City Chain Stores (S) Pte Ltd v Louis Vuitton Malletier

• Court: Court of Appeal (Singapore)
• Judge: Chao Hick Tin JA
• Judgment Date: 06 November 2009
• Neutral Citation: [2009] SGCA 53
• Citation: [2009] SGCA 53
• Defendant Counsel: Wong Siew Hong and G Radakrishnan (Infinitus Law Corporation)
• Plaintiff Counsel: Tan Tee Jim SC, Christopher De Souza and Ng Guan Zhen (Lee & Lee)
• Published date: 12 November 2009
• Docket Number: Civil Appeal No 150 of 2008
• Date: 06 November 2009
• Subject Matter: Trade Marks and Trade Names

6 November 2009 Judgment reserved.

Chao Hick Tin JA (delivering the judgment of the court):

Introduction

1 The present appeal concerns the alleged infringement by the appellant, City Chain Stores (S) Pte Ltd (“the Appellant”), of a mark of a well-known brand in luxury goods owned by the respondent, Louis Vuitton Malletier (“the Respondent”). It raises three broad issues, namely: (a) whether there has been infringement of a registered trade mark under ss 27(1) and 27(2) of the Trade Marks Act (Cap 332, 2005 Rev Ed) (“the Act”); (b) whether a claim in passing off has been established; and (c) whether s 55 of the Act on the protection of well-known trade marks has been breached.

2 The Appellant, which was incorporated in Singapore on 2 November 1985 with an issued and paid-up capital of S$1.8m, is a wholly-owned and indirect subsidiary of Stelux Holdings International Limited (“Stelux”), a company founded in 1963 and which has been listed on the Hong Kong Stock Exchange since 1972. Stelux operates two major retail chains: “City Chain” and “Optical 88”. The Appellant is a part of the City Chain retail chain which was first set up in Hong Kong in 1985. Currently, there are more than 360 City Chain stores and counters operating in Hong Kong, Macau, China, Thailand, Malaysia and Singapore. There are 36 City Chain outlets in Singapore.

3 The Respondent is a company incorporated in France. Founded in 1854, it commenced business as a trunk maker. Today, it has an estimated brand value of US$20.3bn and it is now part of the LVMH Group which was formed in 1987. Currently, the Respondent’s products include fashion and travel items, luggage, handbags, leather goods, ready-to-wear fashion, footwear, jewellery, writing instruments and sunglasses. Since 2002, the Respondent has also been manufacturing and selling watches. In Singapore, the Respondent’s products are available exclusively through LVMH Fashion Singapore Pte Ltd (a wholly-owned subsidiary of the LVMH Group) which, at the time of the trial, operated three stores in Singapore: at Ngee Ann City, Hilton Hotel Arcade and Raffles Hotel Arcade. It has recently opened a fourth store at a newly completed high-end shopping mall.

4 Stelux had business dealings with the LVMH Group prior to this dispute. For example, one City Chain store in Hong Kong carried Tag Heuer, Christian Dior and Fendi watches (brands which are part of the LVMH Group). There has not been any previous dealing between Stelux and the LVMH Group in Singapore. Although Stelux and the LVMH Group were at one point in negotiation for Stelux to have dealership rights in Singapore for Tag Heuer, nothing materialised from that.

Facts leading up to the commencement of the alleged trade mark infringement action

5 In November 2006, the Appellant launched a range of watches in Singapore bearing the SOLVIL trade mark as well as flower devices on its dial and strap (“the Solvil watch”). Daniel Roland Plane (“Plane”), a solicitor based in Hong Kong, who was responsible for the design and management of intellectual property enforcement programmes for the LVMH Fashion Group in the Asia Pacific region, discovered in 2007 that the Solvil watches were being offered for sales at City Chain outlets in Hong Kong, several cities in China (including Shanghai, Beijing, Shenzhen and Guangzhou) as well as in Malaysia (Kuala Lumpur) and Singapore.

6 Plane instructed co-ordinated enforcement raids to be carried out against the City Chain outlets in China (ie, in Beijing, Shenzhen,Guangzhou and Chongqing), Malaysia and Singapore. In Singapore, a private investigator, Mr Ng Chui Guan (“Ng”), visited the Appellant’s outlets at The Central, Marina Square, Suntec City Mall and Plaza Singapura between 4 May and 9 May 2007 and made trap purchases from each outlet. Ng also deposed that between 9 May and 13 May 2007, he visited 22 other City Chain outlets around Singapore and observed that the Solvil watches were available or on display at those outlets. In China, the respondent only succeeded in its legal action in Shenzhen Intermediate People’s Court but that is under appeal. In Malaysia, following the raids, no legal proceedings have been initiated against any party.

7 On 15 May 2007, the Respondent proceeded to file four complaints against the Appellant alleging infringement of s 49 of the Act. The Respondent alleged that its Flower Quatrefoil mark had been infringed by the Appellant’s use of its flower design (“the Solvil Flower”) on the Solvil watches sold by the Appellant.

