CAPITAL DYNAMICS SDN. BHD AND OTHERS v. CAPITAL DYNAMICS HOLDING AG

HCMP 2572/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2572 OF 2014

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JUDGMENT
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1. The appellants appeal against a decision of the registrar of Trademarks dated 19 September 2014, in which the registrar refused the opposition of the appellants to the registration of the three marks “Capital Dynamics”, “CAPITAL DYNAMICS” and “capital dynamics” (“the Marks”), in respect of services in classes 35 and 36, in the name of the respondent.

BACKGROUND

2. The respondent is an independent asset management firm based in Switzerland which focuses on private asset management, including private equity, clean energy, infrastructure and real estate.  It has been investing in private equity funds since 1999 and has developed relationships with over 350 general partners in more than 800 funds world.  The respondent currently has one Asian fund of funds and one Asian separate account for a UK public pension fund with aggregate commitments of US$264 million.  In addition, the respondent’s group has exposure to 38 Asian funds through advisory and/or non‑discretionary mandates, totalling over US$1.2 billion in assets.  Of these funds, eight of them are in Hong Kong, with a total exposure of US$580 million.

3. The name “Capital Dynamics” was first adopted by Capital Dynamics AG.  As a result of various restructurings, in or around 2000 the respondent became the parent company of Capital Dynamics AG and the name “Capital Dynamics” has been used continuously thereafter by the respondent and its affiliated companies.

4. The respondent’s Hong Kong office was opened in March 2007 and its activities were operated by Capital Dynamics (Hong Kong) Limited.  Its Hong Kong revenues were generated by intercompany servicing fees derived through transfer pricing income from the Swiss parent and other companies within the group.

5. The respondent group has protected various marks, all connected to the words Capital Dynamics, in countries including Switzerland, Ireland, United States, Taiwan and New Zealand with the earliest registration being in Switzerland and taking effect in 1999.

6. On 20 August 2009 the respondent made an application to register the Marks under the Trade Marks Ordinance (Cap 559).  The application number assigned by the registrar of Trade Marks was 301410227.  The relevant date for considering the objections is 20 August 2009.

7. On 17 December 2009 Capital Dynamics Sdn Bhd (the 1^st appellant), Capital Dynamics Asset Management Sdn Bhd (the 2^nd appellant) Capital Dynamics (S) Private Limited (the 3^rd appellant) and Capital Dynamics (Australia) Limited (the 4^th appellant) filed a Notice of Opposition, to the application.  Although the original opposition was wider, at the hearing before the registrar the ground of opposition was limited to that contained in section 12(5)(a) of the Trade Marks Ordinance.  Section 12(5)(a) relevantly provides:

“(5) Subject to subsection (6), a trade mark shall not be registered if, or 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…”

8. The appellants are part of the Capital Dynamics group of companies (“the CD Group”) founded by a Mr Tan, who swore the evidence before the registrar.  The 1^st appellant is a Malaysian company founded in 1988 as Malaysia’s first independent investment adviser.  It was the investment adviser of “iCapital.biz.bhd”, a closed‑end fund that has been listed on the main market of Bursa Malaysia Securities Berhad since 2005.  The 2^nd appellant was a Malaysian company and the fund manager of the listed fund.  The 3^rd appellant is a company incorporated in Singapore who is a privately owned global fund manager and the 4^th appellant is also a fund management company and it holds an Australian financial services licence.

9. In 1989 the 1^st appellant launched an English and Chinese weekly investment newsletter (“the Newsletter”), in hard copy, called “icapital”.  In 2002 the internet edition of the same publication became available at a website located at www.icapital.biz.

10. The evidence demonstrates that within Hong Kong there were five subscribers to the Newsletter, variously between 2005 and 2009.  The appellants contend that the evidence does not exclude the possibility of other subscribers having existed over the life of the Newsletter, and strictly that is correct.  However, the burden rests with the appellants to make out their defence to the registration of the Marks, and only the appellants could adduce evidence as to the actual number of subscribers.  The court can base its decision only on the evidence. Consequently the court can only address the position on the basis that the Newsletter has five subscribers.

11. Of those five, one subscribed to both the hard copy and on‑line version between 2007 and 2008 but all the others subscribed to the online version only.  They each paid between 99 and 200 Malaysian Ringgit, although it appears that the hard copy version cost 940 Ringgit including delivery. 

