Intellectual Property Indonesia, Malaysia and Singapore

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IP Newsletter We are delighted to share with you the latest edition of our May 2015 Intellectual Property newsletter covering the latest developments in Indonesia, Malaysia and Singapore. We trust you will find this newsletter useful. If you would like any further information, please contact the team in your jurisdiction. Best regards,

Baker & McKenzie.Wong & Leow (Singapore) Hadiputranto, Hadinoto & Partners (Indonesia) In This Issue Wong & Partners (Malaysia)

Recent Developments In:

Indonesia

Malaysia

Singapore Indonesia

Latest News Minister of Law and Human Rights Regulation No. 29 of 2014 on the Guidelines of Application and Issuance of For more information, please Operational License and Evaluation of Collecting contact: Societies Kuala Lumpur Chew Kherk Ying Pursuant to the enactment of Law No. 28 of 2014 on Partner +60 3 2298 7933 Copyright ("Copyright Law"), the Ministry of Law and Human [email protected] Rights ("MOLHR") has issued Regulation No. 29 of 2014 on the Guidelines of Application and Issuance of Operational Singapore License and Evaluation of Collecting Management Society Andy Leck Managing Principal, ("Regulation No. 29"). Tel: +65 6434 2525 [email protected] The Copyright Law urges authors, copyright holders and

Jakarta performers to be members of collecting societies in order to Daru Lukiantono manage and collect royalties from the commercial use of their Partner copyright and neighboring rights from the public. The Tel: +62 21 2960 8588 [email protected] Copyright Law indicates that collecting societies should be non-profit in nature and obtain operational licenses from the MOLHR by fulfilling certain requirements.

In general, the Regulation No. 29 further specifies issues on establishment, issuance of operational licenses and evaluation of collecting societies.

Baker & McKenzie.Wong & Leow* www.bakermckenzie.com/Singapore Requirements for Obtaining Operational Licenses

Hadiputranto, Hadinoto & Partners* www.hhp.co.id To obtain operational licenses, collecting societies should (i) be in form of Indonesian non-profit legal entity; (ii) obtain Wong & Partners* authorizations from authors, copyright holders or performers www.wongpartners.com to collect, gather and distribute royalties; (iii) represent at

* Baker & McKenzie.Wong & Leow, least two hundred songwriters, or fifty members of performers Hadiputranto, Hadinoto & Partners or other copyright holders (e.g. book authors); (iv) have a and Wong & Partners are member clear objective and capabilities to collect, gather and firms of Baker & McKenzie International in Singapore, Indonesia distribute royalties. and Malaysia respectively Aside from satisfying the above requirements, the collecting societies should submit their written applications for licenses to the MOLHR by enclosing supporting documents, e.g. Deed of Establishment and Articles of Association, Powers of Attorneys from their members, list of members and the works that they are managing.

Upon review of the application, within 14 working days as of the submission date, the MOLHR will issue the operation license if all requirements are met.

National Collecting Societies

The Copyright Law requires establishment of two National Collecting Societies ("NCS"), which is one representing the authors' interests, while the other representing the interests of the neighboring rights owners (e.g. performers). These two NCS should become parent organizations for local collecting societies in the field of song and musical works.

Aside from collecting and managing royalties for their members, the NCS have obligations to (i) establish code of ethics for their members; (ii) supervise their members; (iii) give recommendations to the MOLHR for sanctions against ethical violations by their members; (iv) give recommendations to the MOLHR on the licenses of collecting societies whom they coordinate; (v) set up guidelines, procedures and system in distributing and calculating royalties; (vi) conduct mediation for any copyright and neighboring rights disputes; (vii) provide reports to the MOLHR.

The MOLHR just recently appointed 5 commissioners of the NCS for Composers, and 5 other commissioners of the NCS for Neighboring Rights.

The above commissioners would have a term of 3 years and may be appointed for an additional 1 year.

According to the press release, the NCS will have the duty

2 and task in line with the Copyright Law and Regulation No. 29.

Evaluation of collecting societies

The MOLHR will conduct evaluations of every collecting society and NCS at least once a year.

For such purpose, every collecting society and NCS should prepare performance and financial reports as audited by a public accountant (at least once a year). The audited reports must be submitted to the MOLHR at least within fourteen days after the audit is done, and the result should be announced in national printed or electronic media.

The MOLHR can revoke the operational license of a collecting society or a NCS if: (i) the form of its legal entity has changed to a profit oriented entity; (ii) it does not distribute the royalties to their members; (iii) it can no longer meet the minimum member requirements; (iv) it does not carry out coordination with similar collecting society or NCS in setting up amount of royalty; (v) it does not provide audited reports as required; (vi) it does not announce the audited report; (vii) it uses more than 20% of its operational funds after its first five years and/or uses more than 30% of its operational funds within its first five years, which fund is gathered from the total of royalties collected annually.

DARU LUKIANTONO / WIKU ANINDITO / ARTNA BTARI Partner / Associate / Associate Hadiputranto, Hadinoto & Partners

Malaysia

The Legal Concerns over M-Commerce

In today's day and age, consumers own at least one mobile device. According to the Malaysian Communications and Multimedia Commission (MCMC), Malaysia's mobile penetration rate in 2014 is at 143 percent, the highest rate thus far. The usage of mobile devices has increased significantly in the recent years to the extent that transacting online for day-to-day activities is becoming a norm.

The signs of growth of the Malaysian mobile commerce (m- commerce) industry are clear. For instance, major mobile telecommunications companies (telcos) in Malaysia have made inroads into m-commerce in recent years--through

3 acquisition of online classified company, investment in mobile payment gateway, and the launch of several m- commerce sites. The Malaysian central bank has also taken steps in a similar direction with the launch of a mobile payment and banking service in 2013, which connected the three largest banks in Malaysia with all major telcos to offer mobile inter-bank funds transfer.

Given such trends, businesses that fail to provide consumers with the option and convenience of mobile or online purchases, whether through applications or websites, run the risk of falling behind. Mobile apps may not only be used as a medium for sales and purchases, but may also be used as a platform for advertising and promotion. However, businesses must consider the legal and regulatory risks before riding the m-commerce wave.

