Book Review

• Published date: 01 December 2017
• Date: 01 December 2017
• Author: TAN Tee Jim SC LLB (University of Singapore), LLM (University of London); Senior Partner, Lee & Lee.
• Citation: (2017) 29 SAcLJ 606

1 It is a pleasure to welcome this timely compendium by a constellation of distinguished scholars and practitioners on the many fascinating facets of trademark transactions. As its editors (who also belong to this group) rightly observe at the outset:1

The importance of intellectual property transactions has grown exponentially in the past decade as a result of the increasing financial value of intellectual property assets. For many companies including those operating in high technology and patent-heavy industries, trademarks are often among the, if not the most important assets of the business. [emphasis in original]

2 The reasons are not difficult to fathom. They stem from the nature and function of a trademark. A trademark is any word, name, logo or sign which is capable of distinguishing the goods or services of a trader from that of another trader. It conveys the trade origin or source of the goods or services in relation to which it is used and, in effect, operates in the marketplace to protect consumers against the risk of deception or confusion as to the origin or source of the goods or services. This distinguishing function has the concomitant effect of denoting the quality and other attributes of the goods or services bearing the mark. This enables consumers to make informed purchasing decisions with relative ease and relieves them from having to spend an inordinate amount of time and effort to find suitable alternative goods and services. In economic terms, the consumers' “search costs” are reduced.

3 The distinguishing function of a trademark also has the beneficial effect of inducing traders to improve the quality of their goods and services so as to retain consumer loyalty and goodwill. This may be demonstrated by reference to a situation in which all goods in the marketplace have no trademarks (“no brand goods”). Consumers would, thus, be unable to differentiate or distinguish between different

goods of different traders. The probable effect of the anonymity is that the traders are unlikely to have the incentive to innovate or improve the quality of their goods.

4 As pointed out by Daniel Gervais in his opening chapter “TRIPS, Trademarks and Trademark Transactions”, the major legal systems as well as international agreements have embraced the distinguishing function as a cornerstone of trademark protection. This is, for instance, evident from Art 15.1 of the Agreement on Trade-related Aspects of Intellectual Property Rights2 (“TRIPS Agreement”), which provides that a mark is registrable as a trademark only if it is distinctive in the sense that it is capable of distinguishing the relevant goods or services of a trader from those of another trader and that if it is not inherently distinctive, it must be distinctive through use. This, in turn, has spawned a number of intractable issues highlighted by him, including: what will be the impact on the protection of a trademark if its owner transfers the mark? Will there be consumer deception or confusion as well as loss of distinctiveness of the trademark if the owner transfers the mark without also transferring the business or goodwill in relation to which the mark has been used?

5 This particular issue is of practical importance because, according to Susanna Leong in her chapter on “Trademark Transactions in ASEAN”, trademarks have become “an important part of a firm's intellectual property portfolio” and trademark transactions “are featured with increasing significance in a firm's overall corporate strategies”. The strategies include:3

(a) using the trademark to better protect the trader's market share (that is, his profits) by barring others from using an identical or similar mark in relation to identical or similar goods or services;

(b) licensing the trademark for use by third parties for commercial returns (for instance, through a franchise);

(c) selling the trademark outright for a specified value (for instance, in a company acquisition); and

(d) using the trademark to obtain credit (for instance, as collateral for a loan).

She points out that the most common form of trademark transactions is either an assignment or a licence of the use of the mark by the trademark proprietor.

6 The issue is addressed in Art 21 of the TRIPS...