Novelty Pte Ltd v Amanresorts Ltd

• Jurisdiction: Singapore
• Judgment Date: 31 March 2009
• Date: 31 March 2009
• Docket Number: Civil Appeal No 56 of 2007
• Court: Court of Appeal (Singapore)

Novelty Pte Ltd

Plaintiff

and

Amanresorts Ltd and another

Defendant

[2009] SGCA 13

Chan Sek Keong CJ

,

Andrew Phang Boon Leong JA

and

V K Rajah JA

Civil Appeal No 56 of 2007

Court of Appeal

Tort–Passing off–Damage–Different heads of damage–Blurring/tarnishment–Loss of licensing opportunity–Restriction on expansion–Loss of exclusivity and erosion of distinctiveness–Dilution of goodwill–Tort–Passing off–Goodwill–Misrepresentation–Damage to goodwill–Housing developer using same name as Balinese resort run by company known for its luxury resorts under the name “Aman”–Whether “Aman” names had goodwill in Singapore–Whether there was misrepresentation to relevant sector of public–Whether misrepresentation resulted in damage to company's goodwill–Tort–Passing off–Goodwill–Relevance of internet presence in determining goodwill–Use of trademark–Internet's power of exposure only potential–Existence of domain names and websites alone would ordinarily be insufficient to establish goodwill–Trade Marks and Trade Names–Passing off–Difference in test for damage as between misrepresentation for passing off and s 55 (3) (a) of the Trade Marks Act (Cap 332, 2005 Rev Ed)–“Interests” and “goodwill”–Trade Marks and Trade Names–Well-known trade mark–What was a well-known trade mark–Distinction between trade mark “well known in Singapore” and “well known to the public at large in Singapore”–Section 2 (1) Trade Marks Act (Cap 332, 2005 Rev Ed)–Trade Marks and Trade Names–Well-known trade mark–Whether “Aman” names were well-known trade marks in Singapore–Whether “relevant sector of the public in Singapore” referred to actual consumers and potential consumers in Singapore of the type of goods or services which the plaintiff's trade mark was applied–Whether likelihood of confusion had to be proven under s 55 (3) (a) Trade Marks Act (Cap 332, 2005 Rev Ed)–Sections 2 and 55 (3) (a) Trade Marks Act (Cap 332, 2005 Rev Ed)

The Respondents were companies operating under the Amanresorts group of companies (“the Amanresorts Group”). The Amanresorts Group operated ultra-luxury resorts in many exotic locations in the world and “Amanusa” was one such resort which opened in Bali in 1992. The Respondents were also in the residential accommodation business and they licensed the prefix “Aman” to real estate projects in return for a fee. The Respondents also had luxury goods and services with the “Aman” name. While the word “Aman” was never registered as a trade mark in Singapore, the name “Amanusa” was a registered trade mark since 1998. The Appellant developed housing projects in Singapore, and in contrast to the Respondents, was known for reasonably priced developments in convenient locations. In 2005, the Appellant named a Balinese themed housing project in Singapore as “Amanusa” and the Respondents took legal action against the Appellant under the law of passing off, and also under s 55 (3) (a) of the Trade Marks Act (Cap 332, 2005 Rev Ed) (“TMA”). The High Court found that the 'Aman' names were well known trade marks in Singapore, and that both claims were made out. The Appellant appealed against the High Court's decision.

Held, dismissing the appeal:

(1) A claim under the law of passing off required three elements to be established: (a) presence of goodwill; (b) misrepresentation; and (c) damage to goodwill: at [36] and [37].

(2) On the issue of goodwill, the specific sector of the public to be considered could be limited to small sections of the public, so long as these sections are not negligible. In determining whether goodwill existed in a name, the relevant criterion was exposure, and not use, of that name. Goodwill was the attractive force, which brought in custom and a desire to become a customer of the Respondents without the ability to actually be one only meant that there was reputation among such persons, but this could not therefore form the basis of goodwill. The Respondents had goodwill in Singapore although the goodwill of the “Aman” names was limited to those with a high income who would have been exposed to the Respondents' advertising: at [44], [47], [62] and [66].

(3) While the presence of the “Aman” names on the Internet was a relevant factor in determining the presence of goodwill, the Internet's power of exposure was only a potential power. Just as putting a trade mark on the Internet did not translate into “use” of that trade mark in a jurisdiction, the mere existence of domain names and websites featuring the “Aman” names was not in itself sufficient evidence of exposure. Additional proof to show exposure of the “Aman” names in Singapore was required: at [52] to [54].

