Staywell Hospitality Group Pty Ltd v. Sheraton International, Inc

HCMP 2566/2017

[2018] HKCFI 1816

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 2566 OF 2017

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	IN THE MATTER of section 84 of the Trade Marks Ordinance (Cap 559)
	and
	IN THE MATTER of an appeal against the Decision of Ms Finnie Quek acting for the Registrar of Trade Marks given on 19 October 2017 in relation to an opposition filed by SHERATON INTERNATIONAL, INC. to Trade Mark Application No 301643283 for the registration of the trademark
	in Classes 35 and 43 in the name of STAYWELL HOSPITALITY GROUP PTY LTD

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DECISION

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Introduction

1.On 18 June 2010, the petitioner (“Staywell”) made application under the Trade Marks Ordinance (Cap 559) (“TMO”) for the registration of the trademark (“the subject mark”) shown in Annexure 1 to this decision.

2.Registration was sought in Class 35 [1] and Class 43 [2].  On 2 December 2010, the respondent (“Sheraton”), filed a Notice of Opposition.  The hearing took place before Ms Finnie Quek, for the Registrar, (“the Registrar”) on 17 May 2017.  The relevant date for considering the opposition is 18 June 2010.

3.Ms Quek handed down the decision on 19 October 2017, (“the Decision”).  In simple terms the Decision upheld the opposition under section 12(3) TMO in relation to the subject mark in respect of Class 43 only.  Ms Quek dismissed the opposition in relation to Class 35.  As each party had had a measure of success, the costs order was that each party should bear their own costs.

4.On 16 November 2017, Staywell filed an appeal by Originating Summons seeking orders that the Decision upholding the opposition in relation to Class 43 be set aside and the application to register the subject mark in Class 43 be allowed.  The appeal was confined to asserting errors of law in the application of s 12 (3)(a) & (b) TMO.  The appeal sought the costs of both the appeal and the opposition in favour of Staywell.

The basis of an appeal

5.I was referred to a number of authorities [3] in relation to the basic principles in respect of an appeal.  The leading statements are contained in Hong Kong, in Re NAKED [2010] 1 HKLRD 382 (CA) per Rogers VP at §22: 

“ In my view, the correct approach is that the Registrar’s opinion has to be fully and carefully considered. The Registrar has very particular experience. Any departure from the way in which the Registrar exercised his discretion has to be made upon a sound basis after giving full and most careful consideration to the Registrar’s views and reasons. The exercise of discretion by the Registrar should not be overruled simply because the court itself might have come to a different conclusion. Essentially, therefore,a similar approach should be taken to the exercise of discretion by the Registrar as by a judge.”

That statement reflects the decision of the English Court of Appeal in REEF Trade Mark [2003] RPC 5, per Robert Walker LJ [4], 101 at §28: 

“ In this case the hearing officer had to make what he himself referred to as a multi-factorial comparison, evaluating similarity of marks, similarity of goods and other factors in order to reach conclusions about likelihood of confusion and the outcome of a notional passing- off claim. It is not suggested that he was not experienced in this field, and there is nothing in the Civil Procedure Rules to diminish the degree of respect which has traditionally been shown to a hearing officer’s specialised experience …. On the other hand the hearing officer did not hear any oral evidence. In such circumstances an appellate court should in my view show a real reluctance, but not the very highest degree of reluctance, to interfere in the absence of a distinct and material error of principle.”

6.The correct approach was conveniently summarised by DHCJ Manzoni SC in Re Capital Dynamics (unreported, HCMP 2572/2014, 5 June 2015), at §13, in the following terms:

“ The court should interfere with the registrar’s decision only where it is satisfied that the registrar acted on some wrong principle, such as approaching the problem incorrectly, taking into consideration matters which should not have been taken into consideration or omitting to take into consideration matters that should have been considered—see Terumo KK v Beecham Group Plc [1994] AIPR 306. That, it seems to me, as a threshold test which must be satisfied before the Court should thereafter engage upon the underlying merits of the decision.”

7.This is the approach to the appeal that I adopt.

8.Mr Hughes contended that even if there was no individual error or errors of principle, the appeal could be upheld if the decision was “plainly wrong”.  I accept Mr Wong’s submission that while that might be theoretically correct, in the context of this appeal, this submission cannot be upheld.  Mr Wong correctly asserts that the appeal has not been brought on the basis that the decision is “plainly wrong”, but instead on 26 specific grounds in which it is contended that the Registrar “erred in law” or “ought to have made” a different finding.

