TRADE MARKS ORDINANCE (CAP. 559)
OPPOSITION TO TRADE MARK APPLICATION NO. 302275975
Marks :
Classes : 16, 25
Applicant : Kabushiki Kaisha Nissen Holdings (Nissen Holdings Co., Ltd.)
Opponent : Industria de Diseño Textil, S.A. (Inditex, S.A.)
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STATEMENT OF REASONS FOR DECISION
Background
1. On 7 June 2012 (“Application Date”), Kabushiki Kaisha Nissen Holdings (Nissen Holdings Co., Ltd.)(“Applicant”) filed an application (Application No. 302275975)(“subject application”) under the Trade Marks Ordinance (Cap. 559)(“Ordinance”) for registration of the following series of two marks (collectively, the “subject marks”) :
(“subject mark A”)
(“subject mark B”).
The Applicant claims the colours blue, black and white as elements of subject mark A. Registration of the subject marks is sought in respect of the following goods (“subject goods”):
1 Class 16 Paper; cards; catalogues; printed matter; magazines [periodicals]; wrapping paper; bags [envelopes, pouches] of paper or plastics, for packaging; paper box; office requisites, except furniture (“subject Class 16 goods”).
Class 25 Tee-shirts; camisoles; drawers [clothing]; pants; bodices [lingerie]; underwear; tights; sweat-absorbent underclothing; jerseys [clothing]; underpants; brassieres; petticoats; slips [undergarments]; children clothes; brassieres (chest liners, chest pads); clothing for gymnastics; stockings; sweat-absorbent stockings; hosiery; leggings (“subject Class 25 goods”).
2. Particulars of the subject application were published on 26 October 2012. Industria de Diseño Textil, S.A. (Inditex, S.A.)(“Opponent”) filed a notice of opposition on 25 January 2013 (“Notice of Opposition”) with a statement of grounds of opposition (“Statement of Grounds”). In response to the Notice of Opposition, the Applicant filed a counter-statement on 19 April 2013 with grounds in support of its application.
3. The Opponent’s evidence consists of:
(a) a declaration of Mr. Antonio Abril Abadin made on 16 January 2014 (“Abadin’s 1st Declaration”); and
(b) a second declaration of Mr. Antonio Abril Abadin made on 30 June 2015 (“Abadin’s 2nd Declaration”).
4. The Applicant’s evidence consists of a declaration of Hiroshi Ii made on 8 October 2014 (Ii’s Declaration”).
5. The opposition hearing took place before me on 10 November 2016. Ms Miranda Chan of Messrs. Hastings & Co. appeared for the Applicant, and Ms Florence Lam of Messrs. Wilkinson & Grist appeared for the Opponent at the hearing. I reserved my decision at the conclusion of the hearing.
Grounds
6. The Opponent relies on the grounds under the following sections of the Ordinance:
2 (a) section 12(3); (b) section 12(5)(a); (c) section 12(4); and (d) section 11(5)(b).
Relevant date
7. The relevant date for considering this opposition is the Application Date, i.e. 7 June 2012.
Evidence of the Opponent
8. According to Abadin’s 1st Declaration, the Opponent is a fashion distributor with over 6,000 stores in 86 countries in Europe, Asia, Oceania, United States of America and Africa. The Opponent’s retail stores are operated in the names and formats of Zara, Zara Home, Pull & Bear, Bershka, Massimo Dutti, Oysho, Stradivarius and Uterqüe. ZARA is the Opponent’s flagship chain.1
9. According to Abadin’s 1st Declaration, the mark ZARA was devised by the President and founder of the Opponent Mr. Amancio Ortega Gaona as a fanciful mark in 1975 when the first ZARA store was opened in A Coruña, North Western Spain in 1975.2
10. ZARA is used as the name of a chain of stores as well as the brand of products sold in ZARA stores including goods in Classes 3 (e.g. perfume, cosmetics), 9 (e.g. sunglasses), 14 (e.g. watches jewellery), 16 (e.g. notebooks, pocket diaries), 18 (e.g. bags, purses, belts, backpacks, umbrellas), 24 (e.g. towels), 25 (e.g. clothing, footwear, headgear) and 26 (e.g. headbands, hair pins, hair ties)(collectively the “Opponent’s Goods”). From 2009 onwards, catalogues of the Opponent’s Goods are no longer printed. The annual promotion campaign and the collections for each year are only shown in-store and on the Opponent’s websites. For Hong Kong, Exhibit “AAA-1(b)” to Abadin’s 1st Declaration shows pictures downloaded from the Hong Kong website www.zara.com/hk for the 2009, 2010, 2011, 2012, 2013 and 2014 collections. Products shown include clothing and shoes.3
1 Abadin’s 1st Declaration, para. 4. 2 Abadin’s 1st Declaration, para. 5. 3 Abadin’s 1st Declaration, para. 6.
3 11. ZARA HOME, a brand introduced by the Opponent in 2003, sells home furnishing focusing on textiles (such as bed, table and bathroom linen), tableware, cutlery, glassware and decorative items. The Opponent’s first ZARA HOME store opened in Hong Kong in October 2013 (i.e. after the Application Date).4
12. The Opponent is the owner of the trade marks “ZARA”, “TEXTURES ZARA”, “ZARA BASIC”, “ZARA HOME” and marks similar thereto (collectively, the “Opponent’s Marks”). The Opponent’s Marks have been registered in various jurisdictions around the world. In Hong Kong, the Opponent is the owner of, inter alia, the registered marks set out in Annex 1 (“Opponent’s HK Registered Marks”).
