C.S.S. JEWELLERY CO LTD v. THE REGISTRAR OF TRADE MARKS

HCMP 2602/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2602 OF 2008

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BETWEEN

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J U D G M E N T

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Trade mark registration appeal

1.  This is a trade mark registration appeal. On 9 December 2004, the appellant applied, pursuant to the provisions of the Trade Marks Ordinance (Cap 559), to register the trade mark “CHOW SANG SANG”[1] (the subject mark). After three rounds of evidence and submission, on 19 February 2008, the Registrar of Trade Marks refused to register the subject mark pursuant to section 12(3) of the Ordinance. A detailed “statement of reasons for decision” dated 28 November 2008 and signed by Ms Jessica Law for the Registrar, was subsequently supplied to the appellant. From the Registrar’s refusal, the appellant appeals to the court pursuant to section 84 of the Ordinance.

Historical background and appellant’s use of the subject mark

2.  “Chow Sang Sang” and “周生生” in Chineseare well-known trading names in Hong Kong. According to the evidence, it all started in around 1934 when three brothers,周禹初, 周冠岳 and 周少明,set about carrying on business as jewellers and goldsmiths in Guangzhou under the names of “生生金鋪” and “三生金鋪”, with capital provided by their father, 周芳譜. In about 1938, the three brothers closed down their business and opened the first “周生生金鋪” in Guangzhou. The name “周生生” was chosen for its auspicious meaning, namely, continuous growth or endless vitality of the Chow family. Because of the war, in 1940, the three brothers shut down their business in Guangzhou and set up their jewellery business in Hong Kong and Macau under the name of “周生生金行” (and that of “Chow Sang Sang Jeweller &Goldsmith” in English).

3.  In the early 1940s, the three brothers established a further branch located at Zhanjiang (湛江) in Guangdong province under the name of “周生生金行” (and that of “Chow Sang Sang Jeweller&Goldsmith” in English).

4.  The three brothers had three half-brothers, who were the sons of 周芳譜 and his concubine. The three half-brothers were 周君令, 周君廉 and 周君任. In around 1943, 周芳譜 made an inter vivossettlement of his assets amongst the two branches of his family. The shops in Hong Kong and Macau were to be divided between the two branches of the family, but the branch consisting of the three brothers was entitled to choose which of the two shops to take, subject to financial adjustments. The Zhanjiang establishment was to be taken over by the three brothers. The two branches would run their businesses“side-by-side in a peaceful manner”. Pursuant to the settlement, the three brothers took over the Zhanjiang establishment, and exercised their first right of priority and took up the Hong Kong shop, leaving their half-brothers with the Macau shop.

5.  In 1946, 周芳譜 made a Chinese will in which it was stipulated that:

“All my descendants may use the name 周生生 but they shall not allow outsiders to join in their businesses and shall not sell the name to others.” (translation)

6.  周芳譜passed away in the following year.

7.  Since then, both branches set up further shops using the names “周生生” and “Chow Sang Sang” as integral and distinctive parts of their business names.

8.  On around 1 November 1957, the three brothers split their partnership business amongst themselves. 周冠岳 and 周少明 took over 周禹初’s share in the Macau and Tai Po Road shops, and 周禹初acquired his two brothers’ shares in the Queen’s Road Central shop. Notwithstanding the splitting of the partnership into different businesses, both周冠岳and 周少明 on the one hand, and周禹初 on the other, continued to trade under the names of “周生生金行” and “Chow Sang Sang Jeweller&Goldsmith”.

9.  Thereafter, 周冠岳 and 周少明 opened further shops at Queen’s Road West as well as Aberdeen Main Road.

10.  In the 1960s, the Queen’s Road Central shop operated by周 禹 初 was closed down. Subsequently, 周禹初’s son opened a new shop in Wanchai and has since run it under the names “粵港澳湛周生生” and “周生生珠寶金行”.

11.  In around 1968, 周冠岳 and 周少明 parted ways so that 周冠岳would continue to run the shops at Aberdeen and Western, whilst周少明 would operate the shops at Tai Po Road and Macau concurrently under the names “周生生金行” and “Chow Sang Sang Jeweller &Goldsmith”. On 4 August 1980, 周少明 opened another “周生生金行” (“Chow Sang Sang Jeweller &Goldsmith”) shop in Kwun Tong.

12.  On 9 March 1982, 周少明 caused to be incorporated the appellant. On 31 March 1982,周少明 and his wife assigned to the appellant the assets of the business of “周生生金行” (“Chow Sang Sang Jeweller &Goldsmith”), also known as “周生生珠寶金行”, for a consideration equal to the book value thereof together with the goodwill attached thereto for HK$1.

13.  In the 1980s, upon emigrating to Canada,周冠岳shut down the shop at Aberdeen. In 1989, the shop at Western was sold to the appellant.

14.  It is the appellant’s case that like its predecessors, it has been using “周生生” and “Chow Sang Sang” not only as integral and distinctive parts of its trade names in Chinese and English, but also as its trade marks. There is no dispute that the appellant’s business has flourished over the years.

