In re Omega (Trade Marks)

1995, No.MP43

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H E A D N O T E

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TRADE MARKS ORDINANCE, CAP.43 - LIKELIHOOD OF DECEPTION IS A SEPARATE GROUND OF OBJECTION UNDER S.12(1). THE OBJECTION MAY SUCCEED EVEN WHERE GOODS ARE NOT "CLOSELY ALLIED" - DISENTITLEMENT TO PROTECTION UNDER S.12(1) IS TRIGGERED WHERE THE MARKETING OF GOODS UNDER THE SUIT MARK CONSTITUTES PASSING OFF.

1995, No.MP43

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

MISCELLANEOUS PROCEEDINGS

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D E C I S I O N

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1. This is an appeal by Omega ("the Opponent") against a decision of Mr H.R. Faux (acting for the Registrar of Trade Marks) dated 7 October 1994, allowing an application by Charming Co. Ltd. ("the Applicant") for registration in Class 16 of Part A of the Register of Trade Marks, a mark consisting of "( Omega 亞米茄" arranged vertically (the "suit mark") in respect of "writing instruments, and refills and parts thereof".

2. The Applicant was not represented at the hearing before Mr Faux, the hearing officer. Prior to that hearing (which was held on 8 August 1993), Hobson & Co. who had filed the Counter-Statement on behalf of the Applicant had ceased to act for the Applicant. Copies of Mr Faux's decision as well as the Opponent's Notice of Appeal dated 6 January 1995 were sent to the Applicant at an address in Taiwan that had been provided by Hobson & Co. The Applicant did not appear at the hearing of the appeal which took place on 10 April 1995.

3. Mr Faux treated the proceedings before him as having been based on ss.9, 12(1), 20 and 23 of the Trade Marks Ordinance, Cap.43 ("the Ordinance"). Having found that the suit mark did or might comply with s.9 of the Ordinance and was not prohibited by ss.12(1), 20 and 23 of the Ordinance, he went on to consider the matter of the exercise of his discretion under s.13(2) and concluded that it should be exercised in favour of the Applicant.

4. For the purposes of this appeal, which is a de novo hearing, I need only be concerned with ss.12(1) and 13(2) of the Ordinance. Mr Yan who appears for the Applicant does not rely on either s.9 or s.23 and reserves his rights as regards s.20.

5. Before turning to the facts, it will be convenient to set out the two provisions of the Ordinance which are raised in this appeal. Section 12(1) of the Ordinance provides:-

"12(1) It shall not be lawful to register as a trade mark or part of a trade mark any matter the use of which would be likely to deceive or would be disentitled to protection in a court of justice or would be contrary to law or morality, or any scandalous design."

Section 13(2) of the Ordinance provides:-

"13(2) Subject to the provisions of this Ordinance, the Registrar may refuse the application, or accept it absolutely or subject to such conditions, amendments, modifications or limitations, if any, as he may think right."

Of course, s.13(2) only falls for consideration if the opposition under s.12(1) were to fail.

6. I now turn to the facts. On 27 October 1987, the Applicant applied for registration of the suit mark in respect of "writing instruments, refills and parts thereof". A representation of the suit mark appears as below:-

Ω
OMEGA
亞米茄

7. The Opponent is a world-renowned manufacturer of watches and time pieces. It is the registered owner of the "OMEGA" trade mark and "OMEGA Device" and "亞米茄". Adrian John Sank, the Manager of Omtis Ltd, the sole agent in Hong Kong of the Opponent's watches and time pieces, provided two statutory declarations in support. In brief, the "OMEGA" trade mark and the "OMEGA and Device" trade mark were registered and in use in Hong Kong since the turn of the last century. Its Chinese mark "亞米茄" was registered in 1958. Over the years, very substantial and extensive sales of "OMEGA" watches have been made throughout the world including Hong Kong, backed by extensive advertising and promotion of its "OMEGA" "亞米茄" and "OMEGA and Device" trade marks through the media of newspapers, periodicals, television, window displays in watch shops, signboards and wall calendars. The hearing officer noted that the Opponent's world-wide sales figures were impressive. The advertising and promotion expenditure for "OMEGA" watches has also been extremely substantial. As a result of the very extensive use, advertising and promotion of the Opponent's products and trade marks, the Opponent has acquired a very substantial and established reputation throughout the world and in Hong Kong. Indeed, very few people in Hong Kong would not have heard of "OMEGA" or "亞米茄" watches.