As a starting point, arrangements and collaborations with appointment of third-party app developers must be reviewed carefully. Businesses need to clearly define the extent of assistance required and with the creation of such apps, IP issues need to be dealt with. Ownership of any background or new IP should be agreed to by the parties at the outset, and any necessary licensing arrangement needs to be provided for. A third party escrow provider may also need to be appointed if the developer wishes to retain background IP, and if the business is concerned that there is risk of the developer ceasing business, making the software no longer accessible and hence rendering the app useless. Businesses may also want to consider whether or not it requires maintenance services and upgrades.

In addition to contracting issues, businesses must also be aware of consumer protection laws, privacy laws and other regulations which may impact the way the app is presented to consumers and the terms on which good and services may be sold. In Malaysia, the Consumer Protection Act 1999 dictates that certain contract terms are considered unfair and will be considered void, while the Consumer Protection (Electronic Trade Transactions) Regulations 2012 requires that certain procedures are complied with when supplying goods or services online. Such laws and regulations vary across jurisdictions and it is imperative that businesses ensure that they comply with the relevant laws in all applicable jurisdictions.

CHEW KHERK YING / CHEN HONG SZE Partner / Associate Wong & Partners

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Malaysian Court of Appeal Clarifies Trade Mark Use

The use of a trade mark is of central importance under trade mark law. The first use of a trade mark may confer first ownership. Establishing the use of a trade mark is also important to mitigate the risk of expungement proceedings due to non-use and forms one of the key conditions to be satisfied in a trade mark infringement action.

In the recent case of Mesuma Sports Sdn Bhd v National Sports Council of Malaysia v Trade Marks Registrar of Malaysia in September 2014, the Court of Appeal clarified and confirmed that the use of a trade mark "in the course of trade" was not limited to profit oriented commercial activities.

The Appellant was a company appointed to supply sports clothing bearing the Tiger Stripes Design ("Trademark") to the Respondent, a statutory body established under the National Sports Council Act 1971. The Appellant registered a mark similar to the Trademark under the Malaysian Trade Marks Act 1976, claiming to be the first user of the Trademark as a trade mark in the course of trade. The Respondent is the owner of the Trademark.

One of the key issues before the Court was whether the Respondent had used the Trademark as a trade mark in the course of trade. Although the Respondent did not sell the sports goods bearing the Trademark to the public, the Respondent's distribution of such goods to Malaysian athletes constituted trade in the wider sense, although such distribution was not done with a view to obtaining profit. Further, the Court held that the use of the Trademark on sports clothing was intended to indicate the origin of the goods. As such, the Respondent was the first user of the Trademark as a trade mark and was entitled to register the Trademark.

The clarification from the Court of Appeal is helpful to companies in understanding the activities which constitute use of a trade mark in the context of minimising the risk of non-use expungement proceedings. The giving of free samples and other free promotional activities will clearly qualify as "use" in light of this decision.

CHEW KHERK YING / ADELINE LEW Partner / Associate Wong & Partners

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Unfair Terms Under the Consumer Protection Act

The 2010 amendments to the Consumer Protection Act 1999 introduced a new Part IIIA on “Unfair Contract Terms”. Where certain contractual terms were considered to be procedurally or substantively unfair, then such a contract or term would be at risk of being declared unenforceable or void.

There had been little case law to shed any light on how the newly introduced provisions would be interpreted by the courts until the recent case of Fairview International School v Tribunal Tuntutan Pengguna Malaysia. The action was brought by Fairview International School ("Fairview") against the Malaysian Consumer Claims Tribunal ("Tribunal") seeking a judicial review on the Tribunal's decision that the provisions concerned were unfair. Fairview further contended that the Tribunal acted ultra vires without jurisdiction; and even if it did have jurisdiction, the Tribunal had erred in law for wrongly construing the enrolment contract between Fairview and Sabheena.

The second respondents were the parents of a student at Fairview, whose enrollment was subject to provisions which required a student to submit a withdrawal notice of one full academic term before the actual withdrawal of the student, failing which the security deposit which was paid in advance will be forfeited in full (“First Provision”). There was also a general term that gave Fairview the right to amend, annul or add to the terms and conditions from time to time which shall be applicable to all students enrolled in Fairview (“Second Provision”).

The High Court granted the order sought by Fairview and quashed the decision of the Tribunal. In doing so, it held that the Second Provision empowered the school to unilaterally amend the terms itself and was neither objectionable nor unreasonable per se. In arriving at his decision, the judge considered that the purpose of the change could be for “the betterment of the system of student learning”, which would not be objectionable and would not cause an imbalance to the detriment of the parent or student; thus the change was neither procedurally nor substantively unfair.

Further, the High Court held that the First Provision was not substantively unfair. The High Court observed the competitive environment in which private schools operate in Malaysia and that clauses such as the First Provision were

reasonable as it enabled Fairview to properly plan its intake of student population, and as a matter of public policy it will also instill commitment and discourage students from switching schools at their whim and fancy.

The decision in Fairview sheds some light on the approach which may be adopted by the Malaysian courts in construing such unfair terms and indicates that that the Malaysian courts may not be willing to interpret procedural and substantive unfairness broadly.

CHEW KHERK YING / CHEN HONG SZE / ADELINE LEW Partner / Associate / Associate Wong & Partners

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No Landlord Liability in Malaysia

The Malaysian High Court recently decided in the case of Syarikat Duasama Sdn Bhd v Chevron Malaysia Limited that the concept of “landlord liability” may not be recognised to confer liability on owners of premises, where infringing activities are said to have taken place.

The proponents of this concept generally argues that a landlord can be held liable for the infringing activities that are being committed by the tenants or licensees on their premises if the landlord has knowledge of the same. It is certainly a helpful concept which may be used to help curb infringing activities by getting landlords, who have contractual relationship with the tenants of premises, to take a more proactive step against the tenants. However, attaching liability on landlords by virtue of mere knowledge of infringing or unlawful activities alone has not often been deemed sufficient for liability to kick in, without a more complicit involvement in the infringing activity. Such extension of liability may be considered far reaching by some.

The sale of an alleged infringing deck of playing cards took place at one of the Caltex petrol stations owned by Chevron but leased to an individual retailer. In other words, the day to day operations were managed wholly independently by the retailer including the sourcing of the goods being sold within the retail shop at the petrol station.

A claim for, inter alia, trademark infringement and passing off was filed against Chevron. One of the arguments was premised upon the fact that Chevron, as the landlord of the petrol station, should be liable for the alleged acts of infringement occurring on the said premises operated by an

7 independent retailer. The High Court found no involvement by Chevron in sale of the alleged infringing deck of playing cards and refused to extend the scope of landlord liability on the facts before the Court. The suit filed was wholly dismissed.