The cited mark

15.  As for the three half-brothers, they and their descendants have likewise been doing exceedingly well in their business, also using “周生生” and “Chow Sang Sang” as integral and distinctive parts of their trade names as well as their trade marks. According to the evidence, the three half-brothers first set up in Hong Kong a business as jewellers and goldsmiths in Shanghai Street in 1948. In 1957, they incorporated a limited company by the names of “Chow Sang Sang Jeweller &Goldsmith Co Limited” and “周生生金行有限公司”. In 1971, that company changed its names to its present ones, “Chow Sang Sang JewelleryCompany Limited” and “周生生珠寶金行有限公司”. Its parent company is Chow Sang Sang Holdings International Limited, a listed company in Hong Kong.

16.  On 25 April 1994, Chow Sang Sang JewelleryCompany Limited (“the proprietor”), beneficially owned or controlled by the three half-brothers or their families, applied for registration of a trade mark under Class 14, for gold pendants, gold medallions, gold pins, gold shields (all included in Class 14). The mark consisted of the words “A CORPORATE GIFT IDEA BY CHOW SANG SANG” arranged in an oval, with the word “GOLD” and the Chinese character “金” in bigger fonts in the centre. The application for registration was successful.

Registrar’s views on similarity and confusion

17.  Understandably, the Registrar finds the registered mark of the proprietor (the cited mark) a difficulty standing in the way of the appellant’s application for registration of “CHOW SANG SANG” as its mark under Classes 14 and 35. In this regard, the relevant parts of section 12 of the Ordinance provide:

“…

(3)  A trade mark shall not be registered if –

(a)  the trade mark is similar to an earlier trade mark;

(b)  the goods or services for which the application for registration is made are identical or similar to those for which the earlier trade mark is protected; and

(c)  the use of the trade mark in relation to those goods or services is likely to cause confusion on the part of the public.

…

(7)  Where the grounds for the refusal of registration exist in respect of only some of the goods or services for which the application for registration is made, the refusal shall apply to those goods or services only.

(8)  Nothing in this section prevents the registration of a trade mark where the owner of the earlier trade mark or other earlier right consents to the registration.”

For our present purposes, an “earlier trade mark” means a registered trade mark which has an earlier date of application for registration: section 5(1)(a).

18.  Classes 14 and 35 cover the following goods and services:

“Class 14:  precious metals and their alloys and goods in precious metals or coated therewith (not included in other classes), jewellery, precious stones, diamonds, jade, coral jewellery, crystal jewellery, agates, imitation jewellery, horological and chronometric instruments; all included in Class 14.

Class 35:  wholesale and retail of precious metals and their alloys and goods in precious metals or coated therewith, jewellery, precious stones, diamonds, jade, coral jewellery, crystal jewellery, agates, imitation jewellery, horological and chronometric instruments; all included in Class 35.”

19.  The Registrar takes the view that the subject mark is similar to the cited mark; that the goods or services for which the application for registration of the subject mark is made are identical or similar to those for which the cited mark is protected; and that the use of the subject mark in relation to those goods or services is likely to cause confusion on the part of the public. In terms of section 12(3), the mark cannot be registered.

20.  In particular, in relation to the cited mark, apart from the words “Chow Sang Sang”, the other words contained in the cited mark are all descriptive in nature, and will not generally form the focus of customer attention and therefore will not be considered to be distinctive and dominant within the context of the overall impression conveyed by the cited mark. The oval background is also indistinctive for it merely holds the word elements of the mark. The Registrar therefore concludes that the overall impression created by the cited mark is dominated by the words “Chow Sang Sang”. Having considered the two marks visually, aurally and conceptually, the Registrar comes to the conclusion that the subject mark and the cited mark are substantially similar. In this appeal, no point is taken against the Registrar’s findings in this regard.

21.  Neither does the appellant challenge the Registrar’s further finding that when the subject mark is used in relation to the applied for goods and services, the average consumer would be confused into believing that the respective goods and services provided under the subject mark and the cited mark emanated from the same trade source or economically linked undertakings. The only issue, in terms of section 12(3)(c), taken by the appellant in the appeal, is that the Registrar has failed to consider the other goods covered by the application, namely, “jewellery, precious stones, diamonds, jade, coral jewellery, crystal jewellery, agates, imitation jewellery, horological and chronometric instruments”. I will presently return to this side argument.

Registrar’s views on honest concurrent use

22.  As was the case before the Registrar, in the present appeal, the appellant relies heavily on section 13 of the Ordinance which reads:

“  (1)  Nothing in section 12 (relative grounds for refusal of registration) prevents the registration of a trade mark where the Registrar or the court is satisfied –

(a)  that there has been an honest concurrent use of the trade mark and the earlier trade mark or other earlier right; or

(b)  that by reason of other special circumstances it is proper for the trade mark to be registered.

(2)  The registration of a trade mark under or by virtue of subsection (1) shall be subject to such limitations and conditions as the Registrar or the court thinks fit to impose.

(3)  Nothing in this section prevents the Registrar from refusing to register a trade mark on any of the grounds mentioned in section 11 (absolute grounds for refusal of registration).”

23.  In relation to honest concurrent use, the Registrar did not doubt the honesty of the appellant in using the subject mark. However, he pointed out that at least for 10 years prior to the date of application (in 2004), there had been no use by the appellant of “Chow Sang Sang simpliciter” (ie without any of the appellant’s logo or the characters “粵港澳湛”) in relation to jewellery products: para 67 of the statement of reasons for decision. In relation to gold products, use of the subject mark could not be found after 1989. The Registrar made these findings after examining the evidence presented before him, including invoices, guarantee certificates, advertisements in newspapers and magazines, invitation cards and price tags.

