happiness Marks (i.e. the Subject Mark was “derived” from the Opponent’s Double Happiness Marks); and (b) the Applicant had a track record of engaging in systemic piracy of trade marks.

(iii)  The Hearing Officer had misapprehended the evidence of Chanderson.

98.  I will deal with each of these grounds in turn.

(iii)  Whether the Opponent’s case is premised solely on the confusing similarity between the marks?

99.  According to Mr Yan, the Opponent’s case (as pleaded in §§10 and 17 of the Grounds of Opposition and outlined in §§24-36 and 38 of the 1^st Statutory Declaration of Qian Yi (“Qian”), §§4-19 and 23 of Qian’s 2^nd Statutory Declaration, §§6 and 8 of Qian’s 3^rd Statutory Declaration, §§4, 5 and 17 of the letter from the Opponent’s solicitors to the Registrar dated 20 February 2018 in support of the application for cross-examination) is premised on the alleged confusing similarity between the Opponent’s Double Happiness Marks and the Subject Mark.  In fact, the Hearing Officer admitted that his decision on the Bad Faith Ground was largely based on the alleged “intention of causing confusing similarity between the marks in issue”.[70]  The Hearing Officer held that the Applicant had in mind, at the time of the application, the risk that consumers recognizing the Opponent’s Double Happiness Marks used in relation to cigarettes and tobacco products would, upon seeing the Subject Mark being used on the same kind of goods, think that they come from the same or economically-linked undertakings as the Opponent’s.[71]

100.  The gist of the Opponent’s case is that the Applicant had copied from the Opponent’s Double Happiness Marks, or that the Applicant was deliberately riding on the goodwill and reputation of the Opponent in respect of the Opponent’s Double Happiness Marks.  However, as the marks are not confusingly similar based on the Applicant’s contentions on the Likely Confusion Ground, the Opponent’s case on bad faith must fail because it would not have been possible for the Applicant to copy the Opponent’s Double Happiness Marks or to ride upon the alleged goodwill or reputation of the Opponent.

101.  As the Hearing Officer has rightly found that the contending marks are confusingly similar, the Applicant’s first ground of appeal must fail.  However, if this case goes elsewhere and a contrary view is taken about my judgment on the Likely Confusion Ground, I would express my view briefly on the following issues:

(i)  whether it is a pre-condition of confusingly similarity for a finding of bad faith?

(ii)  whether the Opponent’s case on bad faith is premised solely on the Likely Confusingly Ground?

102.  For the first question, I accept the submissions of Ms Tam that confusing similarity is not a condition to a finding of bad faith.   Under the TMO, bad faith exists as an independent ground of objection. In DC Comics v. Cheqout Pty Ltd[72], the court had made it clear that the bad faith ground does not require the opponent to establish that the trade mark's use would result in deception or confusion.  It is a separate ground of opposition.  Evidence that the use of a mark is likely to cause confusion or deception may be persuasive in considering whether the application to register a mark was made in bad faith.  However, it is neither determinative of that finding nor a prerequisite for it.

103.  In Nautical Concept Pte Ltd v. Jeffery Mark Richard and Another[73], the High Court of Singapore refused the registration of a mark on the bad faith ground despite a finding of no confusing similarity between the respondent’s mark “Jeffrey-West” and the appellant’s mark “JWest”.  The court held that “bad faith” is a separate ground for invalidation, and it includes dishonesty and some dealings which fall short of standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area of trade being examined.[74]  The appellant in that case gave various different versions of purported explanation as to why the sign “JWest” was chosen which led to the court’s conclusion that its “determined and most unconvincing attempt to distance its mark ‘JWest’ form the respondents’ mark only made matters worse”.

104.  For the second question, I do not accept that the Opponent is debarred to advance its argument that the Bad Faith Ground it relies upon is broader than the Likely Confusion Ground.

