Re Guangdong Foodstuffs Import and Export (Group) Corporation

HCMP 2598/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2598 OF 2003

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Coram: Hon Barma J in Court

Date of Hearing: 26 November 2003

Date of Judgment: 12 February 2004

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J U D G M E N T

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1.This is an appeal by Guangdong Foodstuffs Import & Export (Group) Corporation ("GDF") against the decision of the Registrar of Trade Marks ("the Registrar") dated 29 May 2003 refusing to register a trade mark which GDF had applied to have registered in the Register of Trade Marks ("the Register").

2.GDF's application for registration of the subject mark was made on 3 August 1999. Thus, although the hearing of its application before the Registrar took place on 5 May 2003, after commencement of the new Trade Marks Ordinance (Cap. 559) on 4 April 2003, that application (and this appeal) fall to be dealt with under the provisions of the old Trade Marks Ordinance (Cap. 43) (which I shall refer to as "the Ordinance"), by virtue of the transitional provisions contained in the new Ordinance, and in particular paragraph 10(1) of Schedule 5 thereof.

3.GDF is a Chinese state enterprise which was set up in the mid 1950s on the Mainland. Until the mid 1990s, GDF was effectively the sole exporter of foodstuffs and rice wines produced in Guangdong province, there being only one other company (itself formerly a branch company of GDF) which was licensed to export rice wines produced in Guangdong province. The evidence which was relied upon in support of GDF's application shows that, since the 1950s, GDF has exported its canned foods, soya sauces and rice wines to overseas markets, including Hong Kong. That evidence also shows that GDF is also the owner of the well known trademarks "珠江橋" in Chinese, "Pearl River Bridge" in English and an oval-shaped logo depicting a bridge straddling a river in a city, which it has, since the late 1950s, applied to canned foods and rice wines which it produces.

4.It appears that in the mid 1990s, GDF decided to introduce an additional line of products for export to overseas markets under a different trade mark - that is the trade mark which was the subject of this appeal. A representation of the subject mark, which consists of the Chinese characters "御品" in a somewhat stylised form against a square background set in an eight-pointed device, with the romanised spelling of the characters, YUPIN, in English letters alongside the top right hand corner of the device, is as follows:-

It was, I think, common ground that the meaning of "御" is "related to the emperor" or imperial, royal, and that "品" is capable of a number of meanings, including article or object, grade or type and nature or quality. Taken together, they connote a product of imperial, or the highest, quality - goods which could be described as "fit for a king".

5.GDF has already registered the subject mark as Trade Mark No. B06795 of 1998 in Class 29 in respect of canned foods, canned meat, canned fish, canned poultry and game and canned fruits and vegetables. This registration was effected on 9 November 1998 following an application which had been made in 1995. It is subject to the restriction that its registration gives no right to the exclusive use, separately, of the two Chinese characters "御" and "品".

6.By its present application, GDF sought registration of the subject mark in Class 33 in respect of alcoholic beverages other than beers. It is acknowledged by GDF that it has not so far actually used the subject mark on alcoholic beverages which it produces, but it is said in its evidence that it intends to use it in respect of rice wines which it produces, once registration is obtained.

7.GDF's application was for registration in Part A of the Register pursuant to section 9 of the Ordinance. The application was initially refused in correspondence, despite an offer by GDF to disclaim exclusive rights in the two Chinese characters individually (thus bringing the application into line with the existing registration under Class 29 in respect of canned foods). GDF then sought a hearing of its application pursuant to Rule 18 of the Trade Mark Rules, and this hearing took place on 5 May 2003.

8.Following the hearing, the Registrar concluded that the subject mark should not be registered in Part A, for the reasons which are set out in paragraphs 17 and 18 of her decision. Having done this, the Registrar went on to consider whether or not the subject mark should be registered in Part B of the Register under section 10 of the Ordinance, and concluded that it should not be registered under Part B either, for the reasons set out in paragraphs 21 to 33 of her decision. In this appeal, GDF no longer contends that the subject mark should be registered in Part A of the Register, and its appeal is confined to seeking an order for the registration of the subject mark in Part B of the Register.

