Singapore Trade Marks – Precedent that unregistered marks may oppose registration of mark - Florian Mack v Golden Cala Trading EST [2020] SGIPOS 5

In a decision rendered by the Intellectual Property Office of Singapore (IPOS), it was held that the Opponent had succeeded on the following grounds on the law of passing off, goodwill, misrepresentation and likelihood of damages (Section 8(7)(a) Trade Mark Act). However, the Opponent did not succeed in proving that the Applicant’s intention of registering its mark is one that was made in bad faith (Section 7(6) of the Trade Mark Act).

 

(A)       Who are the parties involved in this case?

Golden Cala Trading EST (“Applicant”)

The Applicant is a company incorporated in Saudi Arabia, engaged in the business of distributing and selling contact lenses primarily in the Middle East region. The Applicant in this case had applied to register its “LENS ME” mark.

Florian Mack (“Opponent”)

The Opponent is the proprietor of “LENS ME” mark and had licensed the same to Sky Optical LLC, a company in which he was a director, chairman and general manager. The company, Sky Optical LLC distributed and sold its contacts lenses worldwide via ecommerce. The mark “LENS ME” was not registered.

 

(B)       What actually happened?

Previously, both the Applicant and Opponent (through Sky Optical LLC) were authorised distributors of “ANESTHESIA”, a brand of coloured contact lenses. The Opponent sold these primarily in the UAE and the Applicant sold it in Saudi Arabia. Both parties obtained their supplies from Monsros International, the main distributor in the Gulf region.

The Applicant’s found that they had every right to use and register the Application mark with the view that it was the first to come up with the mark “LENS ME” by stating that the word lens was derived from contact lens and ME represents the region, Middle East. It further claimed that its plans to use the mark goes back to as far as 2013.

The Opponent on the other hand, claims to use the Application mark from as far as the year 2006 and took steps to register the domain name include of the words “LENSME” in the same year. Although the Applicants plans for the brand only came in fruition later in 2015, he maintained ownership of the domain name throughout that time despite the Opponent’s Mark never been directly applied to contact lenses as a product.

 

(C)       What is/are the issue(s) in dispute?

The Opponent relied on two grounds of opposition under the Trade Marks Act which primarily reads as follow:

• Section 7(6) of the Act: a trade mark shall not be registered if the application is made in bad faith; and
• Section 8(7)(a) of the Act: that a trade mark shall not be registered if its use in Singapore is liable to be prevented by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade;

 

(D)       Holding

Out of the two grounds, the Opponent successfully opposed the Applicant’s trade mark application  under section 8(7)(a) of the Trade Marks Act on the basis that the law of passing off was established and that allowing the Applicant to register the Application Mark would cause confusion to the general public and loss of sales to the Opponent.

 

(E)        Rationale for holding

Decision on Section 7(6):

The Opponent relied on Section 7(6) of the Trade Marks Act in opposing the Applicant’s Application mark to which the Hearing Officer summarily relied on the following relevant legal principles prnciples in the Court of Appeal case of Valentino Globe BV v Pacific Rim Industries Inc [2010] 2 SLR 1203 (“Valentino”):

• That the onus is on the Opponent to show that the application was made in bad faith and the burden of disproving any element of bad faith shifts to the Applicant;
• That bad faith does not only deal with actual dishonesty (subjective element) but also dealings that would be considered commercially unacceptable by a reasonable and experienced person in a particular trade (objective element); and
• That it must be fully and properly pleaded and should not be upheld unless it is distinctly proved which is rarely possible by a process of inference.

The Hearing Officer also shed light on the relevant time for determining whether there is bad faith is the time of filing the application for registration although the rule that bad faith must be assessed as at the time of filing the application for registration is not an absolute one. Following PT Swakarya Indah Busana v Dhan International Exim Pte Ltd [2010] 2 SLR 109, the Hearing Officer states that in certain cases the consideration of matters which occurs after the date of application may assist in determining the applicant’s state of mind at the date of registration.

The Opponent’s allegation was based on the point that he was the first to come up with the name “LENS ME” and that the Applicant ought to have known about it.

Taking the above into consideration, the Hearing Officer found that there was insufficient evidence to prove bad faith and the point on who came up with “LENS ME” first was not clear. Furthermore, the Applicant was not aware that the Opponent had any commercial interests in Singapore in connection to the mark. 

With the above and the lack of evidence on the common understanding of informing either parties when making a trade mark, the Opponent ground of opposition under section 7(6) failed.

 

Decision on Section 8(7)(a):

In assessing the ground of opposition under section 8(7)(a), the Hearing Officer went through the element of goodwill, misrepresentation and damage which are required to be successful on the ground of invalidation based on the tort of passing off.

 

Goodwill:

In Singsung Pte Ltd v LG 26 Electronics Pte Ltd (trading as L S Electrical Trading) [2016] 4 SLR 86 (“Singsung”), it was held that goodwill would clearly exist in Singapore if it is shown that a business offers a product or service for sale here and a customer purchases the product or consumes the service here.

The Opponent relied on the fact that it has made sales of contact lenses in Singapore via ecommerce and that though Sky Optical LLC it had approximately 74 actual customers in Singapore prior to filing the mark.

The Hearing Officer found that the goodwill element was made out as the Opponent’s mark had been used in Singapore in connection to its ecommerce sale, there were customers in Singapore, the Opponent took steps in connection to the mark in Singapore by generating sales and that there were repeat purchases on its ecommerce platform which in itself demonstrates goodwill.  

Misrepresentation:

In establishing misrepresentation, the Hearing Officer found that given the high degree of similarity between the marks and in their line of business, the average consumer would likely be confused in the origination of the contact lens and may also assume that both the Opponent and Applicant are commercially linked. Therefore, misrepresentation was established.

Damage:

As the Hearing Officer found that the chances of the average consumer being confused is high, the result of such a case would cause the Opponent to suffer damages through loss of sales and/or the ability to further develop its business through manufacturing and sale of the contact lenses in the future.

With the above, goodwill, misrepresentation and damages made out, the Opponent’s grounds on the law of passing off under section 8(7)(a) was successful.

 

(F)        Point of interests

This case sets precedent for proprietors with unregistered marks by establishing that they too can oppose registration of mark. Although it is more challenging to establish than a registered mark due to the requirement of proving goodwill under section 8(7)(a), it still goes to show that a small customer base does not create any bar in establishing goodwill.