Rainforest Coffee Products Pte Ltd v Rainforest Cafe, Inc

• Judge: Chao Hick Tin JA
• Judgment Date: 14 April 2000
• Neutral Citation: [2000] SGCA 21
• Citation: [2000] SGCA 21
• Defendant Counsel: Sukumar Karuppiah and Vicky Heng Su Lin (Ella Cheong & G Mirandah)
• Published date: 19 September 2003
• Plaintiff Counsel: Tan Hee Liang and Raymond Tan Chee Siang (Tan See Swan & Co)
• Date: 14 April 2000
• Docket Number: Civil Appeal No 118 of 1999
• Court: Court of Appeal (Singapore)
• Subject Matter: Whether respondents' trademark lacking in distinctiveness,s 10(2) & 10(3) Trade Marks Act (Cap 332, 1992 Ed),Respondents intending to use trademark through franchisee,Franchisee as registered user,Infringement,Non using of trademark at time of application,Whether "Rainforest" able to distinguish respondents' restaurant from others,s 52(a) Trade Marks Act(Cap 332, 1992 Ed),Trafficking,Whether respondents guilty of trafficking in trademark,Registration criteria,Inherent adaptability to distinguish and distinctiveness in fact,Trade Marks Act (Cap 332, 1992 Ed),Registration,Whether trademark lacked distinctiveness,Whether respondents can apply for registration of trademark,s 30(7) Trade Marks Act (Cap 332, 1992 Ed),Inherent and de facto distinctiveness,Appellants challenging registration of respondents' trademark,Bona fide choice of name,Preparatory steps as evidence of user,Bona fide intention to use,s 40(1) Trade Marks Act (Cap 332, 1992 Ed),Trade Marks and Trade Names,Ambit of term 'services',Whether registered user provisions mandatory or permissive,Bona fide intention to use and bona fide use of trademark,Rectification of register,"Rainforest" neither novel or invented,Whether trademark a word having direct reference to character or quality of respondents' services,Franchisee agreement not finalised at time of registration,ss 12(1), 12(8)(b), 30(1) Trade Marks Act (Cap 332, 1992 Ed),Defence

(delivering the judgment of the court): This appeal was brought against the decision of the learned judicial commissioner to allow the respondents` claim against the appellants for infringement of their registered trade mark and to dismiss the appellants` counterclaim for cancellation of the trade mark. The learned judicial commissioner also granted an injunction against the appellants and made certain ancillary orders. At the conclusion of the hearing we reserved judgment. Having carefully considered the appellants` contentions we are of the view that the appeal should be dismissed for the reasons which we now give. The background facts, which were largely undisputed, are set out briefly.

The facts

The respondents are a corporation registered in the State of Minnesota, the United States of America, and are in the business of developing and operating a chain of restaurants in and outside of the United States by the name of `Rainforest Café`. These restaurants have a rainforest theme featuring elaborate jungle props, animation and sound effects which are supposed to provide an element of entertainment to diners. The respondents also sell merchandise associated with the restaurants and their theme.

The concept for the respondents` theme restaurants was first conceived in 1989 by the respondents` Senior Vice-President, Steven Schussler. After some experimentation and development of the idea, the respondents opened the first Rainforest Café in October 1994 in Minneapolis, USA. This proved successful and the respondents went on to open new outlets elsewhere in the United States. By the end of 1997, they had opened a total of 16 restaurants, 13 in the United States and three abroad. The domestic outlets were operated by the respondents themselves whilst those overseas were operated by licensees through franchise agreements. In 1995, the respondents completed their initial public offer of shares and obtained a listing on the NASDAQ Board. Presently, the respondents operate 23 outlets in the United States and their licensees operate nine in Canada, Mexico, the United Kingdom and Hong Kong.

The respondents` position, which the appellants challenged, is that they had always intended to expand into Singapore. To that end, on 16 October 1995, they filed trade mark application No 9964/95 for the trade mark `Rainforest Café` (`the trade mark`) in Class 42 covering `restaurant and nightclub services`. The application was successful, and the trade mark was advertised in the Gazette on 7 November 1997 and placed on the register on 30 April 1998. The registration of the trade mark was, predictably, subject to the disclaimer that it does not give the proprietor the exclusive right to use the word `Café`. The respondents subsequently applied to register trade marks of various designs and logos of the words `Rainforest Café` as well as their slogan `A Wild Place to Shop and Eat`. These applications are still pending.

The respondents gave evidence of what they had done pursuant to their plans to open their first restaurant in Singapore. First, they appointed RFC Far East Ltd (previously known as Movie Dream Corporation), a company registered in the British Virgin Islands (`RFC Far East`), as master franchisee for Southeast Asia. The Master Franchising Agreement was signed on 4 August 1997. Second and in turn, a sub-franchisee, RFC Far East Café Pte Ltd (`RFC Far East Café`) was identified. On 15 April 1999, RFC Far East Café entered into a tenancy agreement with Liang Court Pte Ltd for the tenancy of certain premises at Liang Court for the new restaurant. According to the respondents, the parties were in the process of preparing the sub-franchise agreement.