13. According to the Interbrand “Best Global Brands” report which ranks the world’s most valuable brands, ZARA was ranked 48th out of 100 in 2010, 44th in 2011 and 37th in 2012.5 In the Interbrand “Best Global Brands” report 2012, the brand “ZARA” was valued at US$ 9,488 million.
14. The Opponent does not explicitly advertise but relies on the visibility of its prominently situated stores to make itself seen and known. As observed in the Interbrand “Best Global Brands” report 2009, Zara is not a big advertising spender and instead builds awareness through word-of-month and retail presence.6 At the time of Abadin’s 1st Declaration, ZARA has presence in 86 countries with a network of more than 1,800 ZARA stores, including 11 stores in Hong Kong. The first ZARA store in Hong Kong opened in 2004 at the International Finance Centre in Central.7
15. Set out in paragraphs 20 and 21 of Abadin’s 1st Declaration are the worldwide and Hong Kong net sales of the Opponent’s Goods under the Opponent’s Marks during the years 2006 to 2012. The average annual worldwide net sales and the average annual Hong Kong net sales during that period were more than €7.5 billion and HK$1 billion per annum respectively. Sales of ZARA clothing represent approximately 66.11% contribution to the Opponent’s worldwide sales.
16. Exhibit “AAA-10” to Abadin’s 1st Declaration includes copies of invoices issued by the Opponent to Zara Asia Limited in Hong Kong from 2006 to 2012 in respect of various goods in Class 25 including clothing, underwear, caps, hats, socks,
4 Abadin’s 1st Declaration, para. 10. 5 Abadin’s 1st Declaration, paras 11-14 and Exhibit “AAA-5”; Abadin’s 2nd Declaration, para. 5 and Exhibit “AAA-18”. 6 Abadin’s 1st Declaration, para. 15. 7 Abadin’s 1st Declaration, paras 7-9.
4 stockings, ties, gloves and scarves, as well as goods in other Classes such as handbags, purse wallets, belts, imitation jewellery and sunglasses (collectively, the “Opponent’s Verified Goods”).
17. Exhibit “AAA-9(b)” to Abadin’s 1st Declaration includes invoices issued under the Opponent’s “ZARA HOME” mark in respect of sales of the Opponent’s Class 16 goods from 2013, i.e. after the Application Date. There is no evidence that the Opponent has used any of the Opponent’s Marks in Hong Kong in respect of goods in Class 16 before the Application Date.
18. It has not been the policy of the Opponent to make big investments in advertising and since 2007, the Opponent has not published any catalogues. In Hong Kong there have been limited promotion activities that correspond to the seasonal sales advertisements twice a year and some in-store events.8 Set out in Exhibit “AAA-11(a)” to Abadin’s 1st Declaration are advertisement costs of Zara Hong Kong during the years 2007 to 2010. The average annual advertisement costs of Zara Hong Kong during that period was around HK$352,000 per annum. Included at Exhibit “AAA-12” to Abadin’s 1st Declaration are copies of articles written on Zara from Mainland China, India, Israel, Japan, UK, USA etc. Only one article in 2006 is from Hong Kong.
19. The Opponent has obtained registrations of the Opponent’s Marks in Hong Kong and in various countries in the world. Included at Exhibit “AAA-13” to Abadin’s 1st Declaration is a list of trade mark registrations of the Opponent’s Marks and some copies of the relevant registration certificates.
Evidence of the Applicant
20. According to Ii’s Declaration, the Applicant was founded on 10 April 1970. It is a company organized and existing under the laws of Japan. It has three separate core business operating through its subsidiaries, one of which is the commerce business which covers mail-order business and sales representation business for apparel, lifestyle-related goods, etc., along with sales and wholesale of gift items through a “bricks-and-clicks” business model (i.e. combining stores and various media such as catalogues, the internet and mobile phones).
21. The Applicant stated that it had been an online and catalog retailer in Japan with over 40 years of experience selling goods including clothing, underwear, stockings,
8 Abadin’s 1st Declaration, para. 24.
5 shoes, beauty, hair care and household products, and that at the time of Ii’s Declaration in 2014, the Applicant had over 30 million registered customers in Japan. The Applicant stated that it created its global website http://www.nissen.com in 2010 which had been available in Japanese, English, traditional and simplified Chinese.9
22. According to Ii’s Declaration, the mark “SARA COMFORT” was devised by employees of the Applicant and a planning company in September 2011. The background of the devisal of the mark was that the Japanese word “さら さら” would be translated as “smooth and soft” and transliterated as “SA-RA-SA-RA” in English. The Applicant adopted the combination of the half part “SARA” of the Japanese word “さら さら” and the word “COMFORT” to form the subject marks.10
23. The Applicant stated that it first commenced use of the mark “SARA COMFORT” in Japan in April 2012. Included in “Exhibit HI-2” to Ii’s Declaration are copies of the Applicant’s catalogues circulated in Japan from April 2012 to June 2014 showing use of the mark “SARA COMFORT” in relation to clothing. There is no evidence that the Applicant has used any of the subject marks in Hong Kong before the Application Date.
24. The Applicant owns the trade marks registrations in Japan and the People’s Republic of China set out in Annex 2.
Opposition under section 12(3) of the Ordinance
25. Section 12(3) of the Ordinance provides that:
“(3) A trade mark shall not be registered if- (a) the trade mark is similar to an earlier trade mark; (b) the goods or services for which the application for registration is made are identical or similar to those for which the earlier trade mark is protected; and (c) the use of the trade mark in relation to those goods or services is likely to cause confusion on the part of the public.”
