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TRADE MARKS ORDINANCE (CAP. 559)
OPPOSITION TO TRADE MARK APPLICATION NO. 301410227
MARKS:
CLASSES : 35, 36
APPLICANT : CAPITAL DYNAMICS HOLDING AG
OPPONENTS : 1) CAPITAL DYNAMICS SDN. BHD.
2) CAPITAL DYNAMICS ASSET MANAGEMENT SDN. BHD.
3) CAPITAL DYNAMICS (S) PRIVATE LIMITED
4) CAPITAL DYNAMICS (AUSTRALIA) LIMITED
_____________________________________________________________________
STATEMENT OF REASONS FOR DECISION
Background
1. On 20 August 2009 (“Application Date”), Capital Dynamics Holding AG
( “Applicant”), filed an application (“subject application”) under the Trade
Marks Ordinance (Cap.559) (“Ordinance”) for registration of the following
marks as a series of marks (collectively, the “subject marks”):
(Mark A) (Mark B) (Mark C)
The application number assigned by the Registrar of Trade Marks
(“Registrar”) to the subject application was 301410227.
2. Registration of the subject marks was sought in respect of services in classes
35 and 36, the details of which are set out in Schedule A of this decision
(collectively, the “subject services”).
3. Particulars of the subject application were published on 18 September 2009.
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4. On 17 December 2009, Capital Dynamics Sdn. Bhd. (“1st Opponent”),
Capital Dynamics Asset Management Sdn. Bhd. (“2nd Opponent”), Capital
Dynamics (S) Private Limited (“3rd Opponent”) and Capital Dynamics
(Australia) Limited (“4th Opponent”) (the aforesaid companies are hereinafter
collectively referred to as the “Opponents”) filed a Notice of Opposition
together with a Statement of Grounds of Opposition to the subject application.
5. Thereafter, the following documents were filed by the parties to the present
proceedings:
(a) Counter-statement filed by the Applicant on 11 March 2010;
(b) Statutory declaration dated 8 March 2011 made by Tan Teng Boo
(“Mr. Tan”), on behalf of the Opponents, and filed on 9 March 2011
under rule 18 of the Trade Marks Rules (Cap. 559A) (“TMR”)
(“Tan’s 1st SD”);
(c) Statutory declaration dated 7 December 2011 made by Jordan
Urstadt (“Mr. Urstadt”), on behalf of the Applicant, and filed on 9
December 2011 under rule 19 of TMR (“Urstadt’s SD”); and
(d) Supplementary statutory declaration dated 22 September 2012
made by Mr. Tan, on behalf of the Opponents, and filed on 25
September 2012 under rule 20 of TMR (“Tan’s 2nd SD”).
6. The hearing of the above opposition took place before me on 16 April 2014.
Mr. Philips B.F. Wong, Counsel, instructed by China Patent Agent (H.K.) Ltd.,
appeared for the Applicant. The Opponents were represented by Mr. Ling
Chun Wai, Counsel, upon the instructions of Rouse Legal. I reserved my
decision after the hearing.
Grounds of Opposition
7. The grounds pleaded by the Opponents in the Grounds of Opposition were
sections 11(1)(a), 11(4), 12(4) and 12(5) of the Ordinance. At the hearing,
Mr. Ling has rightly limited the opposition to the ground in section 12(5)(a)
of the Ordinance.
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The Opponents’ evidence
8. According to Tan’s 1st SD, the Opponents were part of the Capital Dynamics
group of companies (“CD Group”) founded by Mr. Tan. The 1st Opponent
was a Malaysian company founded in 1988 as Malaysia’s first independent
investment advisor. It was the investment advisor of icapital.biz.Bhd., a
closed-end fund that has been listed on the Main Market of Bursa Malaysia
Securities Berhad (“listed fund”) since 2005. The 2nd Opponent was a
Malaysian company and the fund manager of the listed fund. The 3rd
Opponent, a company incorporated in Singapore, was the first Asian
privately-owned global fund manager. The 4th Opponent was also a fund
management company that held an Australian Financial Services Licence.
9. In 1989, the 1st Opponent launched the English and Chinese printed editions
of a weekly investment publication called “i Capital” and “資本投資”
(“Newsletter” or “Newsletters”). It was initially available in printed form.
In 2002, the Internet edition of the Newletter was launched at
www.icapital.biz (“Website”). The publication was available to investors
and readers worldwide, including Hong Kong.
10. According to computer records adduced by the Opponents, there were five
individual subscribers with addresses in Hong Kong.1 The earliest of such
subscriptions was made in November 2005.
11. According to Tan’s 2nd SD, the Internet traffic data for the Website showed
that traffic originating from Hong Kong from 2004 to 2009 ranged from
36,519 to 204,788 hits per annum.2
12. It is clear from the evidence that Mr. Tan has been active in the media. He
was the guest in a number of interviews on Bloomberg TV and in some of
those interviews, he was identified as the managing director and CEO of the
CD Group. He considered that such interviews have served to publicise the
Opponents and their businesses that were carried on under the name of
“Capital Dynamics”.
1 Exhibit “TTB-3” of Tan’s 1st SD. 2 Paragraph 20 of Tan’s 2nd SD.
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13. Apart from the Bloomberg interviews, Mr. Tan has also given interviews with
various Malaysian broadcast channels as well as newspapers and finance
magazines.
