1 May, 2016
The Audience Motivation Company Asia Pte Ltd v AMC Live Group China (S) Pte Ltd [2016] SGCA 25
SUMMARY
In this landmark case, the Court of Appeal reversed the High Court’s decision and held that AMC Live Group China (S) Pte Ltd (“AMC Live”) was not able to rely on the own name defence under s 28(1) of the Trade Marks Act (Cap. 332, Rev. Ed. 2005) (“TMA”) as its use of its marks did not follow honest practices.
Consequently, the Court of Appeal allowed The Audience Motivation Company Asia Pte Ltd’s (“AMC Asia”) claim for trade mark infringement under s 27(2)(b) of the TMA.
This is the first time that the Court of Appeal has explored the scope and application of the “own name” defence under the TMA, making it a benchmark case for this area of the law.
AMC Asia was represented by Drew & Napier lawyers, Dedar Singh Gill and Gabriel Ong, instructed by Michael Moey of Moey & Yuen.
BACKGROUND
AMC Asia is an events management company which was incorporated in Singapore in August 2000.
On 31 August 2012, AMC Asia obtained registration of (click here to view the logo) (the “AMC Asia Mark”) and in (click here to view the logo) Classes 35, 41 and 42. However, it had used the AMC Asia Mark for some time prior to registration. It had also used other similar unregistered “AMC” marks as far back as April 2002.
AMC Live was incorporated in Singapore in January 2012. It used the following marks (click here to view the logos), both of which were similar to Audience Motivation Company’s trade marks.
AMC Asia sued AMC Live for trade mark infringement under s 27(2)(b) of the TMA and passing off.
HIGH COURT’S DECISION
The High Court dismissed both claims.
Trade Mark Infringement Claim
While there was prima facie infringement (due to visual and aural similarities between the AMC Asia Mark and AMC Live’s marks, AMC Live was able to rely on the own name defence to trade mark infringement under s 28(1)(a) of the TMA. AMC Asia’s claim for trade mark infringement was consequently dismissed.
In particular, the High Court held that:
(a) the own name defence was applicable to the use of a name as a trade mark;
(b) the own name defence was applicable to the name of a company;
(c) the own name defence extended to the use of a company’s trade name and was not limited to the use of its registered corporate name; and
(d) AMC Live’s use of its marks, its trading names and domain name was in keeping with honest practices.
Passing Off Claim
The High Court also held that while two of the three requisite elements (ie misrepresentation and damage) were made out, AMC Asia failed to establish that it had acquired goodwill. Therefore, its passing off claim had to fail.
COURT OF APPEAL’S DECISION
AMC Asia appealed against the High Court’s ruling on the own name defence as well as the finding that it did not enjoy the requisite goodwill to sustain its passing off action.
The Court of Appeal allowed AMC Asia’s appeal on both grounds.
Trade Mark Infringement Claim
The Court of Appeal upheld the High Court’s finding of prima facie infringement of the AMC Asia Mark, but overturned the High Court’s ruling on the own name defence. Specifically, the Court of Appeal ruled that AMC Live’s use of “amc” did not accord with honest practices and that AMC Live was unable to discharge its burden of proving that the marks which it used were honestly and independently conceived.
Passing Off Claim
The Court of Appeal found that there was sufficient evidence of goodwill in AMC Asia’s business.
The classical trinity of goodwill, misrepresentation and damage was made out in the present case to give rise to an actionable claim in passing off.
Principles associated with the own name defence
The Court of Appeal has outlined the relevant principles relating to the own name defence. A brief summary is as follows.
The defence is available in relation to the use of a defendant’s name as a trade mark.
It is also available in relation to the use of corporate names (ie not limited to natural persons). This includes the use of the full company name as well as the defendant’s trading name.
However, the defence is available only insofar as the defendant seeks to justify the use of its own name and nothing more.
The defence is only made out if the defendant uses the name in accordance with honest practices in industrial and commercial matters. This entails both subjective and objective elements so that the court must have regard to standards and practices that are commonly applied in the industry or business as well as the particular motivations and intentions of the defendant. Each element is a necessary, but not in itself sufficient, condition for the defence to be made out. Hence, the court must be satisfied that the invocation of the defence is in accordance with the standards and practices in the industry and also that the defendant is not actuated by dishonest motives or intentions.
The burden of establishing the defence on a balance of probabilities lies on the defendant. This calls for an evaluation of the evidence in the usual way. Assertions of honesty on the part of the defendant will not suffice if the court is not satisfied of this fact on a balance of probabilities upon considering all the evidence.
Considerations when conducting the inquiry into honesty
The Court of Appeal held that it is for the defendant to adduce evidence of its bona fides, especially when the name in question is a trading name used by the company.
It is for the defendant to provide a justifiable basis for its choice of name especially if there is no apparent origin for that name or if it was selected after the trade mark owner had begun using that name.
The defendant bears the burden of providing compelling reasons to explain any other significant sources of similarities between the marks.
Although some degree of confusion may be tolerated, proof of an intention to misrepresent will take the defendant outside the “honest practices” proviso.
This may include an intention to:
(a) create the impression that there exists a commercial connection between the defendant and the trade mark proprietor;
(b) discredit or denigrate the registered trade mark; or
(c) devalue the trade mark through the taking of unfair advantage of its distinctive character or repute.
The Court of Appeal held that Samuel Smith Old Brewery (Tadcaster) v Philip Lee (Trading as “Cropton Brewery”) [2012] FSR 7 at [116] is instructive as to the specific facts that a court may consider, subject to the reservation that these are not exhaustive but are to be seen as sign posts towards the ultimate question of honesty.
Is the own name defence available in passing off?
Given that the own name defence failed in the context of trade mark infringement, it followed that even if the defence was available under passing off (a point which the Court of Appeal left open), it would have failed as well.
Nevertheless, the Court of Appeal expressed the provisional view that the open name defence cannot be extended to cases off passing off. This is because passing off requires misrepresentation to be established and this is assessed objectively and in this regard the assessment is not concerned with the defendant’s subjective intentions.
COMMENT
In all, the own name defence is very limited in scope and the burden is on the defendant to show that it adopted the otherwise infringing name in accordance with honest practices. As a practical matter, this may be difficult to establish. Therefore, it is essential that traders seeking do business in Singapore take the appropriate steps to conduct the necessary trade mark searches before applying to registering a business/company name.
For further information, please contact:
Dedar Singh Gill, Director, Drew & Napier
dedar.singh@drewnapier.com