THE LEGAL FRAMEWORK TO THE APPEAL

12. The correct approach to an appeal of this nature is set in the judgment of Sakhrani J in Host Hotels and Resorts LP v Registrar of Trade Marks [2010] 1 HKLRD 541, which in turn cites various UK and Hong Kong decisions which identify the approach.

13. The court should interfere with registrar’s decision only where it is satisfied that the registrar acted on some wrong principle, such as approaching the problem incorrectly, taking into consideration matters which should not have been taken into consideration or omitting to take into consideration matters should have been considered — see Terumo KK v Beecham Group Plc [1994] AIPR 306. That, it seems to me, is a threshold test which must be satisfied before the court should thereafter engage upon the underlying merits of the decision.

14. Once that test has been satisfied the court must then address the merits of the decision of the registrar, and it should do so by way of a rehearing rather than by way of a review.  In that rehearing the court should be slow to reverse the decision of an experienced registrar on a question which consists largely of a value judgment.  Naturally in the event that the error of principle which, by that stage, the court has already identified affects a value judgment of the registrar, that value judgment will have to be revisited and made again without the error of principle.  However if a value judgment is not vitiated by the error in principle then the court should show a “real reluctance” to interfere with it.  This was identified by Robert Walker LJ in Reef Trade Mark [2003] RPC 5 at 28 as follows:

“… 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.”

15. In the context of Hong Kong, it was re‑affirmed by Rogers VP in Re NAKED [2010] 1 HKLRD 382 at 22:

“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 on 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.”

THE REGISTRAR’S DECISION AND THE APPELLANT’S CRITICISMS

16. The essence of the appellants’ case before the registrar was that they have a right to prevent the registration of the Marks under section 12(5)(a) because they have the protection of the law of passing off.

The law

17. In paragraph 26 of registrar’s decision she set out the essential elements of the cause of action of passing of, as formulated in Reckitt & Coleman Products v Borden Inc [1990] RPC 341:

“(a) the Plaintiff has goodwill attached to the services that he supplies in the mind of the purchasing of public by association with a trademark under which his services are offered to the public, such that the trademark is recognised by the public as distinctive specifically of the Plaintiff’s services.

(b) The Defendant has made a representation to the public leading or likely to lead the public to believe that the services offered by him are the services of the Plaintiff; and

(c) the Plaintiff suffers, or is likely to suffer, damage by reason of the erroneous belief engendered by the Defendants misrepresentation that the source of the Defendants services is the same as the source of those of the Plaintiff.”

18. She then set out, in paragraphs 27 to 53, an analysis of the various cases which deal with the question of whether, and in what circumstances, an opponent to a trademark was able to establish the existence of goodwill.  There is no appeal against her legal analysis, which the appellants contend is in fact is correct. 

19. However, somewhat inconsistently with their support of the registrar’s legal analysis, the appellants also contend that once it is accepted that there were customers in Hong Kong it must follow as a matter of logic that goodwill is established.  In other words the appellants contend that the existence of customers is conclusive of the existence of goodwill, but the absence of customers is not conclusive of the absence of goodwill.  In the absence of customers, the appellants contend that the existence of goodwill must be determined by reference to all the evidence.

20. This was the first error of principle that was relied upon, because, having found that there were customers (albeit of the Newsletter rather than for investment advisory services) the appellants contend that the registrar was bound to find that goodwill was established.  That, they say, is sufficient to dispose of the appeal.  But in the event that the court does not accept that submission, the appellants go on to identify further errors by the registrar in her assessment of the evidence.

The Newsletter

21. The registrar then turned to assess the evidence relied upon by the 1^st appellant as establishing goodwill.  She addressed first the Newsletter, which, it was said, established customers and reputation amongst the investing public in Hong Kong 

22. The registrar identified the nature of Newsletter, in which the most predominant name is clearly “icapital” and “icapital.biz”, which appears to be the business name through which the services of the appellants were sold.  However it is clear that the publisher of the Newsletter was the 1^st appellant and the 1^st appellant’s name appeared in various places on it.  At paragraph 60 the registrar, stated that:

“I agree that it is clear from the evidence that the Newsletter would be referred to by its subscribers as “iCapital” and perhaps to a lesser extent, “iCapital.biz”. However, I consider that the subscribers to a financial publication would also pay due regard to the identity of the publisher. They would generally exercise care in choosing a publication that would give them a more accurate picture of the market conditions and the available investment opportunities. The identity of the publisher is one of the factors that they would take into account in the selection process. That said, the publisher (i.e. 1^st [appellant]) is not giving investment advice to the individual subscribers through the issue of the Newsletter…”

23. She then concluded paragraph 62:

“Based on the above analysis, I do not consider that the Hong Kong subscribers of the Newsletter could be regarded as customers of the investment advisory services provided by the 1^st [appellant]. Rather they were merely customers of the Newsletter published by the 1^st [appellant].”

