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Battle of the famous Mark “LEXUS” in Hong Kong
1 April 2014

On 19 March 2014, the Registrar of Trade Marks in Hong Kong dismissed the opposition application by the owner of well known automobile maker “LEXUS” against a Malaysian biscuit brand also named “LEXUS”. The latter mark was filed as a series of two marks by Munchy Food Industries Sdn Bhd (“Munchy”). This decision is highly significant to well known trademark owners and the Registrar’s detailed reasoning will likely be followed in future similar opposition cases.

Background

Munchy is a biscuit manufacturer in Malaysia. In August 2008, Munchy filed an application for registration of a series of the following two marks (“Subject Marks”) in class 30 (including biscuits) :-

After the Subject Marks were published in November 2008, Toyota filed a notice of opposition to Munchy’s application. Toyota is the owner of the mark “LEXUS” (in classes 6, 9, 12, 14, 16, 18, 22, 25, 28, 34, 36, 37, 39 and 42) (“Opponent’s Marks”) and a well-known brand of luxury automobiles.

Grounds of Opposition

Toyota raised 3 grounds of opposition, relying on sections 12(4), 12(5)(a) and 11(5)(b) of the Trade Marks Ordinance (“Ordinance”).

Toyota argued that the public would likely be confused by the Subject Marks and be misled into thinking that Munchy’s goods are associated with Toyota. It was also alleged that the use of the Subject Marks would take unfair advantage of the Opponent’s Marks and be detrimental to Toyota’s business.

Munchy’s Denial

Munchy denied that the Opponent’s Marks had acquired a well-known status in goods or services other than automobiles. It averred that Munchy’s goods of interest are entirely different from those covered by the Opponent’s Marks and that biscuits under the brand “LEXUS” are one of the core products of Munchy which have been sold extensively around the world.

Opposition under section 12(4)

For an opposition under section 12(4) to succeed, the following elements must be established :-

(a) the applied-for mark is identical or similar to the earlier mark of the opponent;

(b) the earlier mark is entitled to protection under the Paris Convention as a well-known trade mark; and

(c) the use of the applied-for mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trade mark.

The Registrar decided that the Subject Marks were identical to one of the Opponent’s Marks and (a) above was met. The Registrar then considered the decision of the European Court of Justice in Intel Corporation Inc v CPM United Kingdom Ltd [2009] R.P.C. 15 (“Intel Case”) which discussed a European Council Directive equivalent to section 12(4) of the Ordinance.

In the Intel case, it was held that an opponent must show actual and present injury to its mark caused by the applied-for mark or, alternatively, a serious likelihood that such an injury will occur in the future. In this case, the Registrar found no evidence of present or future injury caused by the Subject Marks since all the evidence filed by Toyota only related to the use and reputation of the Opponent’s Marks. Thus, Toyota’s claims of detriment or unfair advantage were nothing more than bare assertions and mere speculations. The Registrar concluded that Toyota had failed to prove the necessary injury required under limb (c) above and thus failed in its opposition under section 12(4).

Opposition under section 12(5)(a)

Under section 12(5)(a), the question is whether the normal and fair use of the Subject Marks in Hong Kong is liable to be prevented by an action of passing off.

Emphasis was placed on the House of Lords’ decision in Reckitt & Coleman Products Ltd v Borden Inc [1990] R.P.C. 341, in which the “Classical Trinity” has to be proved by the plaintiff in a case of passing off, namely (i) goodwill or reputation attached to its goods or services; (ii) misrepresentation by the defendant to the public; and (iii) the plaintiff suffers or is likely to suffer damage by the defendant’s misrepresentation.

As to (i), the Registrar was not satisfied that the Opponent’s Marks had acquired a reputation for goods other than automobiles as the majority of evidence filed by Toyota related only to the sale and promotion of cars.

As to (ii), the Registrar noted that Munchy’s biscuits bearing the name “LEXUS” have been sold locally in Hong Kong since 2001, yet Toyota could not show actual confusion or sufficient likelihood of confusion on the part of the public. In his view, the general public in Hong Kong would not regard an automobile manufacturer and a food company as the same and would not be confused or misled into believing that the food products from Munchy are associated with Toyota. Therefore, no misrepresentation would occur.

In view of the 2 decisions above, Toyota’s claim of passing off was unsuccessful.

Opposition under section 11(5)(b)

Under section 11(5)(b), a trade mark shall not be registered if the application for registration is made in bad faith, which means acting dishonestly or behaving in a manner falling short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area of trade.

There was no evidence to support Toyota’s allegation that Munchy had filed the application of the Subject Marks in bad faith and the Registrar also declined to make such an inference on the facts. He noted that the Opponent’s Marks had no reputation and were not used in respect of biscuits and confectionary in class 30. He also noted that Munchy and Toyota operate in different fields of trade and are not direct competitors. Further, Munchy has a legitimate reason to seek registration of the Subject Marks since it had been selling these biscuits in Hong Kong for several years.

Hence, Toyota failed to establish bad faith in its opposition case under section 11(5)(b).

Conclusion

As none of the grounds relied upon by Toyota were made out, its opposition to the registration of the Subject Marks was dismissed with costs awarded to Munchy. The decision highlights the importance of steps needed to be taken by well known trademark owners to protect their marks against registration of similar or even identical marks in other classes.

If you have any question on the above eNews or on registration, enforcement or protection of intellectual property rights, experience lawyers in our Intellectual Property department will be pleased to assist you.

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