RICHEMONT INTERNATIONAL S.A. v. DA VINCI COLLECTIONS (HK) LTD.

Date of Hearing: 4 August and 1 September 2006

Date of Decision: 1 September 2006

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D E C I S I O N

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1.  On 22 June 2006 I gave summary judgment to the plaintiff on part of its claim.  The defendant now applies to stay the execution of that judgment pending appeal.  The plaintiff also applied to amend my order. 

2.  The plaintiff is the registered proprietor of the trademark “Da Vinci”.

The Claim

3.  The defendant has two shops in Mongkok and Causeway Bay selling watches, jewellery and accessories.  The plaintiff claimed that the defendant had, in the course of its trade, infringed the plaintiff’s trademark by using marks which were identical and/or confusingly similar to the plaintiff’s trademark on goods which were identical or similar to the goods covered by the plaintiff’s registration.  The goods in question were watches.

4.  The statement of claim complained against three marks, namely, (i) the word mark “DA VINCI”; (ii) a rectangular logo with the words “Da Vinci” imprinted against a patterned background as in “”; and (iii) the logo in a shrunken form between the two words as in “DA  VINCI”. 

Summary Judgment

5.  The application for summary judgment was only in relation to the first and third marks.  The claim over the second mark will go to trial.

6.  After a contested hearing, I entered judgment for the plaintiff over these two marks.  I held against the defendant on the argument of non-use by the plaintiff.  I also held against the defendant that the addition of words like “Italy”, “timepieces” and “jewellery” as suffixes to the trademark did not create different trademarks as these suffixes merely describe the goods and did not have any distinctive character.  I also held that the third mark with the rectangular logo in a shrunken form, sitting between the words “Da” and “Vinci”, was also an infringement as the shrunken logo appeared as a decorative element rather than a distinct part of the trademark.  I was referring to the third trademark as it appeared in the exhibits produced at the hearing.

7.  I further held against the defendant on the “own name” defence under section 19(3)(a) of the Trademarks Ordinance which reads:

“(3)   A registered trade mark is not infringed by-

(a)   the use by a person of his own name or address or the name of his place of business;

provided the use is in accordance with honest practices in industrial or commercial matters.”

8.  I held that the defendant was not entitled to use this trademark merely because the Da Vinci Group of Singapore, of which it was a member, had been using the “Da Vinci” mark in the sale of luxurious furniture and lighting.  I said the business of selling watches was distinct from the business of selling luxurious furniture and lighting and neither was the extension of the other.  I also held that if the defendant wanted to use its own name under section 19(3)(a) it would have to use its full name and not the abbreviated form of “Da Vinci”. 

9.  I also held that the defendant was not entitled under section 19(3)(a) to use the trading name “Da Vinci” it had adopted at the shopfront as its trademark as the section did not permit trading name to be so used.

10.  Finally, I also held that “the name of its place of business” meant the name of the geographical location and not the name of the shop.

The plaintiff’s application to amend the order

11.  The order I made on 22 June 2006 was in terms of the plaintiff’s amended summons.  Paragraph 1(a) of the order reads:

“(1)   An injunction be granted to permanently restrain the defendant, whether acting by itself, its officers, servants, agents or representatives or any of them or otherwise howsoever from doing the following acts or any of them in Hong Kong, that is to say: -

(a)     infringing the plaintiff’s Hong Kong Trademark Registration No. 1987B2866 by using, applying, showing, displaying, depicting and/or otherwise dealing in or with the mark “DA VINCI” on goods covered by the plaintiff’s said Hong Kong Trademark Registration.”

12.  Paragraph (1)(b) of the order enjoins the defendant from carrying out the activities of manufacturing, importing, offering for sale and so on. 

13.  The plaintiff wanted to make two amendments to these two subparagraphs.  The first one is to insert the third mark “DA  VINCI” after the first mark “DA VINCI” so as to enjoin the defendant from infringing the third mark as well. 

14.  I do not think it necessary to do so.  My reasons for decision have made it clear that the insertion of the shrunken logo in between the words “Da” and “Vinci” does not make the whole mark a new trademark as the shrunken logo is not a distinct part of the mark but a mere decoration.

15.  It is for this reason that I held that the third mark was an infringement of the plaintiff’s mark.  When the decoration is stripped off, it is the same mark as the plaintiff’s mark.  I held for the plaintiff, not because it owned the third mark as its trademark, but because the third mark is in fact the same as the plaintiff’s trademark.

16.  I have been referred to authorities like Coflexip S.A. & Another v Stolt Comex Seaway MS Ltd & Others [1999] FSR 473, Shell Electric Manufacturing (Holdings) Co. Ltd. v Liu Chi Kuen Tony & Others, HCA 2768/2001 and Commercial Injunctions by Gee, 5th ed. at page 111.  I am told that the plaintiff desires the order to be precise.  However, the order is to enjoin the defendant from infringing the plaintiff’s trademark.  The terms of the injunction are clear.  Any variation of the plaintiff’s trademark which does not result in a different trademark will be caught by the order.  The law is clear.  It is not necessary to set out all ineffective variations of the trademark.  It is also an impossible task.

17.  The second amendment proposed by the defendant is to insert in the two subparagraphs the following sentence:

“For the avoidance of doubt and without prejudice to the generality of the foregoing, the injunction includes any use of the mark “Da Vinci” or “Da” logo “Vinci” with any descriptive, generic or non-distinctive words (“modified Da Vinci marks”) on or in relation to goods covered by the plaintiff’s said trademark registration including without limitation the mark set out in Schedule 1 annexed to this order.” 