14. The annual turnover of the Opponents in Asia from 2004 to 2009 increased
from MYR 2 million to MYR 29.9 million per annum.3 Their advertising
expenditures in Asia ranged from MYR 108,000 to MYR 464,000 per annum
during the above period.4
15. The following marks were registered as series marks in Hong Kong in respect
of services in class 35 and class 36 in 2007 and 2008 respectively in the name
of the 1st Opponent:
TM registration no. 300921393
Trade mark :
Mark description : The colours red and blue were claimed as elements of the mark identified by “A” above.
Date of registration
: 26 July 2007
Class no. and specification
: Class 35 Business management and organization consultancy; business organization consultancy; distribution of samples; economic forecasting; forecasting (economic - ); management (advisory services for business - ); on-line advertising on a computer network; appraisals (business - ); business information; business management consultancy; business research; compilation of information into computer databases; cost price analysis; research (business - ); statistical information; systemization of information into computer databases.
TM registration no. 301059084
Trade mark :
3 Paragraph 11 of Tan’s 2nd SD. 4 Paragraph 12 of Tan’s 2nd SD.
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Mark description : The colours red and blue were claimed as elements of the mark identified by “A” above.
Date of registration
: 26 February 2008
Class no. and specification
: Class 36 Analysis (financial - ); administration of capital investment services; administration of fund investment; administration of investments; administrative services relating to investments; advisory services relating to investments; capital fund investment; capital investment advisory services; capital investments; computerised information services relating to investments; financial investment; financial investment fund services; financial investment research services; fund investment management; international fund investment; investment; investment analysis; investment asset management; investment business services; investment in securities (services for - ); investment information; investment of money (services for - ); investment portfolio management services; mutual funds; private client investment services; provident fund investment; provision of investment information; provision of investment services; securities investment services for personal investors; stock investment management; unit trust investment; advisory services relating to financial investment; consultancy services relating to investment; investment advice; investment management; investment of funds (services for - ); management of investment funds; research services relating to investment.
16. The 3rd Opponent has obtained trade mark registrations of “CAPITAL
DYNAMICS” and/or “Capital Dynamics” in classes 16, 35, 36 and/or 41 in
Malaysia, Singapore, Australia and Mainland China. International
registration of “CAPITAL DYNAMICS” was also obtained under the Madrid
Agreement and Protocol designating the Russian Federation and Vietnam.
The Applicant’s evidence
17. According to the Urstadt’s SD, the Applicant was a Swiss company and an
independent asset management firm that focused on private assets, including
private equity, clean energy, infrastructure and real estate. The name
“Capital Dynamics” was first adopted by Capital Dynamics AG, a wholly-
owned subsidiary of the Applicant, as its trade mark and company name in
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December 1999. Following certain corporate restructurings in or around
2000, the Applicant became the parent company of Capital Dynamics AG
and the name “Capital Dynamics” has since been continuously used as part
of the company name and trade mark of the Applicant and its affiliated
companies (collectively, the “Applicant’s Group”).
18. The Applicant’s Group has been investing in private equity funds since 1999
and it has developed relationships with over 350 general partners in more
than 800 funds worldwide. As regards their exposure in Asia, the Applicant
currently has one Asian fund of funds and one Asian separate account for a
UK public pension fund with aggregated commitments of US$264 million.
In addition, the Applicant’s Group has exposure to 38 Asian funds through
advisory and/or non-discretionary mandates, totaling over US$1.2 billion in
assets. Of these funds, eight of them were in Hong Kong, with a total
exposure of over US$580 million.
19. Mr. Urstadt deposed that the worldwide advertising costs of the Applicant’s
Group for services promoted under the subject marks from 2004 to 2009
ranged from US$250,977 to US$444,157 per annum. The worldwide
annual turnover of the services provided under the subject marks during the
above period increased from US$3.42 million to US$39.26 million per
annum.
20. The Applicant’s Hong Kong office was opened in March 2007 and its
activities were operated by Capital Dynamics (Hong Kong) Limited. Its
revenues were generated by intercompany servicing fees relating to transfer
pricing income from the Applicant and other companies within the
Applicant’s Group.
21. With a view to protecting the marks used by the Applicant’s Group, trade
mark registrations in respect of services in classes 35 and 36 were obtained
by the Applicant in various countries. The relevant marks included Mark A
of the subject marks and “ ” and the countries included
Switzerland, Ireland, United States, Taiwan and New Zealand. The earliest
registration was obtained in Switzerland which took effect in 1999. In
addition, international registration under the Madrid Agreement and Protocol
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was also obtained and the countries designated thereunder included a number
of European countries.
The subject marks
22. Each of the subject marks consists of the words “Capital” and “Dynamics”.
The two words are represented in the upper case or the lower case or a
combination of both.
The relevant consumers
23. The subject services include mainly business management and consultancy,
asset management, financial investment and management of funds and
financial analysis. The relevant consumers include both business
organisations and individuals who are interested in obtaining the above
management or financial services.
The relevant date
24. For the purpose of the subject opposition, the relevant date is the Application
Date (i.e. 20 August 2009).
The relevant law
25. Section 12(5)(a) of the Ordinance is worded as follows:
“(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
(b) ……….
and a person thus entitled to prevent the use of a trade mark is referred to
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in this Ordinance as the owner of an "earlier right" in relation to the trade
mark.”
26. The requisite elements for establishing a passing-off action have long been
formulated in the well-known case of Reckitt & Colman Products v. Borden
Inc.5 These elements have been repeatedly relied upon by the courts in
Hong Kong including the Court of Final Appeal in the decision of Re Ping
An Securities Ltd. 6 In essence, these elements are:
(a) the plaintiff has goodwill attached to the services that he supplies
in the mind of the purchasing public by association with a trade
mark under which his services are offered to the public, such that
the trade mark is recognized by the public as distinctive specifically
of the plaintiff’s services;
(b) the defendant has made a misrepresentation 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 defendant’s misrepresentation
that the source of the defendant’s services is the same as the source
of those of the plaintiff.
