Singapore Intellectual Property Office Sets a Low Bar for Proving Genuine Use in Luxury Goods

A recent decision issued by the Singapore Intellectual Property Office (IPOS) in a trademark revocation proceeding has set a low bar for showing genuine use of a luxury goods trademark in the course of trade in Singapore and thus avoiding full revocation of the challenged mark. According to the decision, luxury goods trademark owners are not required to show the goods bearing the trademark nor advertising materials in Singapore; a few invoices bearing the luxury goods trademark issued by a local business over a reasonable period of time, should suffice.

The case involved an application for revocation of the mark MYSTERY SET for non-use filed by FMTM Distribution Limited (“FMTM”) the owner of the “Franck Muller” trade mark for watches against the Van Cleefs & Arpels (“VCA”), which sells high-end luxury jewellery. FMTM argued that the mark MYSTERY SET was not used in the course of trade in Singapore for the period of 5 years following the registration date on jewellery and watches. Under Singapore law, the burden of proof lies with the proprietor of the mark.

While IPOS’s case summary focuses on the fact that FMTM failed to show that the mark MYSTERY SET is descriptive of a method to set precious stones in jewellery, an important part of the decision for trademark owners relates to the question of what is the quality and quantity of evidence that a proprietor of a trademark has to bring forth to show genuine use of the trademark in the course of trade, in Singapore.

The evidence that was relied upon by the trademark proprietor consisted only of invoices. VCA filed nine invoices in total. No photographs of the goods bearing the mark, no brochures or catalogues, were tendered by VCA. Of the first five invoices tendered, four indicated “boutique accounts” and reflected sales to persons outside Singapore. The additional four invoices indicated the words “mysterious setting” (on two of them) and three were sold to persons outside Singapore. From my reading of the decision, aside from Statutory Declarations, nothing else was filed by VCA and the invoices included a description of the jewellery sold. These descriptions included the words “Mystery Set” or “mysterious setting”. The decision is not sufficiently clear as to which invoices the Tribunal actually relied on, but assuming the Tribunal relied on them all, the question for me was are invoices alone sufficient, even when there is no evidence showing the goods to which the mark is applied onto? It seems that the answer is yes where luxury goods are concerned.

The qualitative measure of what evidence is required to show genuine use was examined in the decision. While the Singapore Trademarks Act does not provide what type of “use” constitutes “genuine use”, the Tribunal relied on the definition of “use” found in the trademark infringement provisions of the Singapore Trademark Act , which it considered to be applicable to revocation actions. The Applicant argued that showing an infringing use requires a lower threshold because in infringement proceedings often the proprietor of the mark does not have access to the evidence, which is exclusively in the hands of the infringer, and that in non-use revocation proceedings, the trademark proprietor who is in command of the evidence to prove use, should show use of the mark being applied onto the goods themselves, at a minimum. The Tribunal disagreed, stating that ”use” for the purpose of infringement proceedings “only provides illustrations of the types of evidence which can be considered, and that one can take into account other types of evidence.” But the Tribunal did not stop there.

Applying Capitol Records LLC v Steven Corporation Pte Ltd [2010] SGIPOS 14 (“Capitol Records”), the Mystery Set Tribunal stated that there is no need to show the mark being applied onto the goods to show genuine use. The Tribunal cited Capitol Records as authority to “the fact that there is no strict requirement that the mark is to be applied onto the goods.”  In Capitol Records, the Tribunal relied on three tax invoices to determine that there was sufficient evidence to show genuine use in trade in Singapore. But, in Capitol Records the proprietor provided copies of photographs of goods bearing the mark. In the instant case, none were provided. The Applicant made this point but the Mystery Set Tribunal stated that since the Capitol Records Tribunal did not rely on these photographs, they were immaterial to the decision. It is a somewhat difficult to agree with such a statement because the Capitol Records decision notes that “the Proprietor has shown that there was use within the relevant period, especially through the evidence [relied on] and through Chow’s SD.” [Emphasis added.] This means that the Tribunal also took into consideration other evidence, which was not tendered in the Mystery Set Case. The Tribunal in Capitol Records also stated that “I am therefore satisfied that there was sufficient evidence of “genuine use” by the Proprietor of the mark… on clothing, in particular, boy’s shorts …” [emphasis add]. Even if the Tribunal in Capitol Records did not rely on the photographs of goods bearing the mark submitted into evidence (and shown during the hearing) it is rather evident that the Hearing Officer was convinced that the mark was applied onto goods.