9.The appellant must be confined to the grounds of his appeal as set out in the Originating Summons and should not be allowed to expand those grounds into some sort of catch all, rolled up, ground which has not in any way been signalled by the Originating Summons to Sheraton.  To allow Staywell to do so would be quite unfair.  That that is so is clear from the following passage in Errea Sport v The Royal Academy of Arts [2016] FSR 24 at §15:

“ I should add that Mr Stobbs argued a different point at the hearing, namely that even if there was no error of principle, the hearing officer was still ‘plainly wrong’ (using the REEF test for an arguable basis of appeal from a multi-factorial decision of this kind) because she had reached a conclusion which no reasonable tribunal could have reached on the facts. So far as this is concerned, it seems to me thatit is not in principle open to an appellant to run such an argument on appeal when it has not been foreshadowed in the grounds of appeal. It involves a wholesale re-arguing of the case, rather than simply the analysis of a single alleged error of law, it would be unfair to the respondent to permit it to be run without notice.”

In my view, the argument is no less valid whether there is a single alleged error of law, or 26 alleged errors of law.

Background facts

10.Staywell is a company incorporated in Australia. Since 1996, it has continually used a “PARK REGIS” mark, reflecting Staywell’s Park Regis Hotel, which opened in 1968, on Park Street, near Hyde Park in Sydney Australia.  The subject mark was chosen to reflect that circumstance, and is said to contain Staywell’s unique and distinctively modified version of the traditional fleur-de-lis design, the English language words, “PARK REGIS”, and the Chinese language wording, in traditional characters: “柏·偉詩酒店”. 

11.The evidence establishes that, prior to 18 June 2010, “PARK REGIS” hotels were operated by Staywell in six locations in Australia.  As at that date, there were no PARK REGIS properties opened outside Australia. On 1 November 2010, Staywell opened a PARK REGIS in Singapore and Dubai, UAE, and in May 2013 in Bali, Indonesia.

12.Opposition to the application was filed by Sheraton.  Sheraton is a subsidiary of Starwood Hotels & Resorts Worldwide Inc (“Starwood”).  Included in Starwood’s trademarked brand names is “ST. REGIS”. The St Regis brand was first used in 1904, in New York City, with the opening of the St Regis New York on 5^th Avenue and 55^th Street, where the hotel remains today. 

13.Sheraton acquired the St Regis New York in 1960, and in 1968 Starwood acquired Sheraton and its property portfolios including the St Regis New York.  The evidence establishes that the ST. REGIS brand has since been expanded to various locations including China (Beijing and Shanghai);French Polynesia; Indonesia; Japan; Mexico; Puerto Rico; Singapore; Aspen, Colorado and San Francisco, California in the USA.  There is no ST. REGIS brand hotel in Hong Kong.

14.Starwood says it has nearly 1,000 properties in approximately 100 countries and territories throughout the world.  It is said that the gross room revenue for ST. REGIS brand properties in 2010 exceeded US$325 million.

15.The “ST. REGIS” mark is registered in various jurisdictions including Bahrain, Chile, France, Hong Kong, Indonesia, Japan, Jordan, Laos, Malaysia, Mexico, New Zealand, Nigeria, Philippines, Qatar and the Russian Federation.  Sheraton is the registered owner of the Hong Kong registered trademarks set out in Annexure 2 as “Respondent’s HK Registered Marks”.  References in the Registrar’s Decision and in this decision to Mark A/Mark B refer to the marks so identified in Annexure 2.

The Decision

16.The Registrar’s Decision, which is comprised in 38 pages, is comprehensive and thorough.  The essential part of the decision, and the part to which Mr Hughes’s submissions were primarily directed, is contained in §§55 – 71, which I set out in full [5].

“ Comparison of marks

55. The average consumer normally perceives a mark as a whole and does not proceed to analyze its various details.

56. The likelihood of confusion or deception is not disproved byplacing the two marks side by side and demonstrating how small is the chance of error in any consumer who places his order for goods (or services) with both marks clearly before him, for orders are not placed, or are not often placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole: De Cordova v Vick Chemical Co (1951) 68 RPC 103 at 106; TWG Tea Co Pte Ltd v Tsit Wing (Hong Kong) Co Ltd (2016) 19 HKCFAR 20, para 46.

57. Each of Mark A and Mark B consists of (i) ‘ST.’, which is an abbreviation for ‘saint’; and (ii) ‘REGIS’.

58. [Staywell] submits that according to Wikipedia (a free encyclopedia), the word ‘Regis’ in Latin stands for ‘of the king’, and ‘St. Regis’ was a French priest (John Francis Regis) recognized as a saint by the Roman Catholic Church.

59. On the other hand, the matter has to be judged through the eyes of the average consumer in Hong Kong of the services in question. The word ‘Regis’ cannot be found in English dictionaries. It is unlikely that the average consumer would be aware of the abovemeaning of the word ‘Regis’ in Latin. He would perceive the word as having no meaning other than as a name. The word ‘Regis’ is inherently distinctive. The average consumer would understand the element ‘ST.’ to be referring to the word ‘saint’ which is usually followed by a name and would be perceived as an attribute of the name. Although the average consumer may not be familiar with the saint John Francis Regis, he would understand the mark ‘ST. REGIS’ to mean a saint by the name ‘REGIS’. Despite the fact that the element ‘ST.’ appears to the left of the element ‘REGIS’, and one would read Mark A and Mark B from left to right, since ‘ST.’ would carry lesser importance than the name following, namely ‘REGIS’. The element ‘REGIS’ would be perceived by the average consumer as the dominant and most distinctive element of Mark A and Mark B.