Case law on goodwill
27. It is clear from the evidence that none of the Opponents has business
operations in Hong Kong. It appears that their businesses were principally
based in Malaysia, Singapore and Australia. Hence, the submissions of the
parties at the hearing were focused on whether the Opponents have goodwill
in Hong Kong prior to the relevant date for the purpose of a passing off action.
28. “Goodwill” is often described as “the attractive force which brings in
custom”. 7 There have been many case authorities and discussions on
whether a business based abroad has acquired the requisite goodwill to
maintain a passing off action in a place outside its home country. Mr. Ling,
5 [1990] R.P.C. 341. 6 (2009) 12 HKCFAR 808 at 816-817. 7 IRC v. Muller’s Margarine [1901] A.C. at 223.
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on behalf of the Opponents, submitted that there was clear divergence in the
approach adopted in England and that used in other common law jurisdictions,
including Hong Kong. Thus, he recommended that the English authorities
should be approached with caution and we should focus on the case law in
Hong Kong. He relied extensively on the cases of Wienerwald Holding AG
v. Kwan Wong Tan and Fong (a firm)(the Wienerwald case),8 Hong Kong
Caterers Ltd v. Maxim’s Ltd (the Maxim’s case),9 Ten-Ichi Company Ltd v.
Jancar Limited (the Ten-Ichi case),10 Kabushiki Kaisha Yakult Honsha v.
Yakudo Group Holdings Ltd (the Yakult case) 11 and Harbour Fit Industrial
Ltd v. Tan Kwai Garden Seafood Restaurant Ltd (the Harbour Fit case) 12 in
his submissions. He also cited the Irish case of C & A Modes v. C & A
(Waterford) Ltd. (the C&A case)13, as it was principally relied upon by the
judge in the Wienerwald case in arriving at his decision.
29. As the case authorities in Hong Kong are directly binding on me, I will
consider these authorities in the main and will refer to the case law in other
jurisdictions where appropriate.
Case authorities submitted by the Opponents
The C&A case
30. This case was cited in all the Hong Kong cases discussed below. The
plaintiff (respondent) was a long established UK company which owned and
operated more than 60 retail drapery shops throughout the UK, including a
large branch shop in Belfast to which large numbers of citizens of the Irish
Republic travelled to purchase their goods. The trading style used by the
plaintiff was the sign “C & A” and this also formed part of its company name.
The plaintiff had advertised its goods extensively in the Irish Republic
through newspapers and magazines circulating there and on television
channels that were available to the viewers in that country. It recruited staff
from the Irish Republic but it did not have any business there. The
defendant (appellant) was a recently incorporated Irish company which also
carried on a retail drapery business using a large motor van with the letters
8 [1979] FSR 381. 9 [1983] HKLR 287. 10 [1990] FSR 151. 11 [2002] 3 HKLRD 595. 12 [2002] 2 HKC 487. 13 [1978] FSR 126.
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“C & A” painted on its sides. Those letters also formed part of the trading
name of the defendant. The defendant offered no explanation for the choice
of its name and its trading style.
31. The plaintiff succeeded in an action for passing off in the Irish Republic
against the defendant and the decision was unanimously confirmed on appeal.
Henchy J. made the following comment at the appellate court:
“Goodwill does not necessarily stop at a frontier. Whether in a
particular area a plaintiff has a goodwill which is liable to be damaged
by the unlawful competition resulting from passing off is a question of
fact and of degree.”14 [my emphasis]
32. The judges were convinced that the plaintiff has a protectable goodwill in the
Irish Republic based on the extensive evidence filed. Such evidence
included the massive advertising conducted by the plaintiff, and the
considerable number of consumers that travelled from the Irish Republic to
the Belfast C&A outlet to do their shopping.
The Wienerwald case
33. The plaintiff in this case was a Swiss company that owned and managed a
chain of more than 400 restaurants trading under the name of “Wienerwald”
in Continental Europe, United States, South Africa and Japan. It planned to
expand its business to Hong Kong and it soon discovered that company
names incorporating the word “Wienerwald” had been reserved by the
defendants, a local firm of accountants. The plaintiff has never carried on
business or engaged in any advertising in Hong Kong. The only advertising
that might come to the attention of the public in Hong Kong was through
some German or other Continental publications. In an action for passing off,
the plaintiff sought interim injunction against the defendants.
34. The Court agreed with the principles in the C&A case and in particular, the
analysis of Henchy J. in that decision. Leonard J. was prepared to accept
that “the reputation to be protected is reputation already existing in this
Colony albeit that reputation may be acquired here even when no business is
14 Per Henchy J. at page 138 of the decision.
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carried on here.”15 However, the court was not convinced from the evidence
adduced that there was a triable issue that the plaintiff had acquired reputation
among a significant segment of the population in Hong Kong. The
application for interim injunction was thus refused.
35. The Wienerwald case confirmed that the court would be prepared to find that
a foreign plaintiff has goodwill in Hong Kong although it does not have a
business here. However, it must be able to show that the goodwill of its
business has penetrated into Hong Kong.16
The Maxim’s case
36. This is an opposition case decided under the repealed Trade Marks Ordinance
(“Cap. 43”)(“repealed Ordinance”). The case concerns an application for
registration of the mark “Maxim’s” together with its Chinese name in respect
of bakery products made by Hong Kong Caterers Ltd. The owner of the
world-renowned restaurant, the Maxim’s of Paris, opposed the application.