24.  The Registrar found that when the subject mark was used in the 10-year period, it was always used in conjunction with other marks of the appellant, such as the appellant’s logo, and the appellant’s trade name in Chinese (粵港澳湛周生生). Sometimes, the subject mark was simply used as an integral element in composite marks used by the appellant. Other distinctive elements in the composite marks consisted of the other marks and names of the appellant.

25.  As regards the appellant’s trade name, “Chow Sang Sang Jeweller & Goldsmith”, the Registrar found that the appellant’s logo, and in recent years, the letters “CSS”, were often given much more prominence in the appellant’s advertisements and invitation cards, than its trade name. In later years, the subject mark and the trade name were often dropped from these advertisements and invitation cards altogether.

26.  The Registrar discerned a consistent trend in the appellant’s use of various names and marks in the 10 years or more leading up to the date of application. The CSS logo had been featured prominently since the appellant’s incorporation in 1982. Increasing prominence had been given to the appellant’s corporate name “CSS Jewellery Company Limited” over the trade name “Chow Sang Sang Jeweller & Goldsmith”. Increasing conspicuousness had also been given to the letters “CSS” over the name “Chow Sang Sang”, so much so that “CSS” had completely replaced “Chow Sang Sang” in some instances such as the more recent advertisements and invitation cards. Prominence had also been given to the Chinese characters “粵港澳湛” over the years, and in some of the media reports, these characters had been used to distinguish between the appellant and the proprietor of the cited mark. The trend was not co-incidental but was obviously a deliberate move by the appellant. The Registrar therefore considered that allowing the appellant to register the subject mark would greatly increase the likelihood of confusion. If the appellant were to reverse the trend described and start to use “Chow Sang Sang” alone, this would, according to the Registrar, increase the likelihood of confusion between the goods and services offered by the two companies.

27.  In those circumstances, the Registrar, in the exercise of his discretion, refused to allow registration of the subject mark. Amongst the considerations he took into account, he gave significant weight to the increased risk of confusion if the subject mark were allowed to be registered.

Registrar’s views on “other special circumstances”

28.  As regards “other special circumstances” under section 13(1)(b) of the Ordinance, the Registrar did not accept the appellant’s claim that the three brothers’ use of the subject mark at different times could be considered as its use on the ground that they were the appellant’s predecessors-in-title. The Registrar did not consider that the history of how the subject mark came to be used by the appellant constituted a special circumstance for allowing registration.

Honest concurrent use and discretion

29.  In this appeal, the main focus of argument lies in section 13(1)(a) of the Ordinance, namely, honest concurrent use. It is common ground between the parties, and Mr Andrew Liao SC (Mr CW Ling with him) for the appellant specifically accepts, that in considering section 13(1)(a), even if an honest concurrent use can be established, the Registrar still retains a discretion on whether to accept registration.

30.  This is based on the old law in the United Kingdom. Whether under the Patents, Designs and Trade Marks Act 1883 or the Trade Marks Act 1938, there were express provisions giving the Comptroller or Registrar a discretion to refuse registration, and according to case law, the Registrar could always take into account public interest to refuse registration, even if an honest concurrent use could be established: In re The Australian Wine Importers Ltd (1889) 41 Ch D 278; In re Ehrmann’s Applications [1897] 2 Ch 495; Kerly’s Law of Trade Marks and Trade Names (12^th ed) paras 10-16 & 10-17. Thus, in the leading case of Pirie (1933) 50 RPC 147, 159, Lord Tomlin mentioned five discretionary considerations to be taken into account in deciding whether to allow registration after an honest concurrent use was established.

31.  In Hong Kong, prior to the enactment of the new Trade Marks Ordinance (Cap 559) in 2000, the law was governed by the old Trade Marks Ordinance (Cap 43, repealed), which essentially followed the 1938 Act.

32.  In 1994, the new Trade Marks Act was enacted in the United Kingdom. In 2000, we have our new Trade Marks Ordinance, which is similar, but not identical, to the 1994 Act. Notwithstanding the absence of any specific reference in section 7 of the 1994 Act to the Registrar having a discretion to refuse registration even if an honest concurrent use is established, it is generally thought that the discretion continues to exist and public interest may be taken into account: see, for instance, Kerly’s Law of Trade Marks and Trade Names (14^th ed) paras 9-150 to 9-161, particularly para 9-159, relying on cases decided under the old Acts.

33.  In our new Ordinance, there is, likewise, no specific reference to the Registrar having a discretion to refuse registration even after an honest concurrent use has been established. However, as indicated, the Registrar in Hong Kong takes the view that such a discretion exists. Mr Liao, for his client, does not dispute this, at least for the purposes of the present appeal.

34.  In those circumstances, I am prepared to go along with the parties, and proceed on the concession and assumption that even if there has been an honest concurrent use, nonetheless the Registrar retains a discretion to refuse registration. One consideration that the Registrar may legitimately take into account is the question of public interest.