105.  The Bad Faith Ground pleaded by the Opponent is widely drawn: “[further] and in the alternative, the Applicant has applied for registration of the [Subject] Mark in bad faith and registration of the [Subject] Mark is prohibited under Section 11(5)(b) of the Trade Marks Ordinance.”[75]  This is broad enough to cover the case advanced by the Opponent in evidence and in submissions, and is not restricted to a case dependent on a finding of “confusing similarity” as suggested by the Applicant.

106.  I agree with Ms Tam that selective reliance on certain passages in the Opponent’s statutory declarations cannot assist the Applicant’s case.  On the contrary, the Opponent did expressly raise the following matters in the statutory declarations:

(i)  The Applicant applied for marks which were identical to the Opponent’s packagings in other jurisdictions, showing prior knowledge and familiarity of the Opponent’s brand and the Opponent’s Double Happiness Marks.[76]

(ii)  There was predatory pattern of conduct on the part of the Applicant in registering other well-known trade marks all over the world.  The only purpose of the evidence is not to demonstrate any likelihood of confusion in respect of the Subject Mark, but to demonstrate a well-documented history of bad faith in knowingly exploiting other well-known marks in the market.[77]

(iii)  The Applicant’s registration and adoption of marks which were identical or similar to the Opponent’s Double Happiness Marks demonstrates that the Applicant was trying to take unfair advantage from the Opponent’s Double Happiness Marks,[78] an allegation which is not premised on the Likely Confusion Ground.

107.  The Hearing Officer’s Interlocutory Decision on Application for Leave to Cross-examine (“the Cross-examination Decision”) also shows that the Hearing Officer and the Applicant well understood the Opponent’s case on bad faith was pitched on a broad basis not confining to “confusing similarity”.  I agree with Ms Tam’s observation that it would otherwise have been irrelevant to enquire into the provenance of the Subject Mark and the reason for the earlier “copycat” trade mark registrations obtained by the Applicant. The Hearing Officer made it clear that one of the main objectives of the cross-examination of Chanderson was to question him on “how the Subject Mark is alleged to have been devised, which Applicant’s evidence is alleged to have been particularly contained in paragraphs 6 and 7 of Chanderson’s statutory declarations dated 19 February 2013”.[79] That inquiry was far more pertinent to “bad faith” than to “confusing similarity”, which is judged from the eyes of the average consumer.  The Hearing Officer also stated that the Applicant had by its Counter-statement demonstrated that it knew very well what kind of “bad faith” case it was going to meet, viz, one that premised upon that the Applicant engaged in “copying” or “trade mark squatting” of the Opponent’s marks in devising the Subject Mark.   The Hearing Officer further went on to say that “the Applicant should not be taken by surprise if Mr. Chanderson’s evidence that the Subject Mark was coined independently and the Applicant did not have regard to the Opponent’s marks is allowed to be tested because such evidence would be relevant, if true, to the pleaded ‘bad faith’ ground and which the Opponent is not prepared to accept without probing of the kind which is appropriately undertaken in cross-examination.”[80]  Finally, the Hearing Officer stated that “the question of how the Applicant coined the Subject Mark has become an issue in the proceedings and this issue is relevant to at least one of the core issues of the case, namely, the pleaded bad faith ground of opposition to the applications for registration of the Subject Mark.”[81]

108.  In fact, the Opponent had also made clear its stance in its submissions in support of the cross-examination application dated 20 February 2018.  The Opponent pointed out that the Applicant had copied the Opponent’s Double Happiness Marks with a view to taking advantage of these marks, and that was why how the Applicant devised the Subject Mark became an issue in the case.  The Opponent also relied on the evidence relating to the pattern of predatory conduct of the Applicant in registering other famous brand owners’ trade marks, and contended that such evidence was “highly relevant to the ground of bad faith and none other issue”.

109.  In a further attempt to support the appeal, the Applicant argues that since the Hearing Officer concluded that his decision under the Bad Faith Ground was largely based on the Applicant’s “intention of causing confusing similarity between the marks in issue”, the alleged errors he made in his consideration of the Likely Confusion Ground would have tainted his analysis on the Bad Faith Ground.