The Assistant Registrar of Trade Marks refused the application by the
exercise of his discretion under section 13(2) of the repealed Ordinance.
The applicant appealed to the High Court. One of the issues that Hunter J.
found necessary to consider at the outset was whether the reputation of a
business has to be based upon and supported by the conduct of a business in
Hong Kong; by actual user in Hong Kong; or by the presence of customers
in Hong Kong.
37. After examining the authorities in this area (including the C&A case, the
Wienerwald case and other authorities in UK, Australia and New Zealand),
Hunter J. summarised his view on this issue as follows:
“It therefore seems to me right in Hong Kong to treat the existence here
of a trading reputation, for both trade mark and passing off purposes, as
a question of pure fact to be determined on the evidence as a
whole.”17[my emphasis]
15 Per Leonard J. at page 392 of the decision. 16 “As I see it what cannot be protected in passing off is a goodwill existing elsewhere which has not yet
penetrated to this jurisdiction.” Per Leonard J. at page 392 of the decision. 17 Per Hunter J. on page 296 of the decision.
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38. Mr. Ling submitted that the above statement has succinctly summarised the
concept of goodwill under Hong Kong law.
The Ten-Ichi case
39. The approach in the Maxim’s case on goodwill or reputation was followed in
the Ten-Ichi case. This is a passing off action in which an application was
made for an interlocutory injunction. The plaintiff was the owner of a chain
of more than 40 Japanese restaurants in Japan called “Ten-Ichi” written in a
certain style of characters. The name was a household name in Japan. The
defendants operated a Japanese restaurant in Hong Kong called “Ten-Ichi”
written in identical style of ideograms as that of the plaintiff’s. The
defendants admitted that they had deliberately chosen to copy the name and
the characters used by the plaintiff. In deciding whether the plaintiff had
goodwill or reputation that should be protected in Hong Kong, Sears J.
highlighted the following facts that appeared clear from the evidence:
(a) the deliberate copying of the plaintiff’s name by the defendants in
a manner that was calculated to cause confusion to the public and
to mislead them in thinking that the defendants’ restaurant was that
of the plaintiff’s;
(b) the location of the defendants’ restaurant was in Tsimshatsui, the
heart of the entertainment and tourist belt;
(c) the large number of tourists between Hong Kong and Japan;
(d) the large population of Japanese residing in Hong Kong;
(e) the trading and commercial activities between the two places; and
(f) the plaintiff’s intention to expand its business to Hong Kong.
40. The judge considered that the defendants must have realized that, as the
plaintiff was so well-known and of such high international reputation,
copying and exploiting its name would lead to financial benefit. According
to his view, this fact alone demonstrated that the plaintiff did have goodwill
in Hong Kong. He then went on to add that other factors such as the number
of Japanese people living in Hong Kong and the plaintiff’s intention to
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expand its business to Hong Kong were also important.18 The judge was
thus satisfied that there was a serious question to be tried that the plaintiff has
established goodwill here and an interlocutory injunction was granted.
41. This case has highlighted some of the factors and circumstances that the
courts would take into account in determining whether goodwill has been
established.
The Harbour Fit case
42. The plaintiff in this case operated three very successful restaurants in
Shenzhen under the name “Tan Gwai Hin”. The restaurants were advertised
in Hong Kong and patronised by Hong Kong citizens who visited Shenzhen.
With the flow of people between Shenzhen and Hong Kong, the restaurants
looked to both cities for their business. The defendant opened a restaurant
in Kowloon. The first three characters of the name of the defendant and its
restaurant were identical to those of the plaintiff. The plaintiff sued for
passing off and applied for an interlocutory injunction against the defendant.
43. After reviewing the previous authorities on the issue of territoriality in
relation to goodwill and the evidence adduced in this case, the court found
that there was a strong case that the plaintiff has an established goodwill in
Hong Kong and that it has at least a serious case to be tried. The application
for interlocutory injunction was refused merely because there was delay on
the part of the plaintiff in taking out the application.
The Yakult case
44. This is a passing off and trade mark infringement case of which the plaintiffs
were a group of companies that owned the trade names and trade marks
relating to the “Yakult” products worldwide. In Hong Kong, the products
were sold in bottles bearing the names “Yakult” and “益力多”. In Taiwan,
they were manufactured and marketed under the name “養樂多”. The
defendant was a Hong Kong company which marketed a similar product
under the name of “Yakudo” in the Mainland. It has not yet launched its
products in Hong Kong but has applied to the Hong Kong Trade Marks
18 Analysis of Sears J. at page 155 of the decision.
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Registry for registration of “Yakudo (養樂多)” and device. Furthermore, it
has applied to the Hong Kong Stock Exchange for listing.
45. The defendant agreed that the plaintiffs had goodwill in Hong Kong in
relation to the name “益力多”. However, it argued that since “養樂多” was
only used in Taiwan by the Taiwanese affiliated company and given that the
Taiwanese affiliate has neither business nor customers in Hong Kong, it did
not have goodwill here for passing off purpose. At the interlocutory stage,
Deputy Judge Lam granted an injunction to restrain the defendant from
seeking a listing status in Hong Kong pending the trial of the action. He
held that there were serious questions to be tried including whether the name
“Yakult” was a badge of goodwill in Hong Kong. He then went further to
express his view that it must be arguable that the law should recognise the
concept of an international goodwill and it was a pure question of fact
whether the goodwill of the plaintiffs manifested itself also in the words “養
樂多”. However, at the trial of the action, the judge did not discuss the issue
of “international goodwill”. He simply held that the plaintiffs enjoyed
substantial goodwill in Hong Kong in relation to “益力多” and the use of “養
樂多” by the defendant would cause substantial confusion in Hong Kong.