60. The subject mark consists of (i) the English words ‘PARK REGIS’, (ii) a device, which [Staywell] describes as a fleur-de-lis device, and (iii) the Chinese characters: “柏·偉詩酒店” which is a phonetic transliteration of ‘PARK REGIS’—柏·偉詩—together with 酒店, the Chinese characters for ‘hotel’.

61. The word ‘PARK’ means a public area of land with grass and trees, and would be perceived as highly evocative or even descriptive especially of the subject Class 43 services to indicate the presence of gardens or recreation grounds. The word ‘REGIS’ has no meaning except as a name, and is inherently distinctive.

62. In assessing the distinctive and dominant components in a composite mark, generally speaking words ‘speak louder’ than devices: see Oasis Stores Ltd’s Trade Mark Application [1998] RPC 631, at 644; Tsit Wing (Hong Kong) Co Ltd v TWG Tea Co Pte Ltd [2015] 1 HKLRD 414 (CA) at para 30(a). The average consumer would more readily refer to the source of the goods or services in question by quoting the words in a trade mark than by describing thefigurative element of the trade mark. The average consumer would perceive the device in the subject mark mainly as a decorative element which would not divert his attention away from the textual elements of the mark.

63. [Staywell] submits that the Chinese characters ‘柏·偉詩’in the subject mark, which have no meaning in Chinese other than as a phonetic transliteration of ‘PARK REGIS’, serve to distinguish the subject mark from the ‘ST. REGIS’ marks and to eliminate anylikelihood of confusion, given the overwhelmingly large number ofHong Kong residents who read Chinese. [Staywell] also points out that [Sheraton] owns [Sheraton’s] Chinese Registered marks listed in Annex 2 hereto, and that as evidenced by certain printouts from websites, [Sheraton] has used the marks ‘瑞吉’ and ‘铱瑞’ in connection with ST. REGIS hotels in Mainland China. On the other hand, I note that Simplified Chinese (and not Traditional Chinese) is used on those websites, and where a price appears, it is in RMB. There is no evidence that those websites are targeted at customers in Hong Kong.

64. By contrast, in the promotional leaflets targeted at Hong Kong customers referred to in paragraphs 18 and 19 above which are in both Traditional Chinese and English, the relevant St. Regis hotel is referred to only by its English name and not by any Chinese name.

65. Moreover, the global appreciation assessments in relation to the relative grounds for refusal in section 12 of the Ordinance must be made on the basis of fair and notional use of the earlier and later marks: Kerly’s Law of Trade Marks and Trade Names (15th Edn.), para 9-030; Tsit Wing (CA) (supra) para 35. Fair and notional use of Mark A and Mark B must include use of ‘ST. REGIS’ without any of [Sheraton’s] Chinese Registered Marks. I must therefore compare the subject mark with Mark A and Mark B without regard to [Sheraton’s] Chinese Registered Marks.

66. Although the Chinese characters ‘柏·偉詩’ in the subject mark otherwise have no meaning, even a Chinese-speaking person in Hong Kong on seeing the subject mark would recognize that those characters together is a transliteration of the English words ‘PARK REGIS’.  Those Chinese characters would therefore be perceived as subordinate to the corresponding English words ‘PARK REGIS’.  [sic]

67. Considering the subject mark as a whole, the element ‘REGIS’is the most distinctive and dominant of the elements making up the subject mark, without the other elements being rendered negligible.

68. Visually, Mark A and Mark B are similar to the subject mark insofar as they share the same distinctive element ‘REGIS’. I have not overlooked (i) the element ‘ST.’ in Mark A and Mark B, (ii) the device, the word ‘PARK’ and the Chinese characters in the subject mark, as well as the relative importance of these elements in the respective marks. Taking each of Mark A/Mark B and the subject mark as a whole, in view of the dominance and distinctiveness of the element ‘REGIS’ in each of those marks, I find that the overall visual impression created by the subject mark is similar to that created by Mark A and Mark B.

69. Aurally, the device in the subject mark would unlikely be pronounced, and it is likely that the average consumer would only refer to the subject mark either by the English words ‘PARK REGIS’ or by the Chinese words ‘柏偉詩酒店’ or just ‘柏偉詩’. The average consumer may not refer to the subject mark by both the English text and the Chinese text which would be quite long. Mark A/Mark B would be pronounced in three syllables: ‘saint-re-gis’, whereas the subject mark would be pronounced in three syllables as ‘park-re-gis’ or in Chinese as ‘柏偉詩’ or ‘柏偉詩酒店’. The pronunciation of the subject mark is similar to that of Mark A/Mark B to the extent that ‘saint-re-gis’ and ‘park-re-gis’ share the same second and third syllables, ‘re-gis’ which are similar to the Chinese transliteration of ‘regis’, namely ‘偉詩’.