18.  In Schedule 1 are listed the following suffixes:

“(1)   Da Vinci timepieces;

(2)   Da Vinci timepiece;

(3)   Da Vinci Italy;

(4)   Da Vinci jewellery;

(5)   Da Vinci jewellery boutiques;

(6)   Da  Vinci Italy;

(7)   Da  Vinci jewellery;

(8)   Da  Vinci guarantee card.”

19.  The variations in the schedules are those found in the exhibits produced at the hearing.  They include a few that I have mentioned in my reasons for decision.  However, none of them has been referred to in the statement of claim.  These variations were dealt with at some length in the arguments.  I held in favour of the plaintiff for the reason that the suffixes were mere descriptions of the goods, the addition of which did not result in different trademarks.  For the same reasons I have given above for not inserting the third mark, I do not see any need to make this amendment.

20.  I would go further to say that for the same reason, it is not necessary for me to spell out in the order that the defendant is not entitled to rely on any of the several lines of the “own name” defence under section 19(3)(a) of the Ordinance. 

21.  If the defendant should continue to infringe the plaintiff’s trademark by applying ineffective modifications to the plaintiff’s mark, the option for the plaintiff would be to commence contempt proceedings.  If the defendant should be able to create a new trademark with modification, which in law does not infringe the plaintiff’s trademark, then such new mark will be outside the scope of this order with or without the proposed amendments.

22.  In the premises, I dismiss the plaintiff’s application for amendment of the order with costs.

The Defendant’s application to stay pending appeal

23.  For the consideration of an application to stay pending appeal, I am guided by the principles summarised by Ma J (as he then was) in Star Play Development Ltd v Bess Fashion Management Co. Ltd., HCA 4726/2001 (unreported) at paragraphs 6-10.  I have also been referred to Canon Kabushi Ki Kaisha v Green Cartridge Co. Hong Kong Ltd & Another No. A78488 of 1993, Minnesota Mining & Mfg v Johnson & Johnson [1976] RPC 671 at 676 lines 7-37, and Neutrogena Corporation & Another v Golden Limited (English Court of Appeal, 4 July 1995).

24.  The defendant filed an affirmation by Mr Raymond Phua, a director of its Singaporean parent company, and an affirmation by Mr Raymond Wong, on of its directors.  Mr Phua said that the defendant had incurred substantial expenditure for advertising and promotion of its watches.  If the defendant were forced to withdraw from circulation all its advertising, promotional and point-of-sale materials bearing the marks in question, including changing all its store signage, it would be very costly.  It would also have a significant impact on the defendant’s jewellery and accessory business.  He also said that there would be irreparable damage to the defendant’s goodwill and reputation.  He referred to the movie “Da Vinci Code” which was promoted in Hong Kong in conjunction with the defendant’s watches.  He was concerned that even if the defendant should succeed on the appeal, the defendant would be unable to restore its position if it were enjoined from using the mark pending the appeal.

25.  Mr Raymond Wong repeated what Mr Phua had said.  He also asserted that the defendant would suffer tremendous damage if it were forced to change all its watches, packaging, store signage, advertising and promotional material, letterheads and business cards.  There would also be damage to the brand name of the “Da Vinci Group” and such damage is not readily quantifiable.  He also said that the defendant had to recall all watches, packaging, point-of-sale material, brochures and to commission new watches, packaging, brochure, guarantee cards and the like.  The exercise of recall would extend to other products too.  He also said that if there were no stay and if the defendant should succeed on the appeal, the damage would be irreparable.  He finally said that a stay would not prejudice the plaintiff as the plaintiff’s watches were sold at high prices and the parties have different customers. 

26.  In the course of the hearing, the defendant’s Singaporean parent company also provided an undertaking to the court and to the plaintiff to pay any loss that may be occasioned to the plaintiff by the stay, if granted, or any profit that the defendant may have to account to the plaintiff during the period of the stay.

27.  The defendant has also given undertakings to keep an account of its turnover during any period of stay and to prosecute the appeal diligently.

Analysis

28.  I deal firstly with the defendant’s prospect of success in the appeal.  Though I have dealt with a number of points in the reasons for decision, these were not difficult points.  My decision was also based on well settled principles of law.  It would not be right for me to go into the details of the defendant’s grounds of appeal.  However, I consider they are mostly assertions contrary to my conclusions.  I would not say that the defendant has a strong likelihood of success in the appeal.  Therefore the defendant has to provide additional reasons to justify a stay.

29.  The scale of the defendant’s business is not big.  It has only two shops.  They sell watches, jewellery and accessories.  It is not in the business of luxurious furniture or lighting.  Those are handled by another company at different shops. 

30.  None of the assertions by Mr Phua and Mr Wong was backed by any particulars.  They referred to the recall of watches, but the watches are only sold at two shops.  No quantity of unsold watches has been given.  The quantity of unsold watches should not be large as the defendant redesigns its watches once every quarter.

31.  Mr Phua and Mr Wong referred to the recall of advertising and promotional materials.  Again no detail or any estimate of cost was given.  No particulars of any advertising or promotion contract with any agent has been specified. 