CHEW KHERK YING / WONG LING YAH Partner / Associate Wong & Partners

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Malaysia: 30 June 2015 deadline to register Medical Devices

Medical devices exported, imported or placed in the market prior to the commencement of the Medical Device Act 2012 ("Act") must be registered within 24 months from 1 July 2013. The 24-month transitional period ends on 30 June 2015.

Players in the medical equipment industry are advised to apply for registration of their medical devices before 30 June 2015, as the failure to register a medical device is an offence punishable by a fine of up to RM200,000 and/or a term of imprisonment of up to three years.

The Act and the Medical Device Regulations 2012 ("Regulations") came into operation on 1 July 2013. The Act is intended to address public health and safety issues and facilitate the medical device trade and industry. The Medical Device Authority Act 2012, which came into effect on 15 March 2012, established the Medical Device Authority ("Authority"), which oversees the execution of the Act.

Registration of Medical Devices

The Act requires medical devices which are imported, exported and placed for sale in Malaysia to be registered. Additionally, establishments are required to classify medical devices based on the level of risk it poses, its intended use, and the vulnerability of the human body in accordance with the prescribed manner. The registration process involves an inspection of the medical device by a conformity assessment body ("CAB") appointed by the Authority in accordance with prescribed "conformity assessment procedures".

The Regulations set out the procedures for medical device registration. The Authority has since issued guidance regarding the definition, classification, essential principles of safety and performance of medical devices and a Good Distribution Practice for Medical Devices ("GDPMD").

Application for an Establishment Licence

Under the Act, an "establishment" includes manufacturers, importers, distributors and local authorised representatives but does not include retailers. An establishment must obtain a licence to import, export or place a medical device for sale in Malaysia ("Establishment Licence"). The requirements and procedures for the application for an Establishment Licence are further detailed in the Regulations. The Act provides for a 12-month transitional period to existing establishments to apply for an Establishment Licence. The 12-month transitional period has however, ended on 30 June 2014. Establishments that have failed to apply for an establishment licence before 30 June 2014 are at risk of a fine of up to RM200,000 and/or imprisonment up to three years upon conviction. As the Establishment Licence contains conditions that the licensees would have to comply with, note that any breach of the conditions imposed will expose licensees to a fine of up to RM100,000 and/or for a term of imprisonment of up to one year as well.

CHEW KHERK YING / FLORENCE TAN Partner / Associate Wong & Partners

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Refusal of a Trademark based on passing off concept

A recent High Court decision in Malaysia reconfirms the incorporation of passing off concept in refusing trademark registration under Section 14(1)(a) of the Trademarks Act ("TMA"). Section 14(1)(a) provides that a mark or part of a mark shall not be registered as a trade mark if "the use of which is likely to deceive or cause confusion to the public or would be contrary to law".

The objective and purpose of section 14(1)(a) was articulated in the Federal Court case of Yong Teng Hing B/S Hong Kong Trading Co & Anor v Walton International Ltd [2012] 6 CLJ 337. The Federal Court held that the objective and purpose of this section was to protect the public and consumers from "instances of confusion or deception as a result of the use of two similar marks", and the standard set was if the new mark will likely "deceive or cause confusion" to the public or consumers – notwithstanding whether the similar mark used earlier was registered in Malaysia or not, and whether it is being used in relations to goods and services which may be different from the one sought to be registered.

The above position was recently reaffirmed in the High Court

9 of Kuala Lumpur’s decision in the case of Solid Corporation Sdn Bhd v Pendaftar Cap Tangan Malaysia & Sun Yuen Rubber Manufacturing Co Sdn Bhd.

Background

The plaintiff, Solid Corporation Sdn Bhd ("Solid Corp") has been involved in the business and distribution of spare parts and parts used in vehicles since 1992. As part of their business development, Solid Corp has coined and continues using a trademark consisting of the word "HANSA parts", also since 1992. Further, this trademark has been registered in Malaysia under various car/vehicle classes of goods.

On 24 January 1996, the 2nd Defendant, Sun Yuen Rubber Manufacturing Co Sdn Bhd ("Sun Yuen") applied for the registration of their trademark consisting of one word, "HANSA". Sun Yuen’s trademark application was advertised in the Gazette on 26 May 2005 for purposes of Opposition Proceedings, which Solid Corp proceeded to do so and file a Notice of Opposition to said mark, and to which Sun Yuen filed a Counter-Statement to.

On 15 April 2013, the Registrar of Trademarks ("the Registrar") dismissed Solid Corp’s opposition and allowed the registration of Sun Yuen’s trademark.

The Plaintiff appealed to the High Court to set aside the decision of the Registrar and for an order that Sun Yuen’s application for registration of its trademark to be dismissed.

Below are the trademarks for both Solid Corp and Sun Yuen for reference:

Solid Corp’s mark

Sun Yuen’s mark

Case Analysis

The High Court held that although Solid Corp’s trademark is “HANSA parts”, the word HANSA is more prominent – to the public and consumers, it is also commonly called, pronounced, known and recognised as HANZA. In light of the fact that both marks have identical words and are pronounced in the same way, the Court adopted the phonetic similarity test established by the Court of Appeal in the case of Sinma Medical Products (M) Sdn Bhd v Yomeishu Seizo Co Ltd & Ors. As such, in the present case it was held that by sound and pronunciation, both marks are the same or

10 nearly resembled each other, thus the likelihood of confusion is unavoidable. The Court emphasised that the "phonetic confusion or resemblance" is a crucial consideration and that test in deciding if two marks closely resembling one another were likely to deceive or cause confusion as per section 14(1)(a).

Further, the Court held that the Registrar had erred in law for not applying the phonetic test and also for concentrating on the nature of goods associated with the marks in question. The Court drew from the House of Lords judgment in BALI Trademark (1969) RPC 472, where it was established that the type of "goods" or "description of goods" are explicitly not requirements under the English legislative equivalent of section 14(1)(a) of the TMA, and as such a similar position should be adopted in Malaysia.

In conclusion, the above clarifies the position in Malaysia that Section 14(1)(a) of the TMA is to be interpreted broadly and if two trademarks used in vastly different industries sound sufficiently similar to each other, then there will be a chance that the later mark may be refused registration by reason of the presence of the earlier similar mark.

