TRADE MARKS ORDINANCE (CAP. 559)
APPLICATION FOR DECLARATION OF INVALIDITY OF TRADE MARK
REGISTRATION NO. 301260918
MARK :
CLASSES :
APPLICANT :
REGISTERED OWNER :
29, 30
GULF & SAFA DAIRIES CO. LLC
MGH INDUSTRIES COMPANY
______________________________________________________________________
STATEMENT OF REASONS FOR DECISION
Background
1.
On 15 April 2011, Gulf & Safa Dairies Co. LLC (“Applicant”) filed an
application under section 53 of the Trade Marks Ordinance (Cap. 559) (“Ordinance”)
for a declaration of invalidity of the registration of Trade Mark No. 301260918
(“Subject Mark”). A representation of the Subject Mark is set out below :
2.
Registration of the Subject Mark was granted on an application for
registration filed by MGH Industries Company (“Registered Owner”) on 22 December
2008 (“Filing Date”). Although the Subject Mark was registered in Classes 29 and 30,
the subject application for invalidation was only directed against the registration of the
Subject Mark in respect of the goods in Class 29, namely “milk and milk products”
(“Subject Goods”).
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3.
According to section 53(8) of the Ordinance, where the grounds of invalidity
exist in respect of only some of the goods or services for which the trade mark is
registered, the trade mark shall be declared invalid as regards those goods or services
only. Thus, for the present purposes, I will only need to consider the question of
validity of the Subject Mark insofar as it relates to the Subject Goods.
4.
The Registered Owner did not file any counter-statement to defend the
registration. This application for declaration of invalidity was therefore treated as
being unopposed pursuant to rules 41(3) and 47 of the Trade Marks Rules (Cap.559A)
(“Rules”).
5.
Further, as the Registered Owner did not file an address for service within
the prescribed period after a notice under rule 107(1) of the Rules was issued by the
Registrar of Trade Marks (“Registrar”) on 9 May 2014, the Registered Owner was
deemed to have withdrawn from the subject proceedings pursuant to rule 107(3) of the
Rules.
6.
The Applicant’s evidence under rules 42 and 47 of the Rules consists of a
statutory declaration made by Mr. Mohamed Abdul Razzaq Abdul Jalil on 13 May 2012,
together with exhibits (“Declaration”).
7.
The matter was scheduled to be heard before me on 9 June 2014. However,
the Applicant did not file a notice of intention to appear within the prescribed period,
and was treated as not intending to appear at the hearing. I will now decide the matter
without a hearing in accordance with rule 75(b) of the Rules.
Grounds for invalidation
8.
According to the statement of grounds submitted on 15 April 2011
(“Statement of Grounds”), the Applicant relies on the following sections of the
Ordinance as the basis of the current application for invalidation:
(i)
sections 11(5)(b) and 53(3); and
(ii)
sections 12(5)(a), 12(5)(b) and 53(5)(b)
Each of the above grounds for invalidation is separate and distinct.
The application for
invalidation will succeed if any of the above grounds can be established.
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The Applicant and the Applicant’s Marks
9.
The background of the Applicant was outlined in the Statement of Grounds
and the Declaration. According to these documents, the Applicant is a producer and
distributor of dairy products in United Arab Emirates (“UAE”) with a history of over 47
years. Started off in 1964 as a small operation in Sharjah supplying milk to the British
forces, the Applicant has now developed into a leading company in the diary sector of
UAE which manufactures and exports milk products and juices to over 15 territories
around the world. The history and latest information of the Applicant’s business can
be gleaned from the printouts of the Applicant’s website http://www.gulfsafadairy.com
and of http://www.alibaba.com exhibited in “MARAJ-1” of the Declaration.
10.
As stated in paragraph 4 of the Declaration, the Applicant is the owner of the
mark “SAFA” and its Arabic equivalent “
” or “
”, which were derived
from the family name “AL SAFA” of one of the very first owners of the Applicant’s
predecessor, Safa Dairies. On 1 March 1971, the following marks were also created
and designed by Mr. Ali Hussein Safa, 1 who was a partner of the Applicant’s
predecessor, for the business:
(i)
(“Mark A”)
(ii)
(“Mark B”)
(Collectively, the “Applicant’s Marks”)
11.
It was averred that the Applicant and its predecessor have used the
Applicant’s Marks in respect of milk, milk shakes, labneh, cream, other dairy products
and juices (“Applicant’s Goods”) in UAE and worldwide since its creation in 1971.
