HOST HOTELS & RESORTS, L.P. v. REGISTRAR OF TRADE MARKS

HCMP 554/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 554 OF 2009

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BETWEEN

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J U D G M E N T

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Introduction

1.  This is an appeal by the appellant Host Hotel & Resorts, L.P. from the decision of the hearing officer Mr Ryan Ng (“the hearing officer”) acting for the Registrar of Trade Marks (“the Registrar”) dated 23 February 2009. The hearing officer refused the appellant’s application to register the mark “HOST HOTELS & RESORTS” (“the mark”) as a trade mark in Class 36 for real estate investment trust services and asset management services.

2.  The absolute grounds for refusal of registration are set out in section 11 of the Trade Marks Ordinance Cap. 559.

3.  Section 11 provides :

“ (1)  Subject to subsection (2), the following shall not be registered-

(a)  ………………………….;

(b)  trade marks which are devoid of any distinctive character;

(c)  trade marks which consist exclusively of signs which may serve, in trade or business, to designate the kind, quality, quantity, intended purpose, value, geographical origin, time of production of goods or rendering of services, or other characteristics of goods or services; and

(d)  ………………..………..”

4.  Subsection (2) of section 11 provides :

“ A trade mark shall not be refused registration by virtue of subsection (1)(b), (c) or (d) if, before the date of application for registration, it has in fact acquired a distinctive character as a result of the use made of it.”

5.  The appellant did not file any evidence of use of the mark. It was no part of the appellant’s case that the mark has in fact acquired a distinctive character as a result of the use made of it before the date of application for registration. Subsection (2) of section 11 does not assist the appellant.

6.  The hearing officer refused the appellant’s application because in his view the mark fell within the absolute grounds of refusal under section 11(1)(b) and (c). These are separate and independent grounds of refusal. The hearing officer came to the view that the mark fell within the prohibition in both (b) and (c) of section 11(1).

The approach on appeal

7.  On an appeal from a decision of the Registrar it is clear that the Court should not interfere with the decision unless it is satisfied that it was wrong in principle.

8.  In Terumo K K v Beecham Group Plc [1994] AIPR 306 it was held that the court would interfere with the Registrar’s decision only where it was satisfied that the Registrar had acted on some wrong principle, such as approaching the problem incorrectly, taking into consideration matters which he ought not to have taken into consideration or omitting to take into consideration matters which should have been considered.

9.  And in Bongrain SA’s Trade Mark Application [2005] RPC 14 Jacob LJ said at paragraph 9 :

“ The approach on appeal was also common ground. It was accepted that Pumfrey J. applied the right test on appeal from the registrar, namely that it was a re-hearing not a review, but that the Court should be slow to reverse the decision of the experienced registrar on a question which consists largely of a value judgment, such as “distinctive character”.”

10.  In Reef Trade Mark [2003] RPC5 Robert Walker LJ (as he then was) said at paragraph 28 :

“ …….an appellate court should in my view show a real reluctance, but not the very highest degree of reluctance, to interfere in the absence of a distinct and material error of principle.”

11.  In the recent decision of the Court of Appeal in Re Naked (Civil Appeal No. 15 of 2009; 15 December 2009) Rogers VP said at paragraph 22 of his reasons for judgment :

“ In my view, the correct approach is that the Registrar’s opinion has to be fully and carefully considered.  The Registrar has very particular experience.  Any departure from the way in which the Registrar exercised his discretion has to be made upon a sound basis after giving full and most careful consideration to the Registrar’s views and reasons.  The exercise of discretion by the Registrar should not be overruled simply because the court itself might have come to a different conclusion.  Essentially, therefore, a similar approach should be taken to the exercise of discretion by the Registrar as by a judge.”

Section 11(b)

12.  Although the hearing officer in his statement of reasons for decision (“the decision”) dealt first with (c) and then (b) of section 11(1) it seems to me that if the mark is refused registration on ground (b) as being devoid of any distinctive character, that is the end of the matter. There is no need to consider (c). This is common ground.

13.  I propose to consider ground (b) of Section 11(1) first.

14.  Is the mark devoid of any distinctive character?

15.  It is plain that the mark is only registrable if it is not devoid of any distinctive character i.e. if it is inherently distinctive.