CHEW KHERK YING Partner Wong & Partners

Singapore

Amendments to Plant Varieties Protection Act Extend Protection to All Plant Varieties

Recent developments

The Plant Varieties Protection Act ("the PVP ACT") has been amended to expand the scope of plant varieties protection to all plant genera and species, and to enable the Intellectual Property Office of Singapore (IPOS) to appoint any technical examining authority for the examination of an application for Plant Variety Protection.

Implications for plant breeders

Plant breeders who were previously not able to protect

11 plant varieties other than orchids, aquatic plants and ornamentals, and vegetables, will now be able to do so.

Plant breeders who wish to protect such plant varieties which have already been commercially exploited in Singapore, will need to file applications by 30 July 2015, provided that such commercial exploitation occurred between 12 months to 4 years, and in the case of trees and vines, 6 years, prior to the filing of the applications.

With the expansion of the types of examining authorities, it is hoped that the quality of the examination will be improved and hence, the resulting strength of protection enhanced, since suitably qualified examiners, appropriate to the type of plant variety concerned, may be appointed.

What the law says

Previously, Plant Variety Protection could only be obtained for specified types of orchids, aquatic plants and ornamentals, and vegetables. With effect from 30 July 2014, any plant genera and species may be protected so long as it is new and satisfies the requirements of being distinct, uniform and stable.

A plant variety is considered new if its harvested or propagating material is commercially exploited with the breeder's consent, not more than the following time periods before the application is filed:

 in Singapore - 12 months;  outside Singapore: o 6 years for trees and vines; or o 4 years for all other types of plant varieties.

If a plant variety has been commercially exploited in Singapore for more than 12 months before the application is filed, it may still be protected if:

 the application is filed before 30 July 2015; and  provided that its commercial exploitation was not before the following time periods before the application is filed: o 6 years for trees and vines; or o 4 years for all other types of plant varieties.

IPOS may now also appoint any person, organisation or entity as an Examiner to examine a plant variety application. Previously, the only examining authority was the Agri-Food and Veterinary Authority of Singapore (AVA).

Actions to consider

Those seeking to protect plant varieties which were not previously protectable should file Plant Variety Protection applications within the following timelines:

 12 months of commercially exploiting them in Singapore;  by 30 July 2015 if already commercially exploited in Singapore for more than 12 months ago, provided the commercial exploitation did not take place more than 4 years before filing the application and not more than 6 years in the case of trees and vines; or  4 years if they are commercially exploited elsewhere unless they are trees and vines (6 years).

ANDY LECK / CELESTE ANG / ANGELINE LEE / CHEAH YEW KUIN Managing Principal / Principal / Principal /Local Principal Baker & McKenzie.Wong & Leow

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IPOS Appointed as First ASEAN International Searching and Preliminary Examining Authority

Recent developments

The Intellectual Property Office of Singapore (IPOS) has been appointed by the World Intellectual Property Organization (WIPO) as an International Searching Authority (ISA) and International Preliminary Examining Authority (IPEA).

Implications for PCT patent applicants

Applicants who file an international application under the Patent Cooperation Treaty (PCT) with IPOS in Singapore, now have the additional choice of electing IPOS, apart from the Austrian, Australian, European, Korean and Japanese Patent Offices previously, to conduct the search and examination of their patent application.

Electing IPOS as the ISA and IPEA may cost less.

IPOS is also able to conduct searches in English and Chinese, and this may be an advantage since the number of applications filed in China is one of the highest in the world.

What the draft Guidelines say

The draft Guidelines essentially touch on the representations of the GUI design to be submitted in the application.

Actions to consider

Should you wish to relay your feedback on the Guidelines to IPOS, please feel free to contact us.

ANDY LECK / CELESTE ANG / ANGELINE LEE / CHEAH YEW KUIN Managing Principal / Principal / Principal /Local Principal Baker & McKenzie.Wong & Leow

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Expansion of Patent Prosecution Highway Program with European, German, Russian Patent Offices and the Global Patent Prosecution Highway Program

Recent developments

IPOS has signed a series of bilateral Patent Prosecution Highway (PPH) agreements with the European Patent Office (EPO), the German Patent and Trademark Office (DPMA), and the Russian Federal Service for Intellectual Property (Rospatent). IPOS has also joined the Global Patent Prosecution Highway (GPPH) network.

Implications for PCT patent applicants

The PPHs will give businesses the option to accelerate their patent applications in those territories, which will open up more growth and expansion opportunities for businesses and investors there.

PPH

The PPH is aimed at promoting expeditious, inexpensive and high-quality patent examination. It allows a patent application to be accelerated based on the search and examination results established by a participating patent office. The sharing of the search and examination results between the patent offices will result in a smoother application process, greater assurance of obtaining a patent, time efficiencies and cost savings.

The PPH agreements with DPMA, Rospatent and the EPO are effective from 1 October 2014, 1 November 2014, and 1 January 2015 respectively. The GPPH is effective as of 1 November 2014.

Currently, there are 17 countries/offices under the GPPH pilot programme, namely Japan, Korea, US, Australia, Canada, Denmark, Finland, Hungary, Iceland, Israel, Nordic Patent Institute, Norway, Portugal, Russia, Spain, Sweden, and the UK.

Actions to consider

Businesses with an interest in the European market and countries in the GPPH pilot programme can now avail themselves of these PPHs to expedite their registrations there in order to exploit the market faster.

ANDY LECK / CELESTE ANG / ANGELINE LEE / CHEAH YEW KUIN Managing Principal / Principal / Principal /Local Principal Baker & McKenzie.Wong & Leow

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Protecting Shape Marks - Nestle v Petra Foods

The High Court issued a landmark ruling in Societe Des Produits Nestlé SA and another v Petra Foods Ltd and another [2014] SGHC 252. This case is instructive as the Court provided a detailed analysis of the applicable principles for the protection of shapes as trade marks as well as the importance of maintaining documentary evidence to prove ownership when asserting copyright infringement.

Facts

The plaintiffs belong to the Nestlé group of companies (collectively, "Nestle"), while the defendants belong to the Petra Foods group (collectively, "Petra Foods"). Nestle was the registered owner of the two-finger and four-finger shape marks in Class 30 (the "Registered Shapes") and asserted ownership of copyright in the design of the packaging of its Kit Kat bars containing a representation of a two-finger bar (the "Artistic Work").

