HONG KONG TRADE MARK INFRINGEMENT
"GREENPEACE"
High Court of Hong Kong

Barry Yen, So Keung Yip & Sin, SKYS  

Issue - whether use of a mark as a name of a business is trade mark use/whether use of a mark on hang tags, sales memos, credit card receipts, business cards, carry bags and on windows is trade mark use.  

Facts - Stichting Greenpeace Council (the Plaintiff) is the proprietor of a registration in Hong Kong for the trade mark GREENPEACE claiming clothing.  Income Team and others (the Defendants) operated a number of very successful retail shops under the name GREEN PEACE.  The Defendants first used the trade name GREEN PEACE IN 1988 and their retail shops have sold well known branded clothing as well as clothing which bore brands which were not well known in Hong Kong.  The Defendants acquired a reputation for selecting clothing which would appeal to the younger market.  

The Plaintiff complained that the Defendants had infringed their GREENPEACE trade mark registration by:  

The issue was whether the use of the GREEN PEACE mark in those circumstances was use on goods and therefore whether there was an infringement.  There was no issue about the validity of the Plaintiff's registration or that the marks were deceptively similar. Whilst there was also an issue relating to passing off that was not discussed at this hearing.  

The Defendants argued that their use did not amount to trade mark use since it did not indicate the origin of the goods.  The Defendants' sought to rely on passages from the decision of the Vice Chancellor in Furnitureland Limited v Harris and others [1989] F.S.R. 536 ("Furnitureland") at 542 where he stated that there was "formidable support for the proposition that the mere retail sales of goods, not being gods for which the retailer accepts any responsibility beyond that of a normal retailer, is not use of a mark in the trade mark sense".  It was argued by the defendants in the Furnitureland case that the use of a mark in relation to goods postulates a use of the mark as a trade mark, the essential nature of which is a representation of the origin of goods or, at least some operation carried out in relation to the goods.  It was argued that any mere retailer of goods under the brand name of the manufacturer is not using the retailer's name as a mark in relation to those goods.  

The judge, Rogers J., stated that the purpose of a trade mark was not simply confined to manufacturing origin.  It was also said to include the selection of goods and offering them for sale.  Rogers J. noted that the Vice Chancellor in the Furnitureland case was only considering an interlocutory application and that he did not come to any concluded view but held that the plaintiff had an arguable case that offering for sale under a name is capable of constituting use of the name in a trade mark sense.  Rogers J. went on to state that infringing use was "use which indicates a connection between the goods and the owner of the name".  

In arriving at his conclusion Rogers J., relied on:  

Rogers J. also favorable quoted C.D. Wilkinson in his book on Hong Kong trade mark law where the learned author stated that "A trade-mark cannot be assumed to denote that its proprietor is the actual manufacturer of the goods to which the mark is affixed.  All that it denotes is that the goods to which such trade mark is affixed are goods in which the proprietor of that trade mark deals, and the goods are probably similar in quality to goods previously purchased from the same proprietor, and with the same trade-mark affixed thereto".  

Rogers J. stated that a retailer can use its own mark on goods alongside a manufacturer's mark.  

Decision - All instances of use referred to above were regarded as being trade mark use relating to goods since the Defendants' offered the goods for sale under and by reference to the mark. In particular:  

Rogers J. noted that in a passing off action the public must be confused but in a trade mark action the plaintiff only needs to show that his rights have been infringed. The Defendant's actions therefore constituted an infringement.  

The full case citation is Stichting Greenpeace Council v Income Team Limited and others [1997] FSR 149. 

Commentary - This is the first case in Hong Kong which clearly stated that use of a mark on a store, on hang tags, on business cards, sales memos, shopping bags and credit card receipts by a retailer was trade mark use on the goods sold in the store even if those goods bear another manufacturer's mark.  

Notwithstanding the decision the Defendant's continued to operate stores under the name GREEN PEACE in Hong Kong up till September 20, 1997. On that day the store will change its name to I.T. This is because a confidential settlement was reached between the parties. As the Defendants did not proceed with their appeal, Rogers' J. decision stands as the current law in Hong Kong and is also binding on the Trade Marks Registry.  

The decision confirmed the role of the trade mark as an indicator of origin. Origin is considered in its broader sense to include selection. This view is reflected in recent opinions of Advocate-General Jacobs in two cases referred to the European Court of Justice.  

In this modern age where trade mark owners are holding trade marks in offshore companies for tax reasons, management reasons or to minimize the risk of expropriation the public commonly has little idea as to who owns the trade mark. Quite often, the assignment from well-known operating companies to the holding companies are not publicized so consumers would not necessarily be aware of the change. In practice trade marks probably best function as an indication of the quality of the goods or services. Whilst consumers may have an impression of who owns a mark they could very well be mistaking an owner for a licensee or sub licensee. To that extent perhaps Rogers J. did not go far enough in stating the modern function of the trade mark.  

Rogers J., at page 160, seeks to distinguish selection from offering goods for sale and states that the latter is in itself trade mark use. The distinction is elusive since selection alone without reference to a trade mark could not be trade mark use.  

Whilst the Defendant's state that they import only from innovative, stylish and high quality labels it is more likely that consumers buy because of the manufacturer's trade mark on the item and all the related advertisements placed by the manufacturer alone in popular magazines and publicity given to fashion shows. Where the items are, as in many cases available in different outlets a number of other factors effect the purchasing decision like price, store decor and service.  

But does the logic apply to all types of uses?  

Sales memos - it is not uncommon to be presented with a credit card receipt which bears a name apparently unrelated to the establishment. This may be because;  

Shop names - what would happen to the local general store which is approached every day to stock confectionery, cigarettes, soft drinks, etc.? The store operator is predominately, if not solely, interested in whether the product will sell. Very little selection takes places in those cases but they would be held to be infringing.  

Nonetheless, the decision is consistent with the definition of infringement in s.9(5) of the draft Hong Kong Trade Marks Bill which states that a person uses a sign if he "offers or exposes goods for sale, puts them on the market or storks them for purposes under the sign, or offers or supplies services under the sign".  

Implications - The case has major repercussions on the way retailers conduct their business. It will dramatically increase the cost of setting up any type of business which retails goods; this includes restaurants and bars, and mail order companies. It will also give owners of trade marks registered in relation to goods the opportunity to bring infringement proceedings in relation to retailers. The practical effect of the Greenpeace case is that:  

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• These comments are provided in general terms only. Please contact Barry Yen on 28108912 or Alice Sin on 28108926 if you would like specific comments on how the case will effect your business.

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Copyright June 1997
So Keung Yip & Sin - SKYS
Barry Yen