In the landmark decision of Staywell Hospitality Group v. Starwood Hotels & Resorts Worldwide, the Singapore Court of Appeal was presented with an opportunity to clarify the principles applicable in opposition proceedings and infringement actions.  Prithipal Singh  and Faizal Shah report from Singapore.

In the landmark decision of Staywell Hospitality Group v. Starwood Hotels & Resorts Worldwide and Anor [2013] SGCA 65, the Singapore Court of Appeal was presented with an opportunity to clarify trademark law in Singapore, in particular, the principles applicable in opposition proceedings and infringement actions.

There were two appeals before the Court of Appeal which arose from opposition proceedings commenced by Sheraton International and Starwood Hotels & Resorts Worldwide (the Opponents), namely:

  1.  an appeal by the Opponents against the finding of the court below that there was no likelihood of confusion or sufficient indication of a connection damaging to the Opponents' interests in order to ground an opposition to registration pursuant to Sections 8(2)(b) and 8(4)(b)(i) of the Trade Marks Act (Cap. 332) and against the finding of the court below that there was no goodwill in the Opponents’ hotel in Singapore for the purpose of grounding an opposition pursuant to section 8(7)(a) of the Trade Marks Act; and
  2.   a cross-appeal by Staywell Hospitality Group (the Applicant) against the finding of the court below that its mark bearing the name PARK REGIS (the Applicant’s Mark) was similar to the Opponents’ registered trademark bearing the name ST. REGIS (the Opponents’ Mark).

Step-by-Step Approach

At the outset, the Court of Appeal endorsed the step-by-step approach as the correct approach to be applied in Singapore. Under the step-by-step approach, the requirements of (a) similarity of marks (marks-similarity); (b) similarity of goods or services; and (c) likelihood of confusion arising from the two similarities, are assessed systematically. Elements (a) and (b) above are assessed individually before element (c), which is assessed in the round.

The Court of Appeal agreed with the Opponents that the similarity of competing marks is a threshold requirement that had to be satisfied before the confusion inquiry is undertaken. However, the Court of Appeal disagreed that the threshold for marks-similarity is low as it is inexorably a matter of expression rather than one that can be resolved by quantitative exercise. In this connection, the court reiterated that the three aspects of similarity (i.e., visual, aural and conceptual) are meant as a guide for the court to determine whether the marks are similar. Similarly there is no requirement in law that all three aspects of similarity must be made out before determining marks to be similar.

In respect of marks-similarity, the Court of Appeal reiterated that distinctiveness (in both its technical and non-technical senses) is a factor integrated into the visual, aural and conceptual analysis as to whether the competing marks are similar. It is not a separate step within the marks-similarity inquiry.

Non-technical distinctiveness refers to what is outstanding and memorable about the mark. The distinctive (in the non-technical sense) components of the mark are those that tend to stand out in the consumer's imperfect recollection. Accordingly, the court is entitled to have special regard to the distinctive (in the non-technical sense) or dominant components of a mark. On the other hand, technical distinctiveness refers to the capacity of a mark to function as a badge of origin. In this connection, technical distinctiveness is an essential element in the marks-similarity inquiry. Indeed, a mark which has greater technical distinctiveness clearly enjoys a high threshold before a competing sign will be considered dissimilar to it.

In deciding whether marks are similar, the court confirmed the well-established principle that the marks are to be considered without having regard to any added or extraneous factor/matter.

With respect to the similarity of goods or services, the Court of Appeal held that where a good or service in relation to which registration is sought falls within the ambit of the specification in which the incumbent mark is registered, the competing goods or services would be regarded as identical. If the good or service are not identical, extraneous factors may be considered:

  1. in infringement cases to establish the degree of similarity between goods and services that are not identical; and
  2. in opposition proceedings where the applicant's and proprietor's goods and services are registered or to be registered in different classes or specifications.

Confusion Inquiry Stage

The Court of Appeal confirmed that there is a difference between the approaches to the confusion inquiry in opposition proceedings as compared to infringement actions. In opposition proceedings, the court must have full regard to the full range of notional and actual uses of the mark.  On the other hand, in infringement actions, the court has to compare the full range of notional fair uses of the incumbent mark against the actual use of the later mark.  In practice, this translates to a higher threshold to be met by an applicant in opposition proceedings. It bears mentioning that the foregoing accords with the position enunciated by the courts in Europe and the United Kingdom.

In respect of factors which are extraneous to the competing marks and to the products in relation to which the marks are used, the Court of Appeal stated that it is not relevant to have regard to extraneous factors concerning the actual and particular circumstances and way in which the mark has been used on the goods in opposition proceedings. Further, in both opposition proceedings and infringement actions, it is impermissible during the confusion inquiry stage to consider factors consisting of steps undertaken by a trader to differentiate his goods or marks from those of the owner of the incumbent mark. Extraneous factors which relate to the nature of the goods or services and the degree of care that would be applied by the customer remained relevant. Be that as it may, the Court of Appeal cautioned that extraneous factors must be managed so as to strike a balance between the competing goals of the trademark registration regime.

 

Initial interest confusion/Goodwill

The Court of Appeal considered the “initial interest confusion” doctrine, which is derived from American trademark law and is focused on protecting the reputation and the goodwill of the prior registered mark. This doctrine has been applied both broadly and restrictively. Under the broad interpretation, it is sufficient to show that the consumer was drawn to the defendant's goods based on its ostensible association with the plaintiff's mark. On the restricted interpretation, initial interest confusion is applicable only if it gives rise to a real risk that the potential consumer will actually purchase the defendant's goods even upon knowing that they are not the plaintiff’s goods. The Court of Appeal confirmed that the doctrine of initial interest confusion should not be introduced into Singapore law as it is inconsistent with the purpose of Section 8(2) of the Trade Marks Act.

The Court of Appeal also considered the approaches undertaken by the courts in ascertaining goodwill, namely:

  1. the hard-line approach where it is essential for the trader to have carried on his trade within the jurisdiction to establish goodwill; and
  2. the soft-line approach where goodwill is established if the trader has an international reputation and is able to draw customers to the source of its attractive force.

The Court of Appeal confirmed the hard-line approach as the approach applicable to Singapore but added that the approach is softened to the extent that any pre-trading activity need not be revenue-generating as long as it is directed at generating demand for the plaintiff’s business and the trader evinces an unequivocal intention to enter the market.

Conclusion

All things considered, the Court of Appeal dismissed the Applicant's appeal. The Court of Appeal found that there was (a) a high degree of aural similarity between the competing marks because of the distinctiveness of the common “REGIS” component in both the technical and nontechnical senses; and (b) a fair degree of conceptual similarity as the marks share a tendency to connote a place or building.

The Court of Appeal allowed the Opponents' appeal in respect of sections 8(2)(b) and 8(4)(b)(i) of the Trade Marks Act. The Court of Appeal was satisfied that the proximity of the markets in which the Opponents and the Applicant operate gave rise to possibility that the Opponents' business expansion opportunities would be prejudiced. However, the Court of Appeal dismissed the Opponents’ appeal in respect of Section 8(7)(a) of the Trade Marks Act as the Court of Appeal was satisfied that there was no goodwill in the Opponents’ hotel in Singapore for the purpose of an opposition.