9.Section 10 of the Ordinance provides, so far as material:-

"	(1)	A trade mark relating to goods to be registrable in Part B of the register must be capable, in relation to the goods in respect of which it is registered or proposed to be registered, of distinguishing goods with which the proprietor of the trade mark is or may be connected in the course of trade from goods in the case of which no such connexion subsists, either generally or, where the trade mark is registered or proposed to be registered subject to limitations, in relation to the use within the extent of the registration."
	...
"	(2)	In determining whether a trade mark is capable of distinguishing as aforesaid the tribunal may have regard to the extent to which -
		(a) the trade mark is inherently capable of distinguishing as aforesaid; and
		(b) by reason of the use of the trade mark or of any other circumstances, the trade mark is in fact capable of distinguishing as aforesaid."

10.As is made clear by section 10(2), a trade mark may be capable of distinguishing goods in respect of which it is proposed to be registered either because it is inherently capable of distinguishing such goods, or because (notwithstanding that the mark is not so inherently capable), it is in fact capable of distinguishing, either by reason of use of the mark, or by reason of "any other circumstances".

11.The Registrar concluded that the subject mark lacked the inherent capability to distinguish since she considered that the words "御品" were laudatory and descriptive of the quality of the goods, and that other traders were likely, quite legitimately, to wish to use such words to describe their own goods. Although I understood Mr Liao SC, who appeared for GDF, to dissent from the Registrar's view that the desire of other traders to use the words to describe their own goods would be legitimate, he made it clear that he did not, at least before me, quarrel with the Registrar's conclusion that the subject mark was not inherently capable of distinguishing.

12.He did however, suggest that the Registrar was wrong, and went too far in concluding (if it was her conclusion) that the subject mark was legally incapable of distinguishing, so that quite apart from not being inherently capable of distinguishing, it could never acquire a factual capacity to distinguish as envisaged by section 10(2)(b). It is well established that there are certain words, such as some place names, which are as a matter of law, unsuitable for any protection as trade marks - see e.g. YORK Trade Mark [1984] RPC 231. Mr Liao suggested that the Registrar so concluded in paragraph 33 of her decision, in which she said:

"I conclude that the subject mark as a matter of law also lacks the capacity to distinguish for registration in Part B."

13.Mr Liao said that such a conclusion would be wrong, and was inconsistent with the previous registration of the subject mark in Class 29 in respect of canned foods, and was also inconsistent with the Registrar's acceptance, in paragraph 32 of her decision, that it was possible that the mark might, through sufficient use in the future, acquire factual distinctiveness which would enable it to be registered in Part B of the register.

14.Mr Xavier, appearing for the Registrar, did not seek to argue that the mark was wholly incapable of ever achieving registration. He submitted that the Registrar, while holding that the subject mark lacked the inherent capacity to distinguish, did not go so far as to hold that it was wholly incapable of registration. I think that this is clearly right. Having concluded that the mark lacked the inherent capacity to distinguish, the Registrar went on to consider whether the mark had the necessary factual capacity, and concluded that it did not, as there was no suggestion that it had already been used on rice wines or other alcoholic beverages of GDF's manufacture, and she was not satisfied that alcoholic beverages were so close in kind to canned or processed foods so as to bring into play the "any other circumstances" limb of section 10(2)(b). As is clear from paragraph 32 of the decision, she did not rule out the possibility that factual distinctiveness might be acquired through use in the future this clearly indicates that she did not consider that the mark was one which could never be capable of registration. In my view, the Registrar was, in paragraph 33 of her decision, simply reiterating that the subject mark should not be registered in Part B of the register because it did not, in her view, satisfy the criteria imposed by section 10 of the Ordinance.

15.In these circumstances, the real issue between the parties was whether, on the evidence before the Registrar, she was right to conclude that the subject mark lacked the factual capacity to distinguish. Given that GDF accepted that it had not yet used the subject mark on its rice wines or on any other alcoholic beverages, this comes down to the question whether by reason of "any other circumstances" apart from actual use of the trade mark, the subject mark is in fact capable of distinguishing goods with which GDF is connected in the course of trade from goods in relation to which no such connexion exists.

