The price of fame and well-known marks

While many businesses devote a great deal of time and money to making their brands better known, there is a flipside to fame. Well-known brands are often the target of opportunistic copying and parodies, both online and offline. While there is increasing recognition that well-known marks are worthy of special protection, the question remains: how much? The issue is also subject to policy considerations, as legislative and judicial bodies seek to balance heavy investment in intellectual property against the need to maintain a healthy level of competition.

While trademark laws in parts of Southeast Asia and Australia – specifically Australia, Indonesia, Malaysia, the Philippines, Singapore and Thailand – do set out protection for well-known marks, they are at different stages of development. While countries such as Australia, Malaysia and Singapore have relatively well-established laws with specific protection for famous marks, the position in countries such as Indonesia and Myanmar remains nascent and somewhat challenging.

The essential function of a trademark is to indicate a single source of origin and prevent consumer confusion. Therefore, a fundamental tenet of all trademark laws is the concept of confusion. However, as the discussion below illustrates, the need to establish confusion in order for a mark to enjoy protection can become a curse when it becomes well known.

Confusion – a big deal for owners of well-known marks

Trademark rights typically result from use or the filing date of a registration. In Singapore, an ‘earlier mark’ can be a mark with an earlier filing date or a mark which, at the relevant time, is well known within the jurisdiction. The latter covers both registered and unregistered marks.

The owner of an earlier mark can seek recourse against the use or registration of a later third-party mark where:

• the third-party mark is identical to the earlier mark and covers identical goods or services – in such a situation, the element of confusion will typically be presumed; or
• either or both of the competing marks or competing goods or services are not identical, but merely similar – in which case the owner of the earlier mark can prevent a third party from using or registering a mark if it can establish that this would result in confusion. Confusion is therefore one of the primary elements to be established in a trademark opposition or infringement action in such circumstances.

This is where it gets tricky. There has been a rash of cases in the region in which challenges brought by owners of high-profile marks failed because the court or trademark office held that there could be no likelihood of confusion because consumers were so familiar with the earlier mark that slight changes to the third-party mark would suffice to make it distinct. In short, the well-known mark was simply too well known to be confused.

Looking at the similarities between some of the marks in these cases (eg, SEIKO v SEIKI in Singapore and ROLEX v SOLEX in Thailand), one cannot help but wonder whether these challenges might have succeeded were it not for the earlier mark’s reputation. The irony is that while one would expect greater protection for well-known marks, it would appear that well-known status becomes a stumbling block with regard to the requirement of establishing confusion.

Too well known to be confused?

The idea that a trademark can be too well known to be confused is not new, having first been considered – at least in Singapore – by the Singapore Court of Appeal as early as 2005 in McDonald’s Corp v Future Enterprises Pte Ltd ([2005] 1 SLR(R) 177). In finding that there was no likelihood of confusion between McDonald’s marks and the defendant’s mark (which comprised a device and the words ‘MacNoodles’, ‘MacTea’ and ‘MacChocolate’), the Court of Appeal observed that: “the very success of [McDonald’s], which is inseparable from its logo, is also the very reason why confusion is unlikely.” However, this discussion has recently been reignited by a slew of decisions in the region involving high-profile marks.

In 2014 the Singapore Trademark Registry dismissed Seiko Holding’s opposition against the registration by a local company of the mark SEIKI for television sets and DVD disc players (In the Matter of a Trade Mark Application by Choice Fortune Holdings Limited and Opposition thereto by Seiko Holdings Kabushiki Kaisha (Trading as Seiko Holdings Corporation) [2014] SGIPOS 8). Despite finding SEIKI to be similar to SEIKO and acknowledging that the goods to be sold under the two marks were also similar, the hearing officer concluded that there was no likelihood of confusion because the SEIKO brand, “no doubt with a long and established presence in Singapore, could be sufficiently entrenched in the minds of consumers as to dispel as real possibility of confusion with…‘SEIKI’”.

