LION CAPITAL LLP v. THE REGISTRAR OF TRADE MARKS

HCMP192/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 192 OF 2008

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JUDGMENT

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Introduction

1.  The Appellant, Lion Capital LLP, is a limited liability partnership with an address in London England, and is engaged in the provision of financial services.

2.  On 30 March 2006, the appellant made application to the Trade Marks Registry in Hong Kong for registration of a Trade Mark in the name of “LION CAPITAL” (“the Mark”) under the Trade Marks Ordinance, Cap. 559 (“the Ordinance”). 

3.  The services covered by the application were in Class 36, specified in the application as:

“Insurance; financial affairs; monetary affairs; financial services; real estate affairs; corporate finance; private equity; investment services; capital, fund and trust investment services; investment management services; mutual fund, collective investment scheme and hedge fund services; unit trust services; financial and investment planning and research; advisory, consultancy and information services relating to all the aforesaid services.”

4.  On 12 June 2006, the Registrar of Trade Marks (“the Registrar”) issued an Opinion under Rule 13(1) of the Trade Marks Rules (“the Rules”), giving relative grounds for refusal to register the Mark, because of the existence of an earlier trade mark registered as “LION FORTUNE” by Credit Lyonnais (“the Earlier Mark”).

5.  There is no dispute that the Earlier Mark is an “earlier trade mark” within the definition of section 5(1)(a) of the Ordinance.

6.  The Rule 13(1) Opinion expressed that the Mark was considered to be similar to the Earlier Mark, and the applied-for services were under the same Class 36 as the class for the Earlier Mark, so that use of the Mark would be likely to cause confusion on the part of the public.  Hence, objection was raised under section 12(3) of the Ordinance.

7.  By letter dated 23 August 2006, the appellant’s solicitors sought a review of that Rule 13(1) opinion.  On 27 February 2007, the Registrar gave a Rule 13(4) Opinion maintaining the relative grounds for refusal of the Mark.

8.  The appellant sought a hearing, for which it put in a Statutory Declaration of Graham Michael Robinson in relation to his investigation into the use of the Earlier Mark.  Amongst other matters, the declaration identified that the use of the Earlier Mark had apparently ceased more than two years earlier.  Whilst the Earlier Mark had previously been used for an ‘umbrella fund’ for a number of funds bearing names including the word “Lion”, the funds had been renamed in 2004/2005 following the merger of Credit Lyonnais with Credit Agricole.

9.  In a Decision dated 4 January 2008, the Registrar refused the application for registration of the Mark, under section 42(2)(b) of the Ordinance. 

10.  By Notice of Motion dated 31 January 2008, the appellant appealed from that Decision to this Court.  The Registrar is the respondent to the appeal.

11.  Although there are five grounds of appeal set out, the main theme underpinning all grounds can fairly be described as relating to the suggestion that the Registrar ought to have held that in the factual circumstances of the case the Mark and the Earlier Mark are distinguishable from each other and the co-existence of the two respective marks is unlikely to cause confusion on the part of the public. Principally, the error is said to flow from too great a concentration on the word “LION” in the two marks, as opposed to a proper focus on the marks as a whole.

12.  On 4 March 2008, directions for the hearing of the Notice of Motion were given by consent. Those directions included that no evidence should be filed and served without leave of the court, and indeed no evidence has been filed and served (though the material in the statutory declaration is in the hearing bundle).

13.  The directions also included that the substantive hearing of the Notice of Motion should be adjourned to a date to be fixed in consultation with counsel’s diary, with one day reserved.  It is not clear to me why it has taken 2 years and 10 months for this matter to come on for hearing, though when at the hearing I asked why, I was told (rather cryptically) that there had been certain discussions in the hope of dealing with the matter in a different way than the pursuit of the appeal, though it turns out any such discussions did not involve the Registrar.

14.  Nevertheless, in the lengthy period between the launching of this appeal and the hearing of this appeal, there has been a change in factual circumstances in that the Earlier Mark’s registration expired on 30 July 2008, and the Earlier Mark was removed from the register on 2 February 2009.

15.  The appellant has, therefore, in the skeleton argument filed by its Counsel Miss Rachel Lam, suggested that as the reason cited by the Registrar for refusing registration of the Mark is no longer applicable, the Court should allow registration of the Mark, and the remainder of the matters in the appeal have become academic.

16.  Of course, Mr Ling Chun Wai, counsel for the Registrar, has pointed out that there is no ground in the Notice of Motion relating to the supposed non-applicability of the reason cited by the Registrar for refusing the application, nor could there have been on the chronology of events.

17.  Mr Ling pointed out that the grounds of appeal are set out in the Notice of Motion dated 31 January 2008, whereas the removal of the Earlier Mark did not occur until 2 February 2009.  He submitted that I should not entertain this point unless and until an application had been granted to allow an amendment to the Motion to raise the point (though he also maintained that the point was ‘bad’ in any event).

18.  At the hearing, Miss Lam made no application to amend, and instead indicated that whilst I might take the factor of the removal of the Earlier Mark into account, her ‘primary’ argument remained that set out in the Notice of Motion.