(4) On the issue of misrepresentation, the target audience of misrepresentation in a passing off action was the actual and potential audience of the claimant. Misrepresentation was actionable only if it caused confusion and while there was no need to show actual confusion, the court had to assess whether there was a likelihood of confusion from the surrounding facts, based on the average reasonable person, with characteristics reflective of the relevant section of the public. Relevant factors in this case included whether there was any fraudulent intention in using the name “Amanusa” for the housing project, and whether the business of the Appellant and the Respondents were in the same field or closely related fields. The identical names, the similar Balinese themes, and the presentation of the Appellant's housing project as high-quality accommodation were factors increasing the likelihood of confusion: at [73], [77], [80], [82], [83], and [91] to [93].

(5) On the issue of damage to goodwill, such damage had to be a real tangible risk of substantial damage and could take place primarily by blurring or tarnishment. Blurring occurred when the plaintiff's get-up instead of being indicative of the plaintiff's goods or services only, became indicative of the defendant's goods or services as well. Blurring required that the plaintiff and the defendant be in competition, or are at least substitutes for each other. Tarnishment, on the other hand, occurs when the goods or services of the defendant were of an inferior quality or if they had some undesirable characteristic. Tarnishment did not require the plaintiff and the defendant to be in competition with each other. The term “dilution” should be used cautiously in passing off cases especially when what was meant was only a blurring or tarnishment of goodwill. There was tarnishment of the Respondents' goodwill because the Appellant's housing project did not exude the same luxury or class: at [97] to [100], [105] and [131].

(6) Loss of licensing opportunity only went towardsquantifying, rather than proving damage. If passing off was proved based on an established head of damage, a plaintiff could in addition to claiming any loss of sales occasioned by such damage, also claim any loss of licensing revenue: at [113] and [114].

(7) A plaintiff who had established goodwill in one form of commercial activity might claim as damage, any restriction of its expansion into another form of commercial activity, provided that the latter was a natural expansion of the first and that there was a close connection between the two activities. The Respondents' field of business was closely connected with the Appellant's field of business as both fields concerned accommodation, and the Respondents were therefore restricted by the Appellant's use of the name “Amanusa” from expanding into the residential accommodation business in Singapore: at [117], [118] and [121].

(8) On the claim under the TMA, a proprietor of a well known trade mark under s 2 (1) of the TMA did not need to carry on business or possess any goodwill in Singapore. Whether a trade mark was “well known in Singapore” was assessed objectively based on the factors stated in s 2 (7) of the TMA. A “relevant sector of the public in Singapore” under s 2 (9) (a) of the TMA covered the actual consumers and potential consumers of the plaintiff's goods or services only, as opposed to all actual consumers and potential consumers of the type of goods or services to which the plaintiff's trade mark was applied. Considering the factors under s 2 (7) (a) and s 2 (7) (b) of the TMA, the “Aman” names were well known in Singapore: [134], [136], [142] to [149], and [154].

(9) Although s 55 (3) (a)of the TMA did not explicitly state that there had to be a likelihood of confusion, this was an implicit requirement of “a connection between [the defendant's] goods or services and the [plaintiff]” under s 55 (3) (a). In other words, there had to be a confusing connection between the plaintiff and the defendant's goods or services. A survey of international agreements, from which s 55 (3) (a) was derived, showed that the requirement of confusion was not dispensed with. The widespread availability of protection to trade marks which were “well known marks in Singapore” should be balanced by requiring confusion to be shown under s 55 (3) (a). This should be contrasted with the more extensive protection given to the exclusive class of trade marks that were “well known to the public at large in Singapore”. These exclusive trade marks were protected against unfair dilution and the taking of unfair advantage of their distinctive character, even in the absence of a likelihood of confusion: at [161], [166] to [177], [198] to [212], and [233].

(10) The tests to be adopted for the “connection” requirement and the “likely to damage the [plaintiff's] interests” requirement in s 55 (3) (a) of the TMA would yield the same result as those obtained from applying the tests for the elements of “misrepresentation” and “damage to goodwill”, under the passing off claim. However, the two sets of tests were different in so far as the tests relating to passing off were concerned with the plaintiff's goodwill, whereas the tests under s 55 (3) (a) related to the interests of...