32.  The injunction does not stop the defendant from selling jewellery and accessories.  They can continue to be sold under the mark in question whilst the watches can be sold under a different mark or under the “DV” mark of the Da Vinci Group.  It is common for different brands of merchandise to be sold in the same shop.  As to the change of stationery and business cards, the cost is quantifiable.  The film “Da Vinci Code” is not shown here now and there is no indication that it will be shown here again in the near future.

33.  Regarding the complaint of the unquantifiable loss resulting from loss of association and brand image in having to dissociate from the Da Vinci Group, there may not need to be a dissociation as the watches can continue to be sold in the shops though under a different mark or under the “DV” mark.  In any case, the dissociation would only be for a short term until the disposal of the appeal.

34.  The plaintiff has also given an undertaking to indemnify the defendant the damages if no stay is granted.  The defendant’s turnover in 2005 was at $2.25 million of which $1.35 million related to watches.  Its loss can be covered by the plaintiff’s undertaking. 

35.  If the defendant should succeed in the appeal, its loss in sales is not difficult to quantify.  Some increase should be built into the quantum of loss to reflect the lack of advertising and promotion for the period pending appeal.

36.  In the premises I do not think the appeal will be rendered nugatory without the stay. 

37.  Furthermore, the defendant has only operated since September 2004 and is a young business.  When it started, those in control of it were aware of the plaintiff’s trademark.  They were aware of the risk and they walked into the situation with their eyes open.

38.  If I should order a stay, the exclusivity and distinctiveness of the plaintiff’s trademark will continue to be damaged. 

39.  The defendant has also submitted that the plaintiff has delayed the action for about a year.  On this, I accept the submissions of the plaintiff’s counsel.  The operation of the defendant had been confined to one shop initially.  It was after it had opened a second shop and then joined the promotion campaign with the movie “Da Vinci Code” that the plaintiff felt the impetus for litigation.  In the premises I do not think I should allow the application to stay.

40.  Subject to an undertaking by the defendant’s solicitors to keep the infringing watches in their custody pending appeal, I stay the operation of paragraph 2 of the order pending appeal.  I also stay paragraphs 3 to 5 of the order pending appeal.  Subject to these, I dismiss the defendant’s application to stay.

Costs of the application for stay

41.  The application for stay has been hotly contested, I think the winner should have the costs too.  I so order.

Date of Decision: 22 June 2006

Date of Reasons for Decision: 7 July 2006

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REASONS  FOR  DECISION

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1.  I have given a summary judgment on 22 June 2006 in favour of the plaintiff pursuant to an amended summons dated 30 May 2006.  Here are my reasons.

2.  The plaintiff is the registered proprietor of the Trade Mark “Da Vinci”.  It is a word mark registered under Hong Kong Trade Mark Registration 1987B2866 in Class 14 for watches and other horological instruments and parts thereof.  It has been so registered since 27 November 1987.  The plaintiff claimed that the defendant had in the course of its trade infringed the plaintiff’s trade mark by using marks which are identical and/or confusingly similar to the plaintiff’s trade mark on goods which are identical or similar to the goods covered by the plaintiff’s registration. 

3.  The amended statement of claim referred to three marks used by the defendant.  They are (i) the word mark “Da Vinci”; (ii) a rectangular logo with the words “Da Vinci” imprinted against a patterned background as in “ ”; and (iii) the logo in a shrunken form between the two words as in “DA  VINCI”.  The application for summary judgment only concerned the first and third marks.  The dispute over the rectangular logo or second mark will go to trial.

4.  The plaintiff pleaded in the Amended Statement of Claim the following acts of infringement:

(a) The defendant on or before 13 December 2004 sold watches bearing the plaintiff’s trade mark “Da Vinci” with packaging and shopping bags bearing this infringing mark at its Causeway Bay shop.

(b) The defendant in or around July 2005 published an advertisement for sale of watches in the July 2005 Edition of the Hong Kong version of Cosmopolitan Magazine which displayed, showed or otherwise depicted the infringing marks. 

(c) On 5 August 2005, the plaintiff’s solicitors sent a letter to the defendant at its Causeway Bay shop demanding it to immediately cease all dealings in and/or with watches which infringed the plaintiff’s “Da Vinci” trade mark and to sign a deed of undertaking to desist from doing so.  The defendant refused the demand through solicitors.

(d) The defendant published an advertisement for sale of watches bearing the plaintiff’s mark “Da Vinci” in the 2005 Summer Edition of the tourists shopping directory called 玩轉香港 which displayed, showed or otherwise depicted some or all of the infringing marks. 

(e) The defendant published an advertisement for sale of watches in the November 2005 Edition of the Hong Kong version of Marie Claire Magazine which displayed, showed or otherwise depicted some or all of the infringing marks. 

(f) The defendant published an advertisement for sale of watches in the December 2005 issue of the In-flight Magazine “Silver Kris” of Singapore Airlines which displayed, showed or otherwise depicted some or all of the infringing marks. 

(g) The defendant on or before 23 January 2006 sold and/or offered for sale watches bearing some or all of the infringing marks at its Mongkok shop.

(h) The defendant on or before 23 January 2006 sold a watch bearing the infringing mark “Da Vinci” with packaging materials and shopping bag bearing this mark at its Mongkok shop.