26. The Opponent’s pleaded case under section 12(3) of the Ordinance is that:11
9 Ii’s Declaration, para. 4. 10 Ii’s Declaration, para. 5. 11 Statement of Grounds, para. 7.
6
“The [subject marks] clearly mimics [the Opponent]’s mark, as “Sara” in the [subject marks] is both visually and phonetically similar to the Opponent’s Marks, in particularly “ZARA”, and the word “comfort” is indistinctive. In addition, the [subject goods] are identical or closely related to the Opponent’s Goods/Services. If registration is granted to the [subject marks], the public will be confused as to the origin of the Applicant’s goods. Such will be contrary to the provision of section 12(3) of [the Ordinance].”
27. Those of the Opponent’s Marks which are registered in Hong Kong are the Opponent’s HK Registered Marks set out in Annex 1. I have considered each of the Opponent’s HK Registered Marks which include the following two marks:
(a) the mark “ ” (Registration No. 199508875) (“Opponent’s Mark A”) registered as of 14 March 1994 in respect of “clothing, footwear, headgear” in Class 25 (“Opponent’s Class 25 registered goods”); and
(b) the mark “ ” (Registration No. 300917262) (“Opponent’s Mark B”) registered as of 20 July 2007 in respect of various goods in Classes 4, 5, 6, 9, 11, 12, 14, 15, 16, 18, 22, 26, 27, 28, 34, including “printed matter; publications; photographs; stationery; paint brushes; typewriters and office requisites (except furniture); plastic materials for packaging (not included in other classes); boxes of cardboard or paper; patterns for making clothes and dress-making; tissues of paper for removing make-up; pattern cases; labels (not of textile); table linen of paper; table napkins of paper, babies' napkins of paper and cellulose (disposable); handkerchiefs of paper; pen cases; bags (envelopes, pouches) of paper of plastics, for packaging; tailors' chalk; hat boxes (of cardboard); hand towels of paper; albums; almanacs; writing instruments and materials; transfers (decalcomanias); calendars; posters; files; passport wallets; catalogues; trading cards; drawing sets; magazines (periodicals); books; lithographs; packing paper; toilet paper; paperweights; mats for beer mugs; ink; stickers [stationery]; steel pens; aquarelles; flags of paper; tickets; writing paper; advertisement boards of paper or cardboard; booklets; patterns for dressmaking; writing or drawing books; paintings [pictures], framed or unframed; greeting cards; pencil sharpeners, electric or non-electric; postcards; money clips” in Class 16 (“Opponent’s Class 16 registered goods”).
7 28. I consider that if the Opponent cannot succeed on the basis of any of the Opponent’s Mark A and the Opponent’s Mark B, it would not stand a better chance of success on the basis of any other of the Opponent’s HK Registered Marks.
29. Section 12(3) of the Ordinance essentially prohibits the registration of a trade mark which would be likely to cause confusion on the part of the public as a result of its being similar to an earlier trade mark and because it is to be registered in respect of goods or services the same as or similar to those the subject of the earlier trade mark.
30. According to section 7(1) of the Ordinance, in determining whether the use of a trade mark is likely to cause confusion on the part of the public, the Registrar may take into account all factors relevant in the circumstances.
31. The following is a useful summary of the approach to be taken in assessing the requirement of likelihood of confusion:12
(a) the likelihood of confusion must be appreciated globally, taking account of all relevant factors;
(b) the matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably circumspect and observant, but who rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question;
(c) the average consumer normally perceives a mark as a whole and does not proceed to analyse its various details;
(d) the visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements;
12 Tsit Wing (Hong Kong) Co Ltd. v. TWG Tea Co Pte Ltd [2015] 1 HKLRD 414 at paras 30, 49 (affirmed in TWG Tea Co Pte Ltd v. Tsit Wing (Hong Kong) Co Ltd (2016) 19 HKCFAR 20).
8 (e) nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, be dominated by one or more of its components;
(f) and beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case an element corresponding to an earlier trade mark may retain an independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark;
(g) a lesser degree of similarity between the goods or services may be offset by a greater degree of similarity between the marks, and vice versa;
(h) there is a greater likelihood of confusion where the earlier mark has a highly distinctive character, either per se or because of the use that has been made of it;
(i) mere association, in the strict sense that the later mark brings the earlier mark to mind, is not sufficient;
(j) the reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense; and
(k) if the association between the marks causes the public to wrongly believe that the respective goods [or services] come from the same or economically-linked undertakings, there is a likelihood of confusion.
Earlier trade mark
32. Section 5(1) of the Ordinance provides, inter alia, that:
“In this Ordinance, "earlier trade mark" (在先商標), in relation to another trade mark, means- (a) a registered trade mark which has a date of the application for registration earlier than that of the other trade mark, taking into account the priorities claimed in respect of each trade mark, if any;”.
9 33. Each of the Opponent’s Mark A and the Opponent’s Mark B is a registered trade mark which has a date of application for registration earlier than that of the subject marks. According to section 5(1)(a) of the Ordinance, each of the Opponent’s Mark A and the Opponent’s Mark B is an earlier trade mark in relation to the subject marks.
Relevant public
34. The subject goods include goods in Classes 16 and 25.
35. The subject Class 16 goods are directed at the public at large and at business consumers (e.g. office requisites). They are primarily visual purchases, although aural reference to the relevant marks cannot be ruled out. The degree of attention one would pay in the selection of these goods is considered average.
36. The subject Class 25 goods are directed at the public at large. Generally speaking, one would expect a reasonable level of attention to be paid by the consumer when selecting such goods. The purchasing act will be mainly visual on account of the goods being commonly purchased based on their aesthetic appeal; they are likely to be selected after perusal of racks/shelves in retail establishments, or from photographs on Internet websites or in catalogues. That said, I would not discount aural considerations which may also play a part.