110.  However, the question posed by the Hearing Officer at §193 of the Decision is: “if the Registrar finds that the Subject Mark is not confusingly similar to [the Opponent’s] Double Happiness Mark, does the Opponent still have any chance to succeed under the bad faith claim irrespective of what the intention of the Applicant is?”  The Hearing Officer eventually concluded that he did not need to address this question, because his decision on bad faith was largely based on the existence of the Applicant’s “intention of causing confusing similarity between the marks in issue.”  Hence, the Hearing Officer’s finding on bad faith is not premised on the finding of confusing similarity under the Likely Confusion Ground, but premised on the finding of the Applicant’s intention. These two are clearly different concepts, because the analysis on the Likely Confusion Ground is governed by a set of established rules, whereas the intention of causing confusing similarity is a factual finding based on tested evidence, in particular the oral evidence of Chanderson.  The Hearing Officer was entitled to find that, as there is at least some similarity between the marks (which is not judged by reference to the eyes of the average consumer according to the established principles under the Likely Confusion Ground), the Applicant’s conduct in targeting the Opponent’s Double Happiness Marks involved dishonesty or some dealings which fall short of standards of acceptable commercial behaviour observed by reasonable and experienced men in the tobacco industry.  In particular, both the Opponent and the Applicant are and were involved in the same restricted industry in supplying cigarettes mainly to ethnic Chinese consumers.

111.  For these reasons, even if the court were to find that the marks are not confusingly similar under the Likely Confusion Ground, which I do not accept it to be the case, this would not by itself impact upon the Hearing Officer’s finding on bad faith.

(iv)  Whether the Hearing Officer had made errors about his findings on the “provenance” of the Subject Mark and the Applicant’s track record of piracy of trade marks?

112.  The Applicant argues that the Hearing Officer erred in holding that the Subject Mark was derived from or coined by reference to the Opponent’s Double Happiness Marks.

113.  First, this is an appeal against findings of fact made by the Hearing Officer.  It is trite that the appellate court would not interfere with any findings of fact made by the court or tribunal below unless such findings are plainly wrong.  The Applicant has not identified any mistakes in the Hearing Officer’s evaluation of the evidence that is sufficiently material to undermine his conclusions.

114.  Mr Yan relies on certain alleged “favourable” answers given by Chanderson in relation to the provenance of the Subject Mark, but he ignores many other relevant considerations, including:

(i)  other aspects of Chanderson’s oral evidence, such as that his explanation for the provenance of the Subject Mark had changed several times (from multiple happiness to “prosperity, wisdom and longevity” to “福祿壽”)[82]; the explanation of the provenance of the Subject Mark was given on hearsay basis as it was “purely the creative designer’s idea”;  he was unable to give any coherent explanation of the idea behind the Subject Mark as he appeared not to understand the meaning of the Chinese characters “福祿壽” at all; he was not in a position to explain how the “福祿壽” idea could be effectively expressed in a “unitary symbol” through the Subject Mark; and

(ii)  other observations made by the Hearing Officer on Chanderson’s demeanour and credibility as a witness as set out at §§157, 184, 185 of the Decision.

115.  The Hearing Officer found as a matter of fact that, at the time of the making of the Subject Application, the Applicant had the intention of causing confusion by the use of the Subject Mark.  There is basis to support such finding, in particular, the Applicant had a history of targeting the Opponent’s Double Happiness Marks and the packagings of the Opponent’s Double Happiness tobacco products.  The fact that the Applicant included the same words “百年龍鳳” and lantern device and copied the same colour tone in the packagings of its own products speaks volume of the conduct of targeting.

116.  Mr Yan complains that the Hearing Officer had failed to consider the fact, on the wedding of the first son of the Applicant’s owner on 12 June 2011, there were on display Tri-Happiness products and signage relating to Tri-Happiness products which bore not only the Chinese characters "福 祿 壽" but also the English words "Prosperity Wisdom Longevity".  However, this incident came up much later in 2011.  That does not explain how the concept of the 3 gods of "福 祿 壽" resulted in the final design of the Subject Mark in 2006 or 2007, in particular when there was a history on the part of the Applicant in targeting the Opponent’s Double Happiness Marks and packagings.  It might be the case that the idea of connecting the “3 gods” concept with the Tri-Happiness logo only came out much later in 2011 for the wedding.  It remains the case that, taking into account the conduct of the Applicant throughout the years, no satisfactory explanation had been given as to how the “3 gods” concept resulted in the design of the Subject Mark.  In any event, the Hearing Officer was entitled to make the finding about the Applicant’s intention at the time of the making of the Subject Application, and the Applicant has failed to establish any material error which warrants the interference by the appellate court.