35.  In other words, on final analysis, section 13(1)(a) entails a two-stage determination:

(1)  whether there has been an honest concurrent use of the subject mark and the earlier trade mark;

(2)  if the answer is in the affirmative, whether after considering all relevant circumstances, including public interest, the Registrar’s discretion should be exercised to accept the application for registration of the mark, despite the fact that the use of the mark in relation to the goods or services in question “is likely to cause confusion on the part of the public” (section 12(3)(c)).  (Such acceptance of the application for registration is, of course, subject to any opposition proceedings: see sections 42-47 of the Ordinance.)

36.  In relation to stage (1), it is important to note that it is essentially a factual question. The focus of the inquiry is on three matters, namely, use, concurrent use, and honesty of the concurrent use. Moreover, the use must be use of the subject mark as a trade mark. Thus, for instance, if the use of the subject mark is not as a trade mark, but simply as an element in a composite mark comprising other distinctive elements as well, the use of the subject mark will not be considered as a relevant use under section 13(1)(a). This is, again, common ground between Mr Liao, and Mr John Yan SC (Mr William Liu with him) for the Registrar in this appeal.

37.  It is important to note that at this first stage, discretionary considerations, such as, public interest and likelihood of confusion, do not come into the equation. They are matters to be considered in stage (2).

38.  In stage (2), by definition, the applicant for registration has already satisfied the Registrar of an honest concurrent use of his mark and the earlier trade mark. The Registrar’s focus of attention is on all relevant considerations that may bear on the exercise of his discretion to register or to refuse registration. Public interest is an important matter to bear in mind. In this regard, the new law differs from the old law in that now, under section 12(8), consent by the proprietor of the earlier trade mark/cited mark will enable the subject mark to be registered, even though registration of the subject mark may give rise to confusion or an increased risk of confusion, thereby prejudicing public interest. Mr Liao therefore submits that under the new law, although public interest remains a relevant consideration, its importance has decreasedwhen compared with the position under the old law.

39.  Subject to that qualification, the parties are agreed that the discretionary considerations set out in Pirie, supra, remain highly relevant. They are:

(1)  the extent of use in time and quantity and the area of the trade;

(2)  the degree of confusion likely to ensue from the resemblance of the marks which is to a large extent indicative of the measure of public inconvenience;

(3)  the honesty of the concurrent use;

(4)  whether any incidents of confusion have in fact been proved;

(5)  the relative inconvenience which would be caused if the mark were registered.

40.  The above considerations are not exhaustive and all relevant circumstances ought to be considered. The discretion of the Registrar and the court is unfettered. Budweiser Trade Marks [2000] RPC 906. Depending on the facts of an individual case, a particular consideration may assume greater significance than others, and this must be borne in mind when understanding the sometimes apparently conflicting judicial statements found in the law reports. Thus, for instance, in Buler [1975] RPC 275, 289, Graham J said that the degree of likely confusion is relatively unimportant provided the honesty of the applicant is established and it is otherwise just in all the circumstances that his mark should be registered. On the other hand, in the local case of Re Borsalini Trade Mark [1993] 1 HKC 587, 593B-C, Godfrey J (as he then was) expressed the view that the degree of confusion likely to ensue from the resemblance of the marks, that is to say, the likelihood of inconvenience to the public, was “the most important consideration” in the case before the Court.

Some confusion relating to the two-stage approach

41.  Turning to the facts in the present case and the reasons given by the Registrar, I am afraid there has been some confusion in relation to the two stages of determination; or, put at the lowest, the way the reasons have been expressed gives rise to the strong impression that such confusion existed. The confusion relates to two matters:

(1)  that the appellant has not used the “subject mark simpliciter” in the 10 years prior to the application;

(2)  that in the same period of time, the appellant has used “粵港澳湛” before “周生生” as its Chinese trade name and trade mark.

42.  In relation to the first matter, the Registrar found that the appellant had not used “Chow Sang Sang simpliciter” for at least 10 years prior to the application for registration. That is true, factually, to the extent that leaving aside the composite marks used during that period of time, whenever “Chow Sang Sang” was used, it was used in conjunction with some other marks or logo of the appellant. Very often, it was used together with “粵港澳湛周生生”. However, the Registrar concluded from that, or at least, gave the impression in his reasons that, there was, therefore, no honest concurrent use of “Chow Sang Sang” as a trade mark during the 10-year period: see, for instance, paras 66 and 67 of the statement of reasons.

43.  If that was what the Registrar meant, he was not correct. The “Chow Sang Sang” mark has certainly been used, as a trade mark, by the appellant on its price tags for jewellery products throughout the years. It is true that it was used together with the Chinese name and mark “粵港澳湛周生生”, but it does not mean that the two were used together as a composite mark, or that “Chow Sang Sang” has not been used as a mark. There is no law against a trader applying to his goods more than one mark. In Hong Kong, as Mr Liao has pointed out, it is common for traders to use two or three marks all at the same time in relation to the same goods, namely, a Chinese mark, an English mark and, very often, a logo. All three marks are, in the example given, used as a trade mark. Of course, sometimes, the three marks are used, not as individual marks, but as a composite mark. There is no definition for a composite mark, but one recognises such a mark when one sees one.

44.  According to the newly admitted evidence, apart from the price tags, the appellant has also used “Chow Sang Sang” on its gold bullions. Again, the Chinese mark “粵港澳湛周生生” has also been used together with the English mark on the gold bullions.