Printouts of the Applicant’s website showing details of the brand “SAFA”, information
about the various products under the brand and pictures of some sample products
bearing the Applicant’s Marks were provided in exhibit “MARAJ-2” of the Declaration.
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This claim is somehow inconsistent with paragraph 3 of the Statement of Grounds, which stated that the
name of the creator was Mr. Adel Abdul Mustapha. However, the date of creation was the same.
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12.
In UAE, the Applicant has applied for registration of the mark “SAFA” with
the Arabic word “
” in 1999 and of the Applicant’s Marks in 2005. The mark
“SAFA” and the Applicant’s Marks were also registered in various countries and places
including Benelux, Canada, Denmark, Germany and India. Copies of the certificates
for registration of the mark “SAFA” and the Applicant’s Marks in the above territories
were contained in exhibits “MARAJ-3” and “MARAJ-5” of the Declaration.
13.
For the sales and distribution of the Applicant’s Goods beyond the territory
of UAE, it was claimed that one of the key clients of the Applicant is Emirates Airlines,
the flights of which cover most cities of the world including Hong Kong, with the
Applicant’s Goods being served on board. Exhibit “MARAJ-4” contains copies of
contract for the supply of the Applicant’s Goods to the flight catering department of
Emirates Airlines from 2004 to 2011. It can be seen from those documents that a
broad variety of milk and beverages such as “UHT Milk – Half Cream”, “UHT Milk –
Full Cream”, “UHT Milk – Non Fat”, “Milk Chocolate Drink”, “Apple Juice”, “Mango
Juice”, “Orange Juice” etc., were all provided under the brand “SAFA”.
14.
As revealed in the copies of the sales and shipping documents provided in
exhibits “MARAJ-6”, “MARAJ-7”, “MARAJ-8” and “MARAJ-9” of the Declaration,
the Applicant has been selling and exporting the Applicant’s Goods to various buyers in
Hong Kong since at least March 2009. However, no record of sales before the Filing
Date can be traced.
The Registered Owner
15.
Since the Registered Owner has not filed any documents or taken any part in
these proceedings, I can only gather its background from the information provided by
the Applicant.
16.
Exhibit “MARAJ-10” of the Declaration contains a printout of electronic
information about the Registered Owner obtained from the Business Registration Office
of the Hong Kong Government. It shows that the Registered Owner was located in
Chung King Mansion at Nathan Road, and it was solely owned by an individual named
Ali Ghazanfar. The Applicant claims that Chung King Mansion is a popular place for
traders from South Asia as well as a hotspot for selling infringing goods, and that Ali
Ghazanfar is a name of Muslim/Arabic origin, hence the Registered Owner must have
known and been aware of the Applicant’s Marks.
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17.
Based on the foregoing, the Applicant pleaded (amongst others) that the
Subject Mark was copied from the Applicant’s Marks, and the application by the
Registered Owner to register the Subject Mark in Class 29 was made in bad faith in
contravention of section 11(5)(b) of the Ordinance.
The relevant date
18.
For the present purposes, I have to determine the validity of the registration
of the Subject Mark by reference to the position as at the Filing Date, i.e. 22 December
2008.
Sections 11(5)(b) and 53(3) of the Ordinance
19.
I will deal with the ground for invalidation under sections 11(5)(b) and 53(3)
of the Ordinance first.
“(3)
Section 53(3) of the Ordinance states that:
The registration of a trade mark may be declared invalid on the ground
that the trade mark was registered in contravention of section 11 (absolute grounds
for refusal of registration).”
20.
Amongst the absolute grounds for refusal of registration set out in section 11
of the Ordinance, subsection 5(b) provides that :
“(5)
21.
A trade mark shall not be registered if, or to the extent that –
(a)
…
(b)
the application for registration of the trade mark is made in bad faith.”
There is no definition for the term “bad faith” in the Ordinance.
22.
In Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd [1999] RPC 367,
Lindsay J. stated the following in relation to section 3(6) of the UK Trade Marks Act
1994 (equivalent to section 11(5)(b) of the Ordinance):
“I shall not attempt to define bad faith in this context.
Plainly it includes
dishonesty and, as I would hold, includes also some dealings which fall short of the
standards of acceptable commercial behaviour observed by reasonable and
experienced men in the particular area being examined.
Parliament has wisely
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not attempted to explain in detail what is or is not bad faith in this context: how far
a dealing must so fall-short in order to amount to bad faith is a matter best left to be
adjudged not by some paraphrase by the courts (which leads to the danger of the
courts then construing not the Act but the paraphrase) but by reference to the words
of the Act and upon a regard to all material surrounding circumstances.”
23.
