Legal Bulletin August 2016

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Published date: 30 Aug 2016

Singapore Court of Appeal considers scope of own name defence under the Trade Marks Act

The Audience Motivation Company Asia Pte Ltd v AMC Live Group China (S) Pte Ltd [2016] SGCA 25
 
The decision of the Singapore Court of Appeal in The Audience Motivation Company Asia Pte Ltd v AMC Live Group China (S) Pte Ltd is interesting and instructive as the decision is the first time the Singapore Court of Appeal has considered the scope and applicability of the current version of the “own name” defence under section 28(1)(a) of the Trade Marks Act.
 
Facts
 
The appeal in the case arose out of the Appellant’s claims for trade mark infringement and passing off against the Respondent. These claims were dismissed in the High Court below where the Respondent successfully relied upon the “own name” defence under section 28(1)(a) of the Trade Marks Act (“own name defence”).
 
The Appellant was incorporated in Singapore in 2000 and was in the business of event management and promotion. Its clients included prominent local and international companies.
 
The Respondent was incorporated in Singapore in 2012 and was part of a group of companies headed by its group CEO, Mr Leong Seng Chet (“Mr Leong”). The Respondent provided event and concert management services across the region in China, Singapore, Taiwan, Malaysia and Hong Kong. While the group had its origins in Chengdu, China (“Chengdu Company”), the headquarters was later relocated from Chengdu to Singapore under the auspices of the Respondent.
 
The Appellant was the registered proprietor of two trade marks, the “AMC Asia Mark” and the “Human Exclamation Mark” (“Appellant’s Marks”) which it claimed had been infringed by the Respondent’s marks. The Appellant’s Marks were registered in Classes 35, 41 and 42 broadly in the areas of event management services and promotional advertising and marketing.
 
The Respondent’s marks in question were its “AMC Group Mark” and “AMC Live Mark” (“Respondent’s Marks”). The Respondent claimed the AMC Group Mark was independently designed. The name “AMC” was intended to be an acronym for “A Music Company”. The Respondent’s application to register the AMC Group Mark in Classes 35 and 41 was stayed due to the Appellant’s objections. The Respondent then changed its name from AMC Group China (S) Pte Ltd to AMC Live Group China (S) Pte Ltd in November 2013 and began using the AMC Live Mark.
 
High Court judgment
 
The Judge in the High Court found that the AMC Asia Mark had prima facie been infringed by the Respondent’s Marks as they were visually and aurally similar. As the parties provided similar services in the area of events promotion and organisation, there was a likelihood of confusion arising from the use of similar marks by the Respondent. Some of the Appellant’s former clients and suppliers attested to actual confusion caused by the similarity of the marks. However, the Judge found that the own name defence to trade mark infringement was applicable and dismissed the Appellant’s claim.
 
In relation to the claim for passing off, the Judge held that two of the three requisite elements, namely misrepresentation and damage, were made out. However, he found that the Appellant had failed to establish that it had acquired goodwill in the AMC Asia Mark.
 
Issues before the Court of Appeal
 
The Court of Appeal considered the following issues:
 
·         whether the Respondent had infringed the AMC Asia Mark;
 
·         if so, whether the own name defence was available to the Respondent;
 
·         whether goodwill, misrepresentation and damage had been proven in order to establish liability for passing off; and
 
·         whether the own name defence is applicable to a claim for passing off.
 
Trade mark infringement
 
The Court of Appeal noted the visual and aural similarities between the Respondent’s Marks and the AMC Asia Mark and upheld the Judge’s finding of prima facie infringement of the AMC Asia Mark. There was also clearly a likelihood of confusion resulting from the Respondent’s use of the Respondent’s Marks and the “amc” name. Further, the Respondent’s intended registration of the AMC Group Mark in Classes 35 and 41 was identical to the Appellant’s registration of the AMC Asia Mark in the same classes. There was thus, prima facie, a case for identity (and not just similarity) of services which the Court of Appeal held the Respondent had failed to displace.
 
Own name defence
 
The Court of Appeal summarised the principles to be applied when considering the applicability of the own name defence:
 
·         The defence is available in relation to the use of a defendant’s name as a trade mark.
 
·         The defence is available in relation to the use of corporate names and this includes the use of the full company name as well as the defendant’s trading name.
 
·         The defence is available only insofar as the defendant seeks to justify the use of its own name and nothing more.
 