Comparison of goods
37. The well known tests for assessing similarity in goods or services are found in Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc. [1999] RPC 117 and British Sugar Plc v James Robertson & Sons Ltd. [1996] RPC 281. These require considerations of all relevant factors relating to the goods or services including, inter alia, their nature, intended purpose, method of use, whether the goods or services are in competition with each other or are complementary, as well as their users and the channels through which they reach the market.
38. The Applicant accepts that (a) the subject Class 25 goods are similar to the Opponent’s Class 25 registered goods;13 and (b) the subject Class 16 goods are similar to the Opponent’s Class 16 registered goods.14 In fact, I find that the Opponent’s Class
13 Skeleton arguments of the Applicant dated 4 November 2016 (“Applicant’s Skeleton Arguments”), para. 16. 14 Applicant’s Skeleton Arguments, para. 32.
10 25 registered goods cover all of the subject Class 25 goods, i.e. identical goods are involved. Moreover, most of the subject Class 16 goods are covered by the Opponent’s Class 16 registered goods. The subject Class 16 goods include goods which are identical to, and goods which are closely similar to, the Opponent’s Class 16 registered goods.
Comparison of marks
39. The average consumer normally perceives a mark as a whole and does not proceed to analyze its various details.
40. The likelihood of confusion or deception is not disproved by placing the two marks side by side and demonstrating how small is the chance of error in any consumer who places his order for goods with both the marks clearly before him, for orders are not placed, or are not often placed, under such conditions. It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole.15
41. Two marks, when placed side by side, may exhibit many and various differences, yet the main idea left on the mind by both may be the same. A person acquainted with one mark, and not having the two side by side for comparison, might well be deceived, seeing the second mark on other goods, into a belief that he was dealing with goods which bore the same mark as that with which he was acquainted.16
42. In assessing the distinctive and dominant components in a composite mark, generally speaking words "speak louder" than devices.17
43. Each of the subject marks consists of the English words “SARA” and “COMFORT”, with each of those words set against a rectangular background. The background for the word “SARA” in subject mark A is blue in colour. The Applicant claims the colours blue, black and white as elements of subject mark A. The subject marks are applied for as a series of trade marks, i.e. they are considered to be marks which resemble each other as to their material particulars and differ only as to matters of a non-distinctive character not substantially affecting the identity of the trade mark (section 51(3) of the Ordinance). The colours used in subject mark A do not substantially affect the identity of the subject marks.
15 De Cordova v. Vick Chemical Co. (1951) 68 RPC 103, at 106. 16 Kerly’s Law of Trade Marks and Trade Names (15th Edn.) para. 18-205. 17 Oasis Stores Ltd.'s Trade Mark Application [1998] RPC 631, at 644.
11 44. The word “SARA” is a feminine name which is quite common. The word “COMFORT” would be perceived as conveying the message that the subject goods are intended to afford comfort to the user; it is indistinctive in respect of the subject goods. The word “SARA” is the dominant element in each of the subject marks.
Comparison with the Opponent’s Mark A
45. Visually, the Opponent’s Mark A consists of a single word “ZARA” which is made up of four letters. The dominant element in the subject marks is the word “SARA” which is also made up of four letters. “SARA” and “ZARA” have the same second, third and fourth letters and differ by the first letter. Consumers normally attach greater significance to the beginnings of words. The different first letter in the short words “SARA” and “ZARA” has a significant impact on the overall visual impression created by each of those words. There is also the English word “COMFORT” in each of the subject marks which is absent in the Opponent’s Mark A. The overall visual impression created by the Opponent’s Mark A is different from that created by each of the subject marks.
46. Aurally, the Opponent’s Mark A would be pronounced in two syllables (ZA-RA), whilst each of the subject marks would be pronounced in four syllables (SA-RA-COM-FORT). According to an extract from the BabyNamesPedia provided by the Opponent,18 the baby girl name Sara is pronounced as SAERah or SEHRah in English, whilst the baby girl name Zara is pronounced as ZAHRaa. There is a degree of similarity between the pronunciation of the words “Sara” and “Zara”. There is also the word “COM-FORT” in each of the subject marks which is absent in the Opponent’s Mark A. The Opponent’s Mark A and the subject marks are aurally similar to a moderate degree.
47. Conceptually, although the Applicant states that “SARA” is the half part of the Japanese word “さら さら” which would be translated as “smooth and soft” and transliterated as “SA-RA-SA-RA” in English,19 the average consumer of the subject goods in Hong Kong would unlikely be familiar with Japanese and thus would unlikely perceive the conceptual meaning of “SARA” as relating to “smooth and soft”. The average consumer would understand the word “Sara” as a common feminine name and possibly a variant of “Sarah”.
18 Abadin’s 1st Declaration, Exhibit “AAA-15”. 19 Para. 22 above.
12 48. Although according to the extract from BabyNamesPedia provided by the Opponent, the name “Zara” is from the elements ‘zahrah’ meaning blossoming flower and that it has sometimes been used as a form of ‘Sarah’, I consider that this would unlikely be known to the average consumer in Hong Kong. According to the Opponent, the mark ZARA was devised by the President and founder of the Opponent Mr. Amancio Ortega Gaona as a fanciful mark in 1975.20 I consider that the average consumer in Hong Kong would likely perceive the word “Zara” either as an invented word or as a rare name, and would not associate it with “Sara” or “Sarah”. In other words, the average consumer would either regard “Sara” and “Zara” as two different feminine names (one of which (Sara) is much more common than the other (Zara)), or as a feminine name (Sara) and an invented word (Zara). The two words are not conceptually similar.