24. That finding is criticised by the appellants as making an error in principle because it is said that the nature of services for which a reputation has been gained is irrelevant.  The publication of the Newsletter itself is a commercial activity whether the content of the Newsletter amounts to investment advice, or analysis or commentary or any other matters relating to investment, and hence that activity itself is capable of protection in passing off provided that the requirements of that cause of action are satisfied. 

25. The respondent criticises the appellants in this appeal because it says that the appellants have now changed their stance in this respect.  It is clear that the submission of the 1^st appellant before the registrar was that the reputation was enjoyed for its investment advisory services under the name of “Capital Dynamics” and not for any other type of business or commercial activity.  Hence the respondent contends that if there was an error in confining herself to investment advisory services, it was one that the registrar was led into by the appellants, and they cannot now complain of it on appeal.

The bloomberg interviews

26. The registrar then went on to address the Bloomberg interviews that Mr Tan had engaged in.  There are a total of 29 interviews which the appellants rely upon although only 18 of them were before the relevant date.  Mr Ling, counsel for the appellants, accepted that interviews after the relevant date were not strictly relevant, although he maintained that they did establish an overall reputation of Mr Tan, operating through the 1^st appellant.

27. I do not see that there is any relevance to the interviews which post date the relevant date.  They may be relevant to establish a reputation of Mr Tan as an investment expert at that the date of the interview, but I do not see how an interview, for example dated 21 March 2012, can possibly be relevant to a reputation which has to be established as at 20 August 2009.  Therefore I disregard any interviews after the relevant date.  Mr Ling did not contend that the registrar erred in principle in disregarding the interviews after 20 August 2009.  Indeed such a proposition would be inconsistent with his acceptance that strictly they are not relevant.

28. However Mr Ling did contend that the registrar erred by placing little or no weight upon the interviews as a whole as establishing a relevant reputation. 

29. This submission was built upon two propositions. 

30. First that the registrar erred in relying upon only five out of a total of 18 interviews which predated the relevant date.  Those five interviews mention Mr Tan and at the same time introduced the 1^st appellant.  The other 13 interviews introduced Mr Tan, but did not make any reference to the 1^st appellant.  Mr Ling contended that Mr Tan himself was associated with the 1^st appellant and consequently his mere appearance, even without mention of the company, was sufficient to assist in establishing goodwill for the company. 

31. Secondly Mr Ling sought to establish that the registrar erred in principle by underestimating the importance and influence of the Bloomberg interviews as a means of establishing a reputation.

Internet hits

32. The registrar then went on to address the number of internet hits that the website had.  The evidence showed hits on the home page of between 36,000 and 204,000 per annum from 2004 to 2009.  However she did not place any great weight on these figures because it was clear that the landing page did not allow access to the Newsletter, and there were no details as to the nature of those hits.  As a result, they could not be relied upon as an accurate representation of persons seeking to avail themselves of the services (of any kind) of the 1^st appellant or of the CD Group, and hence did not assist in establishing the goodwill of the 1^st appellant.

33. The appellants criticised the registrar in this respect, although not in the Notice of Appeal, but Mr Ling did not pursue it “with any enthusiasm” (to use his words). His reticence is, in my view, well placed.  There was no error of principle made in this respect, as it is purely a question of the weight to be placed on available evidence.  Consequently I shall not address this aspect any further, save to note that it is a value judgment of the registrar which is not vitiated by error, and hence I must have due regard to it in the event that I reconsider the merits.

Other interviews and media

34. The registrar then considered other interviews and media cuttings concerning Mr Tan, which also referred to the 1^st appellant or the CD Group.  She did not consider those matters any further because they were all published in Malaysia and not Hong Kong, and hence did not assist to establish goodwill in Hong Kong.  There is no appeal against that conclusion, and no criticism of it either.