16.Although the phrase "any other circumstances" is very general, it has been considered in two English cases in which the equivalent provision in the English legislation arose for examination. The first of these cases is ESSO Trade Mark [1972] RPC 283, where Whitford J held (at pp. 292-3) that it was appropriate to consider, under the "other circumstances" limb of the English equivalent of section 10(2)(b) of the Ordinance, the extensive use over many years of the ESSO trade mark in relation to certain classes of goods (in particular motor fuels and lubricants), and to permit an application for registration to proceed:

"... so as to cover those categories of goods falling within the specification of the present application which can on a reasonable basis be said to be fairly closely allied to the pre-existing fields of the applicants' activities."

17.The other relevant authority is LAURA ASHLEY Trade Mark [1990] RPC 539, where Jacob J, having considered the ESSO decision, said (at p. 552):-

"Applying as I must the reasoning of Whitford J, it is not enough for the applicant for a mark unregistrable without evidence of use to show that his mark is a household name for certain goods to enable him to get registration for any goods or any goods in which he might reasonably or possibly deal. That would enable applicants to foreclose use of a mark in a wide area. In the weighing of the inherent adaptability of a mark and the degree to which it is in fact adapted, "other circumstances" do include use for other goods, but if the use is for goods different from the goods of the application it will only weigh significantly if the goods are close in kind. As it seems to me now, the closeness must be such that the goods are "of the same description" or allied in some other significant way."

18.Applying those decisions, the correctness of which was accepted by both parties, it seems to me that registration of the subject mark in Class 33 should be allowed if the class of goods in respect of which registration was applied for, namely alcoholic beverages other than beers, could be said to be goods of the same description as canned foods (for which the mark was registered under Class 29, and in respect of which it had been used for some three or four years prior to the present application), or if alcoholic beverages other than beers could be said to be closely allied to such canned foods in some other significant way.

19.It appears from the Registrar's decision that at the hearing before her, this part of the case for GDF was put on the basis only that alcoholic beverages should be regarded as being goods of the same description as canned foods. She considered and rejected this argument in paragraphs 26 to 29 of the decision. Before me, Mr Liao did not seek to argue that she was wrong to do so, although he reserved his position should it be necessary to argue the point in a higher court. He submitted, however, that alcoholic beverages, and in particular Chinese rice wines, were allied with canned foods in some other significant way, having regard to the following factors:-

(1)	The evidence before the Registrar disclosed that GDF had in fact been involved in the manufacture of canned foods and Chinese rice wines for about 50 years, and that it had for virtually the whole of that time used its Pearl River Bridge marks on both canned foods and Chinese rice wines.
(2)	Such use of the Pearl River Bridge marks on both canned foods and rice wines over a considerable period of time means that it is likely that consumers would associate those products, bearing such marks, as being connected with GDF. Thus, given the use of the subject mark for canned foods over the last few years, it is likely that consumers seeing the subject mark on Chinese rice wines would similarly associate such rice wines with GDF, which manufactures the YUPIN range of canned foods.
(3)	Both Chinese rice wines and canned foods of the sorts manufactured by GDF are sold through the same channels of trade - such as supermarkets, grocery stores and neighbourhood stores.
(4)	Rice wines and canned foods can be regarded as complementary goods, in that they are both meant for human consumption, and tend to be consumed together.

20.Mr Liao criticised the reasoning of the Registrar, and, pointing to paragraph 29 of the decision, suggested that she had equated the notion of goods closely allied in some significant way with goods of the same description, thus depriving the former phrase of the independent scope which it has. It seems to me that this criticism is not altogether a fair one, given that the case before the Registrar seems to have been put only on the basis that rice wines and alcoholic beverages were goods of the same description as canned foods, as they were both processed foods or materials for human consumption, and were sold through similar channels. It seems clear from the Registrar's decision that the case for registrability of the subject mark was not put in the way that it was put before me by Mr Liao, and that in expressing herself as she did in paragraph 29 of her decision, she was probably doing no more than to state her conclusion that she was not persuaded that there were "any other circumstances" which would justify her in coming to the view that the subject mark was factually capable of distinguishing in respect of the class of goods for which registration was sought.