49. Although there is a moderate degree of aural similarity between the subject marks and the Opponent’s Mark A, the overall visual impression created by each of the subject marks is different from that created by the Opponent’s Mark A, and they are not conceptually similar. Having regard to the visual, aural and conceptual similarities and differences between the subject marks and the Opponent’s Mark A and the overall impression created by each of them, I find that the subject marks are similar to the Opponent’s Mark A only to a very, very low degree.
Comparison with the Opponent’s Mark B
50. The Opponent’s Mark B consists of the words “ZARA” and “HOME”. The word “HOME” is indistinctive of goods for use at home. I have already compared the Opponent’s Mark A (“ZARA”) with the subject marks. With the addition of the word “HOME”, I do not consider that degree of similarity between the Opponent’s Mark B and the subject marks would be any higher than that between the Opponent’s Mark A and the subject marks. Having regard to the visual, aural and conceptual similarities and differences between the subject marks and the Opponent’s Mark B and the overall impression created by each of them, I find that the subject marks are similar to the Opponent’s Mark B only to a very, very low degree.
Distinctiveness of the Opponent’s Mark A and the Opponent’s Mark B
51. The distinctive character of the earlier trade mark is a factor to be taken into account in the assessment of the likelihood of confusion. It is well established that there
20 Para. 9 above.
13 is a greater likelihood of confusion where the earlier mark has a highly distinctive character either because of its inherent qualities or because of the use that has been made of it.21
52. In determining the distinctive character of an earlier trade mark, I must make an overall assessment of the greater or lesser capacity of the mark to identify the goods or services for which it has been registered as coming from a particular undertaking, and thus to distinguish those goods or services from those of other undertakings. In making that assessment, account should be taken, in particular, of the inherent characteristics of the mark, including the fact that it does or does not contain an element descriptive of the goods or services for which it has been registered; the market share held by the mark; how intensive, geographically widespread and long-standing use of the mark has been; the amount invested by the undertaking in promoting the mark; the proportion of the relevant section of the public which, because of the mark, identifies the goods or services as originating from a particular undertaking; and statements from chambers of commerce and industry or other trade and professional associations.22
Distinctiveness of the Opponent’s Mark A
53. The word “ZARA” comprising the Opponent’s Mark A has no meaning in relation to the Opponent’s Class 25 registered goods. It would be taken by the average consumer in Hong Kong either as an invented word or as a rare name. The inherent distinctiveness of the Opponent’s Mark A in respect of the Opponent’s Class 25 registered goods is above average.
54. I have considered the Opponent’s evidence. The first ZARA store in Hong Kong opened in 2004,23 i.e. about 8 years prior to the Application Date. The mark “ZARA” has been used in respect of the Opponent’s Verified Goods. Sales volume for those goods in Hong Kong during the years 2006 to 2012 has been substantial.24 It has not been the policy of the Opponent to make big investments in advertising, and the Opponent’s expenditure in Hong Kong for advertising and promoting its goods during the years 2007 to 2010 has not been very substantial.25
21 Sabel v Puma [1998] RPC 199; para. 31(h) above. 22 Windsurfing Chiemsee v Huber and Attenberger [1999] ETMR 585; Lloyd Schuhfabrik Meyer & Co. GmbH v Klijsen Handel B.V. [2000] FSR 77. 23 Para. 14 above. 24 Para. 15 above. 25 Para. 18 above.
14 55. I have already found that the inherent distinctiveness of Opponent’s Mark A in respect of the Opponent’s Class 25 registered goods is above average. Having regard to the Opponent’s evidence as a whole, I consider that the distinctiveness of the Opponent’s Mark A in respect of the Opponent’s Class 25 registered goods has been somewhat enhanced through use.
56. Overall, I find the distinctiveness of the Opponent’s Mark A in respect of the Opponent’s Class 25 registered goods to be well above average.
Distinctiveness of the Opponent’s Mark B
57. The Opponent’s Mark B consists of the words “ZARA” and “HOME”. Although the word “HOME” is indistinctive of goods for use at home, the word “ZARA” has no meaning in relation to the Opponent’s Class 16 registered goods. The inherent distinctiveness of the Opponent’s Mark B in respect of the Opponent’s Class 16 registered goods is above average.
58. I have considered the Opponent’s evidence and can find no evidence of use of the Opponent’s Mark B in Hong Kong in relation to the Opponent’s Class 16 registered goods before the Application Date.
59. Overall, I find the distinctiveness of the Opponent’s Mark B to be above average.
Likelihood of confusion
60. The likelihood of confusion must be appreciated globally, taking account of all relevant factors. The matter must be judged through the eyes of the average consumer of the goods and services in issue who is deemed to be reasonably well-informed and reasonably observant and circumspect. A lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods or services, and vice versa (Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc (supra)).
Likelihood of confusion with the Opponent’s Mark A
61. Although the subject marks and the Opponent’s Mark A are aurally similar to a moderate degree, the overall visual impression created by the Opponent’s Mark A is different from that created by each of the subject marks, and they are not conceptually
15 similar. The average consumer of the subject Class 25 goods is likely to pay a reasonable level of attention when selecting such goods. The purchasing act will be mainly visual although aural reference may also play a part. Having regard to the overall impression created by the subject marks and the Opponent’s Mark A, I find that the subject marks are similar to the Opponent’s Mark A only to a very, very low degree. The Opponent’s Class 25 registered goods cover all of the subject Class 25 goods, i.e. identical goods are involved. The distinctiveness of the Opponent’s Mark A is well above average.
62. Taking into account the combined effect of all of the above considerations, I consider that even when subject mark A or subject mark B is used in relation to those of the subject Class 25 goods that are identical to the Opponent’s Class 25 registered goods, given the very low degree of similarity between the subject marks and the Opponent’s Mark A, the average consumer would unlikely be misled into believing that those goods and the Opponent’s Class 25 registered goods offered under the Opponent’s Mark A come from the same or economically-linked undertakings.