Conclusions

35. The registrar reached her conclusions at paragraph 75 as follows:

“Looking at the evidence as a whole and in particular, taking into account my observations in relation to each category of evidence, I am not satisfied the 1^st [appellant] has establish goodwill in Hong Kong in respect of investment advisory services with reference to the name ‘Capital Dynamics’.”

36. She then went on in paragraph 76 to state:

“Lest I am wrong on the above findings, and based on the evidence, the 1^st [appellant] should be regarded as having acquired some goodwill in Hong Kong in respect of investment advisory services, I consider that such goodwill was too trivial for the purposes of a passing off action.”

37. The appellants do not contend that there is an error in principle in relation to the finding of triviality, and accept that it is a question of fact and degree as to whether or not the goodwill which is established is, or is not, too trivial to be protected by the law of passing off.  In that context it is clear that the judgment is a value judgment of registrar to which due regard must be had unless that value judgment is vitiated by an error in principle relating to the underlying evidence.  The appellants contend that the errors which they rely upon concerning the evidence are such that this judgment of the registrar in relation to triviality is tainted by those errors.  Hence they say it cannot stand and must be re‑addressed by this court.

ERROR IN PRINCIPLE?

The Law and the need for customers in Hong Kong

38. To support the proposition that the existence of customers Hong Kong is conclusive of the existence of goodwill the appellants rely upon Hotel Cipriani SRL v Cipriani (Grovesnor Street) Limited [2010] RPC 16, and in particular paragraphs 111, 113 and 117 of the judgment of Lloyd LJ.  At 111 Lloyd LJ quoted from Sir Nicholas Browne Wilkinson VC in Pete Waterman Ltd v CBS UK Ltd[1993] EMLR 27:

“The presence of customers in this country is sufficient to constitute the carrying on of business here whether or not there is otherwise a place of business here and whether or not the services are provided here. Once it is found that there are customers it is open to find that there is a business here to which the local goodwill is attached.”

39. Consistent with that, at 117 the judge quoted from Wadlow in “The Law of Passing off”, 3^rd edition (2004):

“It is now suggested that a service business operating from a place or places abroad has customers and therefore goodwill in England to the extent that persons from England consciously seek out and make use of its services in preference to those available from competitors in England or elsewhere. So the foreign business has goodwill here if English residents are prepared to go to it (literally or figuratively) to avail themselves of its services, or if the availability of those services abroad is a material factor in their travelling to wherever the services can be acquired or experienced.”

40. However in my view Cipriani does not support the proposition for which the appellants contend.  Paragraph 111 of the judgment simply identifies that the presence of customers is sufficient to constitute the carrying on of a business.  It does not suggest that the presence of customers is in any sense conclusive.  As to the passage in Wadlow, in paragraph 118 of Cipriani Lloyd LJ expressly declined to adopt that passage as a matter of general principle.  He went on to conclude that based upon the totality of the evidence before the court in that case Cipriani was able to establish that the business had goodwill in England at the relevant time.

41. The appellants’ proposition is also inconsistent with the finding of the registrar in paragraph 53, which is not under appeal, that

“The Hong Kong courts have however approached the issue of goodwill as a question of fact to be determined based on the evidence as a whole in each case. That said, whether the plaintiff has customers in Hong Kong, the promotion and marketing efforts of the plaintiff and the extent of its reputation in Hong Kong are important factors that the courts would take into account when determining the issue of goodwill.”

42. That finding by the registrar is consistent with a line of authorities in both Hong Kong and the UK, including C&A Modes v C&A (Waterford) Ltd [1978] FSR 126 per Hench J at 138 and Hong Kong Caterers Ltd v Maxim’s Ltd [1983] HKLR 287 per Hunter J at 296A.

43. In the circumstances I reject the proposition of the appellants and conclude that the existence of customers in Hong Kong is not conclusive of goodwill, but is merely a factor which will need to be taken into account in making an assessment of the evidence overall.  It is an overall assessment of the evidence which is necessary for the purposes of establishing goodwill. 

44. Consequently I do not accept the appellants proposition that the registrar erred in principle by failing to conclude that the mere presence of customers of the Newsletter inevitably established goodwill.