8. The Opponent has adduced evidence to show that although the manner in which the Opponent's various marks are presented has varied over the years, the present representations of the "OMEGA" and "OMEGA Device" trade marks do not differ very much from previous representations. Where the "OMEGA", the "OMEGA Device" and "亞米茄" marks are used in Hong Kong in conjunction with each other and where space allows for the marks to be placed in a vertical arrangement instead of horizontally next to each other, it has invariably been the practice for the Omega Device to be placed in the top row, the "OMEGA" mark in the middle row and the "亞米茄" mark in the bottom row, as follows:-

Ω
OMEGA
亞米茄

9. It is to be noted that the suit mark has three components comprising the Omega device, the word "OMEGA" and the Chinese characters "亞米茄". These are represented and arranged in a manner that is identical to the vertical arrangement that has been extensively used by the Opponent. Because of the substantial reputation attaching to the Opponent's trade marks and in particular the association by members of the public in Hong Kong of the particular representation and arrangement of the various marks by the Opponent, the Opponent believes that the use by the Applicant of the suit mark would almost inevitably give rise to deception and confusion amongst members of the public who would be deceived, confused or misled into thinking that the Applicant's goods are the goods of or goods connected in the course of trade with the Opponent. In short, the Opponent contends that this is a deliberate attempt by the Applicant to copy and imitate the Opponent's Trade Marks so as to exploit the substantial reputation enjoyed by the Opponent in respect of its Trade Marks.

10. Whilst the Opponent admits that it has neither registered its marks in respect of writing instruments, refills and parts thereof nor sold such goods in Hong Kong, it has adduced evidence to show that owners of famous trade marks tend to use them for a range of products including, in particular, watches and writing instruments. Examples of famous trade marks being used both in relation to watches and writing instruments include "S.T. Dupont", "Cartier", "Dunhill", "Christian Dior", "Guy Laroche", "Tiffany", "Corum", "Chaumet", "Philippe Charriol" and "Caran d'Ache".

11. Mr Chang Wan Chuan, a director of the Applicant, has filed a statutory declaration in support of the application. He says that the Applicant is a famous manufacturer, wholesaler and import and export agent of writing instruments in Taiwan. It is the registered owner in Taiwan of a mark ("the Taiwan mark") represented as follows:-

茄米亞
Ω
OMEGA

12. The Taiwan mark was first registered in Taiwan on 1 October 1957 in respect of writing instruments. The Applicant's pens are sold in Korea as well as Taiwan. Although Mr Chang states that the Taiwan mark has been in use since 1957, there is no evidence that it was in use before 1984. Moreover the sales figures for 1984 suggests that sales at that date were quite minimal as were the Applicant's advertising and promotion expenditure.

Section 12(1) of the Ordinance

13. Mr Yan submitted that s.12(1) differs from s.11 of the Trade Marks Act of U.K. in that the likelihood of deception is an independent ground of objection. That proposition finds support in the decision of Hunter J. in Hong Kong Caterers Ltd. v. Maxim's Ltd [1983] HKLR 287 at 296. Mr Yan submitted that the Opponent is entitled to succeed under s.12(1) if it could establish either (a) that there is a likelihood of deception or (b) the use of the suit mark would be disentitled to protection in a Court of Justice. The onus of proof in such cases that there is no reasonable probability of deception is cast on the Applicant. See Kerly's Law of Trade Marks and Trade Names 12th Ed. at 10-06.

(a) the likelihood of deception

14. The test is whether having regard to the user by the Opponent of its trade marks, in particular in the vertical arrangement in which they are almost invariably represented in Hong Kong, the use by the Applicant of the suit mark in a normal and fair manner in connection with writing instruments will not be unreasonably likely to cause deception and confusion. See Smith Hayden (1946) 63 RPC 97 at p.101 and Kerly (op.cit.) at 10-02. As noted above, the onus of proof is on the Applicant.

15. There is overwhelming evidence before me regarding the manner in which the Opponent has used its trade marks in Hong Kong, in particular, regarding the vertical arrangement noted above. The suit mark is for all practical purposes identical to the mark used by the Opponent in Hong Kong. The learned hearing officer does not disagree: he found that the suit mark, if not identical, is strikingly similar to the Opponent's marks.

16. It is noteworthy that the suit mark which the Applicant seeks to register is not identical to the Taiwan mark. The differences are threefold:

(i) the arrangement is different in that though both are vertical, the Chinese transliteration appears at the top in the Taiwan mark whereas in the suit mark, it appears at the bottom;

(ii) the order of Chinese transliteration reads from left to right in the suit mark (as is used by the Opponent) and from right to left in the Taiwan mark;

(iii) the script used for the word "OMEGA" in the Taiwan mark, in particular for the letters "O" and "G" is markedly different.

17. The Applicant has chosen not to give any explanation as to why the mark it seeks to register is not the Taiwan mark but rather a mark that is virtually the same as that used by the Opponent. Although the onus of proof is upon the Applicant to show that there is no reasonable probability of deception, it has not adduced any evidence in this regard.