117.  The Applicant seeks to rely on the case of “missha & Device” Trade Mark[83] and argues that the Hearing Officer erred in holding that the “track record” of the Applicant in registering various marks in foreign jurisdictions being relevant in the consideration of bad faith.  However, the Hearing Officer had duly taken into account the principles in Missha account at §162 of the Decision.  He “took heed of” of the Applicant’s argument, and expressly reminded himself that there was no evidence showing that any such applications had been made in bad faith and that most of the registrations from those applications were still subsisting and valid.  The Hearing Officer rightly took the dicta in Missha as a matter of “caution”, but he did not consider that the hearing officer in Missha was laying down a general principle for ignoring any evidence of the applicant’s applications in other jurisdictions as proof of certain fact or state of things.  This must be correct as bad faith is a broad enquiry into the factual matrix and the applicant’s subjective state of mind.

118.  When being confronted with the incontrovertible and undisputable evidence relating to the Applicant’s predatory trade mark registration behaviour, Chanderson was unable to offer any satisfactory explanation other than to shy away from it by saying they were registered before his time, and to suggest that it was a long time ago and it was not illegal in those days.  However, these answers do not make the pattern of conduct less morally reprehensible even by ordinary commercial standards. Neither is there any evidence to suggest that the corporation recognized the apprehensible nature of these acts in the past but has turned over a new leaf since.

119.  Indeed, Ms Tam has referred me to various authorities[84] showing that past acts of trade mark trolling, predatory behaviour, or acts of registering a trade mark that does not belong to the applicant in other jurisdictions in relation to other marks are relevant for the consideration of the bad faith ground.  Such line of cases support that consideration of bad faith involves a much broader inquiry.

120.  Mr Yan submits that it cries out for an explanation as to why the Opponent does not seek to invalidate some of the overseas trade mark registrations under the name of the Applicant if its applications were made in bad faith.  However, there may be a lot of reasons as to why the Opponent does not do so.  One must bear in mind that it is not the validity of these trade mark registrations which is in issue, it is whether the Applicant had been targeting the Opponent’s Double Happiness Marks at the time of the making of the Subject Application and its then intention which are relevant in this broad inquiry under the Bad Faith Ground.

(v)  Whether the Hearing Officer had misapprehended Chanderson’s evidence?

121.  The Applicant also alleges that the Hearing Officer had misapprehended some of the evidence given by Chanderson and erroneously questioned his credibility.  However, the appellate court should be slow to interfere with any findings of fact involving the Hearing Officer’s evaluation of the witness’s credibility and demeanour, particularly as the Hearing Officer would have formed and was entitled to form, an impression on credibility not only on the specific parts of the witness’s evidence cited in the Decision.  He would have observed Chanderson’s demeanour throughout the course of his giving evidence and came to the view that he was an “evasive witness”.^[85]

122.  I agree with Ms Tam that the Applicant had selectively relied on answers given by Chanderson in relation to the provenance of the Subject Mark that appear to be favourable to its case, ignoring other aspects of the evidence and the witness’s demeanour that would have affected the Hearing Officer’s finding on credibility.  The Hearing Officer had duly given explanation and reasoning for his findings of fact, and there is no room for this court to disturb such factual findings.

123.  For these reasons, I do not accept that the Hearing Officer had made any errors in reaching his conclusion that, at the time of the making of the Subject Application, the Applicant had been targeting the Opponent’s Double Happiness Marks and intended to cause confusion by the use of the Subject Mark for the same goods, i.e. cigarettes and tobacco products.