45. The corollary argument was also raised.  It was contended by the appellants, and in particular by the 2^nd appellant, that the absence of any customers in Hong Kong was not conclusive as to the absence goodwill.  This question was raised recently in the Supreme Court in the United Kingdom in the case of Starbucks (HK) Limited and Another v British Sky Broadcastings Group PLC and others [2015] UKSC 31 dated 13 May 2015.  The Supreme Court held, at 52, that:

“As to what amounts to a sufficient business to amount to goodwill, it seems clear that mere reputation is not enough, as the cases cited in paras 21-26 and 32-36 above establish. The Claimant must show that it has a significant goodwill, in the form of customers, in the jurisdiction, but it is not necessary that the Claimant actually has an establishment or office in this country. In order to establish goodwill, the Claimant must have customers within the jurisdiction as opposed to people in the jurisdiction who happen to be customers elsewhere.”

46. The 2^nd appellant contends that this finding of the Supreme Court does not represent the law of Hong Kong.  It says that the cases in Hong Kong demonstrate that the absence of customers is not something which inevitably precludes a finding of goodwill, and consequently the law of Hong Kong is different to that of the United Kingdom.

47. The respondent complains that such an argument has not been raised in the Notice of Appeal, and that consequently it was not in a position to address the proposition fully or properly.  As a result the matter has not been fully argued before this court and I decline to reach any concluded view as to whether the Starbucks case should be taken to represent the law of Hong Kong in this respect or not.  For reasons which will become apparent it is in fact not necessary for me to decide this point.  Therefore it will have to be left over to another case in which it is fully argued.

The Newsletter

48. It is at least arguable that in paragraph 62 of the registrar’s decision she effectively disregarded the Newsletter as giving rise to customers of services of the 1^st appellant in Hong Kong because of her view that those customers were customers of the Newsletter rather than of investment advisory services.  On the other hand, in paragraph 74 of her judgment the first aspect of the evidence which she listed as having been relied upon, and having therefore been taken into account as a whole, is the fact that the Newsletter was available to the public for subscription, and had been subscribed to by five subscribers based in Hong Kong.

49. The requirements of a passing off action mandate that the goodwill of the plaintiff is attached to goods or services that he supplies under a mark, and that the defendant has made a misrepresentation leading the public to believe that the services offered by him are in fact the services of the plaintiff. 

50. There is no requirement that the services offered by each of the parties is the same, and there is no requirement, in the context of this case, that the customers of the Newsletter necessarily need to be customers of the 1^st appellant in relation to investment advisory services.  Provided that the services offered by the respondent under the Mark will, or are likely to, lead the public to believe that those services are in fact offered by the 1^st appellant then there is the possibility of a passing off action. 

51. Consequently the fact that the five customers of the 1^st appellant are Newsletter customers rather than investment advisory customers does not mean, as a matter of necessity, that they are not relevant customers for the purposes of assessing goodwill of the 1^st appellant.  Neither does it mean, as a matter of necessity, that those customers are irrelevant to whether the 1^st appellant has, or may have, an action in passing off absent registration of the Marks.  The court, and the registrar, has to look at the evidence as a whole and make an assessment.  There is no single item of evidence which inevitably, and as a matter of necessity, leads to a conclusion relating to goodwill. 

52. The fact that there is a difference between customers of the Newsletter and customers of the investment advisory services is only one of the factors  to be weighed in the balance when considering the strength and extent of the goodwill (if any) that the 1^st appellant has established.  However from paragraph 62 of the registrar’s decision it is at least arguable that she has disregarded the customers as a result of her single finding that they are customers of the Newsletter only. 

53. If that is indeed the approach that the registrar took, albeit perhaps inadvertently as a result of the submissions of the appellant itself, then by disregarding customers of the Newsletter simply because they are not customers of “investment advisory services” the registrar has, in my view, erred as a matter of principle.  Although it is not entirely clear that this was indeed the approach of the registrar, in my view the safest course is to accept that an error of principle has been made and for this court to reconsider the decision, based upon the evidence as a whole, having regard to the correct principles.

54. In the light of that conclusion it is not necessary to address the other aspects of the evidence which the registrar considered for the purposes of deciding whether to reconsider the decision.  However given the due regard that must be had to the value judgments of the experienced registrar, it is necessary to make an assessment as to whether those other aspects of her judgment are in any way vitiated by the error of principle which I have referred to, or indeed any other error of principle.  If they are so vitiated then the court will reconsider those aspects afresh without the deference which would otherwise be given to the value judgment, but if they are not so vitiated, then the court’s consideration will give the appropriate weight to her value judgments.

Bloomberg

55. The only real alleged error of principle which can be discerned from the submissions of the 1^st appellant is that the registrar failed to take into account, as part of her consideration of the evidence, the 13 interviews in which Mr Tan appeared but in which there was no reference to the 1^st appellant. 