The Mystery Set decision went further and clearly indicate that there is no requirement under Singapore law to show that the mark was applied on/onto the goods. The Tribunal stated that the evidence (which we understand comprised of four or nine invoices (depending how you read the decision)) is sufficient to show “sale and offering for sale of “MYSTERY SET” goods; Importation and exportation of “MYSTERY SET” goods in and out of Singapore; and Use of the “MYSTERY SET” mark on invoices.” While invoices, in the eyes of the Tribunal, were sufficient to show genuine use in the course of trade in Singapore, it seems to represents a “leap of faith” by the Tribunal since no Mystery Set goods were ever presented to the Tribunal. The Tribunal simply took the Proprietor’s word for it despite the Applicant’s insistence that the evidence was lacking.

This same evidentiary “leap of faith” was rejected in another very recent decision by an IPOS Tribunal, which was cited in the Mystery Set decision for other propositions. In Bentley Motors Limited v Aucera S.A. [2016] SGIPOS 11 (“Bentley”), the luxury brand owner tried to revoke the mark BENTLEY owned by a local company for eyewear. The evidence tendered by the BENTLEY mark proprietor was of a single transaction involving a number of transactions. The goods were imported into Singapore, sold to a wholesaler who, in turn, made two sales to local stores of some 30 spectacles bearing the mark. It is noted that photographs showing the goods bearing the mark were tendered in evidence, though undated.  Thus, the Tribunal noted that the “Proprietor’s own evidence itself fails short of saying that the Goods bear the Subject mark”.  The Bentley Tribunal, having considered two tax invoices of 30 ”cheap” spectacles, found that these were insufficient to show genuine use in trade in Singapore. The Bentley Tribunal went on to state that “the fact that goods are referred to by a particular invoice does not always mean that the goods will bear that name…” And that “I am not saying for a moment that use of a mark on an invoice can never amount to evidence showing use of the mark in the goods, only that in this case, I do not have evidence that such goods even exist.” This is where things become fuzzy because the Mystery Set Tribunal didn’t have such evidence either but went on to find “sale of “MYSTERY SET” goods”.

For some reason, the Bentley Tribunal found it necessary to see evidence of actual use of the mark on the goods, while the Mystery Set Tribunal decided that none was required. The Mystery Set Tribunal found use of the mark on goods on the basis of a number of invoices, stating that the case is “clearly different” to Bentley since there were several transactions over a period of time.

Clearly, the fact that a few invoices were tendered over a period of time, each specifying an item sold worth hundreds of thousands of Singapore dollars played a significant part in the Tribunal’s departure from Bentley. While 30 cheap spectacles sold to two local shops over a period of 15 days was insufficient to show genuine use, a single jewellery item sold in Singapore for over SGD250,000 and several others transferred between two VCA boutiques was sufficient, even if the Tribunal didn’t see a single item bearing the mark. The Tribunal does refer to a page on VCA’s Internet web site but this page does not show the mark applied to jewellery or watches.

Perhaps, the Mystery Set Tribunal summary is more than telling  – “[t]aking the relevant characteristics of the products or services on the relevant market into account, I am of the view that quantity as well as turnover of the relevant products constitute genuine use of the Subject Mark. In this regard, I agree with the Proprietors that the relevant goods are luxury items and as such have a smaller consumer base which justifies the low volume, high value transactions on an annual basis.” [Emphasis added.]

True, there is merit in the Tribunal’s determination that when it comes to luxury brands, there are fewer sale transactions and that those could count as more significant. And it is also evident from the decision that since Singapore case law, directs the Tribunal to look for real or genuine trade, the Tribunal took VCA’s claim of bona fides use to heart. But, the evidentiary “leap of faith” in this case remains unclear since it should be very easy for a luxury brand owner such as VCA to tender evidence of actual use of their marks on the goods than for the Tribunal to have to leap to an evidentiary conclusion. If VCA’s use of the Mystery Set trademark is on paper only, there is some concern that such “leaps of faith” will provide extended protection, where none is due.

The full grounds of decision can be found at http://www.ipos.gov.sg/Services/HearingsandMediation/LegalDecisions/2017.aspx.

The writer’s firm has represented the Applicant in other proceedings before IPOS.