Basic Trademark v Karelia Tobacco

Author:

Regina Quek
One Legal
Singapore

Basic Trademark is a member of the BasicNet group, which manufactures sports and recreational wear under various brands including KAPPA and ROBE DI KAPPA. Basic owns registrations for various marks such as KAPPA, ROBE DI KAPPA.

Basic Trademark SA v Karelia Tobacco Company Inc was a trade mark opposition by Basic to the application by Karelia Tobacco Company, a cigarette manufacturer originating from Greece, to register a mark KAPPA in Class 34 for "Processed or unprocessed tobacco, smokers' articles, tobacco products, cigarettes, cigars, cigarillos, tobacco, cigar and cigarette holders, cigars and cigarette cases, ashtrays, cigar clippers, tobacco pipes, pouches for tobacco, cigarette lighters, pocket devices for rolling cigarettes, cigarette papers, humidors for tobacco products, matches".

At the hearing held before the Principal Assistant Registrar of the Registry of Trade Marks, Intellectual Property Office of Singapore (PAR) on August 23 2011, Basic proceeded with the opposition on the grounds of sections 8(2)(b), 8(4)(b)(i) and 8(7)(a) of the Singapore Trade Marks Act (Cap. 322, Rev Ed 2005).

Section 8(2)(b) of the Act provides that:

A trade mark shall not be registered if because…it is similar to an earlier trade mark and is to be registered for goods or services identical with or similar to those for which the earlier trade mark is protected, there exists a likelihood of confusion on the part of the public.

Section 8(4)(b)(i) of the Act provides that:

Subject to subsection (5), where an application for registration of a trade mark is made on or after 1st July 2004, if the whole or an essential part of the trade mark is identical with or similar to an earlier trade mark, the later trade mark shall not be registered if –

(a) the earlier trade mark is well known in Singapore; and

(b) use of the later trade mark in relation to the goods or services for which the later trade mark is sought to be registered…would indicate a connection between those goods or services and the proprietor of the earlier trade mark, and is likely to damage the interests of the proprietor of the earlier trade mark.

An "earlier trade mark" is defined in section 2(1) of the Act as follows:

(a) a registered trade mark or an international trade mark (Singapore), the application for registration of which was made earlier than the trade mark in question, taking account (where appropriate) of the priorities claimed in respect of the trade marks; or

(b) a trade mark which, at the date of application for registration of the trade mark in question or (where appropriate) of the priority claimed in respect of the application, was a well known trade mark, and includes a trade mark in respect of which an application for registration has been made and which, if registered, would be an earlier trade mark by virtue of paragraph (a) subject to its being so registered.

Section 8(7)(a) of the Act provides that:

A trade mark shall not be registered if, or to the extent that, its use in Singapore is liable to be prevented…by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trade mark or other sign used in the course of trade.

By way of her Grounds of Decision dated November 18 2011, the PAR held that Basic's opposition succeeded on Sections 8(4)(b)(i) and 8(7)(a) of the Act.

The decision on Section 8(4)(b)(i)

Karelia conceded that the Kappa Mark was identical to the KAPPA word mark(s) registered by Basic.

The PAR found that Basic's KAPPA marks were well known to all actual and potential consumers in Singapore of the goods to which Basic's KAPPA marks were applied.

In coming to this conclusion, the PAR took into account, in particular, Basic's sales revenues in Singapore from 1998 to 2008, extensive sports sponsorships (in particular football sponsorship), and worldwide marketing and advertising expenditure from 1999 to 2008. The PAR also noted the comment by the Court of Appeal in Novelty Pte Ltd v Amanresorts Ltd and another [2009] SGCA 13 that it is not too difficult for a trade mark to be regarded as well known in Singapore. She pointed out that the fact that a mark is used in several industries does not per se mean that it cannot be well known in Singapore.

The PAR also found that use of the Kappa mark would indicate a confusing connection between the goods claimed by Karelia, and Basic.

In this regard, the PAR noted that tobacco companies have been known to expand their businesses into the area of fashion apparel and accessories, and referred to the case of Hugo Boss AG v Reemtsma Cigarettenfabriken GmbH [2009] SGIPOS 7. The PAR also noted that there is a close connection between tobacco and sports in terms of tobacco companies running advertisements at sports events.

Finally, the PAR found that Basic's interests were likely to be damaged in view of the confusing connection.

She took into account Basic's longstanding investment in sports sponsorship, which had built up an image for Basic's KAPPA marks that was in line with health and fitness. In view of the increasing rejection of tobacco products and smoking by sports and sporting events, and the essentially inimical concepts of sports as compared to tobacco products and smoking, the PAR concluded that Basic was likely to suffer damage in terms of damage to: (i) the image of Basic's KAPPA marks; (ii) Basic's core business in sporting gear; and (3) Basic's desirability as a sports sponsor, which would in turn affect its ability to further its commercial interests through sports sponsorship.

The decision on Section 8(7)(a)

The PAR found that Basic possessed goodwill in the KAPPA mark. In coming to this conclusion, the PAR took into account, in particular, Basic's sales revenues in Singapore from 1998 to 2008, advertising expenditure in Singapore from 2004 to 2008, and extensive sports sponsorships.

In view of her conclusion under the Section 8(4)(b)(i) ground of objection that there was a confusing connection likely to damage Basic's interests, the PAR similarly found that there would be misrepresentation likely to cause damage to Basic's goodwill should there be use of the Kappa mark.

The decision on Section 8(2)(b)

On Section 8(2)(b), the PAR confirmed that the better test for likelihood of confusion was the three-step approach used in British Sugar plc v James Robertson & Sons Ltd [1996] RPC 281, and that this test was applicable with regards to Section 8(2) of the Act.

For the first step of determining whether the marks were similar, the PAR reiterated that the Kappa mark was identical to Basic's KAPPA marks visually, aurally and conceptually.

However, the test failed at the second step of similarity of goods or services. The PAR applied the test for determining similarity of goods set out in the British Sugar case, and noted that Karelia's goods were specific products used for smoking and with smokers as their target market, while the users and uses of Basic's goods were clearly different. Accordingly, the PAR concluded that the goods could not be considered as competitive and the ground of opposition under Section 8(2)(b) of the Act failed.

Notwithstanding the above, in view of the PAR's decision on Sections 8(4)(b)(i) and 8(7)(a) of the Act, Karelia's application to register the Kappa mark was refused.

This article first appeared on WTR Daily, part of World Trademark Review. For further information, please go to www.worldtrademarkreview.com