56. The other proposition made by the 1^st appellant is really simply that the registrar did not give sufficient weight to the fact that Bloomberg is a well respected media channel, and those that are interviewed on it inevitably establish reputation and goodwill simply by virtue of the fact that they are interviewed.  That effect is amplified, so says the 1^st appellant, if one is interviewed on several occasions.  Mr Ling complained that registrar took a quantitative approach, without looking at the qualitative impact that an interview or series of interviews on Bloomberg, as a pervasive media outlet for those interested in investment, would have on the investing public in Hong Kong.

57. But that is not an error of principle.  It is simply a proposition that the registrar took an erroneous view as to the weight of the evidence.  Provided that her view is not so far wrong that no reasonable person in the position of the registrar could have taken it, the registrar is entitled to assess the evidence and place whatever weight she considers appropriate upon it.  I do not consider that her view is outside of the ordinary scope of views that a reasonable decision maker might reach, and consequently I do not consider that the weight she attached to the Bloomberg evidence was an error of principle. 

58. In any event I do not accept that registrar wrongly assessed the qualitative nature of the Bloomberg interviews.  In paragraph 63 she stated:

“As Bloomberg is a well-known provider of business information, it is highly persuasive and enjoys a high captive audience in a major international financial centre like Hong Kong.”

And at paragraph 67 she stated:

“I agree that Mr Wong has raised some valid observations. However, they should not be taken too far as Bloomberg TV has long been used and relied upon by professionals engaged the financial and commercial fields in Hong Kong as one of the important providers of financial information.”

It is clear that the registrar was well aware of the commercial reputation of Bloomberg and gave appropriate weight to the qualitative effects of the evidence.

59. However if she erroneously omitted to rely upon the 13 interviews, her assessment of the evidence relating to the Bloomberg interviews as a whole will inevitably be tainted by that error.  I therefore turn to that question.

60. It was agreed by both parties that for the purposes of establishing goodwill appropriate for a passing off action it was necessary that the goodwill should attach to services provided under the marks in question.  That is inevitable given the three requirements for a passing off action.  It is also set out in Hotel Cipriani at page 272, paragraph 213, citing Inland Revenue Commissioners v Muller & Co’s Margarine Ltd [1910] AC 217.

61. As a result, if a Bloomberg interview of Mr Tan does not in any sense associate Mr Tan with the 1^st appellant, then it is difficult to see how the goodwill it may generate (assuming that it does) is in fact goodwill attached to 1^st appellant.  The highest that the 1^st appellant could state its case in this respect was that Mr Tan was well known as its Chief Executive Officer and therefore any interview by him would inevitably be associated with it, and hence with the Marks in question.

62. Two points arised from that. 

63. First this court was not shown any evidence to support the proposition that Mr Tan was always and inevitably to be associated with the 1^st appellant or the CD Group.  Consequently this court does not accept the proposition that Mr Tan is inevitably so associated. 

64. Secondly, even if there was such evidence, unless that evidence was so strong as to allow only the conclusion contended for by the appellants, it could not be said that the registrar erred in principle.  If, on the evidence of Mr Tan’s association with the 1^st appellant and the CD Group, there was room for a reasonable decision maker to take the view that there needed to be a more concrete connection between Mr Tan and the 1^st appellant than merely his presence, then the view of the registrar would be one she was entitled to reach and it could not be criticised as being wrong in principle. 

65. As a result I do not consider that there is any error in principle in the registrar’s assessment of the evidence relating to the Bloomberg interviews.  Further, in the light of the discussion above, it is clear that the registrar’s assessment of the weight to be given to the Bloomberg interviews is a value judgment, and it is not in any way vitiated by the error of principle that I have identified concerning the Newsletter.  As a result I must be reluctant to depart from the registrar’s assessment unless there is a sound basis to do so.  I do not think that there is.

The other evidence

66. As set out above there is no sustainable challenge in relation to the assessment of the other evidence, and consequently I do not find that there has been any error of principle in relation to the assessment of that evidence.  Neither is the registrar’s assessment of this evidence in any sense vitiated by the error of principle relating to the Newsletter.

Triviality

67. Triviality is a question of fact and degree.  Inevitably therefore it must be a value judgment made by the registrar.  However if the registrar has erred in principle when assessing the underlying evidence it is inevitable that any conclusion she reaches on triviality will be tainted by that error.  As a result in my view the court needs to reconsider the question of triviality afresh.