Likelihood of confusion with the Opponent’s Mark B
63. Having regard to the visual, aural and conceptual similarities and differences between the subject marks and the Opponent’s Mark B and the overall impression created by each of them, I find that the degree of similarity between the subject marks and the Opponent’s Mark B is very, very low. The subject Class 16 goods include goods which are identical to, and goods which are closely similar to, the Opponent’s Class 16 registered goods. The distinctiveness of the Opponent’s Mark B is above average.
64. Taking into account the combined effect of all of the above considerations, I consider that even when subject mark A or subject mark B is used in relation to those of the subject Class 16 goods that are identical to the Opponent’s Class 16 registered goods, given the very low degree of similarity between the subject marks and the Opponent’s Mark B, the average consumer would unlikely be misled into believing that those goods and the Opponent’s Class 16 goods offered under the Opponent’s Mark B come from the same or economically-linked undertakings.
65. The ground of opposition under section 12(3) of the Ordinance is not made out.
16 Opposition under section 12(5)(a) of the Ordinance
66. Section 12(5)(a) of the Ordinance provides, inter alia, as follows:
“(5) … a trade mark shall not be registered if, or to the extent that, its use in Hong Kong is liable to be prevented –
(a) by virtue of any rule of law protecting an unregistered trade mark or other sign used in the course of trade or business (in particular, by virtue of the law of passing off); …
and a person thus entitled to prevent the use of a trade mark is referred to in this Ordinance as the owner of an “earlier right” in relation to the trade mark.”
67. The Opponent claims that:26
“Use of the [subject marks] would constitute an act of passing-off and registration of the same should be prohibited under Section … 12(5)(a) of the Ordinance.”
68. The issue for determination is whether at the Application Date, use of the subject marks by the Applicant was liable to be prevented by virtue of the law of passing off.
69. I consider that if the Opponent cannot succeed on the basis of the Opponent’s “ZARA” mark, it would not stand a better chance of success on the basis of any other of the Opponent’s Marks.
70. The elements of the tort of passing off as formulated by Lord Oliver in the JIF case27 have been repeatedly relied upon.28 Adapted to the facts of the present case, the Opponent has to establish that:
(a) the Opponent has sufficient goodwill attached to the Opponent’s goods in the mind of the purchasing public by association with the Opponent’s “ZARA” mark;
26 Statement of Grounds, para. 12. 27 Reckitt & Colman Products Limited v. Borden [1990] RPC 341. 28 Applied in e.g. Ping An Securities Ltd v 中國平安保險 (集團) 股份有限公司 (2009) 12 HKCFAR 808 (FACV 26/2008).
17 (b) the Applicant has made a misrepresentation leading or likely to lead the public to believe that the subject goods offered by the Applicant are the goods of the Opponent; and
(c) the Opponent suffers, or is likely to suffer, damage by reason of the erroneous belief engendered by the Applicant’s misrepresentation that the source of the Applicant’s subject goods is the same as the source of the goods offered by the Opponent.
71. The relevant date for determining the criteria under section 12(5)(a) of the Ordinance is the date of the application for registration of the mark in suit or the date of commencement of the conduct complained of, whichever is earlier.29
72. Since there is no evidence of use by the Applicant of any of the subject marks in Hong Kong before the Application Date, the relevant date is the Application Date, i.e. 7 June 2012.
Goodwill
73. I have considered the Opponent’s evidence of use. The first ZARA store in Hong Kong opened in 2004. I find that the Opponent has used its “ZARA” mark in Hong Kong in relation to the Opponent’s Verified Goods before the Application Date. I am satisfied that as at the Application Date, the Opponent has goodwill in Hong Kong in relation to the Opponent’s Verified Goods, which is known to the public by association with the “ZARA” mark.
Misrepresentation
74. I have considered the nature and extent of the reputation enjoyed by the Opponent, the closeness of the respective fields of activity in which the Applicant (by reference to the subject goods) and the Opponent (by reference to the Opponent’s Verified Goods) carry on business, the degree of similarity between the subject marks and the Opponent’s “ZARA” mark and the way they would likely be used in relation to the subject goods and the Opponent’s Verified Goods. In view of the very low degree of similarity between the subject marks and the Opponent’s “ZARA” mark, I consider that when any of the subject marks is used in relation to the subject goods, the public would
29 Cadbury-Schweppes Pty Ltd v The Pub Squash Co Ltd [1981] RPC 429; Inter Lotto (UK) Ltd v Camelot Group Plc [2004] RPC 9.
18 unlikely be confused into believing that those goods offered under any of the subject marks by the Applicant are goods of the Opponent, or in some way connected with or guaranteed by the Opponent. The element of misrepresentation is therefore not made out.
Damage
75. It follows that there is nothing from which it could be inferred that the Opponent is likely to suffer damage by reason of any erroneous belief engendered by the Applicant’s misrepresentation.
76. Accordingly, the ground of opposition under section 12(5)(a) of the Ordinance is not made out.
Opposition under section 12(4) of the Ordinance
77. Section 12(4) of the Ordinance provides, inter alia, as follows:
“… a trade mark which is– (a) identical or similar to an earlier trade mark; and (b) proposed to be registered for goods or services which are not identical or similar to those for which the earlier trade mark is protected, shall not be registered if, or to the extent that, the earlier trade mark is entitled to protection under the Paris Convention as a well-known trade mark and the use of the later trade mark without due cause would take unfair advantage of, or be detrimental to, the distinctive character or repute of the earlier trade mark.”