45.  In my view, leaving aside the composite marks used also by the appellant, the fact that the appellant has in the relevant period of time used “Chow Sang Sang” together with some other marks or logo, does not detract from the fact that during that period of time, he has used “Chow Sang Sang” as a mark, a badge of origin of its goods. In other words, to the extent that the Registrar thought otherwise, he was in error. The fact that “Chow Sang Sang” has always been used together with other marks or logo is not a matter relevant to the first stage of determination under section 13(1)(a). It could assume significance in stage (2). But that is a wholly different question from whether the appellant can establish an honest concurrent use of the subject mark during the relevant period.

46.  Secondly, whether the appellant has during the same period added the geographic words “粵港澳湛” to its Chinese name “周生生”, so that the English mark“Chow Sang Sang” has always been used together with “粵港澳湛周生生”, is, in my view, wholly irrelevant to the stage (1) determination.

47.  What is important to remember is that the appellant is not seeking to register the Chinese mark “周生生”. It is seeking the registration of “Chow Sang Sang”. Moreover, what he is trying to do under section 13(1)(a) is to establish an honest concurrent use of “Chow Sang Sang”. He does not seek here to establish an honest concurrent use of “周生生”. The descriptive words “粵港澳湛” have been added to qualify “周生生”. They were never added to qualify “Chow Sang Sang”.

48.  In other words, the use of the additional words “粵港澳湛” has nothing to do with whether the appellant has, during the relevant period of time, had an honest concurrent use of “Chow Sang Sang” as a trade mark. This is a matter wholly irrelevant to the stage (1) determination. However, it could be relevant to the stage (2) determination, in terms of the risk of confusion. But that is a separate matter.

49.  To the extent that the Registrar thought otherwise (see for instance, para 66 of the statement of reasons), he was mistaken.

Stage (1): honest concurrent use

50.  Based on the appellant’s use of “Chow Sang Sang” on the price tags and the gold bullions, as well as in his trading name “Chow Sang Sang Jeweller&Goldsmith”, I have no doubt that the appellant has established a case of concurrent use.

51.  I should add that appellant’s use of the subject mark in its trading name is a matter that has attracted some debate. In my view, it is an academic debate because, even if there were no such use, I would still have come to the conclusion that there had been sufficient concurrent use in the relevant period by reason of the use on the price tags and the gold bullions. In any event, I believe there has also been relevant use by reference to the trading name. I agree with Mr Liao in his submission that the words “Jeweller& Goldsmith” in the trading name are purely descriptive, and the most, and indeed, only, distinctive part of the trading name is the words “Chow Sang Sang”. Just as the Registrar thought that “Chow Sang Sang” as an element in the cited mark constitutes the most distinctive part of the mark, so that if the subject mark is allowed registration, there is a likelihood of confusion, I take the view that “Chow Sang Sang” in the trading name of the appellant forms the most distinctive part of that trading name, and the use of “Chow Sang Sang” in the trading name qualifies as use of “Chow Sang Sang” by the appellant as a trade mark.

52.  Honesty in the present case cannot be questioned. Given the unique historical background involved in the present case (regardless of whether the earlier partnerships of the three brothers could be regarded as the predecessors-in-title of the appellant in relation to the use of the mark), honesty cannot be in issue.

53.  In other words, in my view, the appellant has passed the stage (1) test, namely, that it has established an honest concurrent use of the subject mark and the cited mark during the relevant period of time.

Stage (2): discretionary considerations

54.  That leads to stage (2) of the determination, ie the exercise of the Registrar’s discretion.

55.  Looming large in the picture is the likelihood of confusion if registration is allowed. Before considering this factor further, it should be noted that although this appeal is by way of rehearing, as a matter of general principle or practice, the court does not lightly interfere with the exercise of the Registrar’s discretion. The Registrar and his officers, of course, possess great experience in trade mark matters, and this Court pays full respect to that. However, in the present case, given the confusion or apparent confusion discussed at some length above, which has, in my view, coloured the approach of the Registrar to the dual questions of an honest concurrent use and the exercise of discretion, I believe the Court is quite entitled to interfere and exercise the discretion afresh. Of course, that does not necessarily mean that, in exercising the discretion afresh, the Court must come to a different conclusion from the Registrar. What matters is that the Court should look at all relevant matters, and come to a balanced exercise of discretion.

56.  Lying at the heart of the matter is the likelihood of confusion. I have already mentioned that Mr Liao for the appellant accepts that this remains a relevant consideration, even though under the new law, it has a reduced significance. Here, one must not forget the historical background. The confusion or risk of confusion has always been there, given the common origin of the two marks. It is true that in recent years, as the Registrar pointed out, the appellant has moved away from using “Chow Sang Sang” alone, and more significantly, from using “周生生” alone. “Chow Sang Sang” has always been used in conjunction with other trade marks and logo of the appellant. “周生生” has always been preceded, in recent years, by “粵港澳湛”. Moreover, the Registrar has noticed the increased use of “CSS” instead of “Chow Sang Sang” in the appellant’s advertisements and invitation cards. The evidence is that there has been a deliberate decision on the part of the appellant to move away from simply using “Chow Sang Sang” and “周生生”, so as to distinguish its products and services from that of the proprietor’s.