In March 2015 the registry dismissed an opposition by Converse Inc against the proposed registration by a Malaysian company of the sign in respect of clothing, relying on its registered marks – in particular, the mark in respect of footwear and headgear (In the Matter of a Trade Mark Application by Southern Rubber Works Sdn Bhd and Opposition thereto by Converse Inc [2015] SGIPOS 11). The hearing officer found the marks to be visually similar, but aurally and conceptually distinct, eventually ruling that the “dissimilarity in the words of the two competing marks outweighs the visual similarity in the layout”. She also concluded that there was no likelihood of confusion, based on the fact that Converse’s reputation was based on its brand name; it had never used the star device on its own, unaccompanied by the brand name. The hearing officer reasoned that consumers would thus be more likely to focus on the words in the mark and not on the star device, and thus were less likely to be confused by the application mark which contained different words, although a similar layout. Once again, one cannot help but wonder whether the hearing officer might have accorded greater weight to the overall visual similarity in the marks’ layout if the CONVERSE mark were not so well known.

This case followed hot on the heels of an earlier Singapore High Court decision in a trademark infringement and passing-off claim brought by Han’s (F&B) Pte Ltd – owner and operator of a longstanding chain of Western restaurants in Singapore called Han’s Café – against another local company operating a Japanese restaurant called HAN Cusine of Naniwa under the sign (Han’s (F&B) Pte Ltd v Gusttimo World Pte Ltd [2015] 2 SLR 825). The court found the defendant’s sign to be similar to the plaintiff’s registered marks HAN’S, and the goods to be similar as well. However, despite this, it ruled that there was no likelihood of confusion. One factor which weighed heavily in its decision was that “the reputable Han’s trademarks militate against confusion”.

The same refrain has been taken up by trademark offices and courts in neighbouring jurisdictions, as illustrated by the following decisions.

In Australia, the Federal Court found that DIGITAL POST AUSTRALIA was not deceptively similar to AUSTRALIA POST, based on the reasoning that the name AUSTRALIA POST had become iconic through extensive and prolonged use – so much so that “potential consumers of digital post services will perceive and pay attention to even slight changes to the mark” (Australian Postal Corp v Digital Post Australia Pty Ltd (No 2) (2012) 293ALR369; 96 IPR532; [2012] FCA862;BC201206030). The decision was appealed without success (Australian Postal Corporation v Digital Post Australia [2013] FCAFC 153; BC201315501).

In a similar vein, the Philippines IP Office dismissed Apple’s objection to a Manila company’s registration of the mark MY/PHONE for mobile phones (Apple, Inc v Solid Broadband Corporation (IPOPHL, Decision 2015-103)). The officer opined that: “The buying public should be credited with a modicum of intelligence and discernment in purchasing articles, such as gadgets and mobile phones... The fame and popularity of iPhones in fact makes it improbable for one to confuse the my/phone product as an iPhone.”

Earlier this year, a hearing officer at the Singapore trademark registry dismissed an opposition by Converse, concluding that Converse’s reputation centres around its brand name and that Converse never used its star device on its own, unaccompanied by the brand name

Picture: Emka74/Shutterstock.com

Similarly, the Supreme Court of Thailand dismissed an opposition brought by Rolex AS, maker of ROLEX watches, against registration of the mark SOLEX for jewellery (Rolex AS Company v Nuntana Pitisaithakorn, Supreme Court Opinion 5168/2005). The defendant had been using its mark SOLEX in respect of keys, but sought to expand the goods that it sold to include jewellery. The court found that consumers wre unlikely to confuse SOLEX with ROLEX, as the latter was well known in Thailand for watches, while SOLEX was well known for keys. This case is slightly different from the others discussed here, in that both the prior and later mark were well known. This could be seen as a double whammy, in the sense that not only would consumers not confuse SOLEX with ROLEX because they recognised ROLEX, but SOLEX would also likely be recognised in its own right.

The common thread in all these decisions is that, despite the later mark being similar to the earlier mark and covering similar goods and services, the fact that the earlier mark was well known was apparently detrimental to the owner’s claim, as it was then seen to be too well known to be confused.