5.  The defendant did not deny of having committed these acts.  It, however, denied in the amended defence that the plaintiff had any goodwill or reputation in its exclusive collection of watches under the “Da Vinci” trade mark.  It further denied that the plaintiff had marketed or sold any watches under the “Da Vinci” trade mark in Hong Kong or elsewhere.  It pleaded that the plaintiff only sold its watches under the “IWC” trade mark.  It also denied that the plaintiff’s line or family of “Da Vinci” watches bore the “Da Vinci” trade mark.  It further denied that the mark it used was identical or confusingly similar to the plaintiff’s trade mark. 

6.  The defendant further pleaded in the amended defence the following in relation to the acts of alleged infringement:

(a) The defendant admitted that it had sold watches at its Causeway Bay shop on or before December 2004 which bore the “Da Vinci” word and/or device marks which belonged not to the plaintiff but to its Singapore affiliate and with packaging and shopping bags that bore the said word and/or device marks of its Singapore affiliate.  

(b) It also admitted that it had advertised for sale of watches under the “Da Vinci” word and/or device marks of its Singapore affiliate in the July 2005 Hong Kong Edition of Cosmopolitan Magazine, the 2005 Summer Edition of 玩轉香港, the November 2005 Hong Kong Edition of Marie Claire Magazine and the December 2005 Edition of the Singapore Airlines “Silver Kris” in-flight Magazine.

(c) It also admitted of having offered for sale of watches bearing some or all of the “Da Vinci” trade marks of its Singapore affiliate at its shop in Mongkok on or before 23 January 2006.

7.  The defendant also objected to the validity of the plaintiff’s registration on the ground of non-use for at least three years without any reason for it.  It also pleaded that its use of the word or mark “Da Vinci” was the use of its own name in accordance with honest practices in industrial or commercial matters and such was permitted by section 19(3) of the Trade Marks Ordinance, Cap. 559.

8.  Finally, it referred to the 2^nd application by its Singapore affiliate for registration of the trade mark “Da Vinci” in Class 14 and sought to stay this action pending the outcome of that application. 

NON-USE

9.  I deal with the issue of non-use first.  This issue covers a number of matters raised in the amended defence as referred to above.  If the defendant should succeed in showing a triable issue on non-use by the plaintiff, the action will have to go to trial regardless of the merits of the other issues.  

10.  In La Mer Technology Inc v Laboratories Goemar S. A. [2004] FSR 785, the registered proprietor had sold about £800 worth of goods falling within the Class 3 Registration in the relevant five year period.  The European Court of Justice found that the low turnover was a reflection of the commercial failure of the company which owned the trade mark rather than the use of the trade mark solely for the purpose of maintaining its registration and, further, that the registered proprietor had shortly following the relevant period recruited a new sales agent in the United Kingdom to boost its sales.

11.  The ECJ said in para. 25 of its judgment:

“… there is genuine use of a trade mark where it is used in accordance with its essential function, which is to guarantee the identity of the origin of the goods or services for which it is registered, in order to create or preserve an outlet for those goods or services; genuine use does not include token use for the sole purpose of preserving the rights conferred by that mark.  When assessing whether use of the trade mark is genuine, regard must be had to all the facts and circumstances relevant to establishing whether the commercial use of the mark is real in the course of trade, particularly where such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark.  When it serves a real commercial purpose, in the circumstances cited above, even minimal use of the mark or use by only a single importer in the Member State concerned can be sufficient to establish genuine use within the meaning of the Directive.”

12.  In response to the defendant’s assertion that the plaintiff’s “Da Vinci” watches did not bear the “Da Vinci” trade mark, the plaintiff’s legal counsel, Mr Frisanco made an affidavit on 31 March 2006 and produced some sample photographs of a few “Da Vinci” watches.  These photographs showed that the words “Da Vinci” had in fact been etched or engraved on the back casing and back of the dial of the watches.  I am of the view that such evidence is sufficient to defeat the defendant’s assertion that the watches did not bear this mark.  

13.  On the question of whether the plaintiff had marketed the watches under the “Da Vinci” trade mark in addition to the “IWC” trade mark, Mr Frisanco produced a number of brochures published in 1996 to 2004 which promoted the “Da Vinci” line of watches.  There was a clear theme of the promotion that the “Da Vinci” that appeared in 1985 was the first automatic chronograph that had a perpetual calendar with year and perpetual moon-phase displays.

14.  Mr Frisanco also produced some advertising materials proving the plaintiff’s efforts in promoting the “Da Vinci” line of “IWC” watches in Hong Kong.  He also produced a bundle of sample invoices showing that there had been many sales of “Da Vinci” watches in Hong Kong in the last few years up to September 2005.  In addition, he also produced a number of magazine articles and newspaper clippings published in the last few years up to January 2005 showing the recognition by the writers of these materials that “Da Vinci” watches were made by the plaintiff. 

15.  On these evidence and on the statement of the law in La Mer, I find that the plaintiff has genuinely used the “Da Vinci” mark as a trade mark on its watches in conjunction with its “IWC” trade mark.  I also find that it has marketed and sold watches with this trade mark in Hong Kong and owned the goodwill and reputation in it.  The “Da Vinci” trade mark on a watch indicates its origin in the plaintiff.  The matters raised by the defendant in its amended defence that are covered by this issue have no merit.  I hold that the defendant has no defence on non-use of the trade mark by the plaintiff. 

IDENTICALITY

16.  Section 18(1) of the Trade Marks Ordinance provides:

“(1) A person infringes a registered trade mark if he uses in the course of trade or business a sign which is identical to the trade mark in relation to goods or services which are identical to those for which it is registered.”