70. Conceptually, there is a certain degree of conceptual similarity between the subject mark and Mark A/Mark B as they have in common the element ‘REGIS’ in the respective marks, and the Chinese characters in the subject mark, which consists of a transliteration of the English words ‘PARK REGIS’ and a translation of the indistinctive word ‘Hotel’, merely serve to reinforce the concept of the English words. Overall, the subject mark is conceptually similar to Mark A and Mark B.

71. Having regard to the visual, aural and conceptual similarities and differences between the subject mark and Mark A/Mark B and the overall impression created by each of them, I find that the subject mark is similar to Mark A and Mark B.”

The appeal

17.The appeal is confined to the upholding of the opposition and consequent rejection of the application in respect of Class 43.  Sheraton does not cross-appeal in respect of the dismissal of the opposition and consequent acceptance of the application in respect of Class 35.

18.As originally filed, the appeal contained 26 grounds.  However in the course of the hearing at least six of those grounds were abandoned, and a number of others were able to be discussed collectively [6].

The legal principles to be applied

19.I propose to consider first, the legal principles arising from section 12(3) of the TMO, which provides:

“ (3) A trademark shall not be registered if—

(a) the trade mark is similar to an earlier trade mark;

(b) the goods or services for which the application for registration is made are identical or similar to those for which the earlier trade mark is protected; and

(c)   the use of the trade mark in relation to those goods or services is likely to cause confusion on the part of the public.”

20.I am satisfied that Mr Wong has accurately set out in his skeleton the relevant principles in the following terms:

(a)   the coordinate “and” in section 18(3) TMO (and hence similarly section 12(3)) is employed in a cumulative and causal sense.  In other words it is the “similarity” in the marks and goods (or services) in sub-sections (a) and (b) which renders the use likely to cause confusion specified in sub-section (c): see Tsit Wing (CFA, supra, §16[56]), at §§60 – 65;

(b)   when applying section 12(3) TMO, it cannot be erroneous in assessing “similarity” to consider if there be any striking features of the mark or sign which appear “essential” or “dominant”, but doing so without disregarding the entirety of the mark or sign or stripping it of its context: see Tsit Wing at §47;

(c)   in assessing the distinctive and dominant components in a composite mark, generally speaking words “speak louder” than devices: see Oasis Stores (supra, §16[62]) at 644, and Tsit Wing (Hong Kong) Co Ltd v TWG Tea Co Pte Ltd (unreported, HCA 2210/2011, 24 July 2013, at §104(i);

(d)   the fact that a mark consists exclusively of the earlier mark, to which another word has been added, is an indication that the two trademarks are similar: see PP Gappol Marzena Porczyńska v EUIPO/Gap (ITM), Inc [2018] ETMR 3 at §63; “MOVIDA” Trade Mark (“MOVIDA” v “GEODAN MOVIDA”), Decision of OHIM (Second Board of Appeal), R 965/2009-2, 2 March 2010, at §§19 – 20; “SOHO LAB” Trade Mark (“SOHO LAB v LAB”), Decision of OHIM (Second Board of Appeal), R 602/2007-2, 18 January 2008, at §20; “PROTOS PRIUS” Trade Mark(“PROTOS PRIUS” v “PRIUS”), Decision of OHIM (First Board of Appeal), R 1480/2007-1, 5 June 2008, at §§39 – 40 and 44;

(e)   the fact that a word element comes first in a composite mark does not always and automatically confer on it the status of the most distinctive component: ecoblue AG v OHIM [2008] All ER (D) 134 (Nov), at §32; “MOVIDA” Trade Mark, at §§7 and 72; “KUNG FU PANDA” Trade Mark (“KUNG FU PANDA” v “PANDA”), Decision of OHIM (Fourth Board of Appeal), R 128/2010-4, 1 October 2010, at §§23 – 24; “MALTESERS WOPPERS” Trade Mark (“MALTESERS WOPPERS” v “WHOPPERS”), Decision of OHIM (Fourth Board of Appeal), R 806/2007-4, 2 July 2008, at §§23 – 24;

(f)   assessing the similarity between signs is rarely made on a simple matter of arithmetic.  On the contrary, the comparison must be based on the overall impression given by the signs and their perception by the consumer: see “MOVIDA” Trade Mark, at §21.