18. Mr Yan submitted that applying the Smith Hayden test, the answer has to be that deception and confusion will almost inevitably arise for the following reasons:-

(i) the Opponent enjoys a very substantial reputation and makes extensive use of the marks represented and arranged in the manner described as the vertical arrangement on signboards, advertisements and calendars;

(ii) the Applicant has taken and copied the exact transliteration used by the Opponent and not some other;

(iii) the suit mark uses the same script as that used by the Opponent for the three components of its mark, namely the English, the Chinese and the device;

(iv) the Applicant seeks to register all three elements of the Opponent's mark in combination as is used by the Opponent in the same vertical arrangement;

(v) it is not unusual for owners of famous brands to branch into other areas of the market for luxury goods;

(vi) there is unchallenged evidence that the Applicant has copied the Opponent's mark and seeks to trade on the Opponent's goodwill.

If someone sets out to deceive, such an inference may properly be drawn against them. See Slazenger & Sons v. Feltham & Co. (1889) 6 RPC 531 at 538. Therefore the Court is entitled to find that the Applicant's intention is to trade on the Opponent's reputation.

19. The learned hearing officer accepted that the Opponent's marks are famous throughout the world and in Hong Kong in particular and that it has sufficient reputation in its marks to justify an opposition under s.12(1) of the Ordinance. However, he rejected the Opponent's objection under s.12(1) on the basis that that section requires that the Opponent's watches are goods "which can on a reasonable basis be said to be fairly closely allied to the pre-existing fields of the Opponent's activities" and that the Opponent failed to meet this requirement. See the Decision at para. 114.

20. This conclusion was apparently based on Ferodo Ltd's Application (1945)62 RPC 111, " Esso" Trade Mark [1972] RPC 283 and Laura Ashley Trade Mark [1990] PRC 539. However, a closer examination of these authorities reveals that none of them was a decision on s.11 of the U.K. Act which is the provision parallel to s.12(1). Rather, they respectively relate to s.27 (registration of defensive trade marks), s.10(2)(b) and s.9.(3)(b) of the U.K. Act.

21. I accept Mr Yan's submission that s.12(1) does not require that the goods be "closely allied". It is stated in Kerly (op.cit. at 10-03) that s.11 of the U.K. Act extends to cases where the Opponent's mark has been used only upon goods of a different description from those for which registration is sought. See also Players [1965] RPC 363 and "Golden Jet" [1979] RPC 19. Indeed, the learned hearing officer had, earlier in his decision (at para. 58) correctly taken this view of s.12(1).

22. Mr Faux concluded (at para. 118) that no one would think of pens when seeing the Opponents marks or hearing its name. That with the greatest respect, is not the question. The real question is what would people think if they see the Applicant's pens with the suit mark?

23. I am satisfied on the evidence and in the light of all the factors referred to above that the use by the Applicant of the suit mark in a normal and fair way would lead to deception and confusion. I do not agree with Mr Faux's finding that watches and pens would not normally be sold through the same trade channels. The evidence which relates to the market for luxury goods, into which category the Opponent's goods unquestionably fall, is otherwise.

24. Further, I do not agree that what the Applicant is seeking is a monopoly of the market. Rather, it is to prevent someone who is deliberately copying the Opponent's mark with the intention of trading on the Opponent's goodwill from trading on a mark that would inevitably confuse and deceive the public.

25. For these reasons, the Opponent succeeds in its objection under s.12(1). It is therefore not strictly necessary to consider Mr Yan's second point on s.12(1). Nevertheless as the point was taken, I will address it.

(b) disentitlement to protection

26. Mr Yan has further submitted that the marketing of pens under the suit mark in Hong Kong would undoubtedly constitute passing-off. If that is accepted, he submitted that the Court ought to refuse to register the suit mark under the other ground in s.12(1) namely, conduct disentitling the Applicant to protection in a Court of Justice.

27. On the passing-off aspect, I was referred to Nike (Ireland) Ltd & Anor v. Network Management Ltd [1994]12 EIPR D-319 where an injunction to restrain passing-off was granted against the defendants who had commenced to market Spanish produced toiletries in the U.K., the main branding indicator being a prominent representation of the word "Nike". The plaintiffs are the well-known sports good manufacturers. Jacob J. found that distribution and sales of the defendants' products would amount to passing-off although cosmetics were not part of the plaintiff's business and there were no plans that they should be.

28. I agree that a passing-off action would in all probability succeed were the Applicant to market pens in Hong Kong bearing the suit mark. Would a passing-off action trigger the disentitlement to protection ground in s.12(1)? That question does not appear to have been decided by the courts in Hong Kong. Registration has the effect of protecting the owner of the mark from passing-off actions because registration legitimizes the owner's use of the mark. If a user would in all probability constitute passing-off, such user should not be protected through registration. I find considerable force in Mr Yan's argument. I agree that this is an additional ground of objection under s.12(1).

29. As I have found for the Opponent in its objection under s.12(1), the exercise of the court's discretion under s.13(2) does not arise. The appeal succeeds and the decision of the Registrar is accordingly reversed.

30. I make an order nisi that the Applicant do pay the Opponent's costs here and before the Registrar.

(Doreen Le Pichon)

31. Deputy Judge of the High Court