RECONSIDERATION OF THE DECISION

68. There is no appeal against the findings of fact which have been made by the registrar in paragraphs 57-60 of the decision in relation to the Newsletter.  The Newsletter is predominantly under the mark “iCapital” and less so under the mark “icapital.biz”.  It is said to be published and printed by 1^st appellant, and all payments are to be made to the 1^st appellant.  The registrar accepted that:

“Subscribers to a financial publication would also pay due regard to the identity of the publisher. They would generally exercise care in choosing a publication that would give them a more accurate picture of the market conditions and the available investment opportunities. The identity of the publisher is one of the factors that they would take into account in the selection process.”

69. Goodwill is not in itself an easy concept.  In Reckitt & Coleman Products Ltd v Borden [1990] RPC 341 at 406 Lord Oliver described it as:

“First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the Plaintiff’s goods or services.”

70. The concept was also described in the Australian case of Taco Bell v Taco Co of Australia (1981) 60 FLR 60 (although according to Wardell, The Law of Passing off, that case no longer represents the law of Australia) as: “A business and goodwill attached to a particular place if there is an attraction among people there to do business with it.”

71. In the light of the finding of the registrar that customers are attracted to the Newsletter by the identity of the publisher, which I consider to be correct, I accept that a subscriber to the Newsletter is a relevant customer of the 1^st appellant, and that the Newsletter and its subscriber base is such that it is capable of creating goodwill for the 1^st appellant, and that the goodwill will be relevantly attached to the mark in question.  It will create “an attraction among people [in Hong Kong] to do business”with the 1^st appellant.

72. As to the Bloomberg interviews, I have already addressed the criticism which has been made of the decision of the registrar.  In my view it is misplaced and I should be slow to depart from her conclusion on what is essentially a value just made by her as to the effect of those interviews.  There is no sound basis to depart from her conclusion on the Bloomberg interviews.

73. The registrar has not expressly identified the effect of her assessment of the Bloomberg interviews on her overall assessment of the evidence concerning goodwill. However, it is clear that she was not satisfied that the relevant Bloomberg interviews established any goodwill, either individually or in combination with other aspects of the evidence.

74. Similar comments apply in relation to the other evidence which the registrar referred to and relied upon. 

75. I find no sound basis on which to interfere with her general conclusions concerning that evidence. 

76. Consequently the position reached is that I accept that the Newsletter is capable of creating goodwill, and indeed does create relevant goodwill for the purposes of assessing the opposition under section 12(5)(a) of the Trade Marks Ordinance.

77. The next question is, therefore, whether the goodwill which in fact arises, having regard to the correct consideration of the Newsletter, as well as the other evidence as a whole, is sufficient to justify an action for passing off, or whether it is too trivial.  The registrar considered it was trivial, but as identified above did so on an erroneous consideration of the Newsletters. Therefore I need to reconsider the question afresh.

78. In this context there are two competing concepts.  First, that the law of passing off protects the goodwill of a small business as much as a large.  Secondly, the law of passing of will not intervene to protect goodwill which any reasonable person would consider trivial.  The 1^st appellant relies upon the first of those concepts whereas the respondent relies upon the second.  According to Laddie J in Sutherland v V2 Music Ltd [2002] EWHC 14; [2002] EMLR 28, it is not easy to formulate a test for this bottom line of goodwill, but it is simply a matter of fact and degree. 

79. The 1^st appellant relies upon four factors which it says are relevant to the nature and extent of the 1^st appellant’s goodwill:

(1) The wide reach and powerful impact of Bloomberg.

(2) The nature of the services provided by the 1^st appellant, namely their investment advice or analysis which was instantly accessible to customers in Hong Kong via the internet.

(3) The nature of customers who were likely to be sophisticated investors with an appetite for investing in international stock markets with some disposable income.

(4) The importance likely to be attached by the customer to the identity of the provider of stock analysis and advice.

80. It relies upon various cases, including decisions concerning interlocutory injunctions, to support the proposition that a small business is just as much protected as a large business.  I do not find the cases which concern interlocutory injunction applications to be of any assistance.  The issue in those cases is normally whether there is an arguable case, and the court therefore inevitably reaches no conclusion about the actual strength of the case.  As a result they provide no guidance as to circumstances in which a small business may be protected.

