With many Southeast Asian countries being involved in tobacco farming, it is easy to see how trademark protection over cigarettes would be important in the region. Cigarette manufacturer Jamal Abdulnaser Mahmoud Al Mahamid (“the Plaintiff”) and Global Tobacco Manufacturers (International) Sdn. Bhd. (“the Defendant”) clearly exemplified this when they brought their dispute to the High Court of Singapore recently. Both of them registered trademarks for cigarettes in Singapore under the name “Manchester” (the Plaintiff in 2005, the Defendant in 2012).
The Plaintiff’s mark has been registered in over 34 countries, including Singapore. It is used on cigarettes that are sold duty-free, usually to chandlers (dealers who provide supplies to ships). Sales in Singapore amounted to over USD400,000 in 2012, whereas its global sales increased from USD26m in 2012 to USD40m in 2013.
In comparison, the Defendant is a Malaysian company that has been selling cigarettes under various brands since 2003. In 2012, it extended its sales to Singapore and registered its mark at the Intellectual Property Office Of Singapore (IPOS) (for unspecified reasons, the registration of the Plaintiff’s mark had been refused in Malaysia).
In 2014, the Plaintiff initiated proceedings seeking for the invalidation of the Defendant’s mark based on four grounds:
- Both marks are similar, which creates a likelihood of confusion for consumers;
- The use of the Defendant’s mark amounts to passing off;
- The registration of the Defendant’s mark was made in bad faith;
- As the Plaintiff’s mark is well-known in Singapore, there is a risk of likelihood of confusion between the two “Manchester cigarettes”.
On the similarities between the marks, the step-by-step analysis set by previous case law was used whereby three aspects of similarity are taken into account (namely visual, aural and conceptual similarities). Finding one of these three similarities is enough to declare that the marks are similar, based on the assessment of the imperfect recollection of an average consumer.
In terms of visual similarity, the Court found that “Manchester” is the most dominant part of both marks. It is distinctive and non-descriptive (as the word has no obvious link with the product sold). The Judge declared that “the dominance of the text was not diminished in any way by the surrounding graphical elements in either mark. It is the word “Manchester” that would be remembered, not the surrounding frill.” Thus, visual similarity between the marks was found.
The Court also held that the marks had conceptual similarity, even though the Defendant claimed a difference between the two marks in the sentiment and imagery intended to be transmitted to the consumers (the Plaintiff’s mark was supposed to give an impression of nobility and tradition because of the coat of arms and the script “House of Quality”; while the Defendant’s mark had no such intention). The Judge claimed that whatever the word “Manchester” evoked, traditional or modern, is irrelevant, as it is ultimately suggesting the same object (the city Manchester, the country England or Great Britain, or the football teams).
Of course, aural similarity and similarity of goods were not disputed as it was clear to all parties that there was aural similarity and the goods were identical.
Having found similarity between the marks, the Court proceeded to assess the likelihood of confusion. Relying on previous case law that held that, “the more similar are the marks, the more likely confusion would result”, and the principle that a consumer with imperfect recollection may be confused between the two similar marks, the Court found confusion likely with both marks co-existing. Furthermore, as the goods are relatively inexpensive, consumers would not really take due care when buying the cigarettes and may think it is the same mark with a different packaging.
Although the Plaintiff’s first ground of invalidation was successful, the other three grounds failed. There was insufficient evidence of goodwill for the passing off action, as the only element brought by the Plaintiff was the increase of its sales between 2005 and 2012. The Court found this indicative of goodwill, but not enough to establish it. Misrepresentation was found, but not damages.
Concerning the ground of bad faith in the registration of the Defendant’s mark, “bad faith” is conduct which is dishonest when judged objectively by ordinary standards of honest people. The Plaintiff accused the Defendant of exploiting its reputation, claiming that the Defendant must have known about the existence of its mark, it was too much of a coincidence that the Defendant also chose “Manchester” as its trademark, and the Defendant should have done a trademark search. The Court found that there was insufficient evidence to prove any bad faith on the part of the Defendant.
With regard to the ground that the Plaintiff’s mark is well-known and that the Defendant intended to exploit its reputation, insufficient evidence was brought by the Plaintiff. There were only assertions that the Plaintiff’s mark is well-known by the ship-chandler sector, that its mark is sold in over 30 countries and its global sales are USD26m. The sales figures were just raw figures, without any indication on what reach these sales had, what the total cigarette market was or even what the total chandling cigarette market was. There was also lack of evidence in the distribution of marketing material in Singapore. The fact that the Plaintiff sold its cigarettes in 34 countries did not help as that does not equal to the mark being well-known in Singapore.
Most interestingly was the argument put forth by the Defendant that the Plaintiff’s customers are not Singaporeans, and that sailors or others aboard ships passing through Singapore would not constitute a material market for the purpose of determining whether the mark was well-known in Singapore. The Court held that as there was nothing in the Act to suggest otherwise, the Singapore Trademarks Act applies within the territory of Singapore and not just to Singaporeans.
While the other grounds advanced by the Plaintiff were not received, it succeeded in proving the similarity of the marks. As a result, the Defendant’s mark, “Manchester” was found invalid by the Court. This decision by the High Court of Singapore was not a surprising one considering the facts of the case (namely that the words in the marks were dominant and identical) but it does highlight that evidence is crucial in bringing forth successful invalidation actions. To think that this case merely succeeded on the basis of similarity of the marks – if the words differed ever so slightly, the outcome of the case may have been different! Trademark owners should seriously consider having trademark searches done before launching their brands into any jurisdiction.