深圳市德力康電子科技有限公司 v. JOO-SIK-HOI-SA LG (LG CORPORATION) AND ANOTHER

HCMP 881/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 881 OF 2013

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J U D G M E N T

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Introduction

1.  This is the applicant’s appeal from a decision of the Registrar of Trade Marks revoking the applicant’s mark (“Suit Mark”) on the sole ground that the Suit Mark was registered in bad faith contrary to s 11(5)(b) of the Trade Marks Ordinance, Cap 559 (“Ordinance”).

Background

2.  The applicant 深圳市德力康電子科技有限公司 (“De Li Kang”) is a limited company in Shenzhen incorporated under the laws of Mainland China, and was the owner of the Suit Mark          .

3.  De Li Kang applied for registration of the Suit Mark on 1 March 2006 and the Suit Mark, numbered 300590337,was subsequently registered for certain goods in classes 9 and 17.

4.  The 1^st respondent Joo-Sik-Hoi-Sa LG and the 2^nd respondent Joosikhoisa EL Gi are both companies incorporated under the laws of the Republic of South Korea and they will be collectively referred to as “LG” in this judgment.

5.  LG is the owner of the device         (“LG Device”), and other marks which incorporated the LG Device, including                .  This mark and the LG Device are collectively referred to as the “LG Marks”.

6.  On 31 July 2008, LG applied to the Registrar of the Trade Mark (“Registrar”) for a declaration of invalidity of the Suit Mark under section 53 of the Ordinance.  There were a number of grounds in LG’s statement of grounds (“Statement”)[1].  Attached to the Statement is a list of LG’s marks, the class for which each mark was registered and the respective date of registration.  The marks were registered on either 30 January 1995 or 13 April 1995 for goods in class 9 and/or class 17, and the LG Device appeared in all such marks.

7.  On 30 October 2008, De Li Kang filed a counter statement through its representative/trade mark agent 中港知識産權服務有限公司 (“Counter-Statement”)[2], stating, among other things, that the Suit Mark was created by a shareholder of De Li Kang, namely Mr Fan De Wen (“Fan”) from the 3 alphabets in the name of the company, namely “D”, “L”, “K”[3], and drawing distinctions between the Suit Mark and the LG Device.

8.  In support of LG’s application, LG’s assistant manager Mr Ki Woong Baek (“KWB”) filed a statutory declaration on 30 April 2009[4] (“KWB Declaration”), and in opposition thereto, a manager of De Li Kang, namely Mr Liu Li Ya (“LLY”) filed a statutory declaration on 27 October 2009[5] (“LLY Declaration”).  In reply, another manager of LG, Mr Yang Song-I (“YSI”) filed a statutory declaration on 8 October 2010[6] (“YSI Declaration”).

9.  The hearing took place before the hearing officer Ms Caroline Chow (“Officer”) on 3 January 2013 (“Hearing”).  LG was represented by their present solicitors Messrs Deacons and counsel Mr Philips Wong.  De Li Kang, by letters dated 8 and 13 November 2012 through its agent 中港知識産權服務有限公司, informed the Registrar that neither De Li Kang nor its representative/agent would attend the hearing.

10.  At the Hearing, LG relied on, in particular section 11(5)(b), and also sections 12(3), 12(4), 12(5)(a) of the Ordinance.

11.  On 12 March 2013, the Officer concluded with reasons that the application for registration of the Suit Mark was made in bad faith by De Li Kang and the registration was revoked (“Decision”)[7].  In view of this conclusion, the Officer found it not necessary to consider the other grounds put forward by LG.

12.  De Li Kang issued an originating summons on 25 April 2013[8] to appeal against the Decision and set out 8 grounds of appeal listed as 2(1) to (8) respectively (“Grounds”).

13.  LG filed a Respondents’ Notice on 16 July 2013[9], asking this court, among other things, to affirm the Decision on the additional/ alternative grounds under sections 12(3), 12(4) and 12(5) of the Ordinance. 　Although Order 55 and Order 100 of the Rules of the High Court do not provide for procedure for filing a Respondent’s Notice, the parties consented to the filing of such notice, and it was not challenged by Mr Lam that this court would have the jurisdiction to make any relevant findings in dealing with the appeal, or to affirm the Decision on alternative grounds.  This appeal is by way of re-hearing[10].

14.  The Officer was served with all the relevant documents but did not appear at the hearing before this court.  She had sent a letter to LG’s solicitors requesting, among other things, that the court’s attention be drawn to two cases Nuvol TM (1927) 44 RPC 335 and Hicaliq TM, HCMP 638 of 1994.

Relevant Sections in the Ordinance

15.  An application for a declaration of invalidity of the registration of a trade mark may be made by any person, and may be made either to the Registrar or to the court under section 53 of the Ordinance.  Section 53 states:

“(1) An application for a declaration of invalidity of the registration of a trade mark may be made by any person, and may be made either to the Registrar or to the court.

(2) In the case of bad faith in the registration of a trade mark, the Registrar himself may apply to the court for a declaration of the invalidity of the registration.

(3) The registration of a trade mark may be declared invalid on the ground that the trade mark was registered in contravention of section 11 (absolute grounds for refusal of registration).

(4) Where the trade mark was registered in contravention of section 11(1)(b), (c) or (d), it shall not be declared invalid if, in consequence of the use which has been made of it, it has after registration acquired a distinctive character in relation to the goods or services for which it is registered.

(5) Subject to subsections (6) and (7), the registration of a trade mark may also be declared invalid on the ground-

(a) that there is an earlier trade mark in relation to which the conditions set out in section 12(1), (2) or (3) (relative grounds for refusal of registration) apply; or

(b) that there is an earlier right in relation to which the condition set out in section 12(4) or (5) (relative grounds for refusal of registration) is satisfied.

(6) The registration of a trade mark may not be declared invalid under subsection (5) if the owner of the earlier trade mark or other earlier right has consented to the registration.

(7) Where a trade mark has been registered on the ground that there has been an honest concurrent use of the trade mark and the earlier trade mark or other earlier right, as provided for by section 13 (honest concurrent use, etc), the registration of a trade mark may not be declared invalid under subsection (5) unless the Registrar or the court is satisfied that in fact there had been no honest concurrent use of the trade mark and the earlier trade mark or other earlier right.

(8) Where the grounds of invalidity exist in respect of only some of the goods or services for which the trade mark is registered, the trade mark shall be declared invalid as regards those goods or services only.

(9) Without affecting transactions past and closed, where the registration of a trade mark is declared invalid under this section to any extent, the registration shall to that extent be deemed never to have been made.”

16.  Section 11 of the Ordinance sets out the absolute grounds for refusal of registration, and  11(5) of the Ordinance states that:

“(5) A trade mark shall not be registered if, or to the extent that-

(a) its use is prohibited in Hong Kong under or by virtue of any law; or

(b) the application for registration of the trade mark is made in bad faith.”

17.  Section 12 of the Ordinance then sets out the relative grounds for refusal of registration, and sections 12 (3), (4), (5) state as follows:

“(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.