16.  No evidence of use has been put forward and the appellant does not seek to show that the mark was distinctive through use to avail itself of subsection (2) of section 11.

17.  In British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281 Jacob J (as he then was) said at page 306 :

“ What does devoid of any distinctive character mean? I think the phrase requires consideration of the mark on its own, assuming no use. Is it the sort of word (or other sign) which cannot do the job of distinguishing without first educating the public that it is a trade mark?”

18.  In Nestle SA’s Trade Mark Application (Have A Break) [2004] FSR 2 Sir Andrew Morritt VC (as he then was) said at paragraph 23 :

“ The distinctiveness to be considered is that which identifies a product as originating from a particular undertaking. Such distinctiveness is to be considered by reference to goods of the class for which registration is sought and consumers of those goods.  In relation to the consumers of those goods the court is required to consider the presumed expectations of reasonably well informed, and circumspect consumers.  For my part I would particularly emphasise that the relevant distinctiveness is that which identifies a product as originating from a particular undertaking……”

19.  At paragraph 10 of the decision the hearing officer said :

“ The subject mark consists of three ordinary English words “HOST”, “HOTELS” and  “RESORTS” linked up by an ampersand “&” in plain block letters.  It has no other added element or stylization.  According to Encartaâ World English Dictionary, “HOST” means a “place where event is held: a place or organization that provides the space and facilities for an event such as an international sporting competition”, “HOTEL” refers to a “place for overnight stay: a building or commercial establishment where people pay for lodging, and where meals and other facilities such as conference rooms are often available” and “RESORT” refers to a “Vacation place: a place that is popular for recreation and vacations and provides accommodations and entertainment”.  As a whole, the term “HOST HOTELS & RESORTS” is used to describe hotels and resorts that provide space and facilities for organizing events or activities.”

20.  Mr Adler, for the appellant, submitted that the hearing officer had misused the English language when coming to the view that the term “HOST HOTELS & RESORTS” is used to describe hotels and resorts that provide space and facilities for organizing events or activities. He submitted that the word “HOST” invariably means persons or a group of persons holding events and that it was a misuse of the English language to refer to a building or an accommodation as a “HOST”.

21.  I am unable to accept Mr Adler’s submissions. As the hearing officer said at paragraph 10 of the decision, according to Encarta World English Dictionary, the word “HOST” means a “place where event is held : a place or organization that provides the space and facilities for an event such as an international sporting competition”.

22.  It seems to me that the word “HOST” has been used to describe cities or nations hosting events. An example of this is where Beijing was described as the HOST CITY for the 2008 Olympics. Another example is where Germany was described as the HOST NATION for the World Cup in 2006.

23.  Ultimately what must be considered is what the mark as a whole conveys to the relevant public. As the hearing officer said, correctly in my view, at paragraph 20 of the decision, the relevant public are “those members of the general public in Hong Kong who may be interested to invest in real estate through the services offered by real estate investment trusts and asset management companies”.

24.  Does the mark as a whole convey to the relevant public that the mark originates from a particular undertaking? If it does not it is not inherently distinctive.

25.  I would refer to what was said in the judgment of the Court of First Instance of the European Communities in respect of the equivalent of section 11(1)(b) in Sykes Enterprises, Inc v Office for Harmonisation in the Internal Market [2003] ETMR 57 at paragraph 20 :

“ However, a sign which fulfils functions other than that of a trade mark is only distinctive for the purposes of Art. 7(1)(b) of Regulation 40/94 if it may by perceived immediately as an indication of the commercial origin of the goods or services in question, so as to enable the relevant public to distinguish, without any possibility of confusion, the goods or services of the owner of the mark from those of a different commercial origin.”  (emphasis added)

26.  Thus the mark is only distinctive for the purposes of section 11(1)(b) if it may be perceived immediately by the relevant public as an indication of the commercial origin of the services in question without first being educated.

27.  At paragraph 12 of the decision the hearing officer was of the view that :

“ I think the mark as a whole conveys a direct and immediate message about hotels and resorts that are used for hosting events or activities.  When used in respect of the applied-for services, namely real estate investment trust services and asset management services, the subject mark simply indicates that the real estate investment trust services and asset management services are related to or specifically targeting host hotels and resorts.”