Case authorities submitted by the Applicant
46. Mr. Wong, on behalf of the Applicant, submitted that goodwill remained one
of the elements that a plaintiff must prove in a passing off claim. He referred
to Kerly’s Law of Trade Marks and Trade Names19 which said that where a
foreign plaintiff has a substantial reputation within the jurisdiction where the
claim was made, the court would normally accept minimal evidence that a
business existed within such jurisdiction, but there must be some. In the
C&A case, the plaintiff was able to show that it has a substantial body of
customers in the Irish Republic. In the Wienerwald case, the judge did not
hold that pure reputation with no customers in Hong Kong would be
sufficient for a passing off action. Instead, he clearly expressed the view
that local goodwill could be proved by showing the presence of “intermittent
customers” coupled with other factors. 20 As for the Maxim’s case, Mr.
Wong pointed out that passing off was not a specific ground of opposition
under the repealed Ordinance and the court was only concerned with section
19 15th Ed. (2011), paragraph 18-053. 20 Page 389 – 390 of the decision.
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12(1) of the repealed Ordinance. In the Yakult case, the judge specifically
emphasised, at the interlocutory stage, that he has not come to any concluded
view on the law of international reputation. Mr. Wong then drew my
attention to the UK decisions of Anheuser-Busch Inc v. Budejovicky Budvar
NP (the Anheuser case),21 Hotel Cipriani SRL v. Cipriani (Grosvenor Street)
Ltd (the Cipriani case)22 and Starbucks (HK) Ltd v. British Sky Broadcasting
Group Plc. (the Starbucks case).23
47. Based on the above UK authorities, Mr. Wong submitted that in order for the
Opponents to succeed on the ground of passing off, they must have sufficient
goodwill in Hong Kong before the Application Date. Further, such
goodwill could either be proved by actual business carried on in Hong Kong,
or in the absence of such actual business, substantial reputation coupled with
some customers in Hong Kong.
The Anheuser case
48. The plaintiff (appellant) in this case was the brewer of beers in US sold under
the “Budweiser” trade mark. The defendant (respondent) was the brewer of
beers in the Czech Republic in a town formerly called Budweis and its beers
were also sold by the name “Budweiser”. The plaintiff exported a
significant quantity of its beers to UK but they were limited for the use of and
sale in the US military and diplomatic establishments there. Sales of its
beers in the open market were however minimal. When the defendant
actively marketed its beers and achieved substantial sales in UK, the plaintiff
claimed inter alia injunctive relief to prevent the defendant from selling beers
with the “Budweiser” trade mark.
49. The UK Court of Appeal held that the plaintiff had to establish goodwill in
UK in the above trade mark. Goodwill, as opposed to mere reputation,
could not exist except in relation to a business carried in UK. The court
further held that the plaintiff’s trading activities could not constitute a
business if it has no British customers. Customers could include consumers
who purchased the goods directly from the plaintiff or indirectly through the
market. However, the plaintiff’s sporadic and occasional sales of beers in
21 [1984] FSR 413. 22 [2010] RPC 16. 23 [2014] ECC 4.
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the US military base and the diplomatic establishments in UK could not
constitute the carrying of a business there.24
The Cipriani case
50. This is a fairly complex case and one of issues discussed was whether the
claimant, the owner and operator of Hotel Cipriani in Venice, has goodwill in
UK. The Court of Appeal confirmed that the claimant (respondent) has
goodwill in UK on the basis that it had a substantial reputation there and a
substantial body of customers from UK. The findings were partly the result
of the claimant’s significant marketing efforts which were directed at the
relevant public in UK and the significant volume of business placed directly
from UK, either directly by individual clients or via travel agents.25
The Starbucks case
51. The claimants (appellants) in this case included PCCW Media Ltd (“PCCW”),
an internet service provider with an established goodwill in Hong Kong in
relation to the “NOW TV” service. In trying to establish that PCCW also
has a goodwill in England in relation to the supply of the TV service, the
claimants argued that some of the programmes supplied to the subscribers of
NOW TV service in Hong Kong were also viewed free via the internet by a
section of the public in England. The evidence showed that PCCW’s
website could be accessed worldwide and it was not specifically targeted at
the consumers in England.
52. The Court of Appeal confirmed the decision of the trial judge and held that
PCCW has failed to establish a goodwill in UK in respect of the “NOW TV”
services. The judge took the view that the universal presence and
accessibility of the Internet, which enabled access to be gained in UK to
programmes emanating from Hong Kong, was not a sufficiently close market
link to establish an identifiable goodwill with a customer base there. Sir
John Mummery further elaborated this point and said that “generating a
goodwill for service delivery generally involves making, or at least
attempting to make, some kind of connection with customers in the market
with a view to transacting business and repeat business with them”.26
24 See analysis in the judgement of Oliver L. J. from pages 464 – 467 of the decision. 25 Judgement of Lloyd L. J. at paragraph 118 of the decision. 26 Paragraph 104 at page 58 of the decision.
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The position in Hong Kong
53. In today’s world of rapid improvements in the means of communication, it is
not surprising that case law relating to the territorial scope of the goodwill of
a business is still evolving. The case decisions in UK have evolved from
the requirement that the plaintiff must be carrying on a business in UK
(Bernardin v. Pavilion Properties)27 to that of having a substantial body of
customers from UK (the Cipriani case) or a sufficiently close market link
with UK (through making or attempting to make connections with customers
in UK with a view to transacting business with them) (the Starbucks case).