81. Other cases do, however, give some indication of the approach, even if only by the use of adjectives and examples. 

82. Hart v Relentless Records Ltd [2003] FSR 36 refers once again to the trivial nature of goodwill.  It refers to Sutherland v V2 Music Ltd and comments that Laddie J in that case felt that it was close to the borderline even though the band in question was known to tens of thousands of members of the public and admired by a significant number of them. 

83. In Knight v Beyond Properties Pty Ltd [2007] EWHC 1251 (Ch); [2007] FSR 34 David Richards J assessed whether the mark “Mythbusters” as a title of a children’s book had sufficient goodwill.  The opponent had sold 5,000 copies of the first book, 10,000 of the second book and 2,100 of the 3^rd book.  He held that there was a sufficient goodwill to be protected, although by the time of the 3^rd book it was very small, although still capable of being protected by the law of passing off.  He stated that, at [27]:

“A reputation on a relatively small scale will still attract the protection of a claim in passing off, but at some point the reputation may exist among such a small group of people that it will not do so. The minimum size of goodwill required for this purpose is a matter of fact and degree.”

In Hugo Boss Trademark & others v The Britain Boss International Co Ltd & Another,unreported, HCA 2231/2013, 22 April 2015 Zervos J, citing Hart v Relentless Records Ltd, stated:

“It is necessary to show that the goodwill is substantial and not trivial. If the goodwill is trivial, then correspondingly there will be little, if any damage resulting from any passing off.”

84. In this case the Newsletter was subscribed to by five people.  On any view that is a small number of people.  The precise periods of their individual subscriptions is not entirely clear from the evidence, and it is not clear whether their subscriptions are continuous from the date they first subscribed.  But doing the best I can, other than at the relevant date (when I shall assume in favour of the appellants that all five were subscribing), in most other periods during the overall period of their subscriptions (which ran from November 2005 to August 2009), it appears that no more than three were subscribing at any one time.

85. In my view that small number of people (whether it be three or five) subscribing to the Newsletter over a period of approximately four years would fall into the category described by David Richards J as being “such a small group of people that it will not [attract the protection of a claim in passing off]”. 

86. Consequently, I do not believe that the goodwill generated by that small number of customers of the Newsletter is, of itself, sufficient to give rise to a defence under section 12(5)(a) of the Trade Marks Ordinance.

87. But I must also consider the other evidence relied upon, including the Bloomberg interviews and the other aspects set out by the registrar in her decision.

88. In relation to those other aspects, I have already addressed the weight that must be given to the registrar’s value judgments, and concluded that I can see no sound reason to depart from her findings in respect of each of them individually.  In fact I agree with her conclusions.  When combined together, and with the Newsletter as analysed above, I am of the view that the goodwill as a whole is insufficient to attract the protection of a claim in passing off. 

89. Consequently, I agree with the registrar’s findings as set out in paragraph 76 of her Decision, that any goodwill is too trivial for the purposes of passing off.

The 2^nd appellant

90. The position of the 2^nd appellant is slightly different to that of the 1^st appellant.  The 2^nd appellant accepts that it has no customers in Hong Kong, but nevertheless contends that it has sufficient goodwill to attract the protection of passing off.  On one view, that position requires me to determine the alleged conflict between the law of Hong Kong and the law of the United Kingdom as set out in the Starbucks case, and referred to above.  However, Mr Ling, on behalf of the 2^nd appellant has accepted (quite correctly) that the evidence in favour of the 2^nd appellant is not as compelling as that in respect of the 1^st appellant, and that if the appeal of the 1^st appellant fails, then inevitably so does that of the 2^nd appellant, irrespective of the alleged differences between Hong Kong and UK law. 

91. Given that, for the reasons above, I find that the appeal of the 1^st appellant fails, I also conclude that the appeal of the 2^nd appellant fails.  I do that without making any decision concerning the applicability of the issues raised in the Starbucks case to Hong Kong law.

The 3^rd and 4^th appellants

92. The 3^rd and 4^th appellants are named as appellants on the Originating Summons, but no grounds of appeal are set out in the Notice of Appeal in respect of their appeal.  Mr Ling, who acted for them, expressly declined to advance any argument on their behalf.  I dismiss the appeals by them.

DISPOSITION

93. The Originating Summons is dismissed in respect of all four appellants.

COSTS

94. I make a costs order nisi that the 1^st to 4^th appellants shall pay the respondent’s costs of the Originating Summons.