57.  Yet the fact remains that to a substantial extent, possible confusion between goods and services supplied by the appellant and that by the proprietor has been existing for a long long time. Whilst one cannot say that the public has got use to the confusion or possible confusion, the present case is quite different from a case where the registration of a mark may lead to confusion that did not exist before. One is concerned here with an increase in the risk of confusion, which has been present almost from day one, rather than the creation of confusion that did not exist before.

58.  As a matter of commonsense, the move by the appellant not to use “周生生” alone is much more significant than the practice in recent years to use “Chow Sang Sang” in conjunction with other names or marks. Hong Kong is a predominantly Chinese society, and “周生生” is a much more distinctive badge of origin than its English equivalent “Chow Sang Sang”.

59.  Nonetheless, I accept that as a large majority of consumers in Hong Kong are bilingual, accordingly, how the appellant might be referred to by the public in Chinese and the shift away from “周生生” to “粵港澳湛周生生” are relevant to the issue of the likelihood of confusion caused by the appellant’s use of the subject mark, particularly if it is to be used alone.

60.  In this regard, there is no direct evidence from the appellant as to its true intention after registration of “Chow Sang Sang”. Mr Liao has submitted that registration is essential, because potentially, the appellant could be sued by the proprietor for using “Chow Sang Sang” in the way it has been using the mark, given that the proprietor is the owner of the cited mark. It is not easy, according to Mr Liao, to establish a defence of prior use under section 19(4) of the Ordinance, particularly given the Registrar’s view that the prior use of the subject mark by the earlier partnerships of the three brothers could not be treated as that of the appellant (which the appellant does not accept, but does not wish to dispute in this appeal).

61.  It should be noted that without the protection of registration, an honest concurrent use, as opposed to a prior use, is no defence to an action for infringement by a registered trade mark proprietor.

62.  It may be that the present application for registration simply represents a defensive move on the part of the appellant as a result of the apprehension described above. It may also well be that given the trend in recent years, the intention of the appellant is not to use “Chow Sang Sang” alone.

63.  However, one cannot be certain about it. It is legitimate for Mr Yan, for the Registrar, to maintain that a fair and normal use of the subject mark, if allowed to be registered, is using it alone. That may constitute a departure from the practice of the appellant in recent years. But that possibility cannot be excluded.

64.  In my view, given the state of evidence, there must be an increased risk of confusion if registration is allowed. However, one is not, in considering how to exercise a discretion, concerned only with a theoretical increase. One must look at the evidence as a whole, and assess how serious the increase in risk of confusion is. Having considered the evidence as a whole, I take the view that the increase in risk of confusion is moderate, rather than substantial.

65.  As regards the extent of use in time and quantity and the area of the trade, I take the view that the use by the appellant of the subject mark has been extensive. It is true that besides the subject mark, the appellant has, particularly in recent years, used other marks and logo as well. However, it cannot be disputed that on all the price tags used by the appellant in relation to its jewellery products, the subject mark has been used. Furthermore, as regards gold products, the subject mark has been used on gold bullions.

66.  The evidence shows that the business of the appellant has been very substantial, both in relation to its jewellery products as well as to its gold products. Take gold products as an example: for the sale of gold bullions, on which the subject mark has consistently been applied, the sales volumes ranged from just below $10 million to over $76 million between 1992 and 2005.

67.  As for the appellant’s jewellery business, between 1995 and 2005, the sales turnover ranged from slightly over $500 million to over $1.2 billion. Over the same period, the amount spent in promotions and advertisements varied between $2.1 million and almost $7 million.

68.  During the 10 years period prior to the application, the number of shops in Hong Kong of the appellant was around 10. I note, for the sake of completeness, that the appellant also used its mark extensively in territories and countries outside Hong Kong, namely, Australia, Canada, Singapore, Taiwan and Macau.

69.  The fact that the appellant has also, at the same time, used other marks and logo, does not detract from the fact that to the appellant, the subject mark is an important mark as well.

70.  That the use of the mark alone may not be sufficient to distinguish the goods of the appellant from that provided by the proprietor does not mean that the mark has lost its distinctiveness. The mark “Chow Sang Sang” is and remains a distinctive badge of origin of the appellant’s goods and services, distinguishing them from that offered by all traders in Hong Kong, save for that of the proprietor’s. I fail to see how it can be said that the mark is no longer a distinctive badge of origin just because it is not, by itself, sufficient to distinguish its owner’s goods and services from that of one single competitor out of many others.

71.  It is true that over the years, the appellant has used “周生生” together with “粵港澳湛周生生”. The Registrar apparently took this to mean that “Chow Sang Sang” alone is quite insufficient to act as a badge of origin for the appellant’s goods or services, in the absence of the qualifying words “粵港澳湛” (or their English equivalent). I do not agree with this way of reading the facts. In my view, the continued and persistent use by the appellant over the years of the mark “Chow Sang Sang” without any qualification, in conjunction with the Chinese mark “粵港澳湛周生生”, simply represents an effort to educate the public that the mark “Chow Sang Sang” may refer to the appellant’s business, goods and services, rather than that of its competitor which has been using “周生生” as its Chinese trading name and mark (ie the proprietor). In other words, the continued and persistent use by the appellant of the English mark “Chow Sang Sang” is an attempt by the appellant to tell the public that “Chow Sang Sang” does not necessarily mean “周生生” – the name and mark of the proprietor, but may equally refer to “粵港澳湛周生生” – the name and mark of the appellant itself. Far from indicating that the appellant has given up on the English mark “Chow Sang Sang” as a badge of origin of its own goods and services, its use in conjunction with the appellant’s Chinese name and mark represents the appellant’s insistence that the English mark can also refer to its own business and goods, as it has always been the case since day one.