28.  And at paragraphs 19 and 20 of the decision the hearing officer, in my view, applied the correct test. He said :

“ 19.  It follows that the distinctive character under section 11(1)(b) of the Ordinance means that the mark, assuming no use of it, must be capable of identifying the product or service as originating from a particular undertaking, and thus distinguishing it from those of other undertakings.  The distinctiveness of the mark must be assessed by reference to the goods or services for which registration is sought and the perception of the relevant consumers who are reasonably well-informed, observant and circumspect.

20.  By nature of the applied-for services (i.e. real estate investment trust services and asset management services), the relevant consumers are those members of the general public in Hong Kong who may be interested to invest in real estate through the services offered by real estate investment trusts and asset management companies.”

29.  And at paragraph 22 of the decision the hearing officer came to the view that :

“ …….the subject mark as a whole plainly denotes to the average consumers that the applied-for services are related to or specifically targeting host hotels and resorts.  I am not satisfied that without first being educated, the relevant consumers would regard the subject mark as a guarantee of a particular trade origin.”

30.  The hearing officer held that the mark was devoid of any distinctive character in respect of the services in respect of which the registration was sought.

31.  It seems to me, as submitted by Mr Wong, for the Registrar, that the word “HOST” used in conjunction with “HOTELS & RESORTS” conveys to the relevant public that the mark signifies hotels or resorts that are hosts to guests attending events such as conventions. It does not, in my view, convey to the relevant public that the mark originates from a particular undertaking. It is devoid of any distinctive character and, in my view, registration was rightly refused under section 11(1)(b). That clearly is a value judgment made by the experienced hearing officer.

32.  I am unable to discern any error in principle made by the hearing officer in the decision that the mark was devoid of any distinctive character and that registration ought to be refused under section 11(1)(b). The appeal should be dismissed.

Section 11(1)(c)

33.  Although it is not necessary to consider section 11(1)(c) as the other ground for refusal of registration, I shall, however, deal with this briefly.

34.  It was submitted on behalf of the appellant that the hearing officer was also wrong by effectively overlooking the word “HOST” on its own and by treating the mark as if it read simply “HOTELS & RESORTS”. It was also submitted that each part of the mark “HOST HOTELS & RESORTS” must actually and exclusively designate either real estate investment services and/or asset management services themselves, or their quality or a characteristic of the services and that the word “HOST” does not literally designate real estate investment services or asset management services themselves.

35.  I am unable to accept these submissions. It must be remembered that the mark must be considered as a whole and that is what the hearing officer did. He made that clear at paragraph 10 of his decision.

36.  It was further submitted that the hearing officer misanalysed the mark by saying at paragraph 15 :

“ The subject mark consists exclusively of signs which may serve to designate the property portfolio of the applied-for services.  Accordingly, the subject mark is precluded from registration under section 11(1)(c) of the Ordinance.”

37.  The question to consider under section 11(1)(c) is whether the mark :

“ consists exclusively of signs which may serve, in trade or business, to designate the kind, quality, intended purpose …………………or other characteristic of ……….services.”

38.  The hearing officer referred at paragraph 14 of his decision to internet hits showing that the term “HOST HOTELS” had been used by other traders to describe hotels for organizing events although, as he said, it did not form the basis of the objection to the registration.

39.  The relevant consideration, as the hearing officer said at paragraph 9 of the decision, is whether at least one of the mark’s possible meanings designates the characteristics of the goods or services in question. At paragraph 9 he said :

“………………………………..to be precluded from registration under section 11(1)(c) of the Ordinance, a mark does not need to inform the consumers what the relevant goods or services are, nor does it have to be the normal way of describing the goods and services in question. It is sufficient if the mark could be used for the purpose of designating the characteristics of the goods and services, including the kind and intended purpose of the goods and services. A mark is therefore objectionable if at least one of its possible meanings designates a characteristic of the goods and services in question.”

40.  In Bignell v Just Employment Law Ltd [2008] FSR 6, in considering the equivalent of section 11(1)(c), Deputy Judge Robert Englehart QC said at paragraph 35 :

“  The modern approach of the ECJ is summarised in the following passages from the ECJ judgment in OHIM v Wm Wrigley Jr Co, the DOUBLEMINTcase (Case C-191/01 P) [2003] E.C.R. I-12447; [2004] 1 W.L.R. 1728:

“29  Article 7(1)(c) of Regulation No 40/94 provides that trade marks which ‘consist exclusively of signs or indications which may serve, in trade, to designate the kind, quality, quantity, intended purpose, value, geo­graphical origin or the time of production of the goods or of rendering of the service, or other characteristics of the goods or service’ are not to be regis­tered.