(4) Subject to subsection (6), a trade mark which is –

(a) identical or similar to an earlier trade mark; and

(b) proposed to be registered for goods or services which are not identical or similar to those for which the earlier trade mark is protected, shall not be registered if, or to the extent that, the earlier trade mark is entitled to protection under the Paris Convention as a well-known trade mark and the use of the alter trade mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trade mark.

(5) Subject to subsection (6), a trade mark shall not be registered if, to the extent that, its use in Hong Kong is liable to be prevented – (a) by virtue of any rule of law protecting an unregistered trade mark or other sign used in the course of trade or business (in particular, by virtue of the law of passing off); or (b) by virtue of an earlier right other than those referred to in paragraph (a) or in subsections (1) to (4) (in particular, by virtue of the law of copyright or registered designs), and a person thus entitled to prevent the use of a trade mark is referred to in this Ordinance as the owner of an ‘earlier right’ in relation to the trade mark.”

The Grounds

18.  At  the hearing before this court, no submissions on Ground 2(4) were made by Counsel for De Li Kang, Mr Lam, and the other 7 Grounds were grouped by him intomainly-

(i) misapplication of standard and burden of proof－Grounds 2(1) – (3)

(ii) manifest misreading of the evidence – Grounds 2(5) – (8)

19.  The legal errors of the Officer complained  by Mr Lam were:

(1) reversing the burden of proof on De Li Kang to prove absence of bad faith[11] – Ground 2(1);

(2) misapplying the burden of proof of bad faith that requires cogent evidence, instead of “reasons for belief” (有理由相信) that there was bad faith[12] – Ground 2(2); and

(3) failing to direct cross-examination of LG’s witness before finding any bad faith of  De Li Kang[13] – Ground 2(30)

20.  Mr Lam further submitted that the Grounds 2(5) – (8) were also part and parcel of the above errors of law concerning burden and standard of proof.

21.  Thus, essentially, the main ground of appeal was on the misapplication of the standard and burden of proof on “bad faith”.

22.  At the hearing before this court, Mr Lam further emphasised that there were 3 fundamental bases for the Grounds:

(i) There was a lack of particulars of bad faith alleged by LG;

(ii) Unlike the run-of-the-mill cases, in the present case, there was evidence detailing each component of the Suit Mark;

(iii) There was only limited similarity between the Suit Mark and the LG Device and the consumer would not be confused, and that “mere association” would not be sufficient for revocation of the registration of the Suit Mark.

The Legal Principles

Generally

23.  It is accepted by Mr Lam that “the courts are in practice slow to interfere with the Registrar’s exercise of discretion and are prone to give due weight to the daily experience of the Registrar as to what is and what is not suitable for registration as a trade mark[14].

24.  As set out in cases such as Nuvol TM and Hicaliq TM, which were drawn to this court’s attention by the Officer, considerable weight should be given to what has been said by an experienced hearing officer in a decision, and that the court should only interfere if it is satisfied that the hearing officer has acted on some wrong principle, for example, has not approached the problem in the right way, or has taken into consideration matter which he ought not to have taken into consideration, or has omitted to take into consideration matters which were proper for consideration[15].

Meaning and Test of “bad faith”

25.  There is no definition for the term “bad faith” in the Ordinance. The case of Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd [1999] RPC 367 has set out that it includes “dishonesty” and “some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined.”[16]

26.  In the English Court of Appeal case of Harrison’s Trade Mark Application [2005] FSR 10, Sir William Aldous in giving the leading judgment, quoting from Lord Hutton in Twinsectra Ltd v Yardly [2002] UKHL 12 , had stated that :

“25. Lord Hutton went on to conclude that the true test for dishonesty was the combined test. He said:

‘36. Therefore I consider … That your Lordships should state that dishonesty requires knowledge by the defendant that what he was doing would be regarded as dishonest by honest people, although he should not escape a finding of dishonesty because he sets his own standards of honesty and does not regard as dishonest what he knows would offend the normally accepted standards of honest conduct.’

26. For my part, I would accept the reasoning of Lord Hutton as applying to considerations of bad faith. The words “bad faith” suggested a mental test. When considering whether an application had been made in bad faith all the circumstances were relevant. The court had to decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as bad faith by persons adopting proper standards.”[17]

27.  In Ajit Weekly Trade Mark [2006] RPC 25, the Appointed Person had referred to the above cases and had further said that the subjective element of the combined test meant that the tribunal must ascertain what the defendant in that case  knew about the transaction or other matters in question, and it must then be decided whether in the light of that knowledge, the defendant’s conduct was dishonest judged by ordinary standards of honest people, the defendant’s own standards of honesty being irrelevant to the determination of the objective element[18].

28.  The above principles had also been applied by the Registrar in Hong Kong in his decision dated 30 May 2007 in the application of “Daiwa” Trade Mark [19].

Burden and standard of proof of bad faith

29.  Mr Lam referred this court to the case of Royal Enfield Trade Marks [2002] RPC 24 where it was held by the Appointed Person Mr Simon Thorley QC, among other things, as follows:

“An allegation that a trade mark had been applied for in bad faith was a serious allegation and tantamount to an allegation of a form of commercial fraud. Such a plea should not be lightly made and, if made, it should be distinctly alleged and proved. It was not permissible to leave fraud to be inferred from the facts and the same considerations applied to an allegation of bad faith made under section 3(6) of the Trade Marks Act 1992”[20]

30.  In another case referred to by Mr Lam, Brutt Trade Marks [2007] RPC 19, the Appointed Person therein Mr Richard Arnold QC had referred to the above passage of Mr Thorley QC in Royal Enfield and further stated that:-

“I agreed with Mr Thorley that allegation of bad faith is a serious allegation which must be distinctly alleged and which should not be made unless it can be properly pleaded. I also agree that it must be distinctly proved: as discussed above, the standard of proof is on the balance of probabilities, but cogent evidence is required due to the seriousness of the allegation. It is not enough to prove facts which are also consistent with good faith. I do not believe that Mr Thorley meant to say that inference has no part to play in the proof of bad faith. As with the proof of fraud, it may be necessary and proper to rely upon inference. …[21]”

31.  However, as pointed out by LG’s Counsel, Mr Wong, case law such as Dora & Sheeps & Device Trade Mark, 23 August 2013, Trade Marks Registry, clearly show that a case of bad faith is not always established by way of direct evidence, and that where circumstances are such that a conclusion that there has been copying is warranted, a bad faith claim may well succeed[22].

32.  The Registrar in Dora & Sheeps had referred to the decision of Recorder Kotewall SC in Mila Schon Group SpA and Lam Fai Yung (t/a Tung Kwong Co)[1998] 1 HKLRD 682.  In the Mila Schon case,  Mila Schon applied, as a person aggrieved, to rectify the register of trade marks by removing a device in the respondent’s (the registrant) trademark pursuant to the s 48 of the old Ordinance.  In considering Mila Schon’s application, the Learned Recorder had said that although the onus was on the applicant for rectification, where the devices as they ultimately became were so similar, a court could be forgiven for concluding that one was derived from the other unless there was acceptable evidence from the originator of the idea to the contrary[23].