In Harrison’s Trade Mark Application [2005] FSR 10, the English Court of
Appeal held that:
“The words “bad faith” suggest a mental state.
Clearly when considering the
question of whether an application to register is made in bad faith all the
circumstances will be relevant.
However the court must decide whether the
knowledge of the applicant was such that his decision to apply for registration
would be regarded as in bad faith by persons adopting proper standards.”
24.
Further, in Ajit Weekly Trade Mark [2006] RPC 25, the Appointed Person
had referred to the above cases and held:
“The subjective element of the test means that the tribunal must ascertain what the
defendant knew about the transaction or other matters in question.
It must then be
decided whether in the light of that knowledge, the defendant’s conduct is dishonest
judged by ordinary standards of honest people, the defendant’s own standards of
honesty being irrelevant to the determination of the objective element.”
25.
The above principles were referred to and applied in a recent High Court
judgment of 深 圳 市 德 力 康 電 子 科 技 有 限 公 司 v. JOO-SIK-HOI-SA LG
(LG Corporation) and another [2014] HKCFI 558 (HCMP 881/2013) in Hong Kong.
Analysis on bad faith
26.
Did the Registered Owner’s act of applying for registration of the Subject
Mark in relation to the Subject Goods fall short of the standards of acceptable
commercial behaviour observed by reasonable and experienced men in the relevant area
of trade?
27.
As a starting point, it is convenient for me to look at the Applicant’s Marks
vis-à-vis the Subject Mark. Mark A of the Applicant’s Marks consists of three parts: (1)
the word “SAFA” in the middle, (2) a device of three leaves above the word, and (3) a
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wave-like curved line appearing underneath the word “SAFA”. Mark B of the
Applicant’s Marks is identical to Mark A, except that the word “SAFA” is replaced by
the Arabic word “
”. In my view, all the components of the Applicant’s Marks,
especially the words “SAFA” and “
”, do not have any direct reference to, and
are thus highly distinctive of, the Applicant’s Goods. Meanwhile, a comparison of the
Applicant’s Marks and the Subject Mark reveals that the latter is substantially the same
as the former, or more precisely, the combination of each of the Applicant’s Marks. In
view of the identity2 of the marks in question, it is inconceivable that the Registered
Owner would be able to create the Subject Mark independently without having prior
knowledge of the Applicant’s Marks, particularly where all the elements of the
Applicant’s Marks are so distinctive that the possibility of coincidence can be virtually
eliminated. In fact, the Registered Owner did not deny copying or assert that it was
the original creator of the Subject Mark. Clearly, the Registered Owner must have
known and been fully aware of the Applicant’s Marks prior to the Filing Date, and the
Subject Mark was simply derived from the Applicant’s Marks.
28.
What is more, the Subject Goods are identical to and overlap with the
Applicant’s Goods, and there is the unchallenged evidence from the Applicant showing
that it was engaged in the business of producing and selling the Applicant’s Goods
under the Applicant’s Marks for more than 37 years (see paragraphs 9 to 14 above).
Coupled with the fact that the Registered Owner was apparently owned by a person of
Arabic origin (see paragraph 16), I think the only logical conclusion which can be
drawn from the circumstances is that the Registered Owner, having known about the
Applicant’s Marks and the Applicant’s business before the Filing Date, deliberately
applied to register the Subject Mark, being a mark identical to the Applicant’s Marks, in
relation to the goods of interest of the Applicant, with a view to riding on or taking
unfair advantage of the goodwill or reputation of the Applicant’s Marks.
29.
Taking into account all the circumstances relevant to this case, I consider
that the Registered Owner’s conduct of applying for registration of the Subject Mark in
relation to the Subject Goods certainly falls short of the standards of acceptable
commercial behaviour observed by reasonable and experienced men in the relevant area
of trade, and it therefore amounts to bad faith.
2
There is no colour claim in the registration of the Subject Mark. Hence, the colour variation as applied
in the representation of the Subject Mark does not constitute an element of the mark and is disregarded
for the purpose of comparison.
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Conclusion
30.
For the reasons stated above, I find that the ground for invalidation under
section 11(5)(b) of the Ordinance has been made out, and accordingly the registration of
the Subject Mark in respect of the Subject Goods is declared invalid under section 53(3)
of the Ordinance. There is thus no further need for me to consider the other grounds
relied upon by the Applicant.
Costs
31.
As the application for invalidation is successful, I award the Applicant costs.
Subject to any representations, as to the amount of costs or calling for special treatment,
which either party may make 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.
(Ryan Ng)
for Registrar of Trade Marks
17 October 2014
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