30  Accordingly, signs and indications which may serve in trade to desig­nate the characteristics of the goods or service in respect of which registration is sought are, by virtue of Regulation No 40/94, deemed incap­able, by their very nature, of fulfilling the indication-of-origin function ofthe trade mark, without prejudice to the possibility of their acquiring distinctive character through use under Article 7(3) of Regulation No 40/94.

31  By prohibiting the registration as Community trade marks of such signs and indications, Article 7(1)(c) of Regulation No 40/94 pursues an aim which is in the public interest, namely that descriptive signs or indications relating to the characteristics of goods or services in respect of which registration is sought may be freely used by all. That provision accordingly prevents such signs and indications from being reserved to one undertaking alone because they have been registered as trade marks: see, inter alia, in relation to the identical provisions of Article 3(1)(c) of First Council Direc­tive 89/104 of 21 December 1988 to approximate the laws of the member states relating to trade marks, Windsurfing Chiemsee [2000] Ch 523, 551, para 25, and Linde AG v Deutsches Patent- und Markenamt (Joined Cases C-53-55/01) [2003] ECR I-3161, 3202, para 73.

32  In order for OHIM to refuse to register a trade mark under Article 7(1)(c) of Regulation No 40/94, it is not necessary that the signs and indications composing the mark that are referred to in that Article actually be in use at the time of the application for registration in a way that is descriptive of goods or services such as those in relation to which the application isfiled, or of characteristics of those goods or services. It is sufficient, as the wording of that provisions itself indicates, that such signs and indi­cations could be used for such purposes. A sign must therefore be refusedregistration under that provision if at least one of its possible meanings des­ignates a characteristic of the goods or services concerned. ”

41.  The public interest element was also emphasized in Koninklijke KPN Nederland NV v Benelux Merkenbureau [POSTKANTOOR] [2006 Ch 1] at page 30 :

“  54  As the court has already held (the Windsurfing Chiemsee case [2000]Ch 523, 55I, para 25; Linde AG v Deutsches Patent- und Markenamt (Joined Cases C-53-55/0I) [2003] ECR I-3I6I,3202, para 73, and Libertel Groep BV v Benelux-Merkenbureau (Case C-I04/0I) [2004] Ch 83, 9I, para 52), article 3(I)(c) of the Directive pursues an aim which is in the public interest, namely, that such signs or indications may be freely used by all. Article 3(I)(c) therefore preventssuch signs and indications from being reserved to one undertaking alone because they have been registered as trade marks.

55  That public interest requires that all signs or indications which may serve to designate characteristics of the goods or services in respect of which registration is sought remain freely available to all undertakings in order that they may use them when describing the same characteristics of their own goods. Therefore, marks consisting exclusively of such signs or indications are not eligible for registration unless article 3(3) of the Directive applies.

………………………………………………………….

58  ………whether the number of competitors who may have an interest in using the signs or indications of which the mark consists is large or small is not decisive.  Any operator at present offering, as well as any operator who might in the future offer, goods or services which compete with those in respect of which registration is sought must be able freely to use the signs or indications which may serve to describe characteristics of itsgoods or services.”

42.  The hearing officer said, correctly in my view, at paragraph 15 of the decision :

“ In relation to the services in question, the descriptive meanings conveyed by the phrase “HOST HOTELS & RESORTS” are obvious and direct. The subject mark is capable of designating the kind of service offered by the Applicant by conveying to the public the message that the real estate investment trust services offered by the Applicant involve host hotels and resorts. It is also capable of designating the kind of asset management services by similarly conveying the message that the assets and properties managed by the Applicant involve host hotels and resorts. The subject mark consists exclusively of signs which may serve to designate the property portfolio of the applied-for services. Accordingly, the subject mark is precluded from registration under section 11(1)(c).”

43.  In my judgment the hearing officer correctly applied the established principles and came to the right decision that the mark should be refused registration under section 11(1)(c). In my view no error of principle has been shown.

Conclusion

44.  The appeal is dismissed.

45.  I also make an order nisi