In a decision rendered by the Intellectual Property Office of Singapore (“IPOS”), it was held that United U-Li Projects Pte Ltd’s application for invalidation succeeded on two out of four grounds pleaded in their case whilst cross-invalidation by Tan Buck Hai was previously dismissed.
(A) Who are the parties involved in this case?
(a) United U-Li Projects Pte Ltd (“Applicant” or “U-LI Projects”)
The Applicant is the registered proprietor of a series of “U-LI” marks (“Applicant’s Earlier Mark”) in Singapore in Class 6. The Applicant is one of the two authorised distributors of “U-LI” products in Singapore and had been exclusively authorised by the original owner of the “U-LI” brand to register and own the “U-LI” trade mark in Singapore.
(b) Tan Buck Hai (“Respondent”)
The Respondent is the registered proprietor of the “U-LI” mark (“Subject Mark”) in Singapore in Class 9. The Respondent is closely associated to United U-Li Marketing Pte Ltd, one of the two authorised distributors of “U-LI” products in Singapore
(B) What actually happened?
The “U-LI” mark originated from Malaysia, used for a brand of cable management and support system designed, manufactured and sold by a Malaysian company called United U-LI (M) Sdn Bhd (“U-LI Malaysia”), which is a wholly owned subsidiary of United U-LI Corporation Bhd, a public-listed company in Malaysia and the holding company of the U-LI group of companies (“U-LI Group”). U-LI Malaysia is the registered proprietor of the “U-LI” trade mark since February 2001.
In order to market and distribute its goods in Singapore, U-LI Malaysia has relied on the Applicant (U-LI Projects) and United U-LI Marketing Pte Ltd (“U-LI Marketing”) as its authorised distributors. Undisputed by the Applicant, the Respondent claimed that he possesses control of U-LI Marketing. The Respondent submitted that he was initially a director and shareholder of U-LI Marketing when it first incorporated but due to personal circumstances he had to give up on both positions. Notwithstanding that, he continued to work as an employee in U-LI Marketing and provided evidence that he remained a key person responsible for dealing with U-LI Malaysia for the distribution and sale of the U-LI products in Singapore.
At the time of incorporation of U-LI Marketing was another director and shareholder, Clement Ng (“Ng”), who is now the director and shareholder of the U-LI Projects. Ng had resigned from U-LI Marketing after incorporating United U-LI Projects Pte Ltd (the Applicant in the present case). As part of the U-LI Group’s organisational restructuring in 2009, it was decided that the distribution networks would be demarcated such that U-LI Projects would focus on the developer’s projects whilst U-LI Marketing would focus on the dealer market in Singapore. Further evidence submitted showed that the Respondent was never appointed in his personal capacity as an agent or authorised distributor of the U-LI products in Singapore.
Prior to the present case, both parties have come before the IP Adjudicator (“Judge”) one year ago on a similar trade mark invalidation application involving the trade mark sign “U-LI”, but the difference in two cases is that in the earlier case it was the Respondent whom applied to invalidate a series of trade marks involving the sign “U-LI” belonging to the Applicant. As the cross-invalidation application was filed by the Respondent later than the present one filed by the Applicant, the cross-invalidation by the Respondent was dismissed and the appeal against the decision was subsequently withdrawn. The Applicant’s series of trade mark therefore remains registered.
In the present case, the Applicant had applied for a declaration of invalidity on the following grounds:
- earlier trade mark under Section 8(2)(a) and (b) read with Section 23(3)(a)(i);
- passing off under Section 8(7)(a) read with Section 23(3)(b);
- bad faith under Section 7(6) read with Section 23(1); and
- fraud and misrepresentation under Section 23(4) of the Trade Marks Act (Cap 332, 2005 Rev Ed) (“the Act”).
(C) What is/are the issue(s) in dispute?
(a) Whether the Subject Mark can be declared invalid under Section 8(2)(a) and (b) read with Section 23(3)(a)(i) of the Act;
(b) Whether the Subject Mark can be declared invalid under Section 8(7)(a) read with Section 23(3)(b) of the Act;
(c) Whether the Subject Mark can be declared invalid under Section 7(6) read with Section 23(1) of the Act; and
(d) Whether the Subject Mark can be declared invalid under Section 23(4) of the Act.
(D) Holding
Having considered all pleadings, evidence and submissions, the Judge found that whilst the Applicant did not make out two grounds of invalidation, it could however succeed on the relative ground of Section 8(2)(a) and on the absolute ground under Section 7(6).
