Jenny Bakery, the Hong Kong bakery which has phenomenal sales and is famous for its “4 MIX” cookies packed in teddy bear tins, is struggling with trademark squatters allegedly registering its trademarks in Chinese.

Background

Back in 2009, possibly having no expectation of the overwhelming popularity her bakery among tourists from the Mainland China, the owner of Jenny Bakery (珍妮小熊餅店) only registered the mark “ ” (“Jenny Bakery cookies since 2005 (and  device)”) in English at the Trade Marks Registry in Hong Kong. In 2014, however, an individual filed applications with the Trade Marks Registry for registration of the marks “4 Mix 4 味”, “珍妮曲奇” and “小熊曲奇”, which are provisionally refused.  The owner of Jenny Bakery swiftly thereafter filed further applications of the said marks and marks which are associated with its brand, some of which are provisionally refused.  What else can trademark owners do when they discover their unregistered trademarks have been registered by others?

Opposition

If the trademark squatting is discovered before the trademark is accepted for registration, the trademark owner may oppose its registration pursuant to section 44 of the Trade Marks Ordinance (Cap. 559) (the “TMO”).  Within 3 months after an application for trademark registration is published in the Hong Kong Intellectual Property Journal, any person may give notice of opposition to the application on the ground that its registration should be refused under the TMO.  An example for such ground is that the registration is applied for in bad faith (e.g. when there is no intention to use the trademark on all applied for goods and services, or where the applicant has no entitlement to the mark).

Revocation

Even after a trademark is registered, any person may still apply to the Registrar of Trade Marks or the court for revocation or invalidation of the registration under sections 52 and 53 of the TMO. 

Non-use cancellation

Any person may apply for the revocation of the registration of a trademark if it has not been used as a trademark in Hong Kong without any valid reason for at least 3 years continuously.  In support of the application for revocation, the applicant will have to provide evidence of non-use of the registered trademark, which usually takes the form of statutory declaration of investigators outlying enquiries made to ascertain that no use has been made.  If the revocation application is allowed, the rights of the registered owner of the trademark will cease from the date of the application for revocation or an earlier date if the Registrar of Trade Marks or the court is satisfied that the grounds of cancellation existed at an earlier date. 

The trademark owner may also seek to revoke a registered trademark on the ground that its use shall mislead the public as to the nature, quality or geographical origin of the goods or services for which the trademark is registered.

Invalidation

Under section 53 of the TMO, any person may apply for a declaration of invalidity of a registered trademark on the ground that its registration should have been refused on an absolute ground or a relative ground set out in sections 11 and 12 of the TMO respectively.  In the context of trademark squatting, the relevant absolute grounds would be that (1) the trademark is likely to deceive the public, (2) its use is prohibited in Hong Kong under or by virtue of any law and (3) the application for its registration was made in bad faith.  The relevant relative grounds would be that there is an earlier unregistered trademark or other sign used in the course of trade or business (the “Unregistered Mark”) whereas such Unregistered Mark is protected primarily by the law of passing off, and/or copyright or registered design (if applicable). 

Passing off

As previously discussed in our article “A Discussion on the Common Law Tort of Passing Off”, passing off is a cause of action under the common law tort.  To succeed in a claim of passing off against a trademark squatter, the trademark owner must prove the 3 essential elements of passing off: goodwill, misrepresentation and damage.  The remedies for passing off include injunction against the trademark squatter from misusing the trademark. 

In practice, it is common to see a party who has acquired substantial reputation and goodwill under its trade name and trademark relying on both the statutory provisions for revocation / invalidation of wrongfully registered marks and passing off to stop infringing activities. 

In the present case, as the third party applications for registrations of “Jenny Bakery” and related marks have not been accepted for registration, the owner of Jenny Bakery can oppose the marks when they are published for opposition.  She may also consider bringing passing-off actions against traders who have misrepresented to the public that their goods are goods of Jenny Bakery.

Conclusion

Thanks to Hong Kong’s first-to-use trademark registration system, the unlawful registration of trademarks by squatters is not necessarily the end of the world for the trademark owners.  There are statutory provisions and common law action that trademark owners may resort to for protecting their rights.  That said, the costs of registering a trademark and conducting regular pre-emptive trademark searches are much lower than commencing legal actions.  Corporations should therefore place heavy emphasis on the protection of intellectual property rights in their business plan and consider taking pre-emptive measures in Hong Kong and in important markets such as the PRC to protect their assets.