Petra Foods manufactures, imports and distributes a chocolate product under the trade mark "Take-It" or "Delfi Take-It". Take-It, similar to Kit Kat, is sold in two-finger

and four-finger packs, with a representation of the bars on its packaging.

Nestle brought an action against Petra Foods for trade mark infringement in relation to the Registered Shapes and copyright infringement in the Artistic Work.

The trade mark infringement claims failed as the Court held that the Registered Shapes were invalidated for falling under the Technical Result Exception under the Trade Marks Act (the "Act"), and being devoid of any inherent or acquired distinctiveness under the Act. The Registered Shapes were also susceptible to revocation for non-use under sections 22(1)(a) and (b) as they were never used in the trade mark sense.

The copyright infringement claim also failed as Nestle was unable to prove that it was the owner of copyright in the Artistic Work.

The Court granted a declaration that the registrations for the Registered Shapes were invalid and ordered them to be removed from the Register of Trade Marks.

Shapes as registered trade marks

Under section 23(1) of the Act, a registered trade mark may be invalidated for breach of section 7 of the Act. Section 7 provides the criteria for registration of a trade mark, including three specific grounds on which registration of shape marks are prohibited, namely:

 Technical Result Exception  Nature Exception  Substantial Value Exception

Under the Technical Result Exception, a shape cannot be registered where it consists exclusively of the shape of the goods which is necessary to obtain a technical result. The Court identified that the essential characteristics of the Registered Shapes were the rectangular slab, presence of breaking grooves, and number of grooves and fingers, and that each of these features was necessary for a specific, though different, technical result. The rectangular slab was

16 necessary for efficient manufacture, the breaking grooves for facilitating the breaking up of the chocolate bar, and the number of grooves and fingers to achieve the desired portion size. Thus, the Technical Result Exception applied and the Registered Shapes were vulnerable to invalidation.

Secondly, for the Nature Exception to apply, the mark should consist exclusively of the shape which results from the nature of the goods themselves. This exception is not limited to natural products (e.g. the shape of a banana for bananas) and regulated products (where the shape is prescribed by standards, e.g. a rugby ball) and can also apply to man-made goods where the shape is not pre- determined and which may have alternative shapes. The relevant question to ask in order to ascertain the application of this exception is: "Considering that the generic function of the goods is X, would it therefore be "natural" that a shape for such a good would have essential element Y?" On the facts, the Registered Shapes were registered for "chocolate-coated bars and wafers". The Court found that there is no natural shape for a chocolate-coated bar or wafer, and accordingly, that it could not be said that the Registered Shapes resulted from the nature of the chocolate-coated products.

Thirdly, the Substantial Value Exception applies where the mark consists exclusively of the shape which gives substantial value to the goods. In applying this exception, the Court considered whether the Registered Shapes had such an eye-catching design to give it substantial value over other competing products on account of their aesthetic design. Analysing the evidence before it, the Court found that the taste and feel of the Kit Kat product depended on many factors, and its shape was but one consideration.

The Court also considered whether it was possible to apply the three exceptions in combination in a hybrid argument and observed that it was likely that the exceptions should apply independently of each other, but did not give a decisive answer on this point.

Non-distinctiveness of the Registered Shapes

In deciding if the Registered Shapes were devoid of distinctive character, the Court considered whether the average consumer would regard the putative shape alone as a badge of origin. Finding that the Registered Shapes did not inherently indicate trade origin, the Court went on to consider if the Registered Shapes had acquired

17 distinctiveness through use.

Nestle tendered survey evidence to prove that the Registered Shapes had indeed acquired distinctiveness through the years of use. However, the Court took issue with the methodology of the surveys and gave them little weight, finding that the evidence was insufficient to conclude that the Registered Shapes had any acquired distinctiveness. As such, the Court found that the Registered Shapes were also subject to invalidation for being devoid of any inherent or acquired distinctiveness.

Revocation for non-use

Under sections 22(1)(a) and (b) of the Act, a trade mark may be revoked where it has not been used for a period of 5 years following the date of completion of the registration procedure, or for non-use for an uninterrupted period of 5 years, and where there are no proper reasons for such non-use.

The Court determined that if the Registered Shapes were not used in a "trade mark sense", as badges of origin, they were never put into genuine use as shape marks. On the evidence before it, the Court found that the Registered Shapes had not been used in such a manner. The Court observed that the mere commercial exploitation of the Kit- Kat products, without more, could not be considered trade mark use. The Kit-Kat products are sold in opaque wrappers, which would mean that the actual shapes of the products have no trade mark significance at the point of sale. With respect to the image of the Registered Shapes in a modified form on the packaging, it is descriptive use as it merely illustrated the goods that are being merchandised and served to attract the customers. In addition, even when the Kit-Kat products are actually unwrapped for consumption, the words "KIT KAT" feature prominently. Therefore, the Registered Shapes could be revoked on the basis of non-use.

Shapes as well-known marks

Nestle also argued that it should be afforded protection of the Registered Shapes under section 55 of the Act, as they were well-known marks. In this regard, the Court considered the definition of well-known trade marks in section 2(1) of the Act, particularly that it included "any unregistered trade mark that is well-known in Singapore".

The Court held that there was a fundamental difference between a mark being unregistered and unregistrable for one of the grounds in section 7 of the Act. Since the

Registered Shapes were inherently unregistrable under section 7 of the Act, section 55 could not afford them protection as well-known marks.

Nestle further claimed that it owned copyright in the Artistic Work which had been infringed by Petra Foods. The Court held that in order to argue a claim for copyright infringement, Nestle first had to show that it owned the copyright, by proving a chain of title from the original owner to itself. In this regard, the evidence tendered by Nestle was insufficient to convince the Court of its ownership in the Artistic Work. In particular, in relation to the purported assignment from the last purported owner of the copyright to Nestle, whilst the assignment was between related companies and Nestle produced evidence of a policy which required all such copyright assignments to be recorded in an assignment document, Nestle was unable to produce the actual assignment document in Court. Accordingly, Nestlé's claim of copyright infringement was dismissed.

Comments

This case touches upon several important points. Apart from being a landmark ruling on the applicable principles for the protection of shapes as trade marks under the Act, the case also emphasises the importance of maintaining proper records to demonstrate chain of title in copyrighted works.