33.  Mr Wong also referred to another case in Hong Kong Ip Man Shan Henry v Ching Hing Construction Co Ltd  & Ors (No 2) [2003] 1 HKC 256 where the then Deputy Judge Lam summarised the relevant principles applicable to civil proceedings on drawing adverse inference:

“(a) if a prima facie case is made out, and if there are evidence available to the party against whom the case is established which could displace the prima facie case, and he omits to call such evidence, an inference could be drawn;

(b) however, the inference could be rebutted by a plausible explanation by the party who elected not to call the evidence;

(c) if an inference is to be drawn, it would be an inference that such available evidence, even if adduced, would not displace the prima facie case;

(d) it is also open to a tribunal of fact, upon the drawing of such an inference, to take it into account in respect of a matter with respect to which the person not called as a witness could have spoken,

i. in deciding whether to accept any particular evidence, which has in fact been given, either for or against that party;

ii. in deciding whether to draw inferences of fact, which are open to them upon evidence which has been given [24].”

34.  The decision of Deputy Judge Lam was subsequently upheld by the Court of Appeal in CACV 183 of 2003, 4 February 2005.

On Cross Examination

35.  It was one of the Grounds that the Officer had failed to direct cross examination of the witness LLY of De Li Kang before finding any bad faith, and Mr Lam had referred to another passage of Mr Thorley QC in the Royal Enfield case:-

“Where there is a conflict of evidence (and it is material for the purposes of the dispute for the hearing officer to resolve that conflict) and where it is thought that cross examination is either desirable or necessary to assist him in that task an application for cross examination must be made prior to the hearing before the registry. If the hearing officer wrongly declines to allow cross examination, that can be the subject of an appeal[25].”

36.  Mr Thorley QC then went on to say no application for cross examination was made in that case and therefore there was no decision to refuse cross examination from which an appeal could be made and that in those circumstances, he could not see how either the hearing officer or he could go behind the sworn evidence and infer bad faith from some limited documentary material which occurred three years prior to the relevant date[26]. 

37.  Cross-examination is, however, not a must.  Mr Arnold QC in the Brutt case had said:

“It is the function of cross examination to assist the tribunal to resolve conflicts of evidence. … It does not follow, however, that cross-examination is essential in a case where bad faith is alleged or that the tribunal cannot assess evidence or make findings of fact in its absence. Fairness requires that adverse findings should not ordinarily be made against a witness, such as a finding that he has acted in bad faith, without the witness having the charge put to him and being given the opportunity to answer it. … It should be borne in mind, however, that in proceedings such as these evidence is served sequentially and that giving a witness a proper opportunity to deal with a point will not necessarily require cross-examination. More importantly, perhaps, if the opportunity for cross-examination is passed up, the consequence is that the tribunal must assess the evidence on that basis rather than refraining from considering the evidence and reaching a conclusion. It is instructive to remember that OHIM and the courts in most civil law jurisdictions consider themselves perfectly well-equipped to make findings that parties have acted in bad faith without the benefit of cross-examination[27].”

38.  With the above principles in mind, I now turn to the evidence in the present case.

1^st Fundamental Basis – Lack of Particulars

39.  As earlier mentioned, Mr Lam had emphasized on 3 fundamental bases for the Grounds.  The lack of particulars was his 1^st fundamental basis.

40.  Mr Lam complained that there was no evidence of bad faith and no evidence of copying in the KWB Declaration, and it was only in the YSI Declaration filed in reply that YSI made some “vague” reference to copying and as the burden was on LG to prove bad faith, if LG failed to prove, then there would be no need for De Li Kang to explain.

41.  Further, as the allegation of copying was made only in the reply evidence in the YSI Declaration, De Li Kang simply did not have the opportunity to deal with this latest allegation.  Mr Lam  submitted that the “operative part” of the allegation of bad faith in paragraph 8 of the YSL Declaration[28] lacked particulars, in particular the alleged “specific and distinctive elements”, which were allegedly copied, had not been specified, contrary to the requirements of particulars. 

42.  LG pleaded in its Statement that the Suit Mark was “confusingly similar” to the LG Device and that consumers would very probably think that there was an association between the Suit Mark and the LG Device[29].  Further, LG pleaded that the goods for which the Suit Mark was registered were similar to those of LG’s goods and this would lead consumers to think there was an association between the Suit Mark and the LG Device, and further the supply of any goods registered with the Suit Mark would very probably lead the public to think that such goods were supplied by LG or connected with LG[30].  Bad faith was then specifically pleaded in paragraph 10(a) of the Statement.  Although the actual word “copy” or “copying” did not appear in those said paragraphs,   it was clear what LG was alleging, namely confusing similarity, copying and bad faith.  De Li Kang was fully aware of LG’s allegations, as otherwise in the Counter-Statement, De Li Kang would not have sought to explain the origin of the Suit Mark, and further stating there was no element of “copying”[31]. 

43.  As stated in the KWB Declaration, the Suit Mark looks similar to the LG Device as they both consist of a circle face with a dot acting on the left eye and the letter “L” in the middle, and that the applied for goods also overlap with those covered under the registrations for the LG’s Marks[32].  In response to the KWB Declaration, LLY had set out the origin of the Suit Mark and what it symbolized, and again stating that there was no element of “copying”[33].  

44.  In other words, De Li Kang/LLY was trying to explain there was no “copying” and it was thus fully aware of LG’s allegations.

45.  In any event, the allegation of “copying” and bad faith were specifically raised in YSI’s Declaration which was filed at about end of October 2010.  As pointed out by Mr Wong, De Li Kang could have applied to adduce further evidence under Rule 44(3) of the Trade Marks Rules had it felt necessary to do so, and notwithstanding being legally represented by its trade mark agent throughout, no such application was made within the more than 2 year period before the Hearing.  De Li Kang thus chose to make no attempt to file any further evidence. 

46.  As earlier mentioned, another complaint of Mr Lam was that there were no particulars specified in relation to the “specific and distinctive elements” in the LG Device.  However, at no stage before the Hearing did De Li Kang seek any particulars, or raise this issue.  Under Rule 89 of the Trade Mark Rules, the Registrar may direct any such documents, information or evidence as he may reasonably require to be filed, and the Registrar thus has the power to order further and better particulars.  Notwithstanding this, there was no attempt by De Li Kang to seek any particulars from LG nor did it raise this matter with the Registrar.

47.  In any event, KWB did point out that the Suit Mark and the LG Device both consist of a circle face, a dot acting on the left eye and letter “L” in the middle.   De Li Kang itself had admitted that the black dot was a prominent feature[34]. I accept what was submitted by Mr Wong, that De Li Kang knew full well what LG was alleging.  In the circumstances, I find De Li Kang’s present complaints of lack of particulars not justified.