These decisions suggest that a rights holder’s success in promoting its name can adversely affect its ability to prevent registration or use of a similar mark for similar goods or services where confusion is a prerequisite.

However, rights holders can take some comfort from the fact that courts and registries have made it clear that the reputation of the earlier mark is not the only factor that they will consider when dealing on the issue of confusion. Apart from the reputation of the well-known mark, tribunals have also considered other factors, such as the degree of distinctiveness. For example, in Converse, the star device was found to be a common feature, while in Han’s it was pointed out that ‘Han’ is a common family name. Given the low degree of distinctiveness, consumers were thereby more likely to focus on the less prominent features of the mark and were thereby less likely to be confused. In addition, tribunals have considered the degree or aspects of similarity of the competing marks and the normal circumstances under which consumers would purchase the goods or services (ie, whether the goods were likely to be purchased quickly or be the result of longer consumer deliberation) to be relevant factors.

What should owners of well-known marks do?

To bolster their position, owners of well-known marks should seek defensive registrations where these are available (eg, in Australia), to ensure that they obtain maximum protection available in each jurisdiction.

When it comes to proceedings, a rights holders can commission surveys to show actual or likelihood of confusion among customers to bolster its position. Although it is not necessary to show actual confusion, such evidence can be helpful. However, care should be taken when crafting the survey questions to ensure the veracity and credibility of the survey (eg, in Han’s the survey submitted by the plaintiff was disregarded by the court as there were several deficiencies in its methodology).

Additionally, in some jurisdictions, owners of well-known marks can benefit from additional legal protection where:

• use of the later mark would suggest a connection between the third-party goods or services and the owner of the well-known mark, so as to cause or be likely to cause damage to the owner of the well-known mark; or
• use of the later mark would result in dilution of the well-known mark.

The Supreme Court of Thailand dismissed an opposition brought by Rolex against the registration of SOLEX for jewellery. The court found that consumers were unlikely to confuse SOLEX with ROLEX as the latter was well-known in Thailand for watches, while SOLEX was well-known for keys

Picture: tanuha2001/Shutterstock.com

Use that suggests a connection

Following from their obligations under the Trade-Related Aspects of Intellectual Property Rights Agreement, many countries in the region have amended or are in the process of amending their trademark laws to introduce protection for well-known marks against third- party use of a similar mark that suggests a connection and causes damage to the owner of the well-known mark. However, national treatment varies, with some jurisdictions offering broader protection than others.

In some countries (eg, Australia and the Philippines), there must be a deceptive or confusing similarity between the competing marks before the question of whether use of a later mark suggests a connection or causes damage becomes relevant.

In Singapore and Malaysia, on the other hand, the relevant statutory provisions steer clear of the language of confusion so that, on the face of it, a confusion analysis does not come into play insofar as this ground of protection is concerned.

However, the scope of this protection appears to have been called into question – at least in Singapore – as the judiciary has imported the confusion terminology in considering its application. In Novelty Pte Ltd v Amanresorts Ltd ([2009] 3 SLR(R) 216), the Court of Appeal stressed that the requirement for confusion is not dispensed with when considering whether a rights holder’s use of its mark indicates a connection with a well-known mark. Further, the owner of a well-known mark must show a confusing connection when seeking to prevent registration of a third party’s mark or to restrain (by way of injunction) use of the same, as “the widespread availability of protection available to well-known marks in Singapore should be balanced by requiring confusion”.

The Australian courts, on the other hand, have interpreted ‘indicating a connection’ to include instances where a consumer may be “caused to wonder” whether the goods or services are connected. However, judicial consideration is limited and the law is still unsettled as to whether this includes a requirement of confusion or whether some sort of mental association will suffice.

The suggestion that confusion is or may be relevant to the connection analysis triggers alarm bells – would this ultimately render this ground of complaint less effective as well?