72.  Hong Kong is a predominantly Chinese society. It cannot be disputed that a great deal of reputation of the proprietor’s business must have been generated by the use of the Chinese name and mark “周生生” rather than the cited mark, which is a composite mark in English referring specifically to “corporate gift”. However, because “Chow Sang Sang” is the English transliteration of “周生生”, when discussing confusion, the Registrar has borne in mind the reputation in general generated not only by the cited mark in English, but also by the Chinese name and mark “周生生” as used by the proprietor, even though “周生生” is not itself a registered mark, and even though section 12(3) is only concerned with similarity with an earlier registered mark (ie the cited mark here). No submission has been made on this possible distinction, and I do not wish to proceed on the basis that there is any legal significance arising out of it. But in terms of practical consideration regarding how the discretion should be exercised, I believe I am entitled to bear this in mind. In other words, a lot of confusion that might arise would be as a result of reputation generated, not by the cited mark itself, but rather by the Chinese name or mark “周生生” used by the proprietor, which is an unregistered mark. Legally, as presently advised, this fact does not mean that I can ignore this type of confusion. However, in terms of how the discretion should be exercised, I do not think the law, again as presently advised, requires me to ignore this fact either.

73.  As I said, honesty of the appellant in the concurrent use cannot be doubted. This is not only relevant in establishing honest concurrent use, but is also a material factor to bear in mind in terms of a balanced exercise of the discretion.

74.  As regards actual instances of confusion, there is no such proof. However, that is not surprising, given that at the initial stage, all the Registrar had was evidence coming from the appellant itself. Given the history and background, I proceed on the basis that there must have been some actual instances of confusion in the past. As I said, I further proceed on the basis that registration would lead to an increased risk of confusion.

75.  As to the relative inconvenience which would ensue to the appellant and the proprietor respectively, I bear in mind that by reason of the registration of the cited mark, if the registration of the subject mark by the appellant is disallowed, the appellant would run a real risk of not being able to use “Chow Sang Sang” at all in future. Again, the assessment of a risk is involved here. Thus far, the proprietor has not, in reliance on the cited mark as a registered mark, taken any steps to prevent the appellant from using “Chow Sang Sang”. However, there is evidence that the relationship between the two sides has become tense in recent years, and there are opposed applications pending before the Registrar relating to some common or similar marks.

76.  On the other hand, if the registration is allowed, apart from the question of confusion which has been separately considered, there is no real prejudice to the proprietor. The concurrent registration of the subject mark would not mean that the proprietor can no longer use the cited mark or “Chow Sang Sang”. On the finding of the Registrar, the proprietor is the prior user of “Chow Sang Sang”. Moreover, it is the proprietor of the cited mark, which is a registered mark.

77.  In the present case, one additional consideration that the Court should take into account is the historical background. This matter has been relied on by the appellant as a ground for invoking section 13(1)(b) of the Ordinance, namely “other special circumstances”. However, in my view, it is a special circumstance which should be taken into account even in considering how the discretion should be exercised under section 13(1)(a). It must be remembered that apart from the five specific considerations mentioned in Pirie, the Court is also entitled to take into account other relevant considerations, depending on the circumstances of an individual case.

78.  In my view, in the present case, it is simply right and appropriate to take into account the historical background, in considering how the discretion under section 13(1)(a) should be exercised. In the instant case, the honest concurrent use arises from the historical link that the appellant can trace between its use of the subject mark and the use made by the three brothers of the marks “周生生” and “Chow Sang Sang” more than half a century ago. This is so regardless of whether strictly and technically speaking, the appellant could be described as a successor-in-title to the three brothers’ partnership business, and thus their use of the subject mark. On the peculiar facts of the present case, it would be a surprising result if only one branch of the extended Chow family could have “Chow Sang Sang” registered as a trade mark, even though both branches have been using “Chow Sang Sang” (as a transliteration of “周生生”) in one form or another, continuously for decades.

79.  It is true that in recent years, the appellant’s side has used “周生生” and “Chow Sang Sang” in a slightly different manner from the way the same are used by the proprietor’s side, so as to distinguish the goods and businesses of the two sides. Yet, as Mr Liao has put it, the refusal of the appellant’s registration of “Chow Sang Sang” for that reason would have the practical effect of “penalising” the appellant for its effort to lessen the potential confusion to the public by using “周生生” and “Chow Sang Sang” in a slightly complicated manner than that of its competitor’s. The important thing, and the bottom line, is that the appellant has never stopped using “Chow Sang Sang” as a trade mark.

80.  Whilst the present case contains many features that are different from Budweiser, supra, which involved the American Budweiser’s mark and the Czech brewer’s “Budweiser Budvar” mark, the latter case is nonetheless illuminating in that despite the obvious increase in the risk of confusion by allowing the registration of the Czech brewer’s mark as simply “Budweiser”, the Court allowed the registration. Amongst other things, the Court took into account the unusual history of the usage of the relevant marks in that case.

