Transshipment is not genuine use

The Hong Kong Court of First Instance has overturned the registrar's decision to refuse an application by Brands Inc Limited to revoke a registration in the name of Kabushiki Kaisha Regal (Regal) for the mark REGAL (and device) on the grounds of non-use of the registered mark.

The issue for determination was simply whether the transshipment of goods bearing the REGAL trademark through Hong Kong constituted genuine use. The goods had been manufactured in China pursuant to orders placed by the Japanese trademark owner with manufacturers in Hong Kong. The registrar held that the transshipment of the goods through Hong Kong constituted genuine use, although in the later CAMELLIA Case (see Genuine use remains a thorny issue) the registrar took a different view. On appeal in the REGAL Case, the Court of First Instance has found that the transshipment did not amount to genuine use.

Applying the European and UK authorities Ansul BV v Ajax Bradbeveiliging BV and LABORATOIRE DE LA MER, the court held that transshipment was not consistent with the "essential function of a trademark, which is to guarantee the identity of the origin of goods or services to the consumer or end user". As the goods had never been exposed to any market in Hong Kong in which third parties would or might rely on the mark as a badge of origin in respect of the goods, there had been no genuine use of the mark in Hong Kong.

In the judgment, the court made several interesting observations, including the following:

• The European and UK authorities applied. Regal's counsel had argued that such cases should be viewed with some reserve as conditions in Hong Kong may differ from those in Europe.
  
  
• The rights conferred by a Hong Kong trademark registration are territorial and must be considered in relation to the position in Hong Kong. Events in mainland China should not be taken into account.
  
  
• It was not relevant that import and export amounted to use for the purpose of infringement of a registered trademark. The Trademarks Ordinance separately defines 'use' for the purpose of infringement and for the purpose of revocation.

For a discussion of the registrar's decision in this case, see Import and export constitutes genuine use.

Sandra Gibbons, Lloyd Wise & Co, Hong Kong