(E) Rationale for holding
(a) The basis under Section 8(2)(a) and (b) read with Section 23(3)(a)(i) of the Act is the likelihood of confusion with an earlier registered trade mark that is identical or similar, covering goods or services that are identical or similar. The earlier trade mark in the present case is the series of “U-LI” marks registered by the Applicant as the Applicant’s mark was registered on 8 April 2011 whilst the Subject Mark was only registered on 19 September 2013. The Judge highlighted from Section 23(3)(a)(i) that the registration of a trade mark to which the conditions in Section 8(2)(a) and (b) apply may be declared invalid unless it can be shown that the proprietor of the earlier trade mark has consented to the registration. The Applicant in this case tendered evidence which showed that neither U-LI Projects (proprietor of Applicant’s Earlier Mark) or U-LI Malaysia (original owner of the “U-LI” mark in Malaysia) had been aware or had consented to the Respondent’s registration of the Subject Mark. Further, the Applicant asserted with supporting documentary evidence that they were the ones who had been exclusively authorised by U-LI Malaysia to register and own the “U-LI” trade mark in Singapore. On this point, the Respondent sought to argue that U-LI Malaysia had never informed him about the Applicant being the sole authorised entity in Singapore to register the trade mark on its behalf. The Respondent further argued that U-LI Malaysia never behaved as an aggrieved trade mark owner would as it had never confronted the Respondent directly and even continued to do business with him. However, the Judge was not persuaded by the arguments put forth by the Respondent and found it clear that the Respondent did not have the consent from the Applicant or U-LI Malaysia to register the Subject Mark. The judge opined that U-LI Malaysia may well have other commercial or economic reasons for continuing to trade with U-LI Marketing but that in itself did not mean it had consented or acquiesced to the registration of the Subject Mark.
Moving on to the test for similarity and likelihood of confusion for the ground of invalidation under Section 8(2)(a) and (b) of the Act, the Judge pointed out the step-by-step approach set out in Staywell Hospitality Group Pty Ltd v Starwood Hotels & Resorts Worldwide, Inc and another and another appeal [2014] 1 SLR 911 which requires a systematic assessment of the three requirements of (i) similarity (or identity) of marks; (ii) similarity (or identity) of goods or services; and (iii) likelihood of confusion arising from the two similarities. Applying the test to the present case, the Judge found the analysis to be straightforward as the Subject Mark appears to be identical to one of the Applicant’s Earlier Mark (in series) in the sense that both marks are made of “U-LI” in almost the same font type and arranged in the same order. Whilst the Respondent did not register a series of marks akin to the Applicant, the Judge found there to be no significant differences in the marks and that they are undeniably identical whether visually, aurally or conceptually. With regard the goods which both marks cover, the Judge found that although the Subject Mark was registered in Class 9 whilst the Applicant’s Earlier Mark was registered in Class 6, the two classes are highly similar in description, save that Class 6 applies to non-electrical cable management whilst Class 9 covers electrical cable management systems. The Judge further noted that whilst the product specifications are registered in different classes, these products in question were described consistently such that the nature of the goods and its notional fair use to which both marks can be applied are essentially the same. Finally, the Judge was persuaded on the issue of likelihood of confusion that it was already clearly demonstrated in the evidence tendered by the Applicant wherein customers had wrongly indicated in their purchase orders the name “United U-Li Marketing Pte Ltd” instead of “United U-LI Projects Pte Ltd”.
Having considered his findings based on the step-by-step approach, the Judge found that the Subject Mark is identical to the Applicant’s Earlier Mark and therefore the Applicant succeeds on the ground of invalidation under Section 8(2)(a).
(b) The next ground of invalidation pleaded by the Applicant is based on the tort of passing off under Section 8(7)(a) read with Section 23(3)(b) of the Act. The well-established law here is set out in Singsung Pte Ltd v LG 26 Electronics Pte Ltd (trading as L S Electrical Trading) [2016] 4 SLR 86 which requires an examination of three key elements of goodwill, misrepresentation and damage. The Applicant has pleaded in the present case that the registration of the Respondent’s Subject Mark has damaged or will damage the Applicant’s goodwill as the public will likely to be confused between the Subject Mark and the Applicant’s mark. Considering that the Applicant has been trading under the U-LI brand since 2009 and that financial reports and publicity materials reflected the revenue obtained from the sale and promotion of the U-LI products, the Judge found that the Applicant’s goodwill was clearly established. Moving on to the next element of misrepresentation, the Judge noted that the threshold question of distinctiveness ought to be considered first. As it was the undisputed position of the parties that the products bearing the “U-LI” mark originated from U-LI Malaysia, the Judge found that the threshold requirement of distinctiveness could not be met since the Applicant is not an exclusive distributor of the U-LI products in Singapore. Since the element of misrepresentation could not be met, it followed that the Judge did not find it necessary to consider the last element of damage.
The ground of invalidation under Section 8(7)(a) read with Section 23(3)(b) as pleaded by the Applicant therefore failed.