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.
54. Using the approach adopted by the courts in Hong Kong, I will proceed to
examine whether the Opponents have established that they have goodwill in
Hong Kong for the purpose of a passing off action.
Do the Opponents have goodwill in Hong Kong?
55. The Opponents claimed that they enjoyed a significant reputation in Hong
Kong in respect of the services which they provided by reference to the name
or trade mark “Capital Dynamics”. At the hearing, Mr. Ling focused his
submissions on the goodwill of the 1st Opponent and, to a lesser extent, the
2nd Opponent in relation to investment advisory and fund management
services.
1st Opponent
56. The 1st Opponent was an independent financial advisor and the publisher of
the Newsletter. Mr. Ling submitted that the 1st Opponent enjoyed a degree
of reputation among the public in Hong Kong for its investment advisory
services under the name “Capital Dynamics”, particularly among the readers
27 [1967] R.P.C. 581.
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of the Newsletter and the viewers of Bloomberg TV. Furthermore, the
paying subscribers to the Newsletter showed that the 1st Opponent had a
customer base in Hong Kong.
The Newsletter
57. The computer record adduced by the Opponents shows that there were five
individuals with their addresses in Hong Kong who have subscribed to the
Newsletter. The earliest of such subscriptions was made in November 2005.
The first point put forward by Mr. Wong was that having five subscribers over
a period of 20 years (from the launch of the Newsletter in 1989 up to the
Application Date) was too trivial for the Opponents to acquire goodwill for
the purpose of passing off.
58. The second point raised by Mr. Wong concerns the details in the Newsletter
and the subscription form. There were English and Chinese versions of the
Newsletter and they were available in printed form, and subsequently, in
electronic form. The exact form or version subscribed by the Hong Kong
customers were not revealed in the evidence. Mr. Wong highlighted the
names or signs used on such publication for my attention.
(a) English version of the Newsletter (in printed form):28
The sign “ ” appears prominently on the
top of the front page of the Newsletter and it is considerably larger
than the rest of the contents. Below it is the sign
“ ”. There is a note in the middle of
this page to inform the readers that the Newsletter was published
and printed by the 1st Opponent. The name of the 1st Opponent
also appears at the footer on the front page as well as the header
on each subsequent page (next to the volume number of the
Newsletter).
28 Exhibit “TTB-17” of Tan’s 2nd SD.
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(b) Chinese version of the Newsletter (in printed form):29
The sign “ ” appears prominently on the
top of the front page and it is considerably larger than the rest of
the contents. Below it is the sign “ ”.
The 1st Opponent (identified by its English name) was referred to
as the publisher and printer of the Newsletter in the middle of the
front page and also at the footer of that page.
(c) Electronic version available on the Website (i.e.
www.icapital.biz): 30
The sign “ ” appears prominently on the
top of the homepage. There is a brief introduction of the 1st
Opponent, the 3rd Opponent and the 4th Opponent on the left-hand
column of the homepage. Mr. Wong pointed out that viewers
would not be able to access the articles posted on the Website
unless they have subscribed to the Newsletter.
(d) Subscription form:31
The signs “ ” and
“ ” appear prominently on the top of
the form. The 1st Opponent (identified by its English name) is
referred to as the publisher and printer of the Newsletter at the
footer.
59. Based on the above evidence, Mr. Wong argued that the trade marks used in
the Newsletters and the subscription form were “ ”,
and “ ”. The subscribers would perceive
“i Capital” or “資本投資” (as opposed to “Capital Dynamics”) as the name
29 Exhibit “TTB-17” of Tan’s 2nd SD. 30 A copy of the homepage of the Website was printed and produced as evidence at Exhibit “TTB-2”
of Tan’s 1st SD. 31 Exhibit “TTB-17” of Tan’s 2nd SD.
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of the Newsletter. Furthermore, the issuance of a financial publication to
the public is different from the provision of financial advice to the public.
The subscribers should be regarded as customers of the Newsletter instead of
the Opponent’s investment advisory services.
60. I agree that it is clear from the evidence that the Newsletter would be referred
to by its subscribers as “i Capital”, “資本投資” 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. the 1st Opponent) is not giving investment advice to the individual
subscribers through the issue of the Newsletter. This is evident from the
following statements on the front page of the Newsletter:
“Any recommendation contained in this publication does not have any
regard to the specific investment objectives, financial situation and
particular needs of any specific addressee. It is published for the
assistance of recipients but it is not to be relied upon as authoritative or
taken in substitution for the exercise of judgements by any recipient.”32
61. Furthermore, it is worth noting that the issue of a newspaper, magazine or
other publication which is generally available to the public does not fall
within the definition of “advising on securities” which is a regulated activity
under the Securities and Futures Ordinance (Cap. 571).33
62. The Newsletter was made available to the public through subscription and it
contains the views of the CD Group on the general market conditions and its
analysis on selected securities. Given the wide range of background and
financial conditions of the subscribers, the contents were not, and could not
be, directed at the investment needs and circumstances of each subscriber.
On the other hand, a consumer who seeks professional investment advisory
services would expect his advisor to consider his financial conditions,
investment objectives and risk appetite before advising him of the financial
32 The Chinese version of the Newsletter also contains statements to the same effect. 33 Part 2 of Schedule 5 of the Securities and Futures Ordinance (Cap.571).
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products that suit his needs. It should be clear to him that a financial
publication that is generally available to the public could not serve his
purpose. 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 1st Opponent. Rather, they
were merely customers of the Newsletter published by the 1st Opponent.