21.It is clear from the decision that the Registrar did not take account of the first two of the factors relied upon by Mr Liao. Her failure to do so is understandable, given the way in which the case was argued before her. However, it seems to me that the fact that GDF has been engaged in the manufacture of Chinese rice wines as well as canned foods for nearly half a century, and that it has applied one of its trade marks to both these products is a relevant consideration when seeking to assess whether or not the subject mark is factually capable of distinguishing, as required by section 10(1) of the Ordinance.

22.It seems to me that the evidence established that GDF's pre-existing fields of activity encompassed both the manufacture of canned foods, and the manufacture of rice wines. In seeking to register the subject mark in Class 33, with the intention of applying it, once registered, to rice wines of its manufacture, GDF would be seeking to use the mark in relation to goods which are already within its existing fields of activity.

23.Further, the prior use of the Pearl River Bridge marks on both canned goods and Chinese rice wines is, to my mind, also significant. Mr Xavier submitted that the use of another, different mark, even if in relation to both canned foods and rice wines, cannot assist the applicant. With respect, however, it seems to me that such prior use, over a long period, is likely to result in an association in the minds of the public between canned foods and Chinese rice wines bearing those marks as being (as is the case) the goods of the same manufacturer. That being so, it seems to me that when seeing the subject marks on both canned foods and Chinese rice wines, the public would be likely to react the same way, by associating canned foods and rice wines bearing the same mark as being goods of the same manufacturer, whether GDF or someone else.

24.This association is perhaps strengthened by the third and fourth factors relied upon by Mr Liao, although I would not have thought those factors on their own to be adequate to justify a conclusion that Chinese rice wines and canned foods were allied in a sufficiently significant way.

25.I therefore conclude that in the circumstances of this case, and on the evidence before the Registrar, Chinese rice wines are, although not goods of the same description as canned foods, allied with canned foods in a significant way, such as to render the subject mark, which has been registered and used by GDF in respect of canned foods factually capable of distinguishing rice wines manufactured by GDF from those of other manufacturers.

26.GDF's application, however, was for registration in Class 33 in respect of alcoholic beverages other than beers. Given that GDF's evidence does not appear to disclose that it has been involved in the manufacture of alcoholic beverages other than rice wines, and has not sold (whether under the Pearl River Bridge marks or otherwise) any other alcoholic beverages in its trade in the past, I am unable to accept that the whole of the class of goods applied for is allied in any significant way, if at all, with the canned foods which are the subject of the existing registration under Class 29. When I raised this point with counsel in the course of argument, Mr Liao indicated that while he maintained his appeal in respect of the whole of the class of goods for which registration had been applied for, it was open to me to limit the ambit of the registration if I thought it appropriate to do so. I understood Mr Xavier to agree that this was so.

27.In the circumstances, as I am satisfied, by reason of the circumstances which I have referred to, that the subject mark is factually capable of distinguishing rice wines of GDF's manufacture from those made by other producers, I propose to allow GDF's appeal, and order that the decision of the Registrar be set aside, and that the Registrar do proceed to register the subject mark in Part B of the Register, subject to the limitation that the registration should be in respect of Chinese rice wines only, and not other alcoholic beverages. It does not seem to me that this should cause any difficulty for GDF, since there is no evidence that it wishes to use the mark in respect of any alcoholic beverages other than Chinese rice wines. I would also order that the registration be limited so as to disclaim any exclusive rights in the two Chinese characters individually.

28.So far as costs are concerned, while GDF has succeeded in its appeal, it has done so to a limited extent only, as it has not obtained the full extent of the registration for which it had applied. Moreover, the basis on which it has succeeded was not one which was argued before or considered by the Registrar. In the circumstances, I think that so far as costs are concerned, each party should bear its own costs, and I shall make no order as to costs.

Representation:

Mr Andrew Liao, SC and Mr Martin Liao, instructed by Messrs Sanny Kwong & Henry Lo, for the Applicant

Mr Albert R Xavier, leading Mr Gregory Payne, SGC, instructed by Department of Justice, for the Respondent