Mark for tobacco products refused based on identical mark for sports goods

In Basic Trademark SA v Karelia Tobacco Company Inc, the principal assistant registrar of the Registry of Trademarks, Intellectual Property Office of Singapore, has upheld an opposition against the registration of the trademark KAPPA.

Basic Trademark SA is a member of the BasicNet group, which manufactures sports and recreational wear under various brands including Kappa and Robe di Kappa. Basic owns registrations for various marks, such as KAPPA, ROBE DI KAPPA and the figurative marks depicted below:

Basic opposed an application by Karelia Tobacco Company Inc, a cigarette manufacturer originating from Greece, to register the mark KAPPA in Class 34 of the Nice Classification for: “Processed or unprocessed tobacco, smokers' articles, tobacco products, cigarettes, cigars, cigarillos, tobacco, cigar and cigarette holders, cigars and cigarette cases, ashtrays, cigar clippers, tobacco pipes, pouches for tobacco, cigarette lighters, pocket devices for rolling cigarettes, cigarette papers, humidors for tobacco products, matches.”

At the hearing held before the principal assistant registrar on August 23 2011, Basic proceeded with the opposition based on Sections 8(2)(b), 8(4)(b)(i) and 8(7)(a) of the Singapore Trademarks Act (Cap 322, Rev Ed 2005).

Section 8(2)(b) of the act provides that:

“A trademark shall not be registered if, because… it is similar to an earlier trademark and is to be registered for goods or services identical with or similar to those for which the earlier trademark is protected, there exists a likelihood of confusion on the part of the public.”

Section 8(4)(b)(i) provides that:

“Subject to Subsection (5), where an application for registration of a trademark is made on or after July 1 2004, if the whole or an essential part of the trademark is identical with or similar to an earlier trademark, the later trademark shall not be registered if -

(a) the earlier trademark is well known in Singapore; and

(b) use of the later trademark in relation to the goods or services for which the later trademark is sought to be registered… would indicate a connection between those goods or services and the proprietor of the earlier trademark, and is likely to damage the interests of the proprietor of the earlier trademark.”

An 'earlier trademark' is defined in Section 2(1) as follows:

“ (a) a registered trademark or an international trademark (Singapore), the application for registration of which was made earlier than the trademark in question, taking account (where appropriate) of the priorities claimed in respect of the trademarks; or

(b) a trademark which, at the date of application for registration of the trademark in question or (where appropriate) of the priority claimed in respect of the application, was a well-known trademark,

and includes a trademark in respect of which an application for registration has been made and which, if registered, would be an earlier trademark by virtue of Paragraph (a) subject to its being so registered.”

Section 8(7)(a) provides that:

“A trademark shall not be registered if, or to the extent that, its use in Singapore is liable to be prevented… by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered trademark or other sign used in the course of trade.”

By way of her grounds of decision dated November 18 2011, the principal assistant registrar held that Basic’s opposition succeeded under Sections 8(4)(b)(i) and 8(7)(a).

With regard to Section 8(4)(b)(i), Karelia conceded that its mark was identical to the KAPPA word mark(s) registered by Basic. The principal assistant registrar found that Basic’s KAPPA marks were well known to all actual and potential consumers in Singapore of the goods to which the marks were applied.

In coming to this conclusion, the principal assistant registrar took into account, in particular:

• Basic’s sales revenues in Singapore from 1998 to 2008;
• extensive sports sponsorships (in particular football sponsorship); and
• worldwide marketing and advertising expenditure from 1999 to 2008.

The principal assistant registrar also noted the comment by the Court of Appeal in Novelty Pte Ltd v Amanresorts Ltd (2009] SGCA 13) that it is not too difficult for a trademark to be regarded as well known in Singapore. She pointed out that the fact that a mark is used in several industries does not per se mean that it cannot be well known in Singapore.

The principal assistant registrar also found that use of the KAPPA mark by Karelia would indicate a confusing connection between the goods claimed by Karelia and Basic.

In this regard, the principal assistant registrar noted that tobacco companies have been known to expand their businesses into the area of fashion apparel and accessories, and referred to the case of Hugo Boss AG v Reemtsma Cigarettenfabriken GmbH ([2009] SGIPOS 7). She also noted that there is a close connection between tobacco and sports in terms of tobacco companies running advertisements at sports events.

Finally, the principal assistant registrar found that Basic’s interests were likely to be damaged in view of the confusing connection. She took into account Basic’s longstanding investment in sports sponsorship, which had built up an image for Basic’s KAPPA marks that was in line with health and fitness. In view of the increasing rejection of tobacco products and smoking by sports and sporting events, and the essentially inimical concepts of sports and tobacco products, the principal assistant registrar concluded that Basic was likely to suffer damage in terms of injury to:

• the image of its KAPPA marks;
• its core business in sporting gear; and
• its desirability as a sports sponsor, which would in turn affect its ability to further its commercial interests through sports sponsorship.

With regard to Section 8(7)(a), the principal assistant registrar found that Basic possessed goodwill in the KAPPA mark. In coming to this conclusion, she took into account, in particular, Basic’s sales revenues in Singapore from 1998 to 2008, advertising expenditure in Singapore from 2004 to 2008 and extensive sports sponsorships. In view of her conclusion under the Section 8(4)(b)(i) ground of objection that there was a confusing connection likely to damage Basic’s interests, the principal assistant registrar similarly found that there would be misrepresentation likely to cause damage to Basic’s goodwill should there be use of the KAPPA mark by Karelia.

With regard to Section 8(2)(b), the principal assistant registrar confirmed that the better test for likelihood of confusion was the three-step approach used in British Sugar plc v James Robertson & Sons Ltd ([1996] RPC 281), and that this test was applicable with regards to Section 8(2) of the act.

As to the first step (whether the marks were similar), the principal assistant registrar reiterated that Karelia's mark was identical to Basic’s marks visually, aurally and conceptually. However, the test failed at the second step (similarity of the goods or services). The principal assistant registrar applied the test for determining the similarity of goods set out in British Sugar, and noted that Karelia’s goods were specific products used for smoking and with smokers as their target market, while the users and uses of Basic’s goods were clearly different. Accordingly, she concluded that the goods could not be considered as competitive and the ground of opposition under Section 8(2)(b) failed.

Notwithstanding the above, in view of the decision on Sections 8(4)(b)(i) and 8(7)(a), Karelia’s application to register the KAPPA mark was refused.

Regina Quek, One Legal LLC, Singapore