21.The Court of Final Appeal in Tsit Wing (supra), at §47, set out 11 matters constituting a useful and accurate summary of the appropriate approach in assessing the requirement of likelihood of confusion. Those matters were applied also by the Court of Appeal in Tsit Wing (Hong Kong) Co Ltd v TWG Tea Co Pte Ltd[2015] 1 HKLRD 414, [2015] 1 HKC 403 at §35, per Lam VP, where that court adopted the well-known criteria from Specsavers International Healthcare Ltd v Asda Stores Ltd[2012] FSR (19) 555 at 574 – 575. It is not necessary to repeat those here.

22.Next, Mr Wong relied upon De Cordova (supra, §16[56]), at p 106, for the proposition that the likelihood of confusion or deception is not to be disproved by placing the two marks side-by-side and demonstrating how small is the chance of error.  It is more useful to observe that in most persons, the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail, than by any photographic recollection of the whole.

23.Finally, Mr Wong, reminding me that this was not a passing off case, relied upon the proposition that the global appreciation assessments in relation to the relative rounds must be made on the basis of “fair and notional” use of the earlier and later marks, rather than by taking into account the actual use in the marketplace is required in the equivalent assessments in relation to infringement.  Consequently, it is immaterial that the applicant has used, or intends to continue to use, the applied-for mark in a particular way: see Re Ping An Securities Ltd (2009) 12 HKCFAR 808, at §18; “Peanut Man Device” Trade Mark, Decision of Trade Marks Registry, 18 November 2014 at §§39 – 42; Tsit Wing (CA), per Lam VP, at §§51 – 62; and Kerly’s Law of Trade Marks and Trade Names, 16^th Edn (2018), §§11-030, 11-087 – 11-088.

24.These are the principles that I apply to my consideration of the individual grounds of appeal.

Grounds 2, 3 and 4

25.I accept Mr Wong’s submission that these may be considered together.  Essentially, they constitute an assertion that the Registrar failed to examine the marks as a whole and without dismemberment or excision.

26.In §49 of the Decision, the Registrar set out the 11 matters detailed by the Court of Final Appeal in Tsit Wing (see §21 above).  Reference must also be made to §§55 and 56 of the Decision (see §16 above).  It is plain from those passages of the Decision that the Registrar was well aware that the marks should be compared as a whole.  But as was made clear by the Court of Final Appeal (see §20(b) above), that does not require that the Registrar should not analyse each of the marks in detail to determine the dominant and distinctive parts of the mark. 

27.The analysis complained of merely reflects that part of the exercise which must be carried out.  From that it may be seen from the Decision, §§68 – 70, that the marks have been compared as a whole.  The Registrar was careful not to overlook the element “ST.”, the device, the word “PARK” and the Chinese characters in the subject mark as well is the relative importance of these elements in each of the marks.

28.I accept Mr Wong’s submission that in this respect the Registrar correctly applied the legal principles in arriving at the necessary value judgment.  There is no error of principle.

Ground 5

29.Mr Hughes argued that the Registrar erred in law by failing to apply the test that, in the case of trademarks comprising more than one word, the first word is usually given more prominence by the average consumer.  In respect of some word combinations that is undoubtedly right.  But the fact that a word element comes first in a composite mark does not always and automatically confer on the status of the most distinctive component: see §20(e) above. 

30.I have no doubt at all that the Registrar was quite right to hold that the element “REGIS” would be perceived by the average consumer is the dominant and most distinctive element, because the element “ST.” is merely an attribute of the name, with consequently lesser importance.  Equally, she must have been right to find that notwithstanding that the word “PARK”, although being both evocative and descriptive, and preceding the word “REGIS”, the word “REGIS” formed the most distinctive and dominant element of the subject mark: see Decision §§61 and 67.

31.There is no error of principle in this respect.

Ground 7

32.In applying the principle of “fair and notional use” in this respect, the Registrar did not hold that fair and notional use must exclude both Staywell’s and Sheraton’s Chinese language trademarks.  In fact, she was considering Sheraton’s earlier Hong Kong registered trademarks which were relied upon, which did not have any Chinese characters: see Marks A, B and C, Annexure 2 below.  That was correct as a matter of law.

33.The Chinese element in the subject mark was appropriately addressed when undertaking the comparison exercise: see Decision §§66, 68 – 70.

Grounds 8 and 12

34.These grounds relate to the Chinese element of the subject mark which the Registrar found to be subordinate to the English language component.  I accept Mr Wong’s submission that the Registrar is entitled to make this finding of fact, by forming a view as to which element in the subject mark would impress upon the average consumer and which would be most easily remembered by the average consumer.

35.The Registrar, being bilingual, is uniquely placed to make this finding of fact.  That is particularly so when, on Staywell’s own evidence the first three Chinese characters are purely a phonetic transliteration of the expression “Park Regis”. 

36.There is no error of law.

Ground 10

37.This ground alleges that the Registrar made an error in finding that the element “REGIS” is the dominant element, and disregarded the device component.  The Registrar gave detailed reasons as to why she considered that that word was the dominant element and it is clear that the device was not disregarded: see Decision §§60 – 67.