The first mark

17.  The defendant had at times used the first mark “Da Vinci” with additions like “Da Vinci Italy”, “Da Vinci Timepieces” and “Da Vinci Jewellery”.  It argued that none of these uses would constitute use of a sign identical to the plaintiff’s trade mark “Da Vinci”. 

18.  On this point, the plaintiff has referred to Decon Laboratories Ltd v Fred Baker Scientific Ltd  [2001] RPC 293.  The claimant in this case was the registered proprietor of two UK registered trade marks being the word mark “Decon”.  They were registered under Class 3 for cleaning and decontaminating substances and preparations and under Class 5 for sanitary substances, disinfectants, sterilising substances and preparations.  The claimant also owned the registration of the same trade mark for the same goods in the European Community. 

19.  The claimant manufactured and sold a range of products primarily intended for laboratory use.  They were sold under a range of trade marks all included the mark “Decon”.  About 80% of the sales were of “Decon 80” which was a well-known material for cleaning glassware in laboratories. 

20.  The 1^st defendant imported from the 2^nd defendant a range of sterilising and cleaning materials for use in clean rooms.  They were sold under a range of marks which included the mark “Decon”.  Save for the inclusion of this word, the defendants’ composite marks were not identical with any of the composite marks of the plaintiff.  The defendant’s principal product had the mark “Decon-Ahol”.

21.  On whether the marks were identical, Pumfrey J said at page 299:

“8.     … Thus, the only question is whether the signs complained of are the same as the registered trade marks or merely similar.  The principles which must be applied to determine this question and the associated question of infringement are as follows:

(1)  The comparison is mark for sign.

(2)  The sign used by the defendant has to be identified.

(3)  In identifying the sign used by the defendant, the court must look to find what the defendant is using to identify his goods.

(4) The comparison requires the court to assume that the plaintiff’s mark is used in a normal and fair manner in relation to the goods for which it is registered, and then to assess the likelihood of confusion in relation to the way in which the defendant uses its sign.

(5) Matter added to the sign used by the defendant is to be discounted.  This widely stated principle is not absolute, but must be judged on the facts of the case.  If for example a word mark is buried in the defendant’s sign so that in Jacob J’s phrase only a crossword fanatic could find it then the sign used by the defendant does not comprise the mark at all.  In the Treat case, Jacob J gave the example of the presence of the word in the phrase “theatre atmosphere”.  As Lord Greene said in Saville Perfumery Ltd v June Perfect Ltd (1941) 58 RPC 147, the statutory protection “is absolute in the sense that once a mark is shown to offend, the user of it cannot escape by showing that by something outside the actual mark itself he has distinguished his goods from those of the registered proprietor”.  If the word “mark” in this phrase is substituted with the word “sign” then this is a statement of the modern law.

9. There seems to me to be no serious doubt that the signs used by the defendants have two parts, a prefix consisting of the word “Decon” accompanied by a part somewhat more descriptive of the particular product.  The claimant actually uses is mark in the same way, and this use, as a prefix accompanied by a more descriptive suffix, seems to me to be well within the scope of the ordinary and fair use of the claimant’s mark.  The suffixes (-ahol, -clean, -phene and –phase) do not change the nature of the principal sign: they are all “Decon plus a suffix” marks, and not different signs differing essentially from each other.  The suffixes cannot distinguish the goods from those of the registered proprietor, since their principal function is to refer to the nature and quality of the goods themselves.  It seems to me to be very clear that this is an example of the use of an identical sign upon goods in respect of which the claimant’s mark is registered and that there is accordingly infringement under section 10(1).  The fair manner of use of the claimant’s mark undoubtedly includes its use as a mark for a range of products and the defendants use is precisely the same.”

22.  I am also referred to AAHPharmaceuticals Ltd v Vantagemax plc [2002] EWHC 990 (Ch) which is another decision of Pumfrey J given on 18 April 2002.  The claimant was the proprietor of the word mark “Vantage” registered in Class 35 in respect of operation of incentive scheme and information relating there too.  The claimant was a wholesale distributor of pharmaceutical and healthcare products to a chain of independent retail pharmacies who traded under the name Vantage.  The pharmacies in the chain participated in a membership scheme operated by the claimant. 

23.  The defendant operated a multi-collection point loyalty card scheme.  It enabled the participating customers to collect points called Vantage points whenever they bought goods or services from participating merchants.  The points could be accumulated and exchanged for gifts.  In effect, the scheme resembled a trading stamp scheme in which stamps were replaced by points centrally recorded on an account for the customer.  The account was identified by a card resembling a credit card.  The card bore the words “Vantage Rewards” at an angle across the left-hand part of the card on separate lines or in a form which also bore the marks relating to the merchant from whom the card was originally obtained by the customer.  The scheme was suitable for use by members of the public in all retail and service sectors of the market. 

24.  On the concept of identity, Pumfrey J referred to para. A53 of the Opinion of Advocate General Jacobs given to the ECJ in SA Société LTJ Diffusion v SA Sadas [2003] FSR 1 as follows:

“The concept of identity between mark and sign and Art. 5(1)(a) of Council Directive 89/104/EEC covers identical reproduction without any addition, omission or modification other than those which are either minute or wholly insignificant. 

