Inclusion of prior mark in later mark does not guarantee success in opposition

Singapore

In Kenzo v Kenzo ([2013] SGIPOS 2), a hearing officer at the Intellectual Property Office of Singapore has refused an opposition brought by Kenzo, a fashion house now part of the LVMH Group, against a trademark application for KENZO ESTATE filed by Tsujimoto Kenzo, an individual who owns a winery of the same name in Napa Valley, California, United States. The application was filed in Class 33 of the Nice Classification, covering "wine; alcoholic beverages of fruit; western liquors (in general)".

The applicant founded his winery in 2001 and released the first vintage wine under the trademark KENZO ESTATE in 2008. Since then, these wines have been available in fine restaurants in the United States and Japan, but not in Singapore.

The opponent was founded by Kenzo Takada, and subsequently joined the LVMH Group in 1993. It has operated a retail store in an upmarket shopping mall in Singapore, Ngee Ann City, since the early 1990s. In 1997 Hennessy launched a special cognac vintage named 'Hennessy by Kenzo', which was sold exclusively through DFS outlets in Asia (including Singapore) and the United States between 1997 and 2000. However, there had been no further use since then and the applicant had successfully revoked the opponent's registration for KENZO in Class 33 without resistance from the opponent.

In the present case, the opponent opposed the registration of the trademark under Section 8(4)(b) of the Singapore Trademarks Act (well-known marks), Section 8(7)(a) (passing off) and Section 7(6) (bad faith).

With regard to Section 8(4)(b)(i) and (ii), the opponent had to prove that:

  • the marks were identical or similar;
  • KENZO is well known in Singapore; and
  • use of KENZO ESTATE in relation to the claimed goods would (a) indicate a connection with the opponent and was likely to damage its interests; or (b) if KENZO is well known to the public at large in Singapore, would dilute the distinctive character of KENZO in an unfair manner or would take unfair advantage of the distinctive character of KENZO.

The hearing officer held that there were some aural and visual similarities between the marks KENZO and KENZO ESTATE; however, they were not conceptually similar, since 'Kenzo' is a personal name and 'estate' suggests a spacious place.

Following recent case law (which held that the distinctiveness of the opponent's mark is relevant in assessing the similarity of the marks), the hearing officer found that KENZO was of average distinctiveness, in light of the existence of six live businesses in Singapore using the name Kenzo. The relevant sector of the public was held to consist of actual and potential consumers in Singapore of the opponent's fashion, perfumery and cosmetic goods. 

The opponent's KENZO marks were held to be well known to the relevant sector of the public in Singapore for the purposes of Section 8(4)(b)(i), given the fact that the opponent took part in the opening act of the Singapore Fashion Festival in 2001 and had had a prime retail position for 18 years. The hearing officer was however critical of the evidence lodged by the opponent. In particular, a large amount of the evidence post-dated the date of the application for KENZO ESTATE and was therefore irrelevant; the sales figures were incomplete and not supported by the invoices provided and, while samples of advertisements were submitted, the promotional expenditure was not. Consequently, the evidence was not sufficient to support a finding that the opponent's KENZO mark was well known to the public at large in Singapore. The opposition under Section 8(4)(b)(ii) thus failed. 

In assessing the likelihood of confusion, the hearing officer held that the goods were very different. There was insufficient evidence of the commonality of licensing arrangements between fashion houses and alcoholic beverages companies, and the Hennessy cognac was only an instance of co-branding, rather than a business extension. The fact that the opponent's goods are relatively expensive and that purchasers would thus exercise care was also factored into her decision, as did the evidence that the applicant's wine was likely to be sold to exclusive wine retailers and/or to fine dining hotels/restaurants, whereas the opponent's goods were likely to be sold through its own boutiques. The use of 'Napa Valley' on the wine label, together with the word 'estate' in the trademark, would clarify that the wine came from the United States and not from France. In light of these factors, the opponent had not established that there was a likelihood of confusion between the marks.

The opponent also argued that it would suffer damage due to:

  • the limitation of a possible expansion into alcoholic beverages;
  • the loss of the possibility of licensing or franchising its mark;
  • the misappropriation of its goodwill and reputation, thereby eroding the distinctiveness of its mark; and 
  • the fact that any inferiority in the applicant's goods, or any legal or financial trouble of the applicant, would tarnish its goodwill.

The hearing officer held that these claims were unsubstantiated. She noted that there must be a genuine intention to expand the business before there can be damage via limitation, which had not been proved. She also noted that the opponent had not resisted the revocation of its Class 33 registration. The opposition under Section 8(4)(b)(i) therefore also failed. 

With regard to passing off, the three elements that the opponent had to prove to succeed were:

  • goodwill;
  • misrepresentation; and
  • damage.

Based on her reasoning concerning Section 8(4)(b), the hearing officer held that the opponent had goodwill in Singapore. The opponent argued that the misrepresentation resided in the use of the mark, not in any imitation of its brand. However, as the hearing officer had earlier found that there was no likelihood of confusion, she held that no misrepresentation had been proved. Similarly, she held that there was no damage to the opponent.

With regard to bad faith, the hearing officer held that the opponent did not have sole claim to the personal name Kenzo and that there was no evidence that the applicant had created the mark in bad faith. 

This case highlights the increasing difficulties that mark owners are facing when seeking to rely on their prior registered trademarks to prevent the registration of subsequent marks, even if there is an element of similarity between the marks. This is especially so where the subsequent mark is being registered for goods falling outside the scope of the goods covered by the prior registration. The case reiterates that the mere inclusion of a prior mark in a subsequent mark will not guarantee success in an opposition.

This case also highlights the evidentiary burden that any prospective opponent faces when seeking to rely on the protection afforded to marks that are well known to the public at large in Singapore. The importance of maintaining archives of both financial and advertising data to support the use of trademarks in each country cannot be overstated. Often a trademark owner depends on local distributors for such information; however, as these local distributors may not have an incentive to keep proper records, it often becomes difficult to trace historical records, especially going back over a number of years. It is therefore prudent for any trademark owner operating through a local distributor to insist that relevant financial and evidentiary records be provided for safekeeping and to keep a separate record of such information. 

Angeline Lee, Baker & McKenzie.Wong & Leow, Singapore

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