2^nd Fundamental Basis

48.  Mr Lam submitted that in the run-of-the-mill cases,  such as 晴QQ, TM 301212722, 9 January 2013[35] and Suen Polo Suen TM 301353627, 15 July 2013[36], the one accused of bad faith, despite having been given an opportunity, did not file any evidence in reply to the allegation of bad faith and/or to explain how the mark was designed. However, in the present case, Mr Lam pointed out that De Li Kang did file the Counter-Statement and also the LLY Declaration, detailing how the Suit Mark was designed and there were explanations as to how each component of the Suit Mark originated[37].

49.  Mr Lam submitted that there was a difference between “bad design” and “copying” and this did not mean that the Officer could find bad faith based on a “bad design”.

50.  Mr Lam tried to distinguish the 4 cases relied on by Mr Wong for submitting that the Officer was entitled to “infer” bad faith. Mr Lam submitted that in the Dora Sheeps case, there was no explanation by the applicant at all as to why the word “Dora” was adopted in the suit marks, which element was identical to the mark of the opponent, and thus in that case, the Registrar drew an adverse inference against the applicant for deliberate copying.

51.  As for the Mila Schon case, Mr Lam submitted that case was not about “bad faith” but the issue of “proprietorship” under the old Ordinance and the person who was alleged to have devised the design of the respondent’s device refused to co-operate and refused to file evidence. Then, in the Kabushiki Kaisha Scolar (Scholar Co Ltd) Device Trade Mark, 6 December 2012, Trade Marks Registry, the marks in that case were “strikingly similar” and the Registrar thus found “copying” and “bad faith”.  As for the 4^th case, the Ip Man Shan Henry case relied on by Mr Wong, Mr Lam submitted that it was not a trade mark case, but a trust case.

52.  Suffice to say at this stage, the Officer did consider the explanations given in the LLY Declaration regarding the creation or design of the Suit Mark.  She analysed LLY’s evidence in detail and in the end found such explanations not credible, and she rejected such evidence giving proper reasons[38].  I will deal further on this when considering the respective Grounds.

3^rd Fundamental Basis

53.  The 3^rd Fundamental Basis submitted by Mr Lam was that the similarity between the Suit Mark and the LG Device is “limited” and “insignificant”, as in the LG Device, there is an identifiable smiling face and a single eye, whereas in the Suit Mark, according to Mr Lam, there is no face.

54.  Further, as the similarity between the Suit Mark and the LG Device is only “limited” and “insignificant”, Mr Lam said one could hardly infer “copying” and that De Li Kang was not “capitalising” on LG.  

55.  Mr Lam referred this court to Tsit Wing (Hong Kong) Company Limited & Others and TWG Tea, Company Pte Ltd & Anor, HCA 2210/2011, 24 July 2013 where principles on “assessment of similarity” were set out[39]. It is stated therein that in assessing the distinctive and dominant components in a composite mark, generally words “speak louder” than devices.

56.  There are, however, no “words” in the Suit Mark or the LG Device, only alphabets.  

57.  Notwithstanding the submissions of Mr Lam, I do not find that the similarity between the Suit Mark and the LG Device to be only “limited” or “insignificant”. 

The Grounds

Grounds 2(1)

58.  De Li Kang accused the Officer of reversing the burden of proof on De Li Kang to prove absence of bad faith.

59.  Before dealing with the origin of the Suit Mark, the Officer had considered whether De Li Kang knew about the LG Marks.

60.  She pointed out that there was no challenge by LLY to the detailed evidence in the KWB Declaration as to the LG Device being used and registered in different jurisdictions around the world, and used in Hong Kong since 1995, and further LG had achieved substantial turnover in respect of the products bearing the LG Device between 2001 and 2005 both in Hong Kong and worldwide, and also the LG Device was accredited as a “Superbrand” in Hong Kong in 2004 and 2005[40].  

61.  In the LLY Declaration, LLY disclosed that since not later than 2002, De Li Kang had been having dealings with an Indian subsidiary of LG, namely LG Electronics India PVT Ltd (“LG India”).  LLY was at that time alleging that since then LG should be aware of the Suit Mark and yet no action was taken by LG, or any warning issued[41]. 

62.  The YSI Declaration was in fact filed in reply to the LLY Declaration.  YSI denied that LG had any knowledge of the Suit Mark since this was not reflected on any of those purchase orders sent by LG India and exhibited by LLY[42].  There was no other evidence/documents produced by LLY to support what he alleged.  Further, it was De Li Kang’s case that it started using the Suit Mark in 2004[43], and not 2001/2002.  As pointed out by YSI, the LLY Declaration in fact showed that De Li Kang was indeed aware of LG or at least LG India since 2002 and further De Li Kang had or should reasonably have knowledge of the LG Device before its use of the Suit Mark in 2004, since the LG Device appeared on those purchase orders of LG India produced by LLY[44].

63.  The Officer had considered all the evidence before her and stated that more importantly De Li Kang carried out business dealings with LG India in the year 2002 immediately upon De Li Kang being incorporated and had been supplying electronic parts to LG India since then, and she thus had reasonable grounds to believe that De Li Kang already had knowledge of LG’s products before incorporation of De Li Kang.  As LG started to use the LG Marks on LG’s products as early as 1995, she believed that De Li Kang was aware of the LG Marks before the date of De Li Kang’s application to register the Suit Mark on 1 March 2006, or even earlier than its incorporation[45].

64.  The Officer then compared each component in the Suit Mark with the LG Device in detail and concluded that the two marks were 頗為相類似, or quite similar[46].

65.  It seems clear from the Officer’s above findings and conclusions that she was satisfied that a prima facie case of copying had already been established, and it was under these circumstances that she went on to consider, in the light of such similarities and prior knowledge of the LG Device, whether De Li Kang had provided any sound explanation for such similarities, and she had said such explanation regarding the origin of the Suit Mark was crucial in the present proceedings.

66.  Mr Lam submitted that LLY had explained that Fan used a circle as an outer frame of the Suit Mark, for two reasons[47]-

(i) A circle is a frequently used shape in most trade  marks (圓形是大多數商標慣常採用的形狀);

(ii) Using a circle makes it easier to identify/distinguish and to use (便於作為商標的識別及應用).

67.  Mr Lam complained that the Officer did not deal with LLY’s explanation in (ii) above.  It seems to this court that (ii) is somewhat inconsistent with (i), since a frequently used shape is unlikely to be easily identifiable/distinguishable.  In any event, in paragraph 36 of the Decision, the Hearing Officer was referring to examples as to why she found LLY’s explanations lacked persuasion.  Failing to refer to (ii) would not have affected her conclusions that LLY’s explanations lacked persuasion.  The Officer clearly stated that she did not believe LLY’s explanations for the origin of the Suit Mark[48].