8 The Flower Quatrefoil mark is one of four constituent elements that make up the Louis Vuitton Monogram Canvas design (“the Monogram”) which has been applied to the Respondent’s goods since 1896. Even today, the Monogram is still applied to a majority of the Respondent’s products. The Monogram was first registered as a trade mark in France in 1905 and is registered as a trade mark in Singapore in respect of a number of classes.

9 The Flower Quatrefoil mark itself is also registered in Singapore under Trade Mark No T0514535D in respect of:

Goods made of precious metals, their alloys or plated therewith, in particular craftwork objects, ornamental objects, tableware, ashtrays, boxes and cases, powder compacts; jewellery, jewellery articles (including fashion jewellery) in particular rings, rings for keys, rings, buckles, earrings, cuff links, bracelets, charms, brooches, chains, necklaces, tie pins, ornamental pins, medallions; timepieces and chronometric instruments including watchstraps, watches, wristwatches, pendulum clocks, pendulettes, alarm clocks, caskets and cases for time pieces.

10 The magistrate issued four search warrants (Nos 64/2007 to 67/2007) which were executed at the four above-mentioned outlets (see [6] above) on 16 May 2007. A total of 24 of the Solvil watches were seized. On 16 November 2007, four charges in Private Summonses Nos 2246-2007 to 2249-2007 were issued against the Appellant for breaching s 49(c) of the Act. The Appellant responded by applying by way of criminal motion for the search warrants to be quashed. On 13 December 2007, the Respondent filed a writ of summons (Suit No 779 of 2007 (“Suit 779/2007”)) against the Appellant. The parties agreed that Suit 779/2007 and the criminal motion would be heard together. The trial judge allowed the claim in Suit 779/2007 and dismissed the criminal motion. His grounds of decision are reported in Louis Vuitton Malletier v City Chain Stores (S) Pte Ltd [2009] 2 SLR 684 (“GD”).

11 In Suit 779/2007, the Respondent sought, inter alia, an injunction to restrain the Appellant from doing any act that would infringe the Respondent’s trade mark, pass off its watches or cause confusion or indicate a connection between the Appellant’s and Respondent’s goods; a declaration that the Respondent’s trade marks were well-known within 2(1) of the Act; an inquiry into damages suffered by the Respondent and the delivery up of the Solvil watches (see [27] of the GD). The thrust of the defence in the court below was that the Solvil Flower was not used as a trade mark on the Solvil watches as it was merely decorative; the use of the Solvil Flower was not a misrepresentation that was likely to deceive the public; the Respondent’s trade mark was not well known to the relevant sector of the public or the public at large and the Solvil watches did not infringe s 55 of the Act (see [28] of the GD).

12 At the conclusion of the trial, the trial judge ordered (at [89] of the GD) that (a) the Respondent succeed in its claim on the grounds of infringement of trade mark under ss 27(1) and 27(2) of the Act, in passing off and under s 55 of the Act; (b) the injunctions as claimed be issued; (c) at the option of the Respondent, there be an inquiry as to damages or an account of profits; (d) the infringing articles be delivered up within 14 days from the date of judgment or, alternatively, the Appellant’s solicitors to confirm with the Respondent’s solicitors by letter that there were no further infringing articles in the possession of the Appellant; (e) the Appellant pay the Respondent costs of the civil action; and (f) the criminal revision application be dismissed with no order as to costs.

13 In this appeal, there are three main issues in dispute which we shall deal with in turn, namely, (a) whether the Appellant’s Solvil watches infringe the Respondent’s registered Flower Quatrefoil mark under ss 27(1) and 27(2) of the Act; (b) whether the Respondent’s claim for passing off has been established; and (c) whether the Appellant has breached s 55 of the Act on the protection of well-known trade marks.

Whether the Appellant’s Solvil watches infringe ss 27(1) and 27(2) of the Act

Section 27(1) of the Act

14 Sections 27(1) and 27(2) of the Act prescribe the acts which would amount to an infringement of a registered trade mark as follows:

Acts amounting to infringement of registered trade mark 27. —(1) A person infringes a registered trade mark if, without the consent of the proprietor of the trade mark, he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered.

(2) A person infringes a registered trade mark if, without the consent of the proprietor of the trade mark, he uses in the course of trade a sign where because —

(a) the sign is identical with the trade mark and is used in relation to goods or services similar to those for which the trade mark is registered; or

(b) the sign is similar to the trade mark and is used in relation to goods or services identical with or similar to those for which the trade mark is registered,

there exists a likelihood of confusion on the part of the public.

15 The Act is based on the Trade Marks Act 1994 (c 26) (UK) (“the 1994 UK Act”). One of the main purposes of the 1994 UK Act was to implement the First Council Directive 89/104/EEC of 21 December 1988 to approximate...