Small differences not always sufficient to differentiate primarily descriptive marks

In The Singapore Professional Golfers’ Association v Chen (February 24 2013), the Singapore Court of Appeal has allowed an appeal brought by The Singapore Professional Golfers’ Association against the first respondent, Mr Chen Eng Waye, the second respondent, Mr Chen Xiangyi Roy, and the third respondent, Singapore Senior PGA LLP, for their unauthorised use of the name Singapore Senior PGA LLP and the initials 'SSPGA'. 

Chen Eng Waye was a former member of the appellant who had resigned on January 31 2008. On November 25 2010, Chen Eng Waye and his son, Chen Xiangyi Roy, registered 'Singapore Senior PGA LLP' as a limited liability partnership. They also registered the marks SINGAPORE SENIOR PGA and its logos in the name of the third respondent. The third respondent subsequently advertised that it would conduct a senior professional qualifying test exclusively for senior golfers. The appellant then commenced action to restrain the defendants from using the name Singapore Senior PGA.

The three elements that the appellant had to prove to succeed in a claim for passing off were:

• goodwill;
• misrepresentation; and
• damage. 

It was held that the appellant did have a “measure of goodwill” in golfing activities generally, and the Court of Appeal confirmed that the protection conferred by the tort of passing off extends to non-commercial organisations. Further, the court found that the appellant’s names, although descriptive, had acquired a secondary meaning through use. It had regularly used its names over 40 years and the appellant’s activities were reported in newspaper articles, golf publications and publicity materials using its names. Given the parties' identical field of business and the strong similarity between the names and acronyms of the two parties when viewed as a whole (taking into account imperfect recollection), there was therefore a likelihood of confusion within the relevant public, which extended beyond the appellant’s members and included aspiring golfers.

In particular, Chen Eng Waye had decided to use the letter 'A' in the third respondent’s name and initials (eg, SSPGA) even though the third respondent was neither a society nor an association. By choosing to use only initials and not the full name, the respondents opened themselves to the adverse inference that they intended to reap the benefit of the “inevitable association” with the appellant’s name given the strong association between the initials 'SPGA' and the appellant. These facts also satisfied the Court of Appeal that the selection and use of the third respondent’s name was actuated by bad faith.

The differences between the parties’ names and initials were not sufficient to avert a likelihood of confusion. The Court of Appeal noted that, where purely descriptive words are used and the association with the claimant is not demonstrably strong, the degree of protection will be less and small differences will be sufficient to enable a defendant to avoid liability. However, this is not a fixed rule of principle.

Here, the addition of 'Senior' and 'LLP' to the third respondent’s name only served to aggravate the confusion, by giving the impression that it was an arm of the appellant catering to older golfers. A person might also conclude from the letters 'LLP' that the third respondent was related to the appellant, but constituted as a limited liability partnership for commercial reasons. As for damage to the appellant’s goodwill, the Court of Appeal also found a real likelihood of loss of income derived from membership and subscription fees, diversion of sponsorship and funding, as well as from test administration fees. The court thus found that the tort of passing off was made out.

The Court of Appeal also found that Chen Eng Waye was personally liable, while Chen Xiangyi Roy was not, under the provisions of the Limited Liability Partnerships Act. Under the act, a partner is not personally liable merely because the LLP has incurred a tortious liability, nor where another partner commits a wrongful act or omission. Nevertheless, the Court of Appeal held Chen Eng Waye liable on the basis that he had conceptualised the activities of the third respondent, chosen and registered its name and used its name and initials in conjunction with the organisation of golfing activities. He also advertised the third respondent on its website and placed an advertisement in a golf publication in Singapore. In contrast, Chen Xiangyi Roy was a partner of the third respondent in name only and thus found to be not liable.

The Court of Appeal then directed the parties to agree on the terms of an order to be made restraining the use of the third respondent's name or any objectionable variations, but declined to award damages, as the appellant’s counsel had conceded that the appellant had suffered minimal damage, since the respondents had ceased their intended activities after receiving a letter on March 1 2011. 

This case is a timely reminder that small changes will not enable defendants to avoid liability in passing off, even if the claimant's name or sign is primarily descriptive, if it can be shown that a likelihood of confusion exists. Further, a partner in a LLP is not necessarily shielded from personal liability for committing the tort of passing off, even if his acts are done in his capacity as a partner. This is particularly the case if the partner is the 'moving force' behind the LLP.

Of greater interest are the remedies that the court granted. The order directing the parties to agree on the scope of the restraining order is an unusual step and seems to be targeted against granting overly broad injunctions. It is also notable that the court refused to award damages, even though the appellant had succeeded in establishing passing off. It remains to be seen whether this will result an increase in the number of defendants being more prepared to toe the line given that they are likely to avoid significant financial punishment as long as they cease use of any allegedly infringing mark upon receipt of a demand from a registered rights owner.

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