Singapore Trade Marks – Successful Invalidation – BITwave Pte Ltd v Fung Shing Company Limited [2018] SGIPOS 21

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In a decision rendered by the Intellectual Property Office of Singapore (IPOS), it was held that the “UCLEAR” trade mark registered by Fung Shing Company Limited is to be declared invalid as BITwave Pte Ltd successfully pleads invalidity under Section 23(1) read with 7(6) TMA in their application.

 

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

(a) BITwave Pte Ltd (“Applicant”)

The Applicant is a technology company incorporated in Singapore specialising in the design and development of products in the field of communications. According to its founder and Chief Executive Officer, Mr. Hui Siew Kok (“SK”), the Applicant’s business first centred around the licensing of its patented technology to established companies until 2008 which the Applicant then begun investing heavily into the research, development and design of a Bluetooth-compatible product known as the “Helmet Communicator” (“HBC100”). The HBC100 was designed for motorcycle riders such that when such helmet was worn, it would allow the biker to talk on his or her mobile phone, listen to music, and/or communicate with their pillion rider whilst riding on their motorcycle.

(b) Fung Shing Company Limited (“Proprietor”)

The Proprietor is a limited company organized and incorporated under the laws of Hong Kong, S.A.R., China. It is in the business of producing and selling audio and audio-related products. The key decision maker of the Proprietor is its director, Mr. Hui Kwai Ming (“Clive”).

 

(B) What actually happened?

In this present case, the Applicant sought to invalidate the registered “UCLEAR” trade mark (“Subject Mark”) which was registered under the name of the Proprietor. The Registrar identified that the parties have had a commercial relationship in connection with the Subject Mark. As the Applicant had learnt that the Proprietor was in the business of supplying parts such as plastic casings, batteries and microphones, and that the Applicant’s HBC100 would involve the manufacture and assembly of such plastic parts, the Applicant decided to place orders with the Proprietor and the parties also agreed that the Proprietor would print the product packaging. However, the Proprietor had without the knowledge and/or consent of the Applicant applied for the registration of the Subject Mark in its name in Singapore. As such, the Applicant had applied for a declaration of invalidity on the following grounds under the Trade Marks Act (Cap 332, 2005 Rev Ed) (“the Act”):

bad faith under Section 7(6) read with Section 23(1) of the Act;
passing off under Section 8(7)(a) read with Section 23(3) of the Act; and/or
copyright under Section 8(7)(b) read with Section 23(3) of the Act.

Initially, the Proprietor took all necessary steps from filing its pleadings to submitting its evidence such that it could defend its trade mark registration. However, the Proprietor was unrepresented at the hearing as its director, Clive failed to show up on the day of the hearing, with its agent on record also failing to provide any notice of such absence to the Applicant. The hearing proceeded nonetheless and the counsel for the Applicant argued that an adverse inference should be drawn from Clive’s unexplained absence from the hearing, which the Principal Registrar (“Registrar”) agreed with as citing the precedent case of Christie Manson & Woods Limited v Chritrs Auction Pte. Limited [2016] SGIPOS 1.

 

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

(a) Whether the Subject Mark can be declared invalid under Section 7(6) read with Section 23(1) of the Act;

(b) Whether the Subject Mark can be declared invalid under Section 8(7)(a) read with Section 23(3) of the Act; and

(c) Whether the Subject Mark can be declared invalid under Section 8(7)(b) read with Section 23(3) of the Act.

 

(D) Holding

The Registrar found that the Applicant succeeds on the ground of bad faith under Section 7(6) read with Section 23(1) of the Act and the Proprietor’s registration of the Subject Mark was therefore declared invalid.

 

(E) Rationale for holding

(a) The Registrar highlighted the leading case of Valentino Globe BV v Pacific Rim Industries Inc [2010] 2 SLR 1203 in setting out the key principles of bad faith as follows:

(i) once bad faith is established, the application for registration of a mark must be refused even though the mark would not cause any confusion;

(ii) the legal burden of proof needed to substantiate an action on the ground of bad faith lies on the party bringing the application of invalidation;

(iii) bad faith embraces not only actual dishonesty but also dealings which would be considered as commercially unacceptable by reasonable and experienced persons in a particular trade, even if no breach of any duty or obligation is found in such dealings;

(iv) the test for bad faith is case-by-case and involves both a subjective element and an objective one: i.e. subjectivity based on what the particular applicant knows and objectivity based on what an ordinary person adopting proper standards would think; and

(v) the ground of bad faith is a serious claim and must be supported with sufficient evidence.

The Registrar took note that whilst the Proprietor did not dispute that it supplied parts and packaging to the Applicant, the Proprietor has argued that HBC100 and the Subject Mark belonged to both parties. The Proprietor alleged that an agreement exists between the parties that ownership to HBC100 and the Subject Mark were shared between them. On the other hand, the Applicant contended that whilst the parties had discussed on the development of HBC100 and the Subject Mark, it was done so not because the Proprietor was to have any claim over HBC100 and the Subject Mark but because the Proprietor was responsible for the printing of the product packaging and he thus ought to be kept in the loop of the Applicant’s development of HBC100 and the Subject Mark. The Applicant was also able to show documentary evidence that the technology to HBC100 was fully developed by the Applicant and that such technology was duly protected by patents fully owned by the Applicant. All in all, the Applicant submitted that the Proprietor’s involvement was strictly limited to the manufacturing and shipping of the plastic parts.

Whilst the Registrar noted that very different version of facts was put out before him, he took particular note that Proprietor’s submission was inconsistent with those on documentary record and the Applicant’s submission and since the Proprietor failed to show up on the day of the hearing, the Registrar opted to reject all of the Proprietor’s version of facts insofar as it conflicts with documentary record and the Applicant’s submission.

The Registrar also reiterated that bad faith is not just about actual dishonest but it also involves dealings which would be considered as commercially unacceptable by reasonable and experienced persons in the trade. The Registrar then found that the Proprietor knew exactly the importance of a trade mark registration and the Proprietor knew from the discussions that the Applicant had created the Subject Mark for purpose of HBC100. The Registrar also noted that the Proprietor was never involved in the actual manufacturing of HBC100 but it was only involved in fulfilling the Applicant’s orders for parts and packaging which meant that the Proprietor was never a trade source of the products nor was it indicative of a trade origin to the Subject Mark. Since it was clear from the documentary record that no agreement exists between the parties as to the ownership of the Subject Mark, the Registrar found that the Proprietor’s actions of registering the Subject Mark in Singapore would not be considered commercially acceptable by reasonable and experienced persons in any trade and by his findings above, the Registrar found the Proprietor’s registration of the Subject Mark was done in bad faith. As such, the Applicant succeeds under this ground of invalidation.

 

(b) As the Registrar has found that the ground of bad faith has been made out, he did not find the need to decide on whether the ground of passing off under Section 8(7)(a) read with Section 23(3) of the Act has been made out.

 

(c) Whilst the Applicant also relied on copyright under Section 8(7)(b) read with Section 23(3) of the Act, the Registrar rejected this ground as he was unable to consider the Subject Mark, being a single word mark with minor stylisation, as an artistic work which may enjoy copyright protection.

 

(F) Point of Interest

The Proprietor’s director, Clive failed to appear before the tribunal to be cross-examined. This cast serious doubt on the credibility of his evidence provided and the Hearing Officer rejected his version of the facts insofar as they conflicted with the Applicant’s account as well as documentary record. The Proprietor also failed to attend the oral hearing, which went on it is absence.