Intellectual Property Singapore Client Alert January 2019 For more information, please contact: Andy Leck +65 6434 2525 firstname.lastname@example.org Lim Ren Jun +65 6434 2721 email@example.com Abe Sun +65 6434 2547 firstname.lastname@example.org Court of Appeal confirms High Court has original jurisdiction to hear patent revocation applications - Sunseap Group Pte Ltd & 2 Ors v Sun Electric Pte Ltd  SGCA 04 Facts The Respondent, Sun Electric Pte Ltd ("Sun Electric"), retails solar energy to consumers in Singapore. It is the registered proprietor of a Singapore patent in respect of a power grid system and a method of determining power consumption at building connections in the system ("Patent"). The first appellant, Sunseap Group Pte Ltd, is the parent and holding company of the second and third appellants. The second appellant, Sunseap Energy Pte Ltd, is a licensed electricity retailer while the third appellant, Sunseap Leasing Pte Ltd, develops and manages rooftop solar photovoltaic systems (collectively, "Sunseap"). Sun Electric commenced High Court proceedings in November 2016 claiming that Sunseap jointly or severally infringed 8 out of 12 claims in the Patent ("Asserted Claims"; the remaining claims are referred to as the "Unasserted Claims"). Sunseap denied all allegations. Sunseap sought in its defence and counterclaim ("D&CC"), among other relief, a declaration of the Patent's invalidity and an order that the Patent be revoked. Sun Electric subsequently applied to strike out certain portions of Sunseap's D&CC. In effect, Sun Electric asserted that Sunseap could not put in issue the validity of any of the claims of the Patent by way of counterclaim in infringement proceedings. This issue was heard before the Assistant Registrar ("AR"), who held that the validity of the Unasserted Claims could not be put in issue by way of defence in infringement proceedings. Furthermore, revocation proceedings could be commenced in the High Court at first instance, particularly where infringement proceedings are already before the High Court and revocation proceedings are brought by way of counterclaim. Sunseap was thus entitled to put in issue the validity of both the Asserted Claims (by way of defence) and the Unasserted Claims (by way of counterclaim) in infringement proceedings before the High Court. Sun Electric appealed to the High Court Judge against this aspect of the AR's decision. The High Court Judge ("Judge") held that in the absence of express statutory provisions conferring original jurisdiction on the High Court to hear revocation proceedings by way of application, or to grant a prayer for revocation whether or not by way of counterclaim in infringement proceedings, the High Court has no jurisdiction because such an order is in rem in nature. Without such jurisdiction, no powers of the Registrar of Patents in respect of revocation applications under section 80 of the Patents Act ("PA"), including the power to revoke a patent, could vest in the High Court. Accordingly, the Judge allowed Sun Electric's Intellectual Property Newsletter January 2019 appeal and proceeded to strike out Sunseap's prayer for revocation. Sunseap then appeal to the Court of Appeal. Decision The Court of Appeal disagreed that the High Court lacks original jurisdiction in all cases to hear applications for the revocation of a patent. In this regard, the PA envisages two categories of cases that are to be dealt with differently. (i) First category - defence and counterclaim in infringement proceedings The first category concerns applications for revocation brought by way of defence and counterclaim in infringement proceedings. In this instance, the Court of Appeal found, contrary to the Judge's position, that the PA confers original jurisdiction on the High Court to determine the validity of a patent. The Court of Appeal observed that pursuant to section 82(1)(a) of the PA, a defendant in infringement proceedings under section 67 is entitled to challenge the validity of the patent by way of defence. Whilst section 82(1)(a) did not, by itself, confer original jurisdiction on the High Court, section 67(1) expressly refers to infringement proceedings brought in "the court". Given that a defendant may only put validity in issue by way of defence in infringement proceedings, it follows that only the validity of asserted claims may be put in issue. The High Court's power to revoke a patent could be exercised where all the claims or all the independent claims in the patent are found to be invalid. In cases where there are independent claims of which the validity has not been disputed and which can be maintained without the invalid claims, the High Court should not revoke the patent, but instead may allow the proprietor to amend the specification in a manner and subject to such terms as the court thinks fit. (i) Second category - applications independent of infringement proceedings The second category concerns applications for revocation brought independently of infringement proceedings, where the applicant challenges the validity of the patent and seeks revocation of the patent. The Court of Appeal found that in this instance, the High Court does not have jurisdiction to determine the validity of the patent, which is expressly excluded by section 82(2) read with section 82(1) of the PA. The Court of Appeal clarified that original jurisdiction to determine the validity of the patent in this category of cases vests exclusively in the Registrar. (iii) In rem jurisdiction The Court of Appeal disagreed that the High Court requires in rem jurisdiction before it can make an order with in rem effect, and held that an in rem judgement can arise equally in an in personam action. On the facts, the Court of Appeal found that the High Court has jurisdiction to determine the validity of the Patent and if invalidity was established, the court could exercise the power to revoke the Patent. Intellectual Property Newsletter January 2019 Comment The Court of Appeal's decision provides useful guidance to future patent litigants on the proper forum in which patent revocations may be sought and on how pleadings should be framed when challenging the validity of a patent by way of defence and counterclaim in patent infringement proceedings. Exclusively descriptive names cannot be trade marked - Chicago Mercantile Exchange Inc. v Intercontinental Exchange Holdings, Inc.  