In reaching its decision in such cases, the national court must first identify what is perceived by the average, reasonably well-informed, observant and circumspect customer as the relevant mark and sign, then assess globally the visual, aural and other sensory or conceptual features of the mark and sign in question and the overall impression created by them, in particular by their distinctive and dominant components, in order to determine whether the two would be perceived by such a customer as the same in the sense that any differences are minute or wholly insignificant, …”

Pumfrey J then said in para. 44 of his judgment:

“…  The evidence with which I have been provided consists of examples of point of sale material, the material which is distributed to customers, the cards which are distributed to the customers, and the instructions which are given to the customers.  I formed at an early stage as a matter of impression the clear impression that the words “Rewards” and “Points” when used wholly descriptively and that the sign that was used by the defendant was “Vantage”.  I find it difficult to contemplate any admissible evidence of the type which I have described which would lead to a different conclusion.  I have accordingly come to the conclusion that this is a true case of identical mark and sign, ...”

25.  In the present case, the words “Italy”, “Timepieces” and “Jewellery” all do not change the nature of the principal sign “Da Vinci”.  They are suffixes to descript the goods.  They have no distinctive character.  They do not make the trade mark a different one.  They should be disregarded.  Without these suffixes, the first mark as pleaded in the amended statement of claim and used by the defendant is identical with the plaintiff’s trade mark.  Such use is contrary to section 18(1) of the Ordinance. 

The third mark

26.  I would refer to ECJ’s decision in SA Société LTJ Diffusion v Sadas Vertbaudet SA [2003] FSR 608 where the Opinion of Advocate General Jacobs was fully accepted.  The ECJ said at paras 50 to 54 at pages 617 to 618:

“50.     The criterion of identity of the sign and the trade mark must be interpreted strictly.  They very definition of identity implies that the two elements compared should be the same in all respects.  Indeed, the absolute protection in the case of a sign which is identical with the trade mark in relation to goods or services which are identical with those for which the trade mark is registered, which is guaranteed by Art. 5(1)(a) of the Directive, cannot be extended beyond the situations for which it was envisaged, in particular, to those situations which are more specifically protected by Art. 5(1)(b) of the Directive.

51.      There is therefore identity between the sign and the trade mark where the former reproduces, without any modification or addition, all the elements constituting the latter.

52.      However, the perception of identity between the sign and the trade mark must be assessed globally with respect to an average customer who is deemed to be reasonably well informed, reasonably observant and circumspect.  The sign produces an overall impression on such a customer.  That consumer only rarely has the chance to make a direct comparison between signs and trade marks and must place his trust in the imperfect picture of them that he has kept in his mind.  Moreover, his level of attention is likely to vary according to the category of goods or services in question (see, to that effect, Case C-342/97 Lloyd Schuhfabrik Meyer [1999] ECR I-3819 at para. [26]).

53.      Since the perception of identity between the sign and the trade mark is not the result of a direct comparison of all the characteristics of the elements compared, insignificant differences between the sign and the trade mark may go unnoticed by an average customer.

54.      In those circumstances, the answer to the question referred must be that Art. 5(1)(a) of the Directive must be interpreted as meaning that a sign is identical with the trade mark where it reproduces, without any modification or addition, all the elements constituting the trade mark or where, viewed as a whole, it contains differences so insignificant that they may go unnoticed by an average customer.”

27.  To an average customer, the shrunken logo appears as a decorative element rather than a distinct part of the trade mark.  Its presence does not produce any significant difference between the third mark and the plaintiff’s mark.  Its does not make the third mark any different from the plaintiff’s mark.  I find that the third mark is also an infringement of the plaintiff’s mark and its use is contrary to section 18(1) of the Ordinance. 

OWN NAME DEFENCE

28.  Section 19(3)(a) of the Trade Marks Ordinance provides:

“(3)  A registered trade mark is not infringed by-

(a) the use by a person of his own name or address or the name of his place of business;

provided the use is in accordance with honest practices in industrial or commercial matters.”

29.  The defendant pleaded in its amended defence and counterclaim that in the promotion and sale of watches under the “Da Vinci” mark, the defendant was using the name of its places of business in Causeway Bay and Mongkok.  It further pleaded that it was using the name by which it and each of the companies within the “Da Vinci Group” was usually known and known to its customers and it was using it in accordance with honest practices pursuant to section 19(3)(a) of the Trade Marks Ordinance.

30.  Mr Tony Phua, a director of the Singaporean company, Da Vinci Collections Pte Limited made an affirmation for the defendant.  He said the defendant was a member of the “Da Vinci Group”.  The Group operated in Asia and Europe with headquarters in Singapore.  The Group was in the business of luxurious furniture and light fittings for residential, commercial and office sectors since May 1994.  Their goods included high-end and well-known classical furniture of famous brand names.  In May 2004, the “Da Vinci Group” introduced fashion accessories, namely watches, jewelleries and leather goods into the market including the Hong Kong market.  It was a natural extension of the business of the “Da Vinci Group” in selling luxury goods and these accessories catered for the same market segment as the other goods of the Group.  He also said that all their goods were sold in their own buildings and concept stores and their stores prominently displayed the “Da Vinci” mark. 

31.  Regarding the operation in Hong Kong, the Da Vinci (HK) Limited started the furniture, lighting and home accessories business in December 2002 in a shop in Happy Valley.  The defendant then opened two shops selling “Da Vinci” watches in Causeway Bay and Mongkok in September and December 2004 respectively. 