68.  To summarise, the Officer’s conclusions of bad faith were based on, among other things, the following:

(i) LG had registered and used the LG Device in many jurisdictions worldwide,  and in Hong Kong since 1995[49];

(ii) LG had achieved substantial turnover of its products bearing the LG Device whether in Hong Kong or other jurisdictions between 2001 and 2005, and the LG Device was accredited  “Superbrand” in 2004 and 2005[50];

(iii) Since the year of its incorporation, ie 2002, De Li Kang had had business dealings with LG India[51]; 

(iv) She had reasons to believe that prior to its incorporation in 2002, De Li Kang already had knowledge of the LG’s products[52];

(v) There was no evidence to contradict YSI’s allegations that it was highly probable that De Li Kang was aware of the LG Device before the design of the Suit Mark and intentionally copied the LG Device[53];

(vi) De Li Kang was aware of the LG Device at the time of its application for the registration of the Suit Mark in March 2006, or even earlier[54];

(vii) The Suit Mark and the LG Device were quite similar (頗為相類似);

(viii) The goods in Class 9 for which the Suit Mark was registered was very wide and included all LG’s products, and the goods in Class 17 for which the Suit Mark was registered were also similar to those for which LG Device was registered[55];

(ix) The explanations provided by De Li Kang as to the origin of the Suit Mark lacked persuasion[56];

(x) De Li Kang was deliberately building up all kinds of reasons to attempt to defend itself and she had reasons to believe that De Li Kang attempted to design a mark similar to the LG Device[57];

(xi) De Li Kang’s behaviour fell short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in this particular field[58] .

69.  In relation to (v) above, Mr Lam had criticized the Officer for misreading the evidence when she said that De Li Kang did not deny copying.  Mr Lam seemed to be taking what the Officer said out of context.  For completeness, what the Officer had in fact said was that there was no denial by De Li Kang and no contradictory evidence to YSI’s allegations that  De Li Kang was already aware of the LG Device at the time of the designing the Suit Mark and was intentionally copying the distinctive elements of the LG Device.  As submitted by Mr Wong, the Officer was simply stating a fact, and as I have mentioned earlier, it was a fact that De Li Kang did not seek leave to file any further evidence/declarations after being served with the YSI Declaration.  In any event, there had been no denial that De Li Kang was already aware of the LG Device at the time of the designing of the Suit Mark.

70.  Mr Wong had shown this court a copy of his written skeleton submissions for the Hearing and the authorities cited by him to the Officer.  All these were served on De Li Kang’s trade mark agent before the Hearing.  Neither of them chose to be present at the hearing or lodged any written submissions in reply.

71.  The legal principles in the Mila Schon case and the Ip Man Shan case were cited and relied upon by Mr Wong at the Hearing in his submissions on the legal principles.   

72.  In  the Mila Schon case, Mila Schon had claimed that the respondent’s device should be removed, first under section 13(1) of the old Ordinance for lack of proprietorship, and secondly, under section 12 (1) of the old Ordinance as it was likely to deceive.   I accept that it was not a case about bad faith, but the Learned Recorder’s remarks, namely that if the marks under comparison were very similar to each other, the Registrar could be forgiven to conclude that one was derived from the other unless there was acceptable evidence to the contrary, can be in my view equally applicable in the present case.

73.  As earlier mentioned, Mr Lam distinguished the Ip Man Shan Henry case as it was not a trade mark case.  However, Mr Wong was only relying on that case for the general principles on drawing adverse inferences in civil proceedings, namely among which, once a prima facie case is made out in civil proceedings, if there is evidence available to the party against whom the case is established which could displace the prima facie case, and he omits to call such evidence, an inference can be drawn.  I accept such principles equally apply to the present case.

74.  Mr Wong further referred to the case of Fossil, Inc and Trimset Ltd & Another [2003] 3 HKLRD 11, which was a case on copyright.  It was submitted  in that case that to prove copying, there were four matters which the plaintiff needed to prove: (i) it must be shown that there was a similarity between the work about which copyright was asserted and the article or work which was said to infringe it; (ii) in order to do that, the plaintiff would need to show that the defendant had access to the copyright work or the finished product made from the copyright work which had provided the opportunity to copy, and if that was shown to be so, a prima facie case would have been made out which would call for any answer by the defendant[59]. It went on to quote from Copinger & Skone James on Copyright to say that in most cases copying could only be deduced by inference from all the surrounding circumstances and that even if an inference of copying could be drawn, it could be rebutted by the defendant’s evidence that he did not copy, and the fact that the defendant denied copying was some evidence to rebut the inference but was obviously not conclusive[60]. Again, what was said above on “copying” are equally applicable in the present case.

75.  The Officer had found there was similarity between the Suit Mark and the LG Device and that De Li Kang was aware of the LG Device at the time of the registration of the Suit Mark, or earlier through its dealings with LG India.  Although in the present case De Li Kang did provide an explanation as to the origins of the Suit Mark stating there was no copying, the designer Fan did not give evidence and no reasons were given for this failure.  Having considered all the circumstances, in my view, the Officer was entitled to draw the inference of bad faith based on all those matters listed above and in paragraph 68.  It is my conclusion that the Officer did not reverse any burden of proof, and that Ground 2(1) has not been made out.

Ground 2(2)

76.  De Li Kang also accused the Officer of misapplying the burden of proof that requires cogent evidence, instead of “reasons for belief” that there was bad faith.

77.  Mr Lam criticized the Officer in that there was no evidence to support what she had said in paragraph 38 of the Decision, nor was it particularized in any pleadings, namely  that she had “reasons to believe” that De Li Kang, being a newly set up producer of electronics parts and  in order to compete in the market and to attract customers to its products to the extent that consumers would be under the mistaken belief that its products were associated with the LG products, had attempted to design a mark similar to the LG Device in the hope of riding on LG’s good will to promote sales of the De Li Kang’s products[61].

78.  Having found that De Li Kang was aware of the LG products prior to the registration of the Suit Mark, the Officer went on to find that the marks were quite similar and also the goods registered were similar.  In my view, she was thus entitled to conclude that the Suit Mark was copied from the LG Device to take advantage of the latter’s enormous reputation and goodwill, given that the marks in question were not descriptive and there was no evidence that they were common in the industry, and further that De Li Kang was only a newly formed company at the time.

79.  The Officer rejected the evidence of LLY and she was entitled to find that the conduct of De Li Kang fell short of standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined.

80.  I accept Mr Wong’s submission that even if one were to disregard whether there was intention to take advantage of LG’s enormous reputation and goodwill or not, the very fact that that De Li Kang had copied from the LG Device which enjoyed enormous reputation and goodwill around the world, and registered the Suit Mark for similar goods as LG’s, was clearly conduct which fell short of standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined.  There was cogent evidence for the Officer’s finding of bad faith.

81.  In the circumstances, it is my view that this Ground has not been made out either.

Ground 2(3) - Failing to direct cross-examination of LLY

82.  De Li Kang alleged that the Officer had erred in law in failing to direct cross-examination of LLY before making any finding of bad faith.

83.  As earlier mentioned, cross-examination is not a must.  Further, as quoted earlier from the Brutt case, in most civil law jurisdictions the courts consider themselves perfectly well-equipped to make findings that parties have acted in bad faith without the benefit of cross-examination.