SGIPOS 20 Facts Intercontinental Exchange Holdings Inc (the "Respondent") is the registered proprietor of the trade marks ("BRENT") and ("BRENT INDEX") (collectively the "Subject Marks"), which were registered on 6 July 2015 for a range of financial services including futures and options trading and the provision of financial and market data. Chicago Mercantile Exchange Inc. (the "Applicant") applied for declarations of invalidity on 27 July 2016 on the basis that the Subject Marks were: (i) devoid of the distinctive character required of a trade mark (section 7(1)(b) of the Trade Marks Act (the "TMA")); (ii) descriptive of characteristics of those services (section 7(1)(c) of the TMA); and/or (iii) commonly-used terms in the relevant trade (section 7(1)(d) of the TMA). Both the Applicant and the Respondent are large corporations involved in the business of operating market exchanges, including the generation and dissemination of data for a variety of financial products. Decision (i) The average consumer At the outset, the Adjudicator gave consideration to the "average discerning consumer" of the financial services for which the Subject Marks were relevant. The Adjudicator held that it was the perceptions of financial services professionals and investment-savvy individuals that must be considered, given that the Subject Marks were registered for a broad range of financial services. Intellectual Property Newsletter January 2019 (ii) Section 7(1)(c) TMA - descriptive of characteristics of services The Adjudicator held that the "BRENT" mark was exclusively descriptive of the services for which it is registered (i.e., crude oil and related financial services). The Proprietor had argued that it had used the word "BRENT" as a short-form of "ICE BRENT" to justify its contention that the "BRENT" mark is distinctive. However, the Adjudicator observed that the word "Brent" could not be transformed into a distinctive mark properly registrable on its own as a trade mark for financial services, merely through use by the Respondent of the word in a descriptive way or together with a distinctive element "ICE", which they chose to drop occasionally for convenience in promotional material. Moreover, whilst the Respondent argued that it was the sole provider of "BRENT" pricing information, the Adjudicator noted that this did not lead inexorably to the conclusion that "BRENT" was a registrable trade mark. Likewise, the Adjudicator held that the average consumer of the relevant services in Singapore could not fail to be informed immediately by use of the "BRENT INDEX" mark of the intended purpose and nature of the particular financial services. The ground of invalidation under 7(1)(c) thus succeeded in respect of the Subject Marks. The Adjudicator further held that the Proprietor's "BRENT"-variant marks did not comprise of a family of marks giving rise to distinctiveness on the part of the Subject Marks. To this end, if the word simpliciter is unregistrable under Section 7(1)(b), (c) and/or (d) of the TMA, it becomes no less unregistrable merely because it forms part of one or more registered trade marks. (iii) Section 7(1)(b) TMA - devoid of any distinctive character The Adjudicator held that as a matter of logic, a trade mark that is exclusively descriptive cannot have any distinctive character as an indication of origin. In light of the Adjudicator's findings on Section 7(1)(c) of the TMA, he held that the ground of invalidation under Section 7(1)(b) succeeded in relation to the Subject Marks. (iv) Section 7(1)(d) TMA - commonly-used terms in the relevant trade In view of the findings that the BRENT mark is both devoid of distinctive character as a trade mark for the specification of services for which it is registered, and exclusively descriptive of at least one of the characteristics of those services, the Adjudicator held that it must follow logically that the Applicant had discharged its onus to prove that the Subject Marks were generic in relation to the "BRENT" mark. Intellectual Property Newsletter January 2019 The Adjudicator found that "BRENT" was a generic word in the relevant market that, in the public interest, should be owned by no trader as a registered trade mark for services provided to those in that market. (v) Section 7(6) TMA - Bad faith The Adjudicator observed that the Applicant had chosen not to rely on the ground of bad faith, despite the extremely broad specification of services for which the Subject Marks were registered. In this regard, the Adjudicator considered whether he had the power under the TMA to decide on his own volition, in the public interest, that a registration was obtained in bad faith. The Adjudicator concluded that he did not. However, the Adjudicator opined that if he had the power to do so, he would have decided in favour of the Applicant. Comment This decision serves as a timely reminder that even if a party is the sole provider of a particular product or service, they do not automatically acquire the right to register the mark under that product or service. This is particularly the case where the trade mark on its own is descriptive in nature of goods or services widely known and referred to in the relevant industry. It is further notable that the onus lies with the Applicant to plead the necessary grounds of invalidation. In this regard, it is beyond the tribunal's scope of powers to invoke such grounds on its own accord, even in the name of public interest. www.bakermckenzie.com Baker McKenzie Wong & Leow 8 Marina Boulevard #0501 Marina Bay Financial Centre Tower 1 Tel: +65 6338 1888 Fax: +65 6337 5100 ©2019 Baker & McKenzie. All rights reserved. Baker & McKenzie International is a global law firm with member law firms around the world. In accordance with the common terminology used in professional service organizations, reference to a “partner” means a person who is a partner or equivalent in such a law firm. Similarly, reference to an “office” means an office of any such law firm. This may qualify as "Attorney Advertising" requiring notice in some jurisdictions. Prior results do not guarantee a similar outcome.