This concern appears to be ameliorated by the fact that the connection may refer not only to a trade connection (ie, that the owner of the well-known mark is the source of the third party’s goods or services, as is the focus of the classic confusion analysis), but also a business connection (ie, that the well-known mark owner had endorsed the third party’s goods or services or licensed its well-known mark for use with the third party’s goods or services – see Novelty Pte Ltd v Amanresorts Ltd at [161] and Mobil Petroleum Co, Inc v Hyundai Mobis [2010] 1 SLR 512).

The argument that a well-known mark is too well known to be confused will be more difficult to make insofar as a confusing connection with quality or business is concerned. Even consumers who are familiar with a well-known brand may be unaware as to whether the brand owner had partnered or entered into some sort of collaboration with another brand. In our view, this ground of attack therefore could still prove useful for owners of well-known marks.

The Australian Consumer Law lends support to protect well-known marks against dilution, though its requirement of “misleading and deceptive conduct” arguably sets a higher benchmark than the standard dilution test

Dilution and unfair competition

Many countries also provide protection for well-known marks against unfair practices or unfair competition of one form or another.

Singapore appears to be relatively developed in this regard, as owners of well-known marks have recourse against third-party marks which are identical or similar and which dilute or take unfair advantage of the well-known mark. The Singapore Court of Appeal has expressly recognised that protection is available on this ground even where there is no confusion. Two forms of dilution are recognised:

• blurring, which occurs when the well-known mark becomes less able to identify the goods and services of its owner – it is enough to show that use of the third-party mark in relation to the third party’s goods or services will lead consumers to call to mind the owner of the well-known mark, which falls short of confusion; and
• tarnishment, which occurs when the well-known mark is applied by a third party to goods or services which are of an inferior quality or have some undesirable characteristic.

However, there are limitations to this protection. Protection against dilution and the taking of unfair advantage is reserved only for marks that have achieved a high level of recognition – that is, marks which are well known “to the public at large in Singapore” (as opposed to being merely well known to the relevant sector of the public). Additionally, the Court of Appeal has suggested (see Novelty Pte Ltd v Amanresorts Ltd) that there will be no blurring unless the owner of the well-known mark and the third party are in competition or their respective goods or services are substitutes for one another. Blurring is not an available argument if the third party’s activities are in a completely different field. On the other hand, the issue of tarnishment can be invoked only if the third party’s goods or services are of inferior quality or have some undesirable characteristic, which is not always the case. As for the taking of unfair advantage, this relies on a link being established between the two competing marks – which unfortunately harks back to the connection test.

Therefore, these grounds of attack are available only to a privileged few. Moreover, they each present different challenges if they are to be applied successfully, restricting their usefulness when it comes to protecting well-known marks.

That said, while Singapore explicitly confers specific protection against dilution, the position is not as entrenched as that in neighbouring jurisdictions.

In Malaysia (eg, Yong Sze Fun (t/a Perindustrian Makanan & Minuman Layang-Layang) v Syarikat Zamani Hj Tamin Sdn Bhd, [2012] 1 MLJ 585 and The Scotch Whisky Association v Ewein Winery (M) Sdn Bhd, [1999] 6 MLJ 280), the Philippines (eg, Levi Strauss & Co v Clinton Apparelle, Inc, 470 SCRA 236 (2005), Philippine Supreme Court) and Thailand (eg, Hackett Limited v Sommal, Supreme Court Decision 201/2548 (2005)), the courts have recognised that owners of well-known marks can suffer damage as a result of their marks being blurred or tarnished. However, as yet no specific legislation has introduced the concept of dilution as a separate ground of action. As such, the owner of a well-known mark must still try to work within the available grounds of protection and dilution is only relevant as a type of damage only where damage must be shown.

In Australia, on the other hand, there is much debate as to whether the statutory protection for well-known marks under the connection test extends to protection against dilution. However, the alternative is that the Consumer Law lends support to protect well-known marks against dilution, although its requirement of “misleading and deceptive conduct” arguably sets a higher benchmark than the standard dilution test.

Conclusion

While companies have embraced the additional protection conferred on well-known marks, it is clear that further clarification is needed in order to balance the competing interests at play. While it is clear that well-known marks are worthy of additional protection, the question remains of how much, before it becomes a case of too much.