Judgment identifies limits to exclusive use of well-known trademarks

Hong Kong

In Stichting BDO v Banco De Oro Unibank Inc, the Hong Kong High Court has reminded that the reputation attached to a well-known trademark is not limitless, but must be viewed in the context of the relevant goods or services. The court dismissed the plaintiffs' claim against the defendants for using a similar BDO mark.

The plaintiffs are members of a global network of accountancy firms and hold registrations for the mark BDO in Hong Kong for accountancy and tax consultancy services, among others. The defendants provide banking and remittance services in Hong Kong, and serve mainly Filipino customers.

The plaintiffs complained that the defendants' use of 'BDO' in their logo, company name and signage, among other things, constituted passing off and trademark infringement.

The court rejected the plaintiffs' claim. The salient findings are as follows.

With regard to passing off, the court found that there was no misrepresentation by the defendants to the relevant public:

  • The plaintiffs' BDO mark adopted a particular colour scheme and an L-shaped frame, which made it look very different from the defendants' BDO logo.
  • The parties were in totally different fields of business.
  • Potential customers of the plaintiffs seeking accountancy services were expected to have a higher level of attention. It would be unusual for an accountancy firm to operate on a shop front basis, so potential customers could tell the difference even if they mistakenly stepped into the Connaught Road premises of the defendants, where the words 'banking hours' and 'Banco De Oro' were displayed.
  • Evidence of actual confusion adduced by the plaintiffs (eg, email enquiries about the defendants mistakenly sent to the plaintiffs) was insufficient since it was not shown that the persons confused were aware of the plaintiffs.

With regard to trademark infringement, the court first considered the well-known status of the plaintiffs' trademark:

  • It was not disputed that the plaintiffs' BDO mark was well known for accountancy-related services. However, the court rejected the wider claim that its fame extended to all non-similar goods or services.
  • The court considered that the reputation attached to the well-known trademark related only to those services that are actually marketed by the plaintiffs and did not extend to all services specified in the trademark registrations.
  • The court also dismissed the suggestion that the relevant public perceived a link between the parties' marks. Importantly, the parties' targeted consumers were quite different, with the defendants mainly serving customers from the Philippines.
  • The defendants had due cause to use the BDO mark, which they had been using as an acronym in the Philippines since 1977 and in Hong Kong since 2007.

The court also found that there was no likelihood of confusion given that the parties' respective services were neither identical nor even similar.

A number of lessons may be learnt:

  • Trademark infringement/passing-off claims are highly fact-sensitive. All circumstances surrounding the use of a mark/name by both parties are relevant. While, in recent years, many such lawsuits in Hong Kong against shadow companies have resulted in favourable (default) judgments for the plaintiffs, trademark/goodwill owners should not take victory for granted.
  • Evidence of actual confusion, while potentially powerful in establishing liability, must come from someone who is aware of the plaintiff's fame.
  • Plaintiffs should act promptly as the lengthy use of a mark by the defendants may support its use in due cause. In the present case, the court found there was good cause for the defendants to use the mark, partly due to the fact that the mark had been used by the defendants for quite some time.

Kenny Wong and Eugene Low, Mayer Brown JSM, Hong Kong

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