(c) The Applicant further pleaded for the Subject Mark to be declared invalid under Section 7(6) read with Section 23(1) of the Act. At the outset, the language of Section 7(6) provides clear mandate that an application to register a trade mark will be invalidated if it was made in bad faith. In this present application, the Applicant asserts that the Respondent’s bad faith conduct lies in his wrongful claim of proprietorship to the Subject Mark even though he knew that he was not authorised to register the mark. The Respondent denied that he had acted in bad faith, stating that he had steered clear of the Applicant’s path since he had registered the Subject Mark in Class 9 instead of Class 6 which the Applicant’s mark was registered in. The Respondent further argued that the “U-LI” mark had become well known and long-associated with the Respondent through his personal efforts in promoting U-LI products in Singapore over many years. The Judge noted the clear position adopted by the Respondent was one wherein he attributed his entitlement to ownership of the U-LI mark to his long-time efforts in promoting the products bearing such a mark. The Judge however was unable to find any evidence which endorsed the Respondent’s belief and highlighted in his decision that no matter how hardworking in promoting the employer’s intellectual property rights, an employee does not thereby acquire rights to them. In any case, the Judge noted that there was no evidence which suggested that the authorised distributors of the U-LI products had themselves acquired any rights to the U-LI mark. The Judge further noted that even if the Respondent was initially misguided or perhaps totally ignorant over his entitlement to the intellectual property rights of the U-LI mark, there were sufficient aspects of his conduct which reflected that his intention was not in good faith. Firstly, the Judge questioned the intention behind the Respondent’s initial decision to use his company, United U-LI Impex Pte Ltd to register the Subject Mark instead of registering it in his own personal capacity, which he would have if he was so clearly adamant to tie his personal efforts and association to the “U-LI” mark. Secondly, the Judge pointed out that if the Respondent had thought himself to be entitled to the “U-LI” mark, he had contrary to that entitlement done nothing about the Applicant’s registration when he had found out of the Applicant’s mark registered in Class 6, which the Judge opined that the Respondent must have thought that such registration was wrongful as against his alleged entitlement. Finally, the Judge found the most telling conduct to be the fact that at no point in time did the Respondent seek to clarify the position with U-LI Malaysia, the original owners of the “U-LI” brand. The Judge opined that the Respondent’s lack of ascertaining clarification from U-LI Malaysia reflected that the Respondent chose to keep his head stuck in the sand instead of facing up to the truth.
All in all, the Judge was persuaded and found that the Respondent’s behaviour would not have been commercially acceptable and would have amounted to bad faith when considered by reasonable and experienced persons in the trade. The Applicant therefore succeeds in the ground of invalidation under Section 7(6).
(d) The final ground of invalidation relied by the Applicant is based upon fraud and misrepresentation under Section 23(4) of the Act. Initially, the Subject Mark was registered by “U-LI Impex Pte Ltd” which turned out to be a typographical error as the correct company name should have been “United U-LI Impex Pte Ltd”, a company incorporated by the Respondent. The Applicant sought to rely on the fact that the Subject Mark was originally registered in the name of a “U-LI Impex Pte Ltd” which is an entity that did not exist at all at that time. The Applicant argued that the Subject Mark was obtained by a misrepresentation and cannot be valid mark as it could not be possible for a trade mark to vest in an entity which does not exist. The Respondent’s counter for this point was that it was simply a typographical error and the register of trade marks had been subsequently corrected to reflect the full name of “United U-LI Impex Pte Ltd”, although in correcting this error, he subsequently registered a full transfer of the ownership of the Subject Mark from United U-LI Impex to himself.
Back to the invalidation basis in the present case, the Judge noted from the precedent of Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR(R) 1073 that in order to establish the ground of fraud or misrepresentation under Section 23(4) of the Act, the Applicant must identify the untrue representation made by the Respondent and prove that there was consequential reliance by the Registrar in accepting the original registration. The Judge found that it was clear from the fact of the facts that the name used in the original registration was a result of typographical mistake and there is no evidence to show that there was any intention on the Respondent’s part to mislead the Registrar into accepting the original registration.
The Judge therefore found that the Applicant failed on the ground of invalidation under Section 23(4).
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This article is written by Renee Xavier from Alpha & Omega.
This article does not constitute legal advice or a legal opinion on any matter discussed and, accordingly, it should not be relied upon. It should not be regarded as a comprehensive statement of the law and practice in this area. If you require any advice or information, please speak to a practicing lawyer in your jurisdiction. No individual who is a member, partner, shareholder or consultant of, in or to any constituent part of Interstellar Group Pte. Ltd. accepts or assumes responsibility, or has any liability, to any person in respect of this article.