78. Although the wording of section 12(4) of the Ordinance suggest that its application is confined to the use of the identical or similar mark on goods or services “not identical or similar” to those for which the well-known mark is protected, it has been authoritatively decided that it ought to be read to apply to the use by the applicant on goods and services “whether or not similar or identical”.30
79. Under section 4(1) of the Ordinance, reference to a trade mark which is entitled to protection under the Paris Convention as a well-known trade mark shall be construed as reference to a trade mark which is well known in Hong Kong and which is the trade mark of a person who –
30 Christie Manson & Woods Ltd v Chritrs (Group) Ltd [2012] 5 HKLRD 829 at 846; Adidas-Salomon AG v Fitnessworld Trading Ltd [2004] FSR 21.
19 (a) is a national of, or is domiciled or ordinarily resident in, a Paris Convention country or WTO member;
(b) has a right of abode in Hong Kong; or
(c) has a real and effective industrial or commercial establishment in a Paris Convention country, a WTO member or Hong Kong, whether or not that person carries on business in Hong Kong or owns any goodwill in a business in Hong Kong.
In determining whether a mark is well known in Hong Kong, the Registrar shall have regard to the factors set out in Schedule 2 to the Ordinance.
80. In the Statement of Grounds, the Opponent claims that:31
“The [subject marks are] identical to the Opponent’s Marks, which are well-known trade marks entitled to protection under the Paris Convention. Therefore even if the [subject goods] are not identical or similar to the Opponent’s Goods/Services, the use and registration of the [subject marks] for the [subject goods] would take unfair advantage of or be detrimental to the distinctive character or repute of the Opponent’s Marks. Registration of the [subject marks] should be refused under Section 12(4) of the Ordinance.”
81. I consider that if the Opponent cannot succeed on the basis of the Opponent’s “ZARA” mark, it would not stand a better chance of success on the basis of any other of the Opponent’s Marks.
82. To succeed under section 12(4) of the Ordinance, the Opponent has to establish that:
(a) the Opponent’s “ZARA” mark is an earlier trade mark which is entitled to protection under the Paris Convention as a well-known trade mark;
(b) any of the subject marks is identical or similar to the Opponent’s “ZARA” mark, and that on a global appreciation of all the factors relevant to the circumstances, the use of any of the subject marks would give rise to a link with the Opponent’s “ZARA” mark in the minds of the relevant public; and
31 Statement of Grounds, para. 9.
20 (c) in consequence of that link, the use of any of the subject marks without due cause either takes unfair advantage of the distinctive character or repute of the Opponent’s “ZARA” mark or is detrimental to that distinctive character or repute.
83. The requirements listed in paragraph 82(a) to (c) above are cumulative. Each of those requirements must be established before a claim under section 12(4) of the Ordinance is made out.
Similarity and link
84. I refer to the requirement set out in paragraph 82(b) above.
85. For the prohibition in section 12(4) to apply, there must be a degree of similarity between the earlier mark and the applied-for mark such that the relevant section of the public establishes a link between them, even though it does not confuse them.32 The fact that for the average consumer, who is reasonably well informed and reasonably observant and circumspect, the later mark calls the earlier mark to mind is tantamount to the existence of such a link.33 The existence of such a link must be appreciated globally, taking into account all factors relevant to the circumstances of the case,34 including:35
(i) the degree of similarity between the conflicting marks;
(ii) the nature of the goods or services for which the conflicting marks were registered, including the degree of closeness or dissimilarity between those goods or services, and the relevant section of the public;
(iii) the strength of the earlier mark's reputation;
(iv) the degree of the earlier mark's distinctive character, whether inherent or acquired through use;
(v) the existence of the likelihood of confusion on the part of the public.
32 Adidas-Salomon v Fitnessworld [2004] FSR 21 at para. 29; Intel v CPM [2009] RPC 15 at para. 30. 33 Intel v CPM (supra) at para. 63. 34 Adidas-Salomon v Fitnessworld (supra) at para. 30; Intel v CPM (supra) at para. 41. 35 Intel v CPM (supra) at para. 42.
21 86. I have already found that the subject marks and the Opponent's “ZARA” mark are similar only to a very, very low degree,36 and that when any of the subject marks is used in relation to the subject goods, the public would unlikely be misled into believing that those goods offered by the Applicant and the goods of the Opponent come from the same or economically-linked undertakings. Despite the fact that some of the subject goods are identical to the Opponent’s clothing products in respect of which the Opponent enjoys reputation at the Application Date and despite the strength of the reputation of the Opponent's “ZARA” mark and its distinctive character, in view of the very low degree of similarity between the subject marks and the Opponent's “ZARA” mark, when the relevant public sees any of the subject marks used in relation to the subject goods, it would not even call to mind the Opponent's “ZARA” mark. Use of any of the subject marks in relation to the subject goods would not give rise to a link with the Opponent’s “ZARA” mark in the minds of the relevant public. The requirement referred to in paragraph 82(b) above is not established.
Unfair advantage/detriment
87. Section 12(4) does not have the sweeping effect of preventing the registration of a sign which is the same as or similar to a well-known earlier trade mark. It is also not intended to enable the owner of a well-known earlier trade mark to object as a matter of course to the registration or use of a sign which may remind people of his mark (Premier Brands v Typhoon [2000] FSR 767). Detriment to and unfair advantage of distinctive character or repute must be provable by real, as opposed to theoretical, evidence and cannot be merely assumed from the fact that the earlier mark has a substantial reputation (Creditmaster Trade Mark [2005] RPC 21).