The Bloomberg interviews
63. Mr. Tan deposed that he has given a number of interviews on Bloomberg TV
that identified him as the managing director and CEO of the CD Group.
Such interviews were broadcasted to viewers in real-time around the world
including Hong Kong, and could also be downloaded from Bloomberg’s
website. In one of the interviews aired on 28 July 2005,34 Mr. Tan was
introduced as an investment guru who was noted for his insight into global
stock markets, particularly those in Asia. 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.
64. The Opponents also provided printouts from Bloomberg’s website to show
that its programmes were broadcasted by certain television channels in Hong
Kong including 1010 Studio on Demand, BBTV – Hong Kong Broadband,
Hong Kong i-Cable, PCCW Now TV and Smartone Vodafone Fone TV.35
The programmes were also broadcasted daily on the local free TVB Pearl
channel.36
65. Mr. Ling emphasised that the above Bloomberg interviews were broadcasted
live to viewers or subscribers of Bloomberg TV. Live broadcast should be
distinguished from Internet TV services through which the NOW TV
programmes were made available to viewers in the Starbucks case. In that
case, the NOW TV programmes were made available on PCCW’s website for
access by any user of the Internet from anywhere in the world free of charge.
Furthermore, such website was not specifically targeted at the viewers in UK.
This is to be distinguished from Bloomberg TV that was broadcasted live to
its viewers or subscribers of its services.
34 CD-Rom adduced at Exhibit “TTB-4” of Tan’s 1st SD. 35 Exhibit “TTB-19” of Tan’s 2nd SD. 36 Exhibit “TTB-20” of Tan’s 2nd SD.
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66. Based on the above evidence and analysis, Mr. Ling submitted that the 1st
Opponent enjoyed a degree of reputation among the public in Hong Kong
and in particular, the viewers of Bloomberg TV.
67. On the other hand, Mr. Wong drew my attention to the printouts from
Bloomberg’s website (paragraph 64 above). He submitted that such
printouts could only show the state of things as at the date the relevant
webpages were printed (i.e. 31 August 2012). However, what is material in
this case is whether the Bloomberg interviews were available for viewing by
the public in Hong Kong at the time when they were broadcasted. In any
event, there was no evidence on the number of viewers of Bloomberg TV in
Hong Kong at the relevant times. 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 in the
financial and commercial fields in Hong Kong as one of the important
providers of financial information.
68. At the same time, I note from the interview recorded on the CD-rom and those
available via the Internet links 37 that only five interviews (“relevant
interviews”) were relevant for the purpose of assessing the goodwill of the
Opponents’ services in relation to the name “Capital Dynamics”. The
relevant interviews were conducted on 28 July 2005, 5 July and 27 November
2006, 6 April 2007 and 22 July 2008 and Mr. Tan was introduced therein by
reference to his position in the CD Group. As for the other interviews, they
were either dated after the Application Date or the dates of the
interviews/broadcasts could not be ascertained from the evidence provided.
Furthermore, Mr. Tan was often introduced with reference to “i Capital
Global Fund” (as opposed to “Capital Dynamics”).
Internet hits
69. Mr. Tan deposed that the Internet traffic for the Website originating from
Hong Kong varied between approximately 36,000 to 204,000 hits per annum
from 2004 to 2009. This piece of evidence also helped to show that the 1st
Opponent has a reputation among the public in Hong Kong.
37 Paragraphs 10 and 12 of Tan’s 1st SD and paragraph 16 of Tan’s 2nd SD.
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70. On the other hand, Mr. Wong highlighted for my attention that viewers of the
Website would not be able to access its contents and the articles posted
thereon unless they have subscribed to the Newsletter.
71. I remind myself that the evidence adduced by the Opponents shows that there
were only five Hong Kong subscribers to the Newsletter over a period of 20
years. It is likely that some of the hits mentioned in paragraph 69 above
might represent repeated access by the subscribers of the electronic version
of the Newsletter. At the same time, there could also be other circumstances
upon which Internet users (aside from the subscribers of the Newsletter)
would come across the Website. It is possible that some Internet users might
be looking up for information concerning the CD Group. However, since
the name of the Applicant’s Group also contain the words “Capital
Dynamics”, it is equally possible that users could in fact be trying to access
the website of the Applicant’s Group or locating their information. Besides,
it is worth noting that “capital” and “dynamic” are common English words
which do not possess a high degree of distinctiveness in the investment and
financial field and these words could be used by Internet users (with no prior
knowledge of the CD Group or the Applicant’s Group) in conducting their
searches.
72. All in all, I do not consider that the Internet hits to the Website would be of
much assistance in establishing the goodwill of the 1st Opponent.
Other media and press interviews
73. Besides the Bloomberg interviews, the Opponents also adduced voluminous
evidence of press cuttings and media interviews with a view to establishing
the reputation of the Opponents. It is clear from the evidence that Mr. Tan
has been actively engaged in media interviews and his comments and analysis
on the financial markets have been quoted and published by the media. In
these interviews, he was often introduced with reference to his title in the CD
Group or “i Capital”. However, it is noted that most of these interviews
were conducted by the Malaysian media38 and the press cuttings were mostly
from newspapers and magazines published in Malaysia.39 There is also no
evidence to show that these interviews or publications were broadcasted or
circulated in Hong Kong.