THE RELEVANCE OF THE SINGAPOREAN DECISION

124.  In the appeal, the Applicant seeks to rely on a decision made by the Principal Assistant Registrar of the Intellectual Property Office of Singapore in NV Sumatra Tobacco Trading Co v CTBAT International Co Ltd[86], whereby the Principal Assistant Registrar dismissed an opposition filed by CTBAT International Co Ltd against an application filed by the Applicant for registration of a composite mark incorporating “Tri Happiness” and the “888” version of the Chinese character in the Subject Mark (“the Singaporean Decision”).  The Hearing Officer did not consider the Singaporean Decision “is of high relevant value to the present proceedings”.[87] The Applicant contends that such observation was wrong and the Hearing Officer should have taken into account the Singaporean Decision in deciding the Subject Application.

125.  The Singaporean Decision would not be relevant in deciding the opposition under the Likely Confusion Ground as the average consumers in the two jurisdictions would be different.

126.  In so far as the relevance of such decision in respect of the Bad Faith Ground is concerned, I agree with Ms Tam that such decision would be of little value due to the following reasons:

(i)     The suit mark in that case is different from the Subject Mark in the present case.  The suit mark in that case is a packaging bearing the textual elements of “Tri Happiness” and “福祿壽, and the “888” device:  (“the 888 Package Mark”) which significantly differs from the Subject Mark  .

(ii)    The Opponent’s earlier registered trade marks in Singapore in that case, “SHUANGXI”, are clearly different from those in the present case. 

(iii)   In Singapore, the Applicant already had a valid registration of the Subject Mark but was subsequently revoked due to non-use.

(iv)   The grounds of alleging bad faith in the Singaporean opposition proceedings are different from those raised in the present proceedings.  In the Singaporean opposition proceedings, the grounds were: (a) the Applicant had no bona fide intention to use the 888 Package Mark in Singapore; (b) the Applicant had “track record of applying to register other tobacco proprietors’ trade marks”; (c)  the Applicant did not discharge its duty to investigate into the bona fides of the 888 Package Mark before seeking registration; and (iv) the Applicant had knowledge of third party registration and use of similar marks.  Whereas in the present case, the Opponent’s case and the Hearing Officer’s finding were not merely based on the track record of trade mark squatting and the Applicant’s knowledge of the Opponent’s earlier marks, but also that oral evidence given by Chanderson, the lack of credible explanation of the provenance of the Subject Mark, the conduct of filing the application or registration of the Subject Mark in light of the knowledge that the Applicant had in respect of the Opponent’s Double Happiness Marks, the various strategies and acts in various jurisdictions including Hong Kong carried out by the Applicant in targeting the 囍 Mark and the packagings of the Opponent’s products etc.

(v)    In the Singaporean Decision, the hearing officer held that what weight to accord to the evidence of past behaviour of track record of applying to register other tobacco proprietors’ trade marks would depend on the circumstances surrounding that application.  In that case, the hearing officer observed that, given the Applicant had used the 888 Package Mark in Indonesia since 2011 and planned to launch its products in Singapore, it appeared to him that it was not inappropriate for the Applicant to apply to register the 888 Package Mark to protect its business interest in Singapore.  These features are absent in the present case.

127.  Furthermore, it is unclear about the extent of the goodwill associated with the Opponent’s “SHUANGXI” marks in Singapore.  On the contrary, the Opponent’s Double Happiness Marks are well known for tobacco products in Hong Kong according to the evidence.  This is very relevant in determining whether it was the Applicant’s intention to cause confusion in the use of the Subject Mark.

128.  The Singaporean Decision is certainly not binding in Hong Kong.  Neither is there any specific factual finding in such decision which warrants the consideration of this court or the Hearing Officer which is relevant to the factual inquiry under the Bad Faith Ground.  Hence, I agree with the Hearing Officer’s observation that the Singaporean Decision is of limited value to the present case.

OTHER GROUNDS OF OPPOSITION

129.  The other grounds of opposition were not considered by the Hearing Officer in the Decision and therefore should not form part of the present appeal.