·         The defence is only made out if the defendant uses the name in accordance with honest practices in industrial and commercial matters. This entails both subjective and objective elements so the court must have regard to standards and practices that are commonly applied in the industry or business as well as the particular motivations and intentions of the defendant. Each element is a necessary, but not in itself sufficient, condition for the defence to be made out. Hence, the court must be satisfied that the invocation of the defence is in accordance with the standards and practices in the industry and also that the defendant is not actuated by dishonest motives or intentions.
 
·         The burden of establishing the defence on a balance of probabilities lies on the defendant. This calls for an evaluation of the evidence in the usual way. The assertions of honesty on the part of the defendant will not suffice if the court is not satisfied of this fact on a balance of probabilities upon considering all the evidence.
 
When conducting the inquiry into honesty, the Court of Appeal highlighted that the following factors may be relevant:
 
·         The defendant has to adduce evidence of its bona fides, especially when the name in question is a trading name used by a company.
 
·         The defendant has to provide a justifiable basis for its choice of name especially if there is no apparent origin for that name or if it was selected after the plaintiff (i.e. the trade mark owner) had begun using that name.
 
·         The defendant has to provide compelling reasons to explain any other significant sources of similarities between the marks.
 
·         Although some degree of confusion may be tolerated, proof of an intention to misrepresent will take the defendant outside the “honest practices” proviso. This may include an intention to:
 
-         create the impression that there exists a commercial connection between the defendant and the trade mark proprietor;
 
-         discredit or denigrate the registered trade mark; or
 
-         devalue the trade mark through the taking of unfair advantage of its distinctive character or repute.
 
·         The court may consider specific factors such as whether the defendant knew of the existence of the trade mark, and if not whether it would have been reasonable to conduct a search, and whether the defendant knew or should have appreciated that there was a likelihood of confusion.
 
Applying the principals and factors outlined above, the Court of Appeal held that the Respondent could not rely on the own name defence as its use of the “amc” name did not accord with honest practices. In particular, the Court of Appeal observed that the name “amc” had no evident connection with, or relation to, the name of the Chengdu Company which was the first company to be incorporated within the group of companies run by Mr Leong. There was no evidence of the Respondent representing itself to others as “A Music Company” save for a single instance where an employee of the Respondent said that the name “amc” was meant to stand for “A Music Company”. Further, the Chengdu Company had posted a job advertisement online and represented itself as a Singaporean company known as “amc” involved in the events management business. This was well before the incorporation of the Respondent and was at a time when the Appellant was the only Singaporean company engaged in the events management scene going by the name “amc”. This strongly suggested active misrepresentation by the Chengdu Company that it was, or was connected to, the Appellant. This misrepresentation continued to be perpetuated when the Respondent, which adopted the name “amc”, was subsequently established.
 
In all the circumstances, the Court of Appeal found that the Respondent had failed to discharge its burden of proving that the “amc” name, the “AMC Group Mark” and the “AMC Live Mark” were honestly and independently conceived or that the use of the “amc” name accorded with honest practices.
 
Accordingly, the Court of Appeal allowed the Appellant’s appeal and reversed the Judge’s decision to dismiss the Appellant’s claim for trade mark infringement of the “AMC Asia Mark”.
 
Passing off
 
Although it was not necessary to do so, for completeness, the Court of Appeal considered the Appellant’s claim in passing off.
 
The Court of Appeal held that the classical trinity of goodwill, misrepresentation and damage had been established in the present case to give rise to an actionable claim in passing off.
 
The Respondent sought to rely on the own name defence in the context of passing off. As the Court of Appeal had already found that the Respondent could not avail itself of the own name defence in relation to the Appellant’s trade mark infringement claim, it followed that the defence would also fail in relation to the Appellant’s claim in passing off, even assuming it were available in principle.
 
The Court of Appeal was of the provisional view that the own name defence, which is statutorily provided for in relation to trade mark infringement subject to the “honest practices” proviso, cannot be extended to cases of passing off which is based firmly on a finding of misrepresentation. Trade mark infringement is established upon a finding of a likelihood of confusion and this need not amount to misrepresentation. But misrepresentation is an essential element of the tort of passing off.
 
While decisions concerning passing off may have given rise to the defence as it now stands in trade mark infringement, the Court of Appeal was of the view that the own name defence should be recognised for what it really is in the context of passing off, i.e. the recognition of the entitlement to use one’s own name to trade as long as there is no passing off, although this does not mean that the fact that one is using one’s own name is necessarily irrelevant in a passing off claim.
 
Conclusion
 
In conclusion, the Court of Appeal allowed the Appellant’s appeal in relation to trade mark infringement.
 
 
If you would like to discuss the impact of this case on your business, please contact:
 
+65 6890 7883
 
+65 6890 7894
 

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