38.The complaint is as to a finding of fact which the Registrar was entitled to make in the course of her analysis of the subject mark. 

39.There is no error of law.

Ground 11

40.This ground repeats, in different words, the complaint, already made as Ground 10, that the factual finding that the element “REGIS” is the dominant element of Sheraton’s mark constitutes an error of law. No error of law is demonstrated, as the Registrar was perfectly entitled to make a factual finding that the element “ST.” being a mere attribute of “REGIS”, was not the dominant element.

41.I accept Mr Wong’s description of the element “ST.” as being both indistinctive, and merely descriptive of the expression “REGIS”, must mean that the dominant element is the expression “REGIS”.

Ground 13

42.This ground, asserting that it was an error to find that the average consumer, when viewing Sheraton’s earlier mark’s would discount “ST.” and focus on “REGIS” is merely another way of expressing the complaints already made in Grounds 10, 11 and 12.

43.As Rogers VP said in NAKED (see §5 above), special care must be given to the Registrar’s opinion.  The Registrar has given extensive and considered reasons.  That a factual argument can be made to the contrary, and it suggested to the Court that the Court might come to a different conclusion, does not demonstrate an error of law.

Ground 15

44.This ground asserts that an error was made in finding that the way the average Chinese speaking consumer in the Mainland sees trademarks differently from the way the average Chinese speaking consumer in Hong Kong perceives trademarks.

45.In the Decision the Registrar had this to say at §75:

“ Apart from the fact that there is no evidence as to the relevant trademark law in Mainland China, the evidence filed by the parties in these proceedings, including the evidence referred to in paragraphs 30 to 33 above, seem to indicate that the way traders in the relevant field use or refer to marks and the way the average consumer perceive those marks in Hong Kong may not necessarily be the same as in Mainland China. I have to judge the matter on the evidence before me in the context of Hong Kong.”

46.In support of this ground, Mr Hughes relied, in part, on the decision of the Trademark Review and Adjudication Board of the State Administration for Industry and Commerce in China (“the TRAB”), in which the Chinese characters in Sheraton’s mark were relied upon to base a finding that because of the composition, pronunciation and visual impression to the relevant public, the subject mark and Sheraton’s mark do not constitute a similar marks.

47.In the present case, there was no evidence before the Registrar as to Mainland trademark law.  The appropriate legal principle is set out in the Peanut Man Device decision, at §45:

“ There can be no dispute that in the present case no evidence has been adduced as to the relevant legal principles under the trade marklaw in South Korea and whether the same considerations apply here. I have applied the principles referred to in paragraph 19 above [7] and have taken into account, inter alia, the fact that there is a monocle in the Opponent’s Mark which is absent in the subject mark in the context of the overall assessment of the degree of similarity between the subject mark and the Opponent’s Mark. I have come to the conclusion that the two marks are similar to a reasonable (butnot high) degree. I do not consider that the two decisions of KIPO [8] take the Applicant’s case any further.”

48.A similar principle was applied in the Cartoon Network & Devicedecision (O/110/03, 17 April 2003), where, at §62, the English equivalent of the Registrar said:

“ Ms Clark did not make anything of the claims to co-existence in other countries and the decisions in other jurisdictions. I will mention that the findings in other jurisdictions do not assist me. I do not know the full circumstances in these cases. Korea and Australia do not follow the law of the EU and both Korea and Finland have different linguistic regimes which means that the perception of trade marks will be difficult. I have to judge the matter on the evidence before me in the context of the United Kingdom.”

49.These are the principles the Registrar has applied and there is no error of law.  The mere fact that the TRAB made a decision that is contrary to the Registrar’s decision does not mean that the Registrar has made an error of law. 

50.Again (see §35 above), the Registrar is uniquely placed to makethis decision.  I accept Mr Wong’s submission that if Staywell wish to rely onhow the average Chinese speaking consumer in the mainland and perceive themark then it was for Staywell to adduce evidence in support of such contention.  There was no such evidence.

Ground 16

51.This ground says that the Registrar made an error in drawing a distinction between the use of simplified and traditional Chinese characters from the perspective of the average Chinese speaking and reading consumer in Hong Kong.  Again, as with the circumstances described in the previous ground, the Registrar was uniquely placed to make this decision, and it is not for me to attempt to second-guess that decision of fact.

52.In any event, Mr Hughes was unable to point to any evidence at all to support the assertion.

Ground 17

53.This ground asserts that an error of law was made by the Registrar, on the one hand, accepting Sheraton’s evidence of its use of simplified Chinese in connection with Sheraton’s earlier trademarks for the purpose of assessing goodwill in the earlier trademarks, but, on the other hand, rejecting that evidence when assessing the concepts of similarity and likelihood of confusion as between the subject mark and Sheraton’s earlier marks.

