Bare assertions fail to establish genuine use of ROXY mark

The Hong Kong registrar of trademarks has revoked the ROXY mark registered in Class 18 of the Nice Classification for handbags (among other things) on the grounds of non-use (Case 199812519, June 15 2007).

Quiksilver International Pty Limited stated during the revocation proceedings that Lee Tung Lok Handbag (LTL Handbag), a limited company, had filed a special resolution and a declaration with the Companies Registry to the effect that it had become dormant as of September 13 2001. Investigations conducted for Quiksilver before the revocation application revealed that LTL Handbag had no business activities in Hong Kong and that the mark had not been used for a few years; LTL Handbag operated a factory in China which produced bags for export, but had no sales in Hong Kong. Quiksilver claimed that LTL Handbag's director had admitted that the Hong Kong company remained in existence purely for the purpose of maintaining the ROXY mark.

LTL Handbag submitted two statutory declarations. One was by a director of the company, who claimed that:

• despite having applied to be a dormant company, LTL Handbag had business activities in Hong Kong and had used the ROXY mark;
  
  
• LTL Handbag had invoices to prove that it had sold bags bearing the mark to a company in Taiwan and three parties in Hong Kong during the relevant period; and
  
  
• LTL Handbag could also produce invoices to show that it had purchased materials for manufacturing bags during the relevant period.

The second declaration was filed by an alleged purchaser. It claimed to have bought bags bearing the mark from LTL Handbag two to three times a week during the relevant period. However, payment had been made in cash on each occasion and the alleged purchaser had not requested receipts.

LTL Handbag's evidence was heavily criticized by Quiksilver, which claimed that it offered no tangible proof of genuine use of the suit mark during the relevant period.

Following the principles on genuine use set out by the European Court of Justice in Ansul BV v Ajax Brandbeveiliging BV (C-40/01) and La Mer Technology Inc v Laboratoires Goemar SA (C-259/02), the registrar held that:

• 'use of a mark' entails use on the market for the goods or services for which the mark is registered, not merely internal use by the undertaking;
  
  
• all relevant facts and circumstances must be considered in establishing whether the commercial exploitation of a mark is genuine - in particular whether such use is considered warranted in the market sector to maintain or create a market share for the goods or services for which the mark is registered; and
  
  
• if the mark's essential aim is not the preservation or creation of market share for the relevant goods or services, its use cannot be considered genuine.

The registrar ordered that the ROXY mark be revoked for the following reasons:

• The alleged sales by the owner to the Taiwanese company involved a number of suspicious and unexplained circumstances. For example, it was highly unusual that no purchase orders, invoices, delivery notes, shipping documents, remittance advice or receipts were produced as evidence of the alleged sales.
  
  
• The unusual nature of the circumstances was heightened when considered in the context of the owner's declaration of dormancy. Aspects of the findings of the applicant's investigation relating to non-use were not denied by LTL Handbag.
  
  
• The invoices which allegedly showed that the owner had sourced raw materials for the production of bags in Hong Kong did not constitute evidence that it had applied the ROXY mark to the bags or their packaging in Hong Kong. Furthermore, the invoices were not issued to the owner. Similarly, the invoices allegedly showing the purchase by the owner of a long roll mould bearing the mark ROXY EXPRESS and a zipper mould bearing the mark ROXY for the manufacture of handbags were issued to another party. The registrar remarked that even if LTL Handbag had been able to produce invoices in its own name, the purchase of moulds by LTL Handbag would not have constituted evidence of applying the mark to bags or packaging in Hong Kong other than solely for export purposes.
  
  
• The alleged purchaser's statutory declaration was found to be unsupported by evidence.

The registrar made reference to an unreported case heard by the Hong Kong High Court - Brands Inc Ltd v Kabushiki Kaisha Regal Corp - in which it was stated that use of a mark should involve it being exposed to third parties (other than the owner or its licensees or agents) on a market in Hong Kong in connection with goods of a type for which it was registered. The registrar considered that even if the alleged sales to the Taiwanese company were genuine, the owner had failed to show exposure of the mark to third parties on the Hong Kong market.

Mena Lo and Florence Lam, Wilkinson & Grist, Hong Kong