The appellants were incorporated on 5 November 1996 and first commenced operations in January 1997 in their registered place of business at 6 Fisher Street, Merchant Square. This is their only outlet and it sells a selection of salads, sandwiches, soups, and desserts together with a variety of speciality coffees and teas, along with soft drinks and beer. The respondents learnt of the appellants` outlet from an article in the July 1997 issue of the trade magazine `Retail Asia`, which was brought to their attention by their Hong Kong franchisees in August 1998. The respondents then instructed their then solicitors in Singapore, Messrs Donaldson & Burkinshaw, to look into the matter. In the course of their investigations, it was found that the appellants had used the word `Rainforest` alone without the rest of their registered name, ie `Coffee Products Pte Ltd`, in their signboards, menus and on certain documents such as receipts. On 4 November 1998, Messrs Donaldson & Burkinshaw wrote to the appellants informing them of the registration of the trade mark and of the respondents` objection to the use of the word `Rainforest` in the appellants` name and business. They demanded that the appellants cease their use of the word `Rainforest` and effect a change of name. There followed an exchange of correspondence with the appellants` solicitors, Messrs Tan See Swan & Co, but no amicable settlement was reached. The respondents accordingly instituted the present proceedings against the appellants on 30 December 1998.

The respondents subsequently filed SIC 311/99 applying for final judgment against the appellants pursuant to O 14 of the Rules of Court (1997 Ed). In the alternative, they prayed for an interim injunction. Prayers (a) and (b) of the summons-in-chambers read:

(a) An injunction to restrain the [appellants] whether acting by [themselves], [their] directors, officers, servants, agents, or any businesses/companies which they control, or otherwise howsoever from doing any of the following acts, that is to say infringing the [respondents`] trade mark no 9964/95 (`the [respondents`] registered trade mark);

(b) to remove the name `Rainforest` from the [appellants`] corporate name, products including signages, letterheads, invoices, receipts, menus, packagings, bags and all promotional materials related to the [appellants`] business which would otherwise infringe the [respondents`] registered trade mark.

At the hearing on a special date, Lai Siu Chiu J granted an interim injunction pending trial in the terms prayed for, restraining the appellants from using the word `Rainforest` standing alone and used apart from the appellants` full corporate name, in the following terms:

Until trial or further order, interim injunction is granted in terms of prayers (a) and (b) of summons-in-chambers provided this order will not stop the [appellants] from operating their café under their corporate name and that the [appellants`] full corporate name, Rainforest Coffee Products Pte Ltd need not be changed or removed. ...

The claim

The respondents` claim against the appellants was for infringement of their registered trade mark. They sought an injunction to restrain the appellants from infringing their trade mark and certain ancillary orders, as follows: (a) that the word `Rainforest` be removed from the appellants` corporate name and products including signboards, menus, receipts, invoices, letterheads and all promotional materials relating to the appellants` business; and (b) that the appellants deliver up to the respondents all goods in their custody, possession or power, the keeping or disposal of which would be in breach of the above-mentioned injunction. The respondents also sought an inquiry as to damages, or alternatively an account of profits. There was an additional claim in passing off but this was abandoned at the beginning of the trial.

The defence

The appellants denied infringing the respondents` trade mark. They raised several defences, including one under s 52(a) of the Trade Marks Act (Cap 332, 1992 Ed), ie that their use of the word `Rainforest` was a bona fide use of their name. The appellants also counterclaimed, inter alia, for:

(a) an order that the register of trade marks be rectified by the cancellation therefrom of the entry relating to registered trade mark No 9964/95; or

(b) an order that the register of trade marks be rectified by the variation of the entry relating to registered trade mark No 9964/95 in such manner and upon such terms as the court thinks fit and just; or

(c) an order that registered trade mark No 9964/95 was descriptive and/or non-distinctive, thus rendering the registration thereof bad and invalid.

The decision below

The appellants admitted operating a café using the name `Rainforest`, but they did not admit that the respondents were about to establish any outlets in Singapore through a franchisee. They denied liability on the following grounds:

(a) the respondents did not use the trade mark in Singapore nor did they have any intention to use it when they applied for registration;

(b) the transaction between the respondents and their master and sub-franchisee amounts to trafficking in the trade mark;

(c) the nature of the services provided by the appellants do not fall within the classification in which the respondents` trade mark is registered;

(d) the word `Rainforest` is not registrable; and

(e) the appellants` use of the word `Rainforest` was a bona fide use of their own name in connection with their business and did not constitute an infringement of the respondents` trade mark by virtue of s 52 of the Trade Marks Act (Cap 332, 1992 Ed) or s 28 of the Trade Marks Act (Cap 332, 1999 Ed).

The learned judicial commissioner first considered the applicable law. The Trade Marks Act (Cap 332, 1999 Ed) (hereinafter `the Act`) came into operation on 15 January 1999 (`the commencement date`) pursuant to the Trade Marks (Commencement) Notification 1998, which was published in Gazette No S634 dated 29 December 1998. Section 109 of the Act repealed the Trade Marks Act (Cap 332, 1992 Ed) (`the repealed Act`). The respondents` trade mark was registered under the provisions...