AuthorClara TUNG BA (Hons) (Cantab).
Date01 December 2014
Published date01 December 2014
Citation(2014) 26 SAcLJ 309

Staywell Hospitality Group Pty Ltd v Starwood Hotels & Resorts Worldwide, Inc

[2014] 1 SLR 911

The registration of a trade mark gives the proprietor exclusive rights to use the trade mark in relation to all goods and services for which the trade mark is registered. In Staywell Hospitality Group Pty Ltd v Starwood Hotels & Resorts Worldwide, Inc[2014] 1 SLR 911, the Singapore Court of Appeal expounded on how courts should give expression to the full extent of these rights when assessing whether the use of a third party's similar or identical mark is likely to cause the public to be confused as to the source of goods. This case note considers the pros and cons of the Court of Appeal's strongly pro-mark approach.

I. Introduction

1 A dispute between two international hoteliers presented the Court of Appeal with the opportunity to conduct a much-needed review of the law on relative grounds for refusal of trade mark registration under s 8 of the Trade Marks Act1 (“the Act”). In a wide-ranging decision the court revisited some old favourites, as well as clarified the position on hitherto unexplored issues. Arguably the most significant aspect of the court's decision was its approach to assessing the likelihood that confusion would result from the similarity between the parties' respective marks and the similarity between products in relation to which the marks were used (“the confusion inquiry”). The court expounded on two concepts relating to the confusion inquiry — that of the “notional fair use” to which a registered trade mark can be put, and the curtailment of the types of considerations which can be admitted when assessing the likelihood of confusion. Taken together, these two pieces of guidance signal a more robust protection for proprietors of registered trade marks. This note discusses some of the upsides and downsides to this new, “pro-mark” approach.

2 But first, a brief summary of the facts.

II. The facts and decision in Staywell

3 The facts are simple. Staywell Hospitality Group Pty Ltd (“Staywell”), an Australian hotel operator, applied to register the series of two marks (“the Applicant Mark”) in Singapore under classes 35 (relating to advertising and business management services) and 43 (relating to hotel services) of the International Classification of Goods and Services (“ICGS”). The application was opposed by Sheraton International, Inc and Starwood Hotels & Resorts Worldwide, Inc (“the Opponents”). The Opponents are American hotel operators which own a number of registered trade marks in Singapore, including the word mark “ST. REGIS” in class 42 (equivalent to class 43 of the current edition of the ICGS). The Opponents initially grounded their opposition in ss 7(4)(b), 7(6), 8(2)(b), 8(4)(b)(i), 8(4)(b)(ii) and 8(7)(a) of the Act. By the time the case reached the High Court, only the oppositions under ss 8(2)(b), 8(4)(b)(i) and 8(7)(a) were in issue. The High Court found that the parties' marks and the services in respect of which the marks were used were similar, but that there was no likelihood of confusion as required for a successful opposition under ss 8(2)(b) and 8(4)(b)(i) of the Act. It also found that there was no goodwill subsisting in the “ST. REGIS” mark as at the date of Staywell's registration application and therefore no ground for opposition under s 8(7)(a) of the Act. The Opponents appealed against the High Court's rejection of the Opposition on all three grounds, while Staywell appealed against the finding that the parties' marks were similar.