54.With respect to Mr Hughes, it appears to me that this ground confuses different elements of the consideration the Registrar was required to undertake. It is correct, as Mr Wong points out, that the Registrar accepted that Sheraton had goodwill in its earlier marks, but that was for the purpose of the section 12(5)(a) ground of opposition, which is not a subject matter of the appeal.  That acceptance was based upon Staywell’s concession, made by its counsel in the skeleton submissions filed before the Registrar.  That is clear from the statement in the Decision at §123:

“ It is not disputed that as at the Application Date, [Sheraton] has some goodwill attached to [Sheraton’s] hotel services in the mind of the purchasing public in Hong Kong by association with [Sheraton’s] HK Registered Marks.”

55.In any event, Mr Wong submits, the Registrar did not rely on the evidence of use adduced by Sheraton in reaching the conclusion under section 12(3). Consequently, he is right to say that it is difficult to see how there could be any error of law in this respect.

Grounds 18, 19, 20, 21, 22 and 23

56.These grounds make an undefined, broad, serial challenge to the conclusion by the Registrar that Staywell’s trademark is similar to Sheraton’s earlier trademarks, visually, aurally, by both English language and Chinese language components, and conceptually.

57.In essence, these grounds are a repetition of the earlier complaints against the factual findings of the Registrar following her analysis, reasoning and value judgement, as set out in the Decision at §§55 – 71 (see §16 above). These are catchall grounds, effectively repeating the challenges already dealt with in respect to similarity.  Staywell may not like the result, but the result does not mean that there has been an error of law.

Grounds 26

58.The Registrar devoted an entire section of the Decision, §§92 – 102, entitled “Likelihood of confusion”.  For the purpose of this ground, the essential paragraphs are:

“ 92. The likelihood of confusion must be appreciated globally, taking account of all relevant factors. The matter must be judged through the eyes of the average consumer of the goods and services in issue who is deemed to be reasonably well-informed and reasonably observant and circumspect. A lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods or services, and vice versa (Canon Kabushiki Kaisha v Metro-Goldwyn-Meyer Inc [1999] RPC 117).

…

99. [Staywell] submits that:

(a) the parties operate their hotels under their respective marks in entirely different segments: the ‘ST. REGIS’ brand is recognized in the travel and tourism industry as a 5 star, luxury brand which is owned by one of the world’s largest hotel and leisure companies operating primarily in the luxury and upscale segments of the lodging industry, whereas the ‘PARK REGIS’ brand is a 3 to 4-star, mid-range brand owned by an Australian hospitality company;

(b) the average lowest rates for [Sheraton’s] ST. REGIS hotels are triple those of [Staywell’s] PARK REGIS hotels—US$479 compared with US$165;

(c) according to the evidence of Mr. Randall Lui, a gentleman with over 42 years of experience in the travel industry, end users have no difficulty in identifying the two different companies; Mr. Lui has never witnessed any issues in the travel arena between the ‘PARK REGIS’ and the ‘ST. REGIS’ brands;

(d) [Sheraton] has not submitted any evidence of actual confusion; although it is trite that the Registrar is entitled to make his own finding of fact regarding likelihood of confusion even absent evidence of actual confusion, the absence of any such evidence is strongly supportive of the overwhelming conclusion that there is no likelihood of confusion.

…

101. The absence of evidence of actual confusion between [Sheraton’s] HK Registered Marks and the subject mark may be due to various reasons. As at the Application Date, neither [Sheraton] nor [Staywell] had any hotel in Hong Kong [9]. In other places, the parties may have been operating at different segments of the lodging industry. On the other hand, in opposition proceedings, the global assessment under section 12(3) of the Ordinance must be made on the basis of notional and fair use of the subject mark and the earlier mark. Although at the Application Date [Staywell’s] PARK REGIS hotels may be in the 3 to 4 star segment of the lodging industry in some jurisdictions, if the subject mark were registered in Hong Kong in respect of the subject services as applied for, [Staywell] would not be restricted by the registration from operating hotels in Hong Kong in the luxury and upscale segment under the subject mark. Likewise, there is nothing in the registration of Mark A that would restrict the owner of Mark A from using Mark A in relation to, for example, hotels in the 3 to 4 star segment. I must make the comparison between notional and fair use of the relevant earlier mark and the mark applied for.”       (My emphasis.)

59.Mr Hughes did not take any exception to the statement of principle in §92.  His argument acknowledges that the question of similarity of goods or services is one of fact.  He said that in the light of the uncontested evidence regarding historical and intended future use of Staywell’s subject mark in respect of 4 and 3 star business focused hotels, as compared to the historical and intended future use of Sheraton’s ST. REGIS Mark in respect of luxury high-end and expensive 5 star hotels, the fair and notional use of the subject Mark did not extend to 5 star hotels and the fair and notional use of Sheraton’s Mark did not extend to 3 and 4 star hotels.