32.  He also said that although the defendant’s name had the word “Collections”, as was the case for some other members of the Group, only the name “Da Vinci” was used to refer to the Group and its members which included the defendant.  The employees and customers of the Group also referred to the Group, its members and its stores solely as “Da Vinci”.  

33.  However, Mr Phua admitted that he was aware of the plaintiff’s registration of the “Da Vinci” trade mark in Hong Kong and elsewhere since March 2004 when the “Da Vinci Group” tried to register this mark for Class 14 goods in Singapore.  The plaintiff opposed their registration of this mark for Class 14.

Extension of business and right to use the trade mark

34.  The first thing I note from Mr Phua’s affirmation is the alleged extension from the luxurious furniture and lighting business into the business of selling watches.  I do not think the defendant can argue that its use of the “Da Vinci” mark on watches is a nature extension of the use of this mark by the “Da Vinci Group” on luxurious furniture and lighting since May 1994.  The business of selling watches is distinct from and not an extension of the business of luxurious furniture and lighting.  They are not the same or similar business or one as the extension of the other.  The defendant cannot argue that because it has the right to use the “Da Vinci” trade mark for a luxurious furniture business, such right can therefore be extended to a business selling watches. 

Own name means full name and not trading name

35.  The own name defence is very narrow and is only available for use of the defendant’s full name subject to the proviso of honest practices.  Subject to the proviso, section 19(3)(a) would only permit the defendant to use “Da Vinci Collections” and not “Da Vinci”.  This is so despite the fact that the defendant has used “Da Vinci” as the trading name in its two shops in Causeway Bay and Mongkok.

36.  In Parker-Knoll Ltd v Knoll International Ltd [1962] RPC 265, the House of Lords agreed with the Court of Appeal that the defendant was entitled to use its full name “Knoll International Limited” or the full name less the word “Limited”, but not the abbreviated name “Knoll”.  The House of Lords said at page 275:

            “Applying this interpretation, it seems to me that Knoll International Limited are entitled to the protection of s. 8.  They are absolutely honest throughout.  Their use of their own name was entirely bona fide.  They made no false representation at all.  It may have been likely to cause confusion, but this must be endured, lest the plaintiffs be allowed an unfair monopoly of the name KNOLL.  The protection extends to the defendant’s use of their own name, “Knoll International Limited,” and also the nature abbreviation of it to “Knoll International” omitting the word “Limited”.  But I would not extend the protection so as to authorise the further abbreviation to “Knoll” alone without the word “International”.  The user which is protected is the honest user of a man’s ordinary name — the name by which he is usually known.  A further abbreviation, which reduces it to less than his ordinary name, is not protected if the likelihood of confusion is thereby increased.”

I would point out that the House of Lords in this case was dealing with the old law where the test of honesty was a subjective one. 

37.  I also refer to NAD Electronics Inc and Anr v NAD Computer Systems Ltd  [1997] FSR 380.  Mr Justice Ferris adjudged that the own name defence only allowed the defendant to use its full corporate name.  The learned judge said at pages 397 to 398:

         “Mr Micklethwaite argued, however, that Computer Systems has a good defence by reason of section 8(a) of the 1938 Act and section 11(2) of the 1994 Act.  Section 8 of the 1938 Act, so far as material, provides that:

         No registration of a trade mark shall interfere with —

         (a) any bona fide use by a person of his own name …

(It goes on to provide for some other things which are not material for the purpose of this case.)

         Section 11(2), so far as material, provides:

         A registered trade mark is not infringed by —

(a) the use by a person of his own name …

provided the use is in accordance with honest practices in industrial or commercial matters.

          It appears to me that neither of these provisions affords any defence to infringement consisting of the use, in relation to relevant goods, of the letters NAD, either in the form of the NAD label as I have described it or in the form of the letters NAD alone, without any box.  “Own name” for the purposes of both provisions must, in my view, be the full corporate name of Computer Systems, namely NAD Computer Systems.  (The omission or inclusion of “Ltd” is, in my view, immaterial.)”

                   Own name is not trading name

38.  Mr Phua also tried to justify the defendant’s defence under section 19(3)(a) by relying on the use by his Group of “Da Vinci” as a trading name.  However, the trading name of the Group is for a furniture and lighting business and not for a watch selling business.  Furthermore, the trading name defence is different from the own name defence under section 19(3)(a).

39.  The use of trading name under the own name defence has also been dealt with by the English Court of Appeal in Asprey and Garrard Ltd v WRA (Guns) Ltd [2002] FSR 487.  The claimant used to be known as Asprey Limited.  It had traded as a family company since 1781 until 1995 when it was sold to Garrard Limited.  The business of the two companies merged and the claimant’s name was changed to the present one in September 1998.  It was the registered proprietor of the trade mark “Asprey” for firearms and ammunition in Class 13 and for jewellery and precious metals in Class 14. 

40.  The 2^nd defendant, William Asprey, was a member of the Asprey family and he used to work for the claimant.  After the claimant was taken over by Garrard Limited, he left the claimant and set up the 1^st defendant of which he was a 70% shareholder and the managing director.  The 1^st defendant opened a shop in London selling guns.  The shop had the name of the 2^nd defendant “William R. Asprey, Esquire” running across the top of the shop.