38 Paragraph 13 of Tan’s 1st SD. 39 Paragraph 17 and exhibit “TTB-22” of Tan’s 2nd SD.
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Findings in relation to the 1st Opponent
74. To sum up, the evidence principally relied on by the 1st Opponent to establish
its goodwill or reputation in Hong Kong in relation to investment advisory
services, includes the following:
(a) the Newsletter that were available to the public for subscription
and in respect of which there were five subscribers based in Hong
Kong;
(b) the five relevant interviews conducted by Mr. Tan over a period of
three years;
(c) the number of hits to the Website where the electronic version of
the Newsletter was posted; and
(d) other press and media interviews with the Malaysian press
broadcasting channels of which there was no evidence of their
availability or circulation in Hong Kong.
75. 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
1st Opponent has established goodwill in Hong Kong in respect of investment
advisory services with reference to the name “Capital Dynamics”.
76. Lest I am wrong on the above findings and, based on the evidence, the 1st
Opponent 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 purpose of a passing off action.
77. In Hart v. Relentless Records Ltd.,40 the UK court held, inter alia, that the
law of passing off does not protect a goodwill of trivial nature. In that case,
the claimant has engaged in some activities under the name of “Relentless”
by making and distributing small quantities of “white label” (promotional)
records. These records were given away to DJs to generate an interest in the
records. A few years later, the defendant (Relentless Records Ltd) launched
a track that was an immediate commercial success. On the issue of passing
off raised by the claimant, the judge was of the view that the name “Relentless”
as denoting the claimant could have been exposed to no more than a few
40 [2003] F.S.R. 36.
- 25 -
hundred semi-amateur DJs. He doubted how many of them could have
actually remembered the name although it would not be unreasonable to
assume that a proportion did. There were odd mentions of it on the radio
and a few magazines. However, in the above situations, what would have
mattered most was the track and performer and not the record company.
The judge concluded that it was a minuscule reputation and the law of passing
off would not protect a goodwill of trivial extent.
78. In the subject opposition, the 1st Opponent has five Hong Kong subscribers
to the Newsletter from the time it launched the publication up to the
Application Date (covering a period of 20 years). The CD Group (including
the name “Capital Dynamics”) was mentioned on five occasions in the
interviews that Mr. Tan had with Bloomberg TV. On such limited evidence,
I am of the view that even if the 1st Opponent did have some goodwill in
respect of investment advisory services, such goodwill is only trivial in nature
and is not adequate for the purpose of a passing off action.
79. I will now proceed to consider whether the other Opponents have acquired
the requisite goodwill in Hong Kong.
2nd Opponent
80. The 2nd Opponent was a Malaysian company (incorporated in 1997) and the
fund manager of the listed fund. The Opponents claimed that the 2nd
Opponent enjoyed an excellent track record in relation to the listed fund. Mr.
Ling acknowledged that the 2nd Opponent did not have any identifiable
customers in Hong Kong. However, he argued that the subscribers of the
Newsletter and the viewers of Bloomberg TV in Hong Kong should be aware
that the 2nd Opponent has been providing fund management and investment
services to the listed fund.
81. Besides the above background information, the 2nd Opponent was in essence
seeking to rely on the same set of evidence as that of the 1st Opponent. This
would include, in the main, subscription to the Newsletter by the five local
subscribers and the relevant interviews.
82. The 2nd Opponent was not the publisher of the Newsletter and did not have
any contractual relationship with the Hong Kong subscribers. Hence, its
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connection with the Hong Kong subscribers was even more remote than the
1st Opponent. My analysis above regarding the Bloomberg interviews also
applies to the position of the 2nd Opponent. On such basis, I find that the
2nd Opponent has failed to establish that it has a goodwill in Hong Kong in
respect of fund management and investment services for passing off purpose.
3rd Opponent and 4th Opponent
83. The 3rd Opponent was a Singaporean fund management company that
launched the “i Capital Global Fund”. The 4th Opponent was an Australian
fund management company which launched the “i Capital International Value
Fund” that was targeted at retail investors. No further details were provided
on the connection between the above companies and Hong Kong.
84. Based on the evidence provided, I am not satisfied that the 3rd Opponent and
the 4th Opponent have established that they have goodwill in Hong Kong in
respect of the fund management and investment services for passing off
purpose.
Findings on section 12(5)(a) of the Ordinance
85. As the first element of a passing off action could not be established, there is
no need for me to proceed further to consider the elements of
misrepresentation and damage.
86. The Opponents have failed to establish the ground of opposition under
section 12(5)(a) of the Ordinance.
Conclusion
87. Besides section 12(5)(a) of the Ordinance, the Opponents have not relied
upon or made submissions on other grounds of opposition at the hearing.
Based on my findings above, the opposition fails.
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Costs
88. The Applicant has sought costs and there is nothing in the circumstances or
conduct of this case which would warrant a departure from the general rule
that the successful party is entitled to its costs. Accordingly, I order that the
Opponents should pay the costs of these proceedings.
89. Subject to any representations as to the amount of costs or calling for special
treatment, which either party makes within one month from the date of this
decision, costs will be calculated with reference to the usual scale in Part I of
the First Schedule to Order 62 of the Rules of the High Court (Cap. 4A) as
applied to trade mark matters, unless otherwise agreed between the parties.
(Maria K. Ng)
for Registrar of Trade Marks
19 September 2014
- 28 -
Schedule A
The subject services
Class 35
Business management and organization consultancy.
Class 36
Asset management and financial transactions of all kinds namely institutional financial
asset management, financial portfolio management, allocation, and structuring for
assets of all kinds, creation and placement of institutional investment products,
financial transaction processing, financial risk analysis, technical analysis of asset
management portfolios and risk management transactions, financial investment and
management in the fields of private investment funds, private investment fund of funds,
hedge funds, buyout funds, real estate funds, and real estate fund of funds, management
of private equity funds, private equity fund investment services, and monetary
operations.