88. As the Opponent has failed to establish that use of any of the subject marks in respect of the subject goods would give rise to a link with the Opponent’s “ZARA” mark in the minds of the relevant public, it follows that there is nothing from which it could be inferred that in consequence of such a link, the use of any of the subject marks either takes unfair advantage of the distinctive character or repute of the Opponent’s “ZARA” mark or is detrimental to that distinctive character or repute. The requirement referred to in paragraph 82(c) above is not established.
89. I find that the ground of opposition under section 12(4) of the Ordinance is not made out.
36 Paragraph 49 above.
22 Opposition under section 11(5)(b) of the Ordinance
90. Section 11(5)(b) of the Ordinance provides that:
“(5) A trade mark shall not be registered if, or to the extent that – … (b) the application for registration of the trade mark is made in bad faith.”
91. The Opponent claims that:37
“The application for registration of the [subject marks] was made in bad faith. The [subject marks] shall not be granted registration as it is contrary to Section 11(5)(b) of the Ordinance.”
92. The term “bad faith” is not defined in the Ordinance. In Gromax Plasticulture Ltd v Don & Low Nonwovens Ltd [1999] RPC 367 at 379, Lindsay J. said in relation to section 3(6) of the UK Trade Marks Act 1994 (equivalent to section 11(5)(b) of the Ordinance):
“I shall not attempt to define bad faith in this context. Plainly it includes dishonesty and, as I would hold, includes also some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined. Parliament has wisely not attempted to explain in detail what is or is not bad faith in this context: how far a dealing must so fall-short in order to amount to bad faith is a matter best left to be adjudged not by some paraphrase by the courts (which leads to the danger of the courts then construing not the Act but the paraphrase) but by reference to the words of the Act and upon a regard to all material surrounding circumstances.”
93. In Harrison v Teton Valley Trading Co (CHINAWHITE) [2005] FSR 10, the English Court of Appeal held that (at para. 26):
“The words “bad faith” suggest a mental state. Clearly when considering the question of whether an application to register is made in bad faith all the circumstances will be relevant. However the court must decide whether the knowledge of the applicant was such that his decision to apply for registration would be regarded as in bad faith by persons adopting proper standards.”
37 Statement of Grounds, para. 11.
23 94. Further, in Ajit Weekly Trade Mark [2006] RPC 25, the Appointed Person stated as follows:38
“The subjective element of the test means that the tribunal must ascertain what the defendant knew about the transaction or other matters in question. It must then be decided whether in the light of that knowledge, the defendant’s conduct is dishonest judged by ordinary standards of honest people, the defendant’s own standards of honesty being irrelevant to the determination of the objective element.”
95. An allegation that a trade mark has been applied for in bad faith is a serious allegation. It should not be made unless it can be fully and properly pleaded and should not be upheld unless it is distinctly proved (ROYAL ENFIELD Trade Marks [2002] RPC 24 at para. 31). The standard of proof is on the balance of probabilities but cogent evidence is required due to the seriousness of the allegation. It is not enough to prove facts which are also consistent with good faith (Brutt Trade Marks [2007] RPC 19 at para. 29).
96. In Ii’s Declaration, the Applicant stated as follows:
“5. The Applicant’s Mark was devised by the employees of Applicant and a planning company in September 2011. The background of the devisal of the Applicant’s Mark was that the Japanese word “さら さら”is translated as “smooth and soft” and transliterated as “SA-RA-SA-RA” in English. The Applicant adopted the combination of the half part “SARA” of the Japanese word “さら さら”and the word “COMFORT” to form the Applicant’s Mark.”
97. The Applicant has provided an explanation on oath as to the origin of the subject marks. I have compared the Opponent’s Marks with the subject marks. I find that the degree of similarity between the subject marks and any of Opponent’s Marks is so low that when any of the subject marks is used in relation to the subject goods, the average consumer would unlikely be misled into believing that those goods and the goods of the Opponent come from the same or economically-linked undertakings.
98. Taking into account all the relevant circumstances of this case, I do not find that there is any basis for concluding that the Applicant’s decision to adopt and to apply for registration of the subject marks would be regarded as in bad faith by persons
38 Applied in 深圳市德力康電子科技有限公司 v Joo-Sik-Hoi-Sa LG (LG Corporation) HCMP 881/2013, [25]-[27].
24 adopting proper standards. The ground of opposition under section 11(5)(b) of the Ordinance is also not made out.
Conclusion and Costs
99. I have considered each of the grounds of opposition relied on by the Opponent and found that none of them has been made out. The opposition against the subject application therefore fails.
100. As the opposition has failed, I award the Applicant costs. Subject to any representations, as to the amount of costs or calling for special treatment, which either party may make within one month from the date of this decision, costs will be calculated with reference to the usual scale in Part I of the First Schedule to Order 62 of the Rules of the High Court (Cap. 4A) as applied to trade mark matters, unless otherwise agreed between the parties.
( Finnie Quek ) for Registrar of Trade Marks 21 April 2017
25 Annex 1 Opponent’s HK Registered Marks
Trade Mark Registration No. Registration Date Class
199508875 14 March 1994 25
199509770 14 March 1994 39
199509867 14 March 1994 3
200001386AA 12 June 1998 9, 14, 18, 35
200110908 8 August 2000 3
300010682 25 April 2003 18, 25
300010718 25 April 2003 25
4, 5, 6, 9, 11, 12, 300917262 20 July 2007 14, 15, 16, 18, 22, 26, 27, 28, 34
301977959 18 July 2011 18
26 Annex 2 Applicant’s trade mark registrations in Japan
Trade Mark Registration No. Registration Date Class
5472246 17 February 2012 16, 25
5511104 27 July 2012 35
Applicant’s trade mark registration in the People’s Republic of China
Trade Mark Registration No. Registration Date Class
11087081 28 October 2013 16
27