KELLY Case set to determine reliability of registrar's guidelines

A case pending in the Hong Kong Court of Appeals will clarify the extent to which trademark owners and practitioners can rely on examination guidelines published by the registrar of trademarks. This follows the Hong Kong Court of First Instance's decision to expunge the mark KELLY for dolls on the grounds that it is primarily a surname, even though toy manufacturer Mattel Inc allegedly followed the registrar's guidelines on such marks (Case HCA 9216/2000, August 2 2004).

In June 1995 Mattel introduced its doll Kelly, from the Barbie range of dolls, on to the Hong Kong market. In February of that year, Mattel had filed an application to register the mark KELLY in respect of "dolls, dolls' clothing, accessories, houses and playsets", and registration was granted in 1997. Mattel subsequently discovered that De Luxe Manufacturing Ltd was producing and selling dolls under the name Sweety Kelly. Mattel sued for infringement of its KELLY mark. In response, De Luxe sought to invalidate Mattel's registration on the grounds that Kelly is, in its ordinary signification, a surname and thus should not have been registered without evidence of substantial pre-application use.

The old Trademarks Ordinance (Cap 43 of the Law of Hong Kong, repealed on April 3 2003), under which Mattel registered its KELLY mark, provided that:

"A trademark (other than a certification trademark) to be registrable in Part A of the register shall contain or consist of at least one of the following essential particulars: … (d) a word or words having no direct reference to the character or quality of the goods or services, as the case may be, and not being according to its ordinary signification ... a surname."

Further, it stated that a word that is a surname "shall not be registrable [in Part A of the register] except upon evidence of its distinctiveness" at the time of application.

De Luxe contended that KELLY has no signification other than being a name or a surname, in evidence of which it submitted dictionaries and book excerpts, indicating that Kelly was a very common Irish last name. De Luxe also pointed to the number of entries for Kelly as a family name in Hong Kong telephone directories: 22 in 1995, 44 in 1997 and 42 in 1999. De Luxe also claimed that as no evidence of distinctiveness of the mark at the time of application was filed, the Part A registration was invalid.

Prior to 1996 the registrar had applied a stringent test for the registration of words that in their ordinary signification are surnames. It researched the telephone directories of many major cities in the world (eg, Berlin, London, Los Angeles, Paris, Rome and the Manhattan and Queens districts of New York), and raised a surname objection if the number of entries collectively or in any of the said directories exceeded a certain number. In 1996 the registrar issued a circular saying that the registry would allow registration of surnames without evidence of distinctiveness, on a de minimis principle, in Part A of the register if the surname appears no more than 50 times in the Hong Kong telephone directory and in Part B of the register if the surname appears no more than 100 times.

Mattel relied on the 1996 circular and argued that KELLY met these criteria at both the date of application and the date of the application's approval, and therefore registration of the mark in Part A of the register was valid. The court held that the guidelines published by the registrar in the 1996 circular should not be regarded as being conclusive or binding, so as to permit one to fail to give consideration to the actual provisions of the legislation by enquiring or considering whether, in this case, the name Kelly is, in its ordinary signification, a surname.

The court held that Kelly should be regarded as a common surname, even in Hong Kong, regardless of how frequently or infrequently it appeared in the Hong Kong telephone directory. The court also observed that as a substantial segment of the Hong Kong population speaks English, the number of persons in Hong Kong who would regard Kelly as being a surname could not simply be dismissed as de minimis. Accordingly, the court ruled that registration in Part A of the register was invalid.

The court went on to consider whether or not it should exercise its discretion to allow the registration to remain on the register. Following Re Application by John Taylor Peddie ((1944) 61 RPC 31), the court held that it would be unfair and unjust that, notwithstanding the fact that a mark should never have been registered in the first place, other traders should be at risk of infringement actions as a result of the exercise of the court's discretion not to expunge the wrongly registered mark. Therefore, the court ordered that the registration for KELLY be expunged, and Mattel's action for infringement of the registration be dismissed.

Although Cap 43 was repealed and replaced by a new Trademarks Ordinance in 2003, the KELLY Case may affect many existing word marks that in their ordinary significance are surnames but achieved registration as a result of the registrar's 1996 circular. It will also help to determine to what extent trademark owners and practitioners can follow examination guidelines published by the registrar.

Rebecca Lo, Rebecca Lo & Co, Hong Kong