TWG vs. TWG: Case Study on Rights in a Mark under Trade Marks Ordinance and Common Law (Part I)

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Déjà vu? You look familiar

Background
In an action concerning trademark infringement and passing-off, the Plaintiff companies are part of the Tsit Wing group of companies in the tea and coffee business with various branches dealing with the manufacture, supply, distribution and retail of tea and coffee formulas. The Plaintiffs are established in Hong Kong, having a history of operations in the region for 80 years. TW Café, a subsidiary of the 1st Plaintiff, also operated cafes and restaurants. Since 1994, the Plaintiffs have been operating cafes and restaurants in Hong Kong under their trade marks, which consist of the acronym “TWG” beside overlapping ovals resembling coffee beans. The Plaintiffs’ trade marks were subsequently registered in 1996 and 1997 with the Hong Kong Trade Marks Registry (“Registry”).

The Defendants are TWG companies. TWG stands for “The Wellness Group” and is a group headquartered in Singapore with business operations in the spa business, tea and spa products. The 1st Defendant TWG Tea Company Limited characterises itself as an international luxury tea company operating tea boutiques/counters and salons at various cities. Both the Plaintiffs and the Defendants have business operations overseas, and the marks of both groups coexist in the People’s Republic of China, Taiwan and Singapore.

The trademark dispute began in Hong Kong when the Defendants expanded into Hong Kong in late 2011. They opened their first tea salon in Hong Kong at the International Finance Centre (“IFC”) displaying their marks. The Plaintiffs’ marks consist of “TWG” within an oval device with “1837” and “Tea” written above and under it respectively, and certain French and English descriptions in smaller print surrounding the oval device. The Defendants filed their application to register their trade marks with the Registry in late 2011. One of the classes of goods they applied for was Class 30 in relation to tea beverages and various assortments of desserts, which the Plaintiffs have also registered their “TWG” marks for.

Once the Plaintiffs discovered that the Defendants were planning to enter the Hong Kong market, they commenced a High Court action against the Defendants for trademark infringement and/or passing off and sought an interlocutory injunction against the Defendants restraining them from using the marks on the basis that they are similar to the Plaintiffs’ marks which also contained the acronym TWG. In addition, they filed an application in the Registry to oppose the Plaintiffs’ application. On the other hand, the Defendants have also filed revocation proceedings in the Registry against the Plaintiffs’ registrations.

The battle begins

Legal principles
The relevant test for trade mark infringement is whether the mark in dispute is similar to a registered trade mark for identical or similar goods or services, such that people are confused as to the origin of the marks (i.e. that they mistake the goods and services offered under the mark in dispute to be those offered by the owner of the registered mark). A case of infringement might also be established even if the goods/services are not similar, if a trade mark is well-known such that the use of the mark in dispute would take unfair advantage of, or is detrimental to, the distinctive character or repute of the earlier trade mark.

For passing off, the Plaintiffs have to prove there was goodwill or reputation in Hong Kong in their business and that the Defendants, by adopting their marks, had made a misrepresentation which would mislead the public into thinking that the Defendants’ goods or services were the Plaintiff’s, which results in damage or likely damage to the Plaintiffs. Generally speaking, it is more difficult to make out a case of passing-off when compared to trade mark infringement since it is not sufficient to merely point to similarity between the marks. The Plaintiffs have to further establish their goodwill and actual or likely damage suffered.

The thorny issues
On trade mark infringement, the test to be adopted by the Court to assess similarity is to compare the marks aurally, visually and conceptually. Since the parties’ trade marks both bore the acronym TWG, there is a certain level of similarity even though the other elements (albeit less distinctive) surrounding/next to the acronym may be different.  Furthermore, as both the Plaintiffs and the Defendants operate in the tea industry and have registered or applied for registration of their marks in relation to identical or similar goods and services, there indeed could be likelihood of confusion as they are in the same market sector and presumably have the same target customers.

The Defendants sought to resist the Plaintiffs’ interlocutory injunction application (and subsequently, to appeal against the interlocutory injunction granted) in the following ways. Firstly, they disputed the Plaintiffs’ claims that their reputation vested in the name “TWG” as opposed to the names “Tsit Wing” and “TW”. The Defendants adduced evidence of non-use of the TWG marks in the Plaintiffs’ business operations after 2010. The Defendants asserted that they operated in a different sphere when compared to the Plaintiffs and portrayed themselves as a luxury tea business with plans of global expansion to dispute likelihood of confusion with the Plaintiffs. Further, the Defendants adduced Hong Kong newspaper reports on their tea business before the launch of their IFC tea salon to establish that they had acquired goodwill and reputation internationally which had a spill-over effect in Hong Kong as well.

Please come back for our next issue for the result of this brewing battle.

IMPORTANT:
The law and procedure on this subject are very specialized and complicated. This article is just a very general outline for reference and cannot be relied upon as legal advice in any individual case. If any advice or assistance is needed, please contact our solicitors.
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Published by ONC Lawyers © 2013