130.  However, in the unlikely event that this case goes elsewhere and a contrary view is taken about the opposition under the Likely Confusion and Bad Faith Grounds, I will also rule that the Subject Application should be refused on the passing off ground under s 12(5)(a) of the TMO (“the Passing Off Ground”).

131.  It is trite law that the classic trinity would have to be present to constitute passing off:[88]

(i)  There must be a goodwill or reputation attached to the goods or services which the claimant supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which its particular goods or services are offered to the public, such that the get-up is recognized by the public as distinctive specifically of the claimant’s goods or services (“the Goodwill Requirement”).

(ii)  There must be a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by it are the goods or services of the claimant (“the Misrepresentation Requirement”).

(iii)  The claimant suffers or, in a quia timet action, that it is likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the claimant (“the Damage Requirement”).

132.  The Opponent would have no difficulty in establishing these requirements.

133.  Though there may be other producers using similar “囍” marks for their products, the evidence clearly shows that the Opponent’s Double Happiness Marks, including the 囍 Mark per se, are well known in Hong Kong for the Opponent’s tobacco products.  Due to the substantial volume of sales, the wide distribution and sales networks, and substantial costs incurred by the Opponent in promoting its Double Happiness cigarettes, the public would associate products bearing the 囍 Mark as originating from the Opponent or undertakings associated with it.  The fact that there are co-existence of other similar marks does not mean that the “substantial” player in the trade cannot enjoy the goodwill associated with the mark.  All depends on the facts of each individual case.  It is clear from the evidence here that the Opponent has built up substantial goodwill and reputation in the Opponent’s Double Happiness Marks in relation to cigarette and tobacco products, and so the Goodwill Requirement is satisfied in the present case.

134.  As to the Misrepresentation Requirement:

(i)  It is sufficient that when there is “a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff”.[89]

(ii)  “Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff”.[90]

(iii)  “It is well settled that evidence of actual confusion is not a precondition of a finding of misrepresentation.  If the court is otherwise satisfied of the probability of deception, actual deception need not be proved”.  Likewise, “it is not necessary to prove an actual intent to deceive”.[91]

135.  Due to the substantial goodwill enjoyed by the Opponent in respect of the 囍 Mark and the close similarity between the 囍 Mark and the Subject Mark, average consumers would probably associate tobacco products carrying the Subject Mark as originating from the Opponent or its related undertakings.  As the “囍” brand is a distinctive and well-known brand of the Opponent, there is a real risk that customers would confuse the products carrying the Tri-Happiness mark as somewhat associated with the Opponent.

136.  As to the effect of the co-existence of other brands, I agree with the observation made by the Hearing Officer that, though some of the customers may have been educated to differentiate the different “囍” brands, the average cigarettes consumers may not be able to do so, in particular when other “囍” products are available for sale in Hong Kong restrictively in small quantities only.  Further, bad faith is not a prerequisite for a finding of misrepresentation, and so I am satisfied that the Misrepresentation Requirement is also met in the present case.

137.  As to the Damage requirement, the claimant does not have to prove actual damage (still less special damage) in order to succeed in an action for passing off.   Likelihood of damage is therefore sufficient.  In practice, damage tends to be assumed unless the case is on the borderline of what would traditionally have been regarded as passing-off.[92]

138.  For these reasons, I have no hesitation in upholding the opposition based on the Passing Off Ground.

139.  There is also an issue as to whether the Subject Application should be refused on the well-known trade mark ground under s 12(4) of the TMO.  Due to my analysis above, this would now become an academic issue. In any event, since the Opponent’s Registered Marks are only well known in the tobacco products market and similar “囍” marks may have been used by other traders for other products in daily life, I have some hesitation whether the Opponent’s Registered Marks qualify as “well-known trade marks” under s 12(4).  Hence, I will not make a ruling on the opposition based on such ground.

140.  For the above reasons, I dismiss the appeal against the Decision of the Hearing Officer.  I also make a costs order nisi that the costs of the appeal be to the Opponent with certificate for 2 counsel, which shall be made absolute 14 days after the date of the handing down of this Judgment.