Conclusion on discretion

81.  Each case must of course be decided on its own facts.

82.  Having borne in mind the relevant facts in the present case, and, in particular, the considerations mentioned above, I have come to the view that the discretion under section 13(1)(a) should be exercised in favour of the appellant. In my view, it is just in all the circumstances of the case to accept the application for registration. All this means at this stage is that the application should not be thrown out of the window. It does not stop anyone from objecting to the application for registration in opposition proceedings (section 44 of the Ordinance). It is quite open to the proprietor to oppose the application of the appellant at that stage. That, indeed, is also a matter that the Court has taken into account in considering how the discretion should be exercised.

83.  In my view, a fair and balanced exercise of the discretion requires that the application be permitted to proceed to the next stage.

Other special circumstances

84.  Having come to that conclusion, it is not necessary for the Court to consider the appellant’s argument based on section 13(1)(b) of the Ordinance (“other special circumstances”).

Conditions or limitations

85.  Nor is it necessary to consider section 13(2) of the Ordinance, which allows the court and the Registrar to permit registration under section 13(1) on conditions/limitations. However, I should indicate that if I had been less confident with my conclusion on how the discretion should be exercised, I would have been prepared to consider allowing the application to proceed nonetheless, on the condition that the use of the subject mark by the appellant after registration shall not go beyond the manner or extent that the subject mark was actually used by the appellant as at the time of application, so as to minimise the increase in risk of confusion.

86.  I do not accept Mr Yan’s argument that to impose such a condition or limitation on use would mean changing the subject mark into a composite mark (so that it could only be used in conjunction with some other marks or logo), thereby rendering the mark no longer a mark/badge of origin by itself. I do not think one can draw that conclusion. The condition would not force the appellant to use the subject mark as merely a constituent element in a composite mark. All it would require is that the subject mark be only used in the same way as it was used as at the time of application. Thus, for instance, when used on price tags, the Chinese mark must also be printed on the price tags; when used on gold bullions, the Chinese mark must also appear on the gold bullions. There is no question of the two marks becoming a composite mark in such uses.

87.  However, for reasons given, I do not think it necessary to impose such a condition/limitation. In case I was wrong, I would still disturb the Registrar’s decision by allowing the appeal to the extent that the application be permitted to proceed subject to the described condition/limitation.

Horological and chronometric instruments

88.  In those circumstances, I need not deal with Mr Liao’s fall back point that in any event, his client’s application should not be refused in relation to the unrelated goods, particularly horological and chronometric instruments, such as watches. For the sake of completeness, I would simply say that in relation to those instruments, I am with Mr Liao, for the reasons that he has advanced by way of submission at the hearing. However, in relation to other goods, I believe the Registrar has been right in considering that they are goods sufficiently similar to that covered by the registration of the cited mark.

Application to adduce further evidence

89.  At the beginning of the hearing, I gave leave to the appellant to adduce additional evidence relating to two matters, namely, the price tags that it had been using since July 1993 on its jewellery products, and the use of the subject mark on gold bullions. I refused the appellant’s application to adduce additional evidence regarding a certain consignment note (the Wai Fung consignment note).

90.  I agree that in this regard, the Ladd v Marshall conditions are not applicable in an appeal from the Registrar to the Court of First Instance. On the other hand, one cannot assume that leave to adduce further evidence is to be had for the asking. The court will look at a number of factors, including whether the evidence could have been filed earlier, and, if so, how much earlier; the explanation for the delay; the nature of the mark; the potential significance of the new evidence; prejudice; the desirability of avoiding multiplicity of proceedings (where relevant); and the public interest in not admitting onto the Registrar invalid marks. Hunt-Wesson Inc’s Trade Mark Application [1996] RPC 233, 241-242.

91.  On the facts of the present case, having borne in mind these factors insofar as they are relevant here, and particularly, the relevance and significance of the proposed evidence to the real issues between the parties, I have come to the conclusion described.

92.  In my view, the new evidence regarding the price tags is of material significance to the present case. It goes to whether there has been an honest concurrent use of the subject mark, and the extent of such use, during the critical period. Likewise, for the new evidence about use of the subject mark on gold bullions.

93.  On the other hand, the new evidence regarding the consignment note is neither here nor there. It goes only to the question of whether use of the appellant’s trading name may be regarded as use of the subject mark, the point being that somebody in a related trade (not a customer) has addressed the appellant simply as “周生生”. In the context of the present case, I do not think this is a really important point, and I do not consider the proposed evidence to be of any great evidential value. In any event, one is concerned with the English mark “Chow Sang Sang”, not the Chinese mark “周生生”.

94.  In those circumstances, I have come to the conclusion described regarding the appellant’s application for adducing further evidence.

95.  There was an application relating to a fourth matter, but it was dropped during the course of hearing, and I need not deal with it.

96.  As I ordered during the hearing, the costs of the two summonses concerned shall be borne by the appellant, to be taxed if not agreed.

Outcome

97.  Returning to the appeal, I order that the appeal be allowed, the relevant decision of the Registrar be set aside, and the application for registration be accepted by the Registrar.

98.  I also make a costs order nisi that the appellant shall have 70% of the costs of the appeal – the reduction in costs is on account of the fact that evidence on the use of the subject mark on gold bullions was only available for the first time on the first day of the hearing of the appeal, and the Registrar did not have the benefit of the additional evidence. I also give a certificate for two counsel.

99.  I thank counsel for their assistance.