41.  Peter Gilson, LJ said in paras 42-43 of his judgment on the own name defence:

         “The first question that arises on this is whether the first defendant can take advantage of this defence.  I can answer the question shortly as Mr Bloch, while not abandoning his submission that it could, recognised the difficulties in that submission and did not press it.  In my judgment it is plain that the defence is not available to the first defendant.  Its own name is WRA (Guns) Ltd.  The fact that it has chosen to adopt the trading name of William R. Asprey, Esquire does not enable it to rely on the own name defence.

         As the judge said, the defence has never been held to apply to names of new companies as otherwise a route to piracy would be obvious.  For the same reason a trade name, other than its own name, newly adopted by a company, cannot avail it.  Further, as the judge also pointed out, because a company can choose to adopt any trading name, there could be an own name defence in almost every case if Mr Bloch were right.  In my judgment he is not.”

Insofar as the sale of watches was concerned, the trade name “Da Vinci” has been newly adopted by the “Da Vinci Group” and it is not entitled to use this name as a trade mark for its watches. 

“The name of its place of business” means the name of the geographical location

42.  Regarding the particular defence under section 19(3)(a) that the defendant could use “the name of its place of business”, the defendant argued that its shops are named “Da Vinci”, hence it is entitled to use this name without infringing the plaintiff’s trade mark. 

43.  Apart from the proviso of honest practices, this submission is also incorrect in interpreting “the name of its place of business” as “the name of its shop” or its trade or business name.  If the defendant were correct, the route to abuse is obvious.  Properly interpreted, “the name of the place of business” should mean the name of the geographical location of the business.

44.  To make this plain, I would refer to Angoves Pty Ltd v Johnson and Ors (1982) 43 ALR 349.  It is a decision of the Federal Court of Australia.  The claimant was the registered proprietor of the trade mark “St Agnes” in respect of brandy and wine.  The Respondents operated a liquor store called “St Agnes Liquor Store” inside “St Agnes Shopping Centre” in the suburb “St Agnes”.  Its paper bags for containing bottles had the name “St Agnes Liquor Store” printed thereon which was followed by the name of the shopping centre and its phone number both in smaller letters.  There was also an advertisement with this name in large block letters followed by the name of the shopping centre and its phone number in smaller letters.

45.  Fitzgerald J at page 374-375:

         “For some purpose, perhaps income tax, one’s place of business may be sufficiently defined by reference to whether it is in Australia or overseas.  For other, eg a State stamp duty, the place of business may be designated by reference to the State, eg South Australia.  In descending order, a place of business may be named by reference to the city or town, suburb, street, street number, or even a particular location such as a shopping centre.  The name of each of these may be for one purpose or another the name of a place of business.  The context must determine which is appropriate.

         Section 64(1)(a) does not speak of the address of a business and I can perceive no reason why it should be so read down.  It seems to me that the protection which it gives to the use of the name of the user’s place of business is an aspect of the same policy which generally prohibits registration of a geographical name as a trade mark (section 24(1)(d)).  In my opinion it would give effect to that policy to hold that, provided only that the name of the place chosen is apt and accurate in its application to the business in question, the section does not require that the location of the business be described in either the fullest or the most precise terms.  In any particular case the aptness and accuracy of the name chosen must be approached as one of fact and degree.  In the case of a suburban liquor store in a suburban shopping centre the name of a suburb can, in my opinion legitimately be considered to be the name of the place of business for the purposes of section 64(1)(a).

…

… It if matters, I am satisfied that, in the respondents’ mark “St Agnes Liquor Store”, the words “St Agnes” are used as the name of the suburb of St Agnes, ie, as the name of the respondents’ place of business.

         In my opinion, it is not inconsistent with that view that the respondents’ mark is frequently used by them in conjunction with the address “St Agnes Shopping Centre, St Agnes”.  As earlier noted, the respondents’ mark, “St Agnes Liquor Store” is the name of their business.  The reference to “St Agnes” in that name is clearly a reference to the suburb in which the respondents’ business is conducted.  The denotation of the suburban locality of the business in its name does not do away with the need to append a further description of the exact address.”

46.  The defendant therefore could not justify the use of the trade mark “Da Vinci” by saying that it was the name of its place or places of business.  In the premises, section 19(3)(a) of the Ordinance would not permit the defendant to use the name “Da Vinci” without the word “Collections” regardless of the proviso.  With this conclusion, I do not think it necessary for me to consider whether the defendant’s use of the mark “Da Vinci” is in conformity with the proviso.

STAY OF THE ACTION

47.  Finally, the defendant has also pleaded that its Singapore affiliate had filed for the second time in Hong Kong a trade mark application for registration of the mark and devices in question in Class 14 for watches, jewellery etc.  The defendant pleaded that if its Singapore affiliate should succeed in the application, it would be provided a statutory defence to infringement under section 19(2) of the Ordinance as it was the exclusive licensee of the Singapore affiliate’s trade mark registration.  The defendant thus asked that the action be stayed pending the outcome of the said application.  The defendant relied on Gala of London v. Chandler [1991] FSR 294.  Section 19(2) provides:

“(2) A registered trade mark is not infringed by the use of another registered trade mark in relation to goods or services for which the latter is registered (but see section 53(9) for the effect of a declaration of invalidity of registration).”

48.  I would not comment on this pending application.  However, the facts in Gala of London are different from the facts in this case.  I would not stay the action.  I also do not think the pending application can deter me from giving summary judgment.