Separately, the Court also emphasised that survey evidence would only be given weight if it were properly conducted and presented. This should serve as a reminder to future litigants who wish to tender survey evidence in support of their claims.

ANDY LECK / CELESTE ANG / ANGELINE LEE / CHEAH YEW KUIN Managing Principal / Principal / Principal /Local Principal Baker & McKenzie.Wong & Leow

------No confusion between HAN's and HAN Cuisine of Naniwa - Han’s (F & B) Pte Ltd v Gusttimo World Pte Ltd

Facts

Han's (F&B) Pte. Ltd. (the "Plaintiff") is the owner of well- known restaurant chain Han's Café in Singapore and

19 proprietor of the trade marks set out below (the "Han's Trade Marks") registered, inter alia, for restaurant services. Han's Café started its first restaurant in 1980 and consists of 21 semi-self-serve restaurants serving western and local food.

Gusttimo World Pte. Ltd. (the "Defendant") is the owner of high end Japanese restaurant HAN cuisine of Naniwa which opened for business in 2012 and trades under the sign below (the "HAN sign").

The Plaintiff claimed that use of the HAN sign constituted trade mark infringement and passing off. The Defendant counterclaimed for groundless threats and sought to invalidate the Han's Trade Marks based on lack of distinctiveness.

The Court found the Han's Trade Marks to be valid and at the same time held that there had been no trade mark infringement nor passing off by the Defendant.

Decision

The Defendant sought to invalidate Han's Trade Marks on the basis that "Han" is a common surname in Singapore hence the Han's Trade Marks are devoid of distinctive character. The Court found the Han's Trade Marks to be valid and noted that the fact that Han is a surname and even a common one does not mean that it must be treated as devoid of distinctive character. While the word mark portion of the Han's Trade Marks, may lack inherent distinctiveness, Han's Trade Marks were overall distinctive due to its unique stylization and typeface. Further, the survey evidence submitted by the Plaintiff also

20 demonstrated that the brand was known to many Singaporeans and therefore the Han's Trade Marks had also acquired distinctiveness through use.

In relation to the Plaintiff's claim for infringement, notwithstanding the presence of the prominent component "HAN" in both the Han's Trade Marks and the HAN sign, the Court found the HAN sign to be only weakly similar to the Han's word marks and dissimilar to the Han's Trade Marks when viewed as a whole. In particular, the Court found the HAN sign to be conceptually different from the Han's Trade Marks as the presence of possessive modifier in "Han's" signified ownership by a person named "Han" while "HAN" evoked a reference to a group of people or type of cuisine. This conceptual difference was further enhanced in the Han's Trade Marks as their styling evoked a sense of comfort and familiarity compared to the simple sophistication portrayed by the HAN sign. The considerable stylization of the Han's lettering in the Han's Trade Marks also rendered it visually dissimilar to the HAN sign.

Further, even though both trade marks were used in relation to the same services, there was no infringement of the Han's word marks as there was no likelihood of confusion despite the strong phonetic similarity. In assessing likelihood of confusion, the Court took into account of the fact that the Plaintiff and Defendant's restaurants are brick-and-mortar establishments. Therefore, potential patrons who will be physically present at the establishments will have direct perception of the respective marks and be cognizant of the conceptual dissimilarities. The success and prominence of the Plaintiff's chain and their trade marks also mitigated against confusion especially since there was only weak visual similarity. Finally, the Court also factored in the significant differences in style, price and type of food, noting that they were not "superficial marketing choices" that had to be discounted in an infringement analysis. Specifically, the Plaintiff's establishments were "value for money" while the Defendant's was a Japanese fine dining restaurant.

Lastly, the Plaintiff also claimed that the Defendant is liable for passing off its business as being associated with theirs. To succeed on the ground of passing off, 3 elements have to be shown: goodwill, misrepresentation and damage. Although the Court found that the Plaintiff possessed goodwill in the Han's Trade Marks, there was no misrepresentation and hence no passing off as use of the HAN sign did not give rise to the confusion that the Defendant's good and services were somehow connected

21 to the source of the Plaintiff's. In particular, the Plaintiff carried on business using the red Han's composite mark , which was found to be dissimilar to the HAN sign. There was also a stark difference in the market segment targeted by the Plaintiff and Defendant's businesses.

Comments

This case illustrates that notwithstanding the presence of a common dominant word component, it may be possible to avoid trade mark infringement and passing off if the target consumers belong to a significantly different market segment and a device that is visually and conceptually dissimilar is incorporated as part of the mark.

ANDY LECK / CELESTE ANG / ANGELINE LEE / CHEAH YEW KUIN Managing Principal / Principal / Principal /Local Principal Baker & McKenzie.Wong & Leow

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Invalidation of Trade Marks Based On Passing Off - Intel v Intelsteer and Tsung-Tse Hsieh v Redsun

Facts in Intel Corporation v Intelsteer

Intel Corporation (the "Applicants"), the owner of registered trade mark INTEL (the "Intel Marks"), sought to invalidate the registered trade mark (the "IntelSteer Mark") shown below, which is owned by Intelsteer Pte Ltd (the "Proprietors"). Both marks are registered in Class 42.

The Proprietors were incorporated in Singapore in 2006 and focused on providing their clients with the latest lighting technology to reduce energy costs and carbon emissions, and improve plant performance.

The Applicants brought an action for invalidation based on confusing similarity, well-known mark and passing off. They succeeded based on passing off.

Decision

A registered trade mark can be invalidated based on confusing similarity if it is similar to an earlier registered trade mark, is registered for identical or similar goods, and

22 there is a likelihood of confusion due to such registration. On the issue of confusing similarity, the Registrar held that even though there is some possibility of initial confusion between the two marks, in light of: (i) the nature of the services which are not cheap; (ii) the fact that they are technical / specialist in nature; and (iii) the purchasing process of the services, any possibility of confusion would be dispelled by the time of purchase.

The Applicants also sought to invalidate the IntelSteer Mark on the basis that the Intel Marks are well-known to the public at large and registration of the IntelSteer Mark (a) causes dilution in an unfair manner or (b) takes unfair advantage of the distinctive character of the Intel Marks. The Applicants failed on both grounds even though the Registrar recognised that the Intel Mark is well-known. In relation to the dilution ground, the Registrar noted that it was insufficient merely to show that registration of the IntelSteer Mark would lead to dilution in the well-known mark's ability to identify or distinguish between goods or services. The dilution must be caused in an unfair manner which means that it must be contrary to honest commercial practice. In this case, the Applicants had not argued how dilution, if any, had occurred in an unfair manner. Similarly, the Applicants had only demonstrated the possibility of an "advantage" being taken at the expense of their trade marks but not addressed why such an advantage was unfair.