60.First, Mr Hughes’s acknowledgement that the issue was one of fact provides an answer to the appeal.  The facts were for the Registrar to find.  The only errors of principle suggested repeat those which have been already dismissed above, particularly the arguments in relation to the distinction between Simplified and Traditional Characters.

61.Second, I accept Mr Wong’s submission that the Registrar’s finding that Sheraton succeeded under section 12(3) was not based on either goodwill or evidence of use of Sheraton’s earlier marks.  What the Registrar is required to do is to compare Sheraton’s earlier marks as registered, against the subject mark as applied for.  It is in that respect that the Registrar is considering the fair and notional use of the marks, correctly assessing the fair and notional use of the earlier and later marks, rather than by taking into account the actual use in the marketplace.  Mr Wong emphasised that the decision is not to be made on the basis of infringement, (passing off).  That must be correct.

62.Mr Wong was right to say that the fact that the parties may have used their marks in some particular ways in other jurisdictions, or even in Hong Kong, does not mean that those are the only ways the marks might be used in the future.  He reminds me that there is no condition in Staywell’s application in respect of the subject mark restricting it only to using the mark in relation to hotels in the mid-sized 3 to 4 star segment.

63.In §102 the Registrar said:

“ Moreover, I accept [Sheraton’s] submission that it is common for large hotel chains to operate differently branded hotels carrying different logos, united only by the use of a common denominator intheir names; the signals to the public that the various hotels, though pitched at different segments of the market, are economically linked. For example, according to [Sheraton’s] evidence referred to in paragraph 20 above, in addition to its GRAND HYATT and HYATT REGENCY hotels which are large high-priced hotels, the Hyatt Hotels Corporation has also used the HYATT brand for its PARK HYATT hotels which are mid-sized hotels.”

64.Mr Hughes complained that the Registrar erred in this respect inengaging in an exercise of speculation leading to the conclusion that Sheratonmight in future commence using its “ST. REGIS” mark in the 3 – 4 star business hotel sector and Staywell might in future commence using the subject mark in the luxury hotel sector.  He said the evidence was incontrovertible that each had operated in the separate sectors.

65.Again in this respect, the submission fails to recognise that the step being taken by the Registrar was simply part of the process in comparing Sheraton’s earlier marks as registered, against the subject mark as applied for.  The analogy was used only to demonstrate that it is common for large hotel chains to operate differently branded hotels carrying different logos, united only by the use of a common denominator in their names.

66.I am satisfied that no error of law in this respect has been established.

Disposal

67.For the foregoing reasons I am satisfied that none of the grounds upon which the appeal has been brought establish an error of law or principle which would justify the interference in the Decision by the Registrar on the part of the Court.  The Appeal must stand dismissed.

Costs

68.Costs must follow the event.  Staywell must pay Sheraton’s costs of the appeal to be taxed on a party and party basis.

Mr Sebastian Hughes, instructed by FitzGerald Lawyers, for the petitioner

Mr Philips B F Wong, instructed by Eccles & Lee, for the respondent

Annexure 1

The subject mark: 

Annexure 2

Respondent’s HK Registered Marks

Trade Mark	Trade Mark No.	Registration Date	Class No.	Services
(“Mark A”)	199913411AA 1	19 June 1998	41	Provision of facilities for musical entertainment and singing; casino and gaming services; all included in Class 41.
			43	Hotel, motel, resort, cocktail lounge, restaurant, bar, cafeteria, canteen and food and beverage preparation services and catering services; all included in Class
(“Mark B”)	300704899	21 August 2006	36	Insurance; financial affairs; monetary affairs; real estate affairs; real estate brokerage, real estate and land acquisition, real estate equity sharing, namely,managing and arranging for ownership of real estate, condominiums, apartments;real estate investment, real estate management, real estate time sharing and leasing of real estate and real property, including condominiums and apartments.
			37	Real estate development services.
(“Mark C”)	301143558	19 June 2008	43	Temporary accommodation; hotel services, motel services, motor inn services, resort services; providing meeting and event facilities; restaurant, bar, lounge,cocktail lounge, cafe and cocktail services; services for providing food and drink; hotel concierge services; providing facilities for meetings and functions;providing facilities for conferences and exhibitions; the operation of hotels and resorts, restaurants and bars.

¹ Trade Mark Nos. 199913411 and 199913412 were merged to become Trade Mark No. 199913411AA on 13 February 2015.

“Mark A”	“Mark B”	“Mark C”

Sheraton’s Chinese Registered Marks

Trade Mark	Trade Mark No.	Registration Date	Class Nos
	200201808AA	4 November 2000	41
			42
	301873503	29 March 2011	36
			39
			41
			43
	302519622	7 February 2013	36
	301712394	10 September 2010	43
			44