84.  Also, as pointed out by Mr Wong, the creator of the Suit Mark, according to De Li Kang’s case was Fan, and not LLY.  Fan did not give any evidence in the present proceedings.  He is apparently a director and shareholder of De Li Kang, and there was no explanation as to why Fan did not give evidence to explain the origin of the Suit Mark, and chose to leave it to LLY who only joined De Li Kang on 7 August 2009.  I accept this was a “significant omission”[62].

85.  Whatever evidence LLY gave in relation to matters prior to his joining De Li Kang, under any cross-examination, would unlikely to be from his personal/direct knowledge, particularly in relation to the alleged design process of the Suit Mark, which according to De Li Kang’s case, was in March 2002, or in relation to whether Fan had knowledge of the LG Device at the time of the design.  Further, as pointed out by the Officer, LLY had not even explained how he obtained the information regarding the design process of the Suit Mark, or provided any supporting evidence.  As stated by the Officer, all such lack of explanation/information cast doubt on LLY’s evidence, and the Officer had stated that the failure of explanation and evidence from Fan reduced the credibility of LLY’s evidence in relation to the design of the Suit Mark[63].

86.  Mr Wong referred this court to another passage in Mila Schon, where the Learned Recorder stated that:

“In the light of these observations, I feel quite unable to ignore the evidence of Mr Sugaya that he did not copy the applicant’s device. However, the lack of evidence from Ms Yeung, the alleged originator of the idea of the respondent’s device, stands on a different footing and there is simply nothing on which the applicant could have applied to cross-examine. I note of course the respondent’s late evidence as to why Ms Yeung gave no evidence, but that does not really remedy the omission.” [64] (emphasis added)

87.  Mr Wong submitted that LG could not apply to cross-examine Fan as Fan had chosen not to give evidence and there was no point to cross-examine LLY at the Hearing as LLY was not involved in the design process.  Mr Wong further pointed out, that in the present case, unlike the respondent in Mila Schon, no explanation had ever been provided as to why the alleged originator of the idea, namely Fan, failed to give any evidence.  I accept Mr Wong’s submissions.

88.  The Officer was entitled to reject the evidence from LLY and to conclude that on a balance of probabilities that it was likely that the Suit Mark was copied from the LG Device based on the evidence adduced and on the proper weight given to such evidence.  

89.  In my view, the Officer did not err in law in failing to direct cross-examination before making any finding of bad faith.

Ground 2(4)

90.  As mentioned earlier, Mr Lam had made no submissions under this ground of appeal.

Ground 2(5)

91.  De Li Kang alleged that the Officer erred in finding that it had not denied having copied the LG Device.

92.  This complaint had been dealt with earlier.  The Officer’s statement is factually correct and the Officer did not commit any error as alleged.  Further, it was clear that the Officer was aware that De Li Kang did not admit copying of the LG Device, otherwise she would not have needed to analyse the evidence in detail and made findings that the Suit Mark was likely to be copied from the LG Device.

Ground 2(6)

93.  De Li Kang alleged that the Officer erred in (a) finding that it alleged that the majority of trade marks, as opposed to quite a number of, were circular in shape and (b) based on such finding in (a), its explanation was not convincing.

94.  There is no merit in (a) as it was indeed LLY’s evidence that the majority of trade marks were circular in shape “圓形是大多數商標慣常採用的形狀”[65].  The Officer was thus entitled to make the findings and conclusions as she did.

Ground 2(7)

95.  De Li Kang alleged that the Officer erred in finding that the dot in the Suit Mark would attract attention[66].

96.  There is again no merit in this allegation because it was the De Li Kang’ own pleaded case that the dot in the Suit Mark was very prominent “處於 D範圍外的黑色圈點十分突出”[67].

Ground 2(8)  

97.  De Li Kang then alleged that the Registrar erred in finding that the Suit Mark was quite similar to the LG Device.

98.  Mr Lam relied on the Tsit Wing case on the assessment of similarity.  As pointed out by Mr Wong, this was in fact the value judgment of an experienced learned hearing officer and there was no error committed in her detailed comparison of the two marks.  I accept what was submitted.  I would just add that I would come to the same conclusion that the two marks were quite similar.   

Conclusion on the Grounds

99.  Having considered the above, the Officer’s approach in respect of the law and her conclusions were in my view entirely correct.  I find there is no merit in the appeal.  Further, having considered the evidence, I agree with the Officer’s conclusions.  In any event, I will also consider LG’s Respondent Notice.

Section 12 (3) of the Ordinance

100.  Section 12 (3) of the Ordinance prohibits the registration of a trade mark which is likely to cause confusion on the part of the public as a result of its being similar to an earlier trade mark and because it is to be registered in respect of goods the same as or similar to those in respect of which the earlier trade marks are registered.

101.  The general legal principles on assessing similar marks for likelihood of confusion have been summarized by DHCJ Horace Wong SC in Guccio Gucci SpA v Gucci [2009] 5 HKLRD 28: 

“(a) The likelihood of confusion must be appreciated globally, taking account of all the relevant factors…

(b) The matter must be judged through the eyes of the average consumer of the goods in issue, who is deemed to be reasonably well informed and reasonably observant and circumspect…

(c) In order to assess the degree of similarity between the marks concerned the court must determine the degree of visual, aural or conceptual similarity between them and, where appropriate, evaluate the importance to be attached to those different elements taking into account the nature of the goods in question and the circumstances in which they are marketed…

(d) The visual, aural and conceptual similarities of the marks must therefore be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components. The perception of the marks in the mind of the average consumer plays a decisive role in the overall appreciation of the likelihood of confusion…

(e) The average consumer normally perceives a mark as a whole and does not proceed to analyse its various details…

(f) There is a greater likelihood of confusion where the earlier trade mark has a highly distinctive character, either per se or because of the use that has been made of it…

(g) The average consumer rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind; further the average consumer's level of attention is likely to vary according to the category of goods in question…

(h) Appreciation of the likelihood of confusion depends upon the degree of similarity between the goods. A lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods, and vice versa…

(i) Mere association, in the sense that the later mark brings the earlier mark to mind, is not sufficient for the purpose of the assessment…

(j) But the risk that the public might believe that the goods come from the same or economically linked undertakings does constitute a likelihood of confusion within the meaning of the section…” [68]

102.  The likelihood of association would arise in 3 sets of circumstances:

(a) Where the public confuses the sign and the mark in question (likelihood of direct confusion);

(b) Where the public makes a connection between the proprietors of the sign and those of the mark and confuses them (likelihood of indirect confusion and association);

(c) Where the public considers the sign to be similar to the mark and perception of the sign calls to mind the memory of the mark, although the two are not confused (likelihood of association in the strict sense).

103.  It is only the first two types of association, ie those which give rise to a likelihood of either direct or indirect confusion that are relevant.[69]

104.  LG relied on its Trade Mark Registrations No 199702892 for Class 17 and 199914285 for Class 9 as earlier trade marks for the purposes of sections 12(3) and (4) (“Earlier Trade Marks”).  The Earlier Trade Marks both consist of the LG Device.  