The Applicants also argued that the IntelSteer Mark should be invalidated because its use is liable to be prevented based on the law of passing off. The Applicants succeeded on this ground. To succeed on the ground of passing off, three elements have to be shown: goodwill, misrepresentation and damage. They were found to have the relevant goodwill in Singapore. Misrepresentation was also made out as the proximity between the Applicants' business of manufacturing microprocessors/computers and the Proprietor's field of energy efficiency made it reasonably foreseeable that the Applicants would expand into the Proprietor's field. The Registrar acknowledged that the purchase process would be unhurried and considered due to the nature of the service and as such there was a possibility that any confusion contemplated may only be an "initial confusion". However, misrepresentation was still found as these factors were outweighed by the fact that the Applicants had already expanded into the area of energy efficiency in the United States and the probability of tie-ups in the local context was not unlikely, based on the Applicants' history of collaborations with local companies. Finally, there was also a likelihood of damage from the

23 restriction of expansion into another commercial activity.

Facts in Tsung-Tse Hsieh v Redsun

Redsun Singapore Pte Ltd (the "Applicants") are the proprietors of the registered trademark (the "Applicants' Mark") in Class 5. They sell green tea and health supplements in Singapore with sales of "RED SUN" tea accounting for 20-25% of their annual sales revenue. Tsung-Tse Hsieh, (the "Proprietor") who owns a chain of bubble tea shops in Taiwan, registered (the "Red Sun Tea Shop Mark") in Class 30.

The Applicants sought to invalidate the Red Sun Tea Shop Mark based on confusing similarity, passing off, well- known mark and bad faith. They succeeded based on passing off.

Decision

The Registrar found the Red Sun Tea Shop Mark and the Applicants' Mark to be similar as the most distinctive and memorable component of both marks was the phrase "RED SUN".

However, the Registrar held that there was no confusing similarity between the marks as they were registered for different products. In this case, the Red Sun Tea Shop Mark is registered in Class 30 with the specification relating to general goods and beverages while the Applicants' Mark is registered in Class 5 with a specification drawn to health food supplements and herbal preparations. The Applicants' goods were therefore not similar as they have a different use of improving the quality of life while the Red Sun Tea Shop Mark is directed at "bread and butter" sustenance and the goods are also generally not in direct competition with each other.

As mentioned previously, a registered trade mark can be invalidated if its use is liable to be prevented based on the law of passing off, which seeks to protect the goodwill of a business. To succeed on the ground of passing off, three elements have to be shown: goodwill, misrepresentation and damage.

The Applicants established the existence of goodwill in the RED SUN trade mark on the registration date of the Red Sun Tea Shop Mark, based on use and promotion of the mark. In relation to misrepresentation, the Registrar found that the use of the Red Sun Tea Shop Mark was likely to

24 lead the public to believe that the goods of the Proprietor are those of the Applicants. The Red Sun Tea Shop Mark was very similar to the Applicants' Mark as it contained RED SUN as a dominant component. The marks were also used in relation to common goods ie., tea. Unlike the assessment of confusing similarity, the Applicants' sale of green tea was relevant in passing off and the Registrar found that goodwill in the "RED SUN" trade mark extended to tea products. Finally, although the Applicants have not sold their green tea in prepared form unlike the Proprietor's local distributor who operated a bubble tea outlet, evidence showed that it was common practice in Singapore for businesses to sell both prepared and unprepared tea under the same name. Therefore, it was likely that the public would be misled into thinking that the Proprietor's goods belonged to the Applicants.

Finally, the Applicants also succeeded in showing a likelihood of damage from the restriction of expansion into another commercial activity since the extended activity of selling tea that is ready for consumption is closely connected to the established activity selling of tea in unprepared form. Accordingly, the Applicants succeeded in invalidating the Red Sun Tea Shop Mark based on passing off.

Comments

These cases demonstrate that it is possible to successfully invalidate earlier trade marks based on passing off even if the mark may not be regarded as confusingly similar under the Act. The premise of such an outcome appears to be the fact that whilst confusing similarity has to be considered only with regard to the specifications of the contesting marks, when considering passing off, the Registrar is able to consider all aspects of the Applicant's business, including those goods/services being offered which may not form part of the specification of goods/services which the marks relied upon have been registered for.

ANDY LECK / CELESTE ANG / ANGELINE LEE / CHEAH YEW KUIN Managing Principal / Principal / Principal /Local Principal Baker & McKenzie.Wong & Leow

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New Proposed Advertising Guidelines for Social Media

The Advertising Standards Authority of Singapore ("ASAS") is drafting new guidelines for interactive advertising, such as for advertisements on social media sites (e.g. Facebook and Twitter) and blogs.

ASAS is an advisory council under the Consumer Association of Singapore ("CASE") that promotes ethical advertising and acts as the self-regulatory body of the advertising industry.

These guidelines will, amongst other things, specify that advertorials must be clearly marked as advertising, and discourage advertisers from buying fake Facebook "likes". ASAS has invited key stakeholders in the social media advertising industry, including social media companies and established media owners, to be a part of drafting the guidelines.

Comments

The Singapore Code of Advertising Practice (the "SCAP"), produced by the advertisers, sales promoters, agencies, and the media) and to all advertisements, including digital communications on the Internet.

Currently, the SCAP imposes an obligation "on all concerned with the preparation and/or publication of an advertisement to ensure that anyone who looks at the advertisement is able to see, without reading it closely, that it is an advertisement and not editorial matter". Furthermore, where paid-for space is in the style of a normal editorial, particular care should be taken to ensure that no part of it can be mistaken for normal editorial matter.

As an example, it appears that having bloggers to complain about rival companies on their blogs, presenting such posts as editorial matter rather than paid content, is a violation of the SCAP.

The ASAS is empowered to ask that advertisements contravening the SCAP be taken down with the assistance of media owners. Errant parties may also face adverse publicity, as the ASAS may publish the names of those who have offended against the SCAP.

