Only material error of principle leads to reversal of findings of fact

In the landmark decision of Future Enterprises Pte Ltd v McDonald's Corporation [2007] SGCA 18 (March 28 2007), the Singapore Court of Appeal has ruled that an appellate court should not disturb the findings of fact of a trademark tribunal, except where there is a material error of principle.

The case involved an application by Future Enterprises Pte Ltd for registration of the word mark MACCOFFEE in Class 30 of the Nice Classification for instant coffee mix. The trademark application was opposed by McDonald's Corporation in view of its prior registration for MCCAFE in Class 30 for, among other things, coffee and coffee substitutes. McDonald's succeeded in the first round before the principal assistant registrar of trademarks, and again in the second round appeal in the High Court. Future then appealed to the Court of Appeal against the High Court's decision, raising the following three issues:

• whether the MACCOFFEE mark was similar to the MCCAFE mark;
  
  
• whether the goods under the MACCOFFEE mark were similar to the goods under the MCCAFE mark such that a likelihood of confusion would exist on the part of the public; and
  
  
• whether the rights conferred by the registration of the MCCAFE mark were statutorily restricted and rendered inoperative under various provisions in the Trademarks Act 1998 by reason of Future's prior unregistered right to proprietorship of the MACCOFFEE mark for instant coffee mix.

On the first two issues, the Court of Appeal noted that both the principal assistant registrar of trademarks, as well as the trial judge, had found that:

• the marks MACCOFFEE and MCCAFE were similar;
  
  
• the goods covered by the marks were similar, if not identical; and
  
  
• a likelihood of confusion arose.

The Court of Appeal alluded to the general principle governing appeals against findings of fact in trademark applications, referring to the UK decision of REEF Trademark [2003] RPC 5, in which it was held that:

"an appellate court should … show a real reluctance, but not the very highest degree of reluctance, to interfere in the absence of a distinct and material error of principle."

It then found the same sentiments expressed in the UK cases of SC Prodal 94 SRL v Spirits International NV and Sunrider Corporation v Vitasoy International Holdings [2007] EWHC 37 (Ch).

Having regard to "the highly subjective nature of assessing similarity and the likelihood of confusion", the Court of Appeal endorsed the approach taken in the United Kingdom. At the same time, the Court of Appeal was also mindful of the fact that Future was already the registered proprietor of the MACCOFFEE and 'Eagle' device mark for Class 30 goods, which it could use, and has in fact used for the past decade.

On the third issue, Future had argued that it had acquired a common law right to the MACCOFFEE mark, arising from its use of the mark in Singapore and/or its international reputation, and that the effect of such a right was that McDonald's was statutorily restricted from asserting its rights under its prior MCCAFE mark in the opposition proceedings.

On the facts, the Court of Appeal found insufficient evidence to show that Future had used the MACCOFFEE mark in Singapore. The Court of Appeal also found that the various provisions of the Trademarks Act relied on by Future had no application to Future in the opposition proceedings. The Court of Appeal emphasized that in determining the scope of rights of a trademark, "paramount consideration" had to be given to the legislative framework and the clear and unambiguous wording of the act. The court also pointed out that the correct approach for Future was to have opposed McDonald's MCCAFE mark at the time it was advertised, or to invalidate the mark on the basis of passing off, rather than to rely on its rights in the MACCOFFEE mark as a "side-door" defence in the opposition proceedings.

In light of the present decision, it is likely to be more difficult to succeed in an appeal in the Court of Appeal against concurrent findings of fact in the High Court and Trademarks Registry.

Yvonne Tang, Drew & Napier LLC, Singapore