The law

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

20.  The kind of error in principle as might justify interference would include approaching the problem incorrectly, taking into consideration matters which the Registrar ought not to have taken into consideration, or omitting to take into consideration matters which should have been considered.

21.  It is clear that an appeal from the Registrar is a rehearing not a review, but the Court should nevertheless be slow to reverse the decision of an experienced registrar on a question which consists largely of a value judgment: see Bongrain SA’s Trade Mark Application [2005] RPC 14 at [9].

22.  As it was put by Robert Walker LJ (as he then was) in Reef Trade Mark [2003] RPC 5 at [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.”

23.  Similarly in Re NAKED [2010] 1 HKLRD 382, at [22], Rogers VP said:

“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.”

24.  When exercising this approach, it seems to me that the Court is indeed exercising an appellate jurisdiction, testing against the relevant principles whether the Registrar was in distinct and material error in reaching the Decision on the materials then before the Registrar. 

25.  The Court is not exercising a function as though it were a first instance court deciding on registration by reference to whatever might be the factual circumstances pertaining as at the date of the hearing of the Motion by which the appeal is brought.

26.  Although Miss Lam drew my attention to section 85 of the Ordinance, which refers to the Court’s powers in the exercise of both its original and appellate jurisdiction under the Ordinance, she did not press on me that I was exercising any original jurisdiction.  I agree that in determining the issues raised by the Notice of Motion, I am not exercising original jurisdiction; rather this is an appeal.

27.  Hence, in the light of the stance taken at the hearing by Miss Lam, though the point does not strictly arise for my decision, I would at least be strongly inclined to the view that an argument upon the change of circumstances which occurred in the lengthy period between the launching and hearing of this appeal would not and could not fall into play in deciding the appeal. 

28.  At the time of the Decision, the Earlier Mark was validly entered on the register and within the definition of “earlier trade mark” as defined in section 5(1)(a) of the Ordinance. 

29.  It does not seem to me to be correct to allow the appellant to place reliance upon a ground which did not exist at the time of the Decision itself.  Indeed, it would seem impossible to identify any material error of principle which the Registrar could have made by reference to a set of circumstances that did not exist at the time of the Decision.

30.  Further, there is real force in Mr Ling’s submission that to allow an appeal based on post-decision events would not only undermine the public interest in finality as regards registration decisions, but it might also affect other applicants for registration by conferring on an appellant priority for its application which it would not otherwise obtain were it to re-file a new application.

31.  (In passing, I note that I have not been told why the appellant has not simply re-applied for registration.  Though that fact is not material to the issues on the appeal, it does seem to have been a course open to the appellant at all times since February 2009.)

32.  The legal principles to have been applied by the Registrar in the consideration as to whether or not to allow registration of the Mark are well settled, and they were not in dispute.

33.  The starting point is section 12(3) of the Ordinance, which provides that:

“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.”

34.  In the Decision (at paragraph 14), the Registrar set out the approach to be taken in determining the question under section 12(3) by reference to various authorities including Sabel NV v. Puma AG [1998] RPC 199; Canon Kabushiki Kaisha v. Metro-Goldwyn-Mayer Inc [1999] RPC 117; Lloyd Schuhfabrik Meyer & Co. GmbH v. Klijsen Handel BV [2000] FSR 77; and Marca Mode CV v. Adidas AG and Adidas Benelux BV [2000] ETMR 723 as follows:

(1) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;

(2) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well-informed and reasonably observant and circumspect—but who rarely has the chance to make direct comparison between different marks and instead relies upon the entire picture of them he has kept in his mind;

(3) the average consumer normally perceives a mark as a whole and does not proceed to analyze its various details;

(4) the visual, aural and conceptual similarities of the marks must be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components;

(5) a lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods or services, and vice versa;

(6) 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;

(7) mere association, in the sense that the later mark brings the earlier mark to mind, is not sufficient for the purposes of refusal of registration under the section;

(8) further, the reputation of a mark does not give grounds for presuming the likelihood of confusion simply because of a likelihood of association in the strict sense; and

(9) if the association between the marks causes the public wrongly to believe that the respective goods or services come from the same or economically linked undertakings, there is a likelihood of confusion within the meaning of the section.

35.  The Registrar then continued (at paragraph 15):

“Having regard to the above legal principles, I must therefore consider whether there are similarities in marks and services which would combine to create a likelihood of confusion. The likelihood of confusion must be appreciated globally and I need to address the degree of visual, aural and conceptual similarity between the marks, evaluating the importance to be attached to those differing elements, taking into account the degree of similarity in the services and the category of services in question. I must compare the marks in issue having regard to the distinctive character of each and assuming normal and fair use of the marks across the full range of the services within their respective specifications.”

36.  It was accepted by Miss Lam that the principles set out by the Registrar in the Decision at paragraphs 14 to 15 (and also paragraph 20) were correct.  I agree.

Analysis

37.  In my view, the Decision is unimpeachable and there is no basis on which this Court could properly interfere with it.