4 The Court of Appeal allowed the Opponents' appeal and upheld the opposition under ss 8(2)(b) and 8(4)(b)(i) of the Act. It, however, maintained the High Court's finding of a lack of goodwill in the “ST. REGIS” mark as at the date of Staywell's registration application, and therefore denied the opposition under s 8(7)(a) of the Act. En route to its conclusion the court clarified the position on the tests for assessing the similarity of marks, the likelihood of confusion, damage to well-known marks and the existence of goodwill. When it came to assessing the likelihood of confusion, the court articulated, first, an approach that considered not only whether confusion was likely to result from the actual use to which the competing marks had been put, but whether confusion was likely to result if marks were used in a notional and fair way across the entire scope of the specification of goods and services for which the mark was registered or sought to be registered. This was referred to as the “notional fair use approach”. In this connection the court for the first time distinguished between the way that the confusion inquiry ought to be conducted in opposition and infringement proceedings. In the former, the court would have regard to the full range of actual and notional uses to which both the competing marks could be put, whereas in the latter, the court would compare the full range of notional fair uses of the incumbent mark against the actual use to which the allegedly infringing mark had been put.2 Second, the court considered whether factors other than the similarity of marks and products themselves (“extraneous factors”) could properly be considered by the court in assessing the likelihood of confusion arising from the similarity of the marks and products. In a carefully considered retraction from the previous approach3 of admitting essentially all and any extraneous factors that would operate to dispel confusion, Staywell took the position that superficial steps taken by the trader to differentiate his goods should not be considered in the confusion inquiry.4 Instead, only factors that are intrinsic to the goods themselves, and which impact the consumer's motivation and ability to exercise care in his purchase of the particular type of products, are to be considered. The door through which extraneous factors could be considered in the confusion inquiry was therefore the impact of marks— and product— similarity on the perception of the consumer. The court then applied these principles to the facts of the case. First, since a notional fair use of both marks within the specification of “hotel services” would encompass hotels bearing different star-ratings, Staywell could not succeed in its argument that its actual use of its mark in relation to its four-starred Park Regis Singapore hotel did not create confusion with the Opponents' six-starred St Regis Singapore hotel.5 Further, the restriction of the types of extraneous factors which could be considered when assessing for confusion, meant that differentiating factors such as the way in which the hotels were marketed were excluded from the confusion inquiry.6 In the result, the court found that there was a likelihood that the hotel-purchasing public would be confused by the similarity of the Applicant Mark to the “ST. REGIS” mark into believing that the parties' hotels were at least economically linked.7 The Opposition under ss 8(2)(b) and 8(4)(b)(i) of the Act succeeded and the Applicant Mark was not allowed to proceed for registration. The result was a ringing endorsement of the exclusive rights which come with trade mark registration.

III. Comment: A clearly more “pro-mark” stance

5 The decision in Staywell followed the trajectory of an earlier decision in Hai Tong Co (Pte) Ltd v Ventree Singapore Pte Ltd8 (“Hai Tong”). There, the Court of Appeal developed a framework for conducting the confusion analysis within the structure of s 27(2) of the Act. Under this framework, the likelihood of confusion was described as the interplay between (a) the degree of similarity between the competing signs; (b) the degree of similarity between the products in relation to which the marks were used; and (c) the effect of these similarities on the relevant public.9 The decision in Staywell was an application and elaboration of this approach.10 In relation to the admissibility of extraneous factors, the court in Hai Tong stated that on a proper construction of s 27(2) of the Act:11

… while it is permissible to have regard to ‘extraneous factors’, this should not be taken as a reference to such factors ‘at large’ and still less to those that are inconsistent with the legislative framework because they impermissibly curtail the rights granted to the registered proprietor of a trade mark.

The court accordingly culled one particular extraneous factor from the confusion inquiry — the packaging of goods. The reason given foreshadowed the decision in Staywell— namely, that taking account of the packaging of a product when assessing for confusion, would “curtail the right of the proprietor of the registered mark to use his mark with packaging of that colour”.12 It should be no real surprise that in Staywell, the court widened the rule against packaging into a more general principle — that any factor which was “susceptible to change by a trader from time to time” would not be admissible in the confusion inquiry.13

The notional fair use approach, which recognises the proprietor's right to apply his mark to a “penumbra of notional fair uses”,14 can also be seen to flow from the same intent to give the registered proprietor the full lay of the land within the registered specification, rather than confine him to operating in a particular slice of that specification.

6 Taken together therefore, the notional fair use approach and the tightening of the range of admissible extraneous factors at the confusion-inquiry stage in Staywell represent a definite shift in judicial philosophy towards more robust protection of registered trade marks. By widening the comparator against which junior marks (whether marks seeking registration or allegedly infringing marks) are assessed to the whole spectrum of notional fair uses to which the senior mark can be put, the potential for overlap is vastly increased. Further, in opposition cases consideration of the particular circumstances of actual use to...

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