105.  As submitted by Mr Lam,  LG had to prove the following:

(1) the Suit Mark is similar to the  Earlier Trade Marks;

(2) the goods or services for which the Suit Mark was made are identical or similar to those for which the  Earlier Trade Marks were registered;

(3) the use of the Suit Mark in relation to those goods or services is likely to cause confusion on the part of the public.

106.  Mr Lam further submitted that while the Officer found that the Suit Mark was similar to the LG Device and the goods were also similar, there was no finding of likelihood of confusion since the Registrar, having erroneously found bad faith, did not find it necessary to rule on the other grounds.  Further, in the present case, while the marks are similar, the degree of similarity is not significant.  The similar features are the circle and the dot, and the alignments of the lines inside the circles are different, with the LG Device showing conspicuously an “L” and an “G” while the Suit Mark showing conspicuously an “L” and a “K”.  Again, Mr Lam relied on the Tsit Wing case that as words very often speak louder than the device[70], in the global assessment, the present similarity of the marks is not significant.

107.  Also, since the LG Device was essentially “stylised image of a human face”, Mr Lam submitted that in no way could the Suit Mark be described as anything akin to a face, and that an average consumer will immediately appreciate the different alphabetic combination inside the circle and the “stylised image of a human face”, and at the very most may have mere association between the Suit Mark and the LG Device, without more.  Mr Lam submitted that that no average consumer would think that a mark with “LK” means or is economically linked to the LG. Further, mere association is insufficient to sustain a finding of likelihood of confusion.

108.  Mr Wong referred this court to the case of De Cordova v Vick Chemical Co (1851) 68 RPC 103, where it has been said that the likelihood of confusion is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any customer who places his order for goods with both the marks clearly before him, for orders are not placed, or are often not placed, under such conditions, and that it is more useful to observe that in most persons the eye is not an accurate recorder of visual detail and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.[71]

109.  As pointed out by Mr Wong, the Officer’s findings of the reputation and goodwill of the LG Device were not challenged by De Li Kang.  I accept Mr Wong’s submission that the distinctive character of the LG Device has substantially enhanced because of its inherent distinctive character and because of the enormous use made of it over the years.

110.  Mr Wong further submitted that the use of the Suit Mark in relation to the registered goods is likely to cause confusion amongst members of the public for the following reasons:-

(a) Visually, the Suit  Mark looks confusingly similar to the LG Device:-

(i) Both marks are in the form of a circular device;

(ii) Both marks adopt black and white as contrast in the design;

(iii) Both marks have a circumference made of black and white contrast design;

(iv) One can see the letter “L” clearly in both marks;

(v) On the left hand side of the letter L in both marks, there is a prominent dot; and

(vi) The overall impression conveyed by both marks is very similar.

(b) Conceptually, both marks adopt similar design concept and play around the letter “L” in a circular device with a dot appeared on its left.

(c) The Suit Mark was registered for goods in respect of which the LG Device enjoys reputation and/or is registered.

(d) Ordinary members of the public will not have the chance to compare the two marks in detail before purchasing and will rely on the imperfect recollection they have in mind in respect of the marks.

111.  Although the Officer did not rule on the Section 12(3) ground of invalidation, she did compare the Suit Mark with the LG Device and found that the two quite similar and the respective registrations cover highly similar goods.

112.  Having considered the above and the evidence before this court, adopting a global assessment, I find that LG has proved that the Suit Mark is similar to LG’s Earlier Trade Marks, the goods or services for which the Suit Mark is registered are similar to those for which the Earlier Trade Marks are protected; and the use of the Suit Mark in relation to those goods or services is likely to cause confusion on the part of the public. 

113.  In the circumstances, the registration of the Suit Mark should also be declared invalid based on section 12(3) of the Ordinance.

Section 12(4) of the Ordinance

114.  Section 12(4) of the Ordinance provides that a trade mark which is identical or similar to an earlier trade mark and which is proposed to be registered for goods or services which are not identical or similar to those for which the earlier trade mark is protected shall not be registered if, or to the extent that, the earlier trade mark is entitled to protection under the Paris Convention as a well-known trade mark and the use of the later trade mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trade mark.

115.  Mr Lam submitted that while the brand name “LG” could be well-known, there was no or no sufficient evidence that the Earlier Trade Marks were well-known in Hong Kong. 

116.  Section 4 of the Ordinance states:

“(1) References in this Ordinance to a trade mark which is entitled to protection under the Paris Convention as a well-known trade mark shall be construed as references to a trade mark which is well known in Hong Kong and which is the trade mark of a person who-

(a) is a national of, or is domiciled or ordinarily resident in, a Paris Convention country or WTO member;

(b) has a right of abode in Hong Kong; or

(c) has a real and effective industrial or commercial establishment in a Paris Convention country, a WTO member or Hong Kong, whether or not that person carries on business in Hong Kong or owns any goodwill in a business in Hong Kong.

(2) In determining for the purposes of subsection (1) whether a trade mark is well known in Hong Kong, the Registrar or the court shall have regard to Schedule 2.

(3) References in this Ordinance to the owner of a well-known trade mark shall be construed in accordance with subsection (1).”

117.  Schedule 2 (1) and (2) of the Ordinance then set out as follows:-

“(1) In determining for the purposes of section 4 (meaning of “well-known trade mark”) whether a trade mark is well known in Hong Kong, the Registrar or the court shall take into account any factors from which it may be inferred that the trade mark is well known in Hong Kong.

(2) In particular, the Registrar or the court shall consider any information submitted to the Registrar or the court from which it may be inferred that the trade mark is, or is not, well known in Hong Kong, including, but not limited to, information concerning the following-

(a) the degree of knowledge or recognition of the trade mark in the relevant sectors of the public;

(b) the duration, extent and geographical area of any use of the trade mark;

(c) the duration, extent and geographical area of any promotion of the trade mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods or services to which the trade mark applies;

(d) the duration and geographical area of any registrations, or any applications for registration, of the trade mark, to the extent that they reflect use or recognition of the trade mark;

(e) the record of successful enforcement of rights in the trade mark, in particular, the extent to which the trade mark has been recognized as a well-known trade mark by competent authorities in foreign jurisdictions; and

(f) the value associated with the trade mark.”

118.  As set out in subsection (3), the factors mentioned in subsection (2) above are intended to serve as guidelines to assist the Registrar and the court to determine whether the trade mark is well known in Hong Kong. It is not a precondition for reaching that determination that information be submitted with respect to any of those factors or that equal weight be given to each of them.  Rather, the determination in each case will depend upon the particular circumstances of that case.  In some cases all of the factors may be relevant.  In other cases some of the factors may be relevant.  In still other cases none of the factors may be relevant, and the decision may be based on additional factors that are not mentioned in subsection (2).  Such additional factors may be relevant alone, or in combination with one or more of the factors mentioned in subsection (2).