38.  Having conceded, appropriately, that the Registrar correctly identified the legal principles to be applied, Miss Lam was forced to submit that it was in the application of those principles that the errors occurred.  The thrust of that criticism was that the Registrar placed insufficient weight or too much weight on certain factors, or that there was an inappropriate focus on some factors to the practical exclusion of others.  This kind of criticism is not classically fertile ground for a successful appeal.

39.  As I have indicated, the theme underlying all of the individual grounds of appeal is that the Registrar ought to have held in all the factual circumstances of the case that the Mark and the Earlier Mark are distinguishable from each other and the co-existence of the two respective marks is unlikely to cause confusion on the part of the public.

40.  Miss Lam’s main assertions essentially repeated the arguments placed by the appellant before the Registrar.  Her headline point was that the two marks should have been construed ‘in the round’, whereas the Registrar focused on a disjointed consideration of the word “LION” separate from the other words “CAPITAL” and “FORTUNE”.  As Miss Lam put it, that focus was essentially to the exclusion of the other words. 

41.  In support of that submission, Miss Lam referred to the cases of Croom’s Trade Mark Application [2005] RPC 2, in particular at [32]–[38], and the Canon case (see above), in particular at [29]–[30].

42.  But I think the criticism is not well placed.

43.  First, the Registrar expressly pointed out (at paragraph 21) that by reference to the services in issue—mainly insurance, financial, investment and related services—the potential for confusion must be judged by reference to the average consumer who is likely to pay a reasonably high degree of care and attention when selecting the services in question.

44.  Secondly, the Registrar plainly did not focus on the word “LION” to the practical exclusion of the other word in each of the marks.  What the Registrar did was to consider, as she should have done, whether any of the words in the two marks was distinctive and dominant.

45.  Because the word “LION” has no apparent meaning or bearing in relation to financial services, the Registrar considered that it is a word “highly fanciful and distinctive of those services”.  On the other hand, because the word “FORTUNE” would likely convey to consumers the message that the services would create large amounts of money or assets for customers, it is “descriptive and indistinctive of those services”. Hence, the Registrar took the view, expressly considering the Earlier Mark as a whole and taking into account the principle of imperfect recollection, that it is the word “LION” that will, for the average consumer, constitute a distinctive and dominant component of the mark.

46.  Similarly regarding the Mark, because the word “CAPITAL” in general financial terms means financial assets or the financial value of assets, or financial resources available for use, the Registrar thought that it had no distinctive character in respect of the relevant services.  As a result, the Registrar considered that the consumer’s main impression and recollection of the Mark is likely to be the word “LION” which is the dominant and distinctive component of it.

47.  I see no error of principle in this approach. Indeed, it seems to me to be an entirely correct approach as a matter of principle.

48.  I do not think that the fact that the words “capital” and “fortune” can bear very different, or a range of different, meanings alters the analysis.  The Registrar has fairly identified the sort of meaning likely to be attributed to those words in the relevant context. Indeed, for my own part, in the context of a financial product, I would tend to think that the word “fortune” is indicative of the amassing of wealth (rather than, say, indicative of matters of chance or luck), which is similar to the concept of building “capital”.

49.  A subsidiary submission taken by Miss Lam relates to the evidence as to the non-use of the Earlier Mark, as is out in the statutory declaration.  She suggests that as the evidence was unchallenged, this ought to have been a factor which the Registrar should have considered in her assessment of to what the consumer might regard at the material time.

50.  In her skeleton argument, Miss Lam submitted that the unchallenged evidence demonstrated that the Earlier Mark was no longer in use, and therefore there would be a lower likelihood of confusion.

51.  This is, at first blush, an attractive submission.  But I consider that it misses the point, and in any event does not accurately reflect the approach taken by the Registrar.

52.  First, the correct legal approach is to assume normal and fair use of the marks across the full range of the services within their respective specifications.  It is therefore not possible to consider the likelihood of confusion by reference to asserted non-use of one of the marks.

53.  It is also important to remember what the statutory declaration actually identified, or could reasonably have identified.  All that it said, and all that it could have said, was that as at the date of the declaration the Earlier Mark had not been in use for some period.  No statement could have been made, and no statement was made, about the use or non-use of the Earlier Mark at any time after the date of the declaration.

54.  There was no error in principle in the Registrar’s approach to this point.  Indeed, the period of apparent non-use of the Earlier Mark was expressly recognized, but the Registrar also pointed out that no application for revocation of that Earlier Mark had been made.  As a result, by virtue of section 80 of the Ordinance, the continued registration of the Earlier Mark was evidence of its validity.

55.  The Registrar correctly pointed out that there was nothing to prevent the owner of the Earlier Mark (or any successor in title) from using that mark in relation to funds or other services covered by the registration if it so wished.

Conclusion

56.  I am completely satisfied that there was no material error of principle in the approach of the Registrar in making the Decision.  There is, in my view, no basis, let alone sound basis, on which this Court could interfere in that Decision, which in any event is fully and carefully reasoned by reference to undoubtedly correct legal principles.

57.  For these reasons, the appeal is dismissed.

[Submissions on costs]

58.  The costs will follow the event of the appeal, so the appeal is dismissed with costs, to be taxed if not agreed.