It is likely that the new guidelines for interactive advertising will set out more clearly how the SCAP applies to digital media advertising. For example, discouraging advertisers from buying fake Facebook "likes" would be an application of the current principle that advertisements "should not mislead in any way by inaccuracy, ambiguity, exaggeration,

26 omission or otherwise".

Advertising on the Internet will be easier to control where social media platforms such as Facebook or Twitter, social media networks such as Nuffnang, or advertising networks such as the Google Display Network are involved. For example, the Singapore High Court recently ruled that a Facebook page is owned by Facebook Inc, and not the person who set it up. This means that ASAS can seek the assistance of social media platforms to remove content on its pages where the advertisements are in contravention of the SCAP. However, advertisements beyond the ambit of such organizations will be significantly harder to police. On the Internet, it may be difficult to identify the person behind an advertisement and therefore, difficult to request that the advertisement be taken down. Also, unlike the newspapers, there is no overall "owner" of the Internet who can deprive a person of advertising space. Therefore, if the advertisements do not appear on a organized network or website with an owner who is willing to cooperate with ASAS, it would be difficult to enforce the SCAP against them.

ANDY LECK / LIM REN JUN Managing Principal / Senior Associate Baker & McKenzie.Wong & Leow

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Singapore Consumer Watchdog Proposes to Expand "Lemon Laws" to Manufacturers

The Consumers Association of Singapore ("CASE") has called for "lemon laws" in Singapore to be extended to apply to manufacturers, making it mandatory for manufacturers to give warranties for all goods sold in Singapore.

CASE will be presenting a formal proposal to the Ministry of Trade and Industry in May 2015.

Presently, the "lemon laws", found under the Consumer Protection (Fair Trading) Act (Cap. 52A) (the "CPFTA"), grant consumers additional remedies against sellers for defective goods, including the repair or replacement of such goods, or even a reduction in price or refund in specified cases.

Currently, such consumer remedies are only available vis- à-vis the immediate seller of the goods to the consumer.

The "lemon laws" stipulate that the person seeking recourse must have been "dealing as a consumer". Whilst manufacturers are not included, some may choose to give warranties which allow the consumer to have the manufacturer repair or replace defective goods.

CASE has expressed that it would like manufacturers to co-share the responsibility for defective goods with retailers. It opines that such an arrangement would help facilitate claims by consumers against retailers for defective goods, by reducing cost for retailers.

If CASE's proposal is accepted, it is likely that a public consultation would follow. However, it remains to be seen how such proposed legislation would be drafted.

Comments

It is unclear how the proposed extension would be effected. One possibility is that the proposed compulsory warranties could exist privately between the manufacturers and retailers. This would compel manufacturers to take responsibility for defects in goods supplied where the defects existed before delivery to the retailers.

It will also be interesting to see how these new obligations of the manufacturers would interact and coexist with the current obligations of the retailers under the "lemon laws". Naturally, this will have an impact on the rights and obligations under the contracts between manufacturers and distributors / retailers, as well as the contracts between retailers and consumers.

Notably, should the proposal be accepted, businesses (manufacturers, distributors and retailers alike) would need to relook their contracts as well as return policies, to ensure that they are compliant with the law and have adequately addressed their rights and obligations.

ANDY LECK / LIM REN JUN Managing Principal / Senior Associate Baker & McKenzie.Wong & Leow

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Anti-online piracy measures in light of Dallas Buyers Club

Recent amendments to the Copyright Act

The Copyright Act now permits courts to grant judicial

28 blocking orders.

The recent amendments to the Copyright Act (which came into force in August 2014) establish a new mechanism for rights holders to effectively disable access to online locations hosting copyright infringing material.

Prior to the amendments, rights holders could only request Network Service Providers ("NSPs") to disable access to copyright infringing material. However, the NSPs were not statutorily bound by such requests. Rights holders would have to then commence legal proceedings against NSPs and establish that they were liable for copyright infringement before they could compel them to remove the copyright infringing material.

Copyright owners and exclusive licensees can apply to the Singapore High Court for a blocking order if their copyrights have been infringed online. If granted, the court order will make it mandatory for NSPs to take reasonable steps to disable access to online locations.

With the implementation of these measures, injunctions can now be obtained against piracy websites with greater speed and certainty.

Dallas Buyers Club

The Singapore High Court has recently ordered the Republic's major NSPs to disclose details of their respective customers to Voltage Pictures, the co-producer and studio owner of the movie Dallas Buyers Club, for alleged illegal movie downloads of the film.

Voltage Pictures intends to institute court actions against infringing end-users and has already sent demand letters to 77 individuals threatening legal action unless a settlement on damages and costs is reached.

This comes amid the Australian Federal Court's decision on 6 April 2015 to require NSPs in Australia to disclose the personal details of some 4,700 users who were alleged to have shared the movie on online file-sharing networks such as BitTorrent. Similar action is being sought by Voltage Pictures in the United States.

Blocking piracy websites

Notwithstanding the above recourse under the Copyright Act, Voltage Pictures decided to institute court actions against the individual consumers rather than apply for

29 website blocking orders against the piracy websites.

On one hand, pundits argue that website blocking can be easily circumvented using a virtual private network. In any case, most piracy websites also have proxy Web addresses or alternative addresses, that can be accessed via Web browsers to allow users to gain access to the blocked sites.

Nevertheless, even though website blocking will not eradicate piracy websites, we believe that the blocking measures constitute a powerful tool to enable rights owners to take action against an infringing website instead of commencing multiple actions against individual end users. These measures have already been employed in other jurisdictions to tackle piracy sites.

We would also note that for cases of small-scale downloads, the likely quantum of damages is limited to the price of a licensed movie download (or a DVD) and legal fees, as the remedy of statutory damages (which is subject to a per-work ceiling of S$10,000 and to an aggregate ceiling of S$200,000 per title per person) is not automatic under Singapore's Copyright Act.

Comments

In view of the above, there is no panacea to tackle online piracy. To address this effectively, rights owners need to consider alternative modes of enforcement and wield them in combination for effective protection of their copyrights.

It is therefore imperative that rights owners decide on an appropriate course of action based on an assessment of the specific facts, including the type and extent of infringement, the nature of the infringers' operations, and the costs involved.

ANDY LECK / CELESTE ANG / ANGELINE LEE / CHEAH YEW KUIN Managing Principal / Principal / Principal /Local Principal Baker & McKenzie.Wong & Leow