119.  In the KWB Declaration, there was evidence on the duration, extent and geographical area of the use of the LG Marks, evidence on promotion of the LG Marks and recognition of the LG Marks as well-known marks in foreign jurisdictions.  As mentioned earlier, the findings on the use and the recognition of the LG Device by the Officer were not really challenged by De Li Kang.  Having considered all the evidence, I am of the view that there is no doubt that the Earlier Trade Marks are well-known marks in Hong Kong within the meaning of section 4 of the Ordinance. 

120.  The Suit Mark has also be found to be similar to the LG Device.

121.  Mr Lam submitted that LG also had to prove that the use of the Suit Mark would take unfair advantage of, or be detrimental to, the distinctive character or repute of the Earlier Trade Marks, and this would require proof that:

(i) There is some link between the Suit Mark and the Earlier Trade Marks; and

(ii) There would be change of economic behaviour of the average consumer of the goods or services in question[72];

(iii) There would be a dilution of the Earlier Trade Marks by tarnishing (making the marks less attractive) or by blurring (making the marks less distinctive)[73].

122.  Mr Wong had submitted that the use of the Suit Mark, without due cause, will take unfair advantage of, or be detrimental to, the distinctive character or repute of the Earlier Trade Marks for the following reasons:-

(i) The LG Device has enjoyed substantial reputation worldwide and in Hong Kong all along.  It has been promoted and used extensively.  The public in Hong Kong was used to recognize LG Device as referring to the LG’s products, and continues to do so today.

(ii) There was no evidence before the Officer that the use of the Suit Mark by De Li Kang was or would be with due cause.

(iii) In adopting such similar mark in relation to similar products, De Li Kang was clearly taking unfair advantage of LG’s enormous reputation built up over the years in respect of the LG Device.

(iv) The public would be attracted to the De Li Kang’s products bearing the Suit Mark because of its similarity to the LG Device. Such similarity to the LG Device serves as an attractive force to sell the De Li Kang’s products to the public.  There was no explanation as to why otherwise De Li Kang would adopt such a similar mark.

(v) Further or in the alternative, the use of the Suit Mark would dilute the distinctiveness of the LG Device because of their similarities.  The distinctiveness and drawing power of the LG Device will be damaged or diluted because of the use by De Li Kang of the Suit Mark.

123.  Having considered the evidence, I find that the use of the Suit Mark would take unfair advantage of the distinctive character or repute of the Earlier Trade Marks and I am of the view that the registration of the Suit Mark should also be declared invalid based on section 12(4) of the Ordinance.

Section 12 (5) (a) of the Ordinance

124.  Finally, Mr Wong also relied on section 12(5)(a) in the Respondent’s Notice.  Under this sub-section, a trade mark shall not be registered if, or to the extent that, its use in Hong Kong is liable to be prevented by virtue of any rule of law protecting an unregistered trade mark or other sign used in the course of trade or business (in particular, by virtue of the law of passing off);

125.  As submitted by Mr Wong, in order to establish passing off, it is well established that an opponent needs to prove the following[74]:

(a) That at the time of the application of the subject mark, the opponent enjoyed goodwill in the opponent’s mark.

(b) That the applicant has made a misrepresentation which is likely to lead members of the public to believe that its goods are the goods of the opponent.

(c) That the opponent suffers, or is likely to suffer damage by reason of the erroneous belief engendered by the applicant’s misrepresentation.

126.  In the present case, De Li Kang had conceded that LG enjoyed substantial reputation and goodwill in respect of the LG Device in Hong Kong at the time when De Li Kang applied to register the Suit Mark.  Mr Wong thus submitted that the Suit Mark is deceptive similar to the LG Device, and members of the public will likely be misled into believing that the De Li Kang’s products are those of or associated with LG’s.

127.  Having considered the evidence, I am, however, not satisfied that there had been sufficient evidence of “misrepresentation” by De Li Kang.  I would not have confirmed the Decision on under section 12(5)(a).

Conclusion

128.  To conclude, I dismiss the appeal. Costs of this appeal be to LG.  This is a costs order nisi, which shall be made final after 21 days. 

[1] B1:1-8

[2] B1:9-14

[3] Para 13, B1:11

[4] B1:55-70

[5] B1:71-76

[6] B1:77-89

[7] B1:37-50

[8] B1:15-29

[9] B1:30-36

[10] O 55 r 3(1) of RHC

[11]  Ground 2(1), B1:18;  see paras 36-28, Decision, B1:47-48;

[12]  Ground 2(2), B1:18, see paras 38, Decision, B1:48

[13]  Ground 2(3), B1:18

[14] Para 100/3/8, Hong Kong Civil Procedure 2014, Vol 1

[15] Pg 4, Hicaliq TM, pg 4, per Rogers JA, as he then was

[16] at pg 379

[17] Holding (3), at pg 178

[18] At para 41, pg 649

[19] At paras 16-18

[20] Holding (2), at pg 509

[21] At para 29

[22] At para 41

[23] Between G and H, pg 697

[24] At para 155, pg 307

[25] At para 33

[26] At para 34

[27] At para 23

[28] B1:81

[29] Para 8, B1:2

[30] Para 9, B1:2

[31] Para13, B1:11

[32] Para 18, B1:62

[33] Para 5, B1:73

[34] Para 13, B1:11

[35] Para 38

[36] Para 26

[37] Para 8, B1:81

[38] Paras 35-36, B1:46-48

[39] At para 104, B1:27-28

[40] Para 25 , B1:44

[41] Paras 15-16 , B1:75

[42] LLY-6, B5:882-887

[43] Para 13, B1:11

[44] Para 8, B1:81

[45] Para 26, B1:44

[46] Paras 27-31, B1:45

[47] Para 5, B1:72

[48] Para 37, B1:48

[49] Para 25(i) and (ii), B1:44

[50] Para 25(iii) and (iv), B1:44

[51] Para 26, B1:44

[52] Para 26, B1:44

[53] Para 26, B1:44

[54] Para26, B1:44

[55] Para 32, B1:45

[56] Paras 36-37, B1:47-48

[57] Para 38, B1:48

[58] Para 39, B1:48

[59] Para 16, pg 20

[60] D-F Para 16, pg 20

[61] Para 38, B1:48

[62] Borrowing words of the Learned Registrar at F-G, pg 679, Mila Schon

[63] Para 34, B1:46

[64] At pg 698D-E

[65] Para 5, B1:72

[66] Para 36(ii), Decision, B1:47

[67] Para 13, Counter-Statement, I:47

[68] At para 79, pg 58-59

[69] Paras 80-82, pg 59-60, Guccio Gucci SpA v Gucci

[70] At para104(i), pg 27

[71] At pg 106

[72] Stichting BDO v Banco De Oro Unibank Inc [2013] 1 HKLRD 847 at paras 207-214

[73] O2 Holdings v Hutchison 3G Ltd [2006] RPC 29 at para 141-144; Intel Corporation Inc v CPM United Kingdom Ltd [2009] RPC 15 at pag 69-77

[74] Para 17, pg 816-817, Ping An Securities Ltd (2009) 12 HKCFAR 808