Singapore refuses protection for Ferrero Rocher shape and packaging

Given the season,  chocolate is on IP Komodo's mind. Its also on the mind of the the Intellectual Property Office of Singapore (IPOS). Ferrero, the chocolate company, had applied to register its product image as a trademarks (left - without wording). It was refused by IPOS for lack of distinctiveness.  The mark did not function as a trademark to indicate origin said IPOS. 

Consumers need logos and words to identify producers usually. Only in exceptional circumstances will shape and packaging become recognized without any.  Under Singapore caselaw distinctive character as an indication of origin is conveyed by the appearance of the mark in itself. There had certainly been extensive sales and marketing in Singapore for the products, almost always with the brand wording. A simple survey failed to show consumers independently recognized the product without the wording. 

It seems a narrow approach, given how recognizable the product above is. A better survey design that didn't draw consumers' minds to the question, might have shown clearer results. In the past children have been known to identity cookies and cereals on shop shelves, long before they can read. Maybe better evidence on appeal might work. 

Meanwhile IP Komodo has his own chocolate collection definitely distinguishable from other products, ready for the holidays! 

Singapore explores plain packaging

Singapore becomes the latest country to examine the issue of plain cigarette packaging. Singapore’s Ministry of Health (MH) has launched a public consultation on whether to adopt standardized packaging of tobacco products with larger and more graphic public health warnings. This follows a previous study and sets out 3 concrete proposals -

(a) regulating the promotional aspects of tobacco packaging;

(b) standardizing tobacco packaging elements; and

(c) increasing the size of graphic health warnings on packs from 50% to 75%.

Like many Health Ministries elsewhere in the world they approach this from a pure public health perspective, with a clear bias against tobacco companies and aiming for a tobacco free society. The consultation asserts that product packaging is a form of misleading advertising so must be restricted and that there is a clear global move to standardized packaging.  Much of the proposal reviews the international developments and their applicability to Singapore. They consider opposing arguments such as that plain packaging increases counterfeiting and that it diminishes IP protection but reject them all.

It seems overall a determined effort to move quickly, perhaps to become the first in the SE Asia region to make this law.

Singapore's role in the counterfeit goods trade highlighted

Singapore is one of the world's largest ports and supposedly the world's largest transhipment port. A recent OECD report points the finger squarely at Singapore for having a major role facilitating the global trade in fake goods. As much as 2% of the world's fake goods are alleged to pass through the city state's port. Despite having a strong IP system, that protection stops at the wharves and docks. Transiting through Singapore, contributing revenues to government coffers and supporting global criminal enterprises, are millions of dollars of fake shipments. This will come as no surprise to anyone who has seen the myriad of container ships parked offshore.

The government is however unwilling to discuss the situation, preferring like an ostrich to avoid the problem. After all they earn money from each shipment that passes through and the cost of inspecting or seizing illegal goods would be very high. Unfortunately this is believed to be only the tip of a far bigger illegal goods iceberg; that counterfeits are only one category of a vast array of much nastier illicit goods that pass through country's ports each year. As the criticism mounts eventually the ostrich will need to take notice.

Batam and the transport of illegal and counterfeit goods

Batam is an island 10 km south east of Singapore, part of the Indonesian Archipelago.  Recent news and industry discussions have begun to highlight Batam's role in counterfeit goods shipment (which appears frequently connected with Singapore). The Indonesian government, based far away in Jakarta, is concerned generally with illicit goods entry into Battam. It recently identified approximately 44 illegal entry points in Batam in 2016 (that is entry points for shipments which don’t pass through Customs). Indonesian Customs are increasing the their security to prevent a huge array of illegal goods entering and exiting Batam. They found 36 examples of a variety of illicit goods in February 2016 via operations at the airport, seaports, and in the local market.

Illicit goods covers a wide array of offences, including counterfeits. Customs officials have observed that imported goods frequently do not pay tarrifs/tax when entering Batam, via Pelabuhan Sekupang on passenger ships. The goods are then transported to Jakarta and other ports in Indonesia, suggesting a large passenger hand carried goods smuggling problem too. Customs officials have a hard time controlling this with limited manpower. They often face physical resistance especially they say from women who bring these goods in, with the help of porters. Newspapers unsurprisingly report widespread bribery to keep this illegal practice under wraps.

Batam and Singapore share a Special Economic Zone with no tariffs or value-added taxes imposed on goods passing between the two.  In one recent case going through Singapore's courts now, a seizure in Singapore of transshipped luxury goods from Shenzhen bound for Batam for processing and re-export suggests Batam is being used by Singapore shippers, as a route for fake goods. Singapore is already widely known as the largest transshipment port in the world, and the general suspicion is that Batam, plays a role in counterfeiting transhipment too. Many Singapore trading and shipping companies are based there, presumably because of the lower risks involved in shipping via Indonesia. 

Indonesia's weak Customs border protection is only part of the problem. Singapore trading companies' involvement makes the problem far worse, along with the relatively easy passenger access. Singapore Customs are under fire for not controlling transhipped fake goods passing through Singapore; Batam's role is a further complication.

Singapore counterfeit goods transshipment

IPWeek@SG closed today. IP Komodo espoused in the last talk one final message that Singapore address the issue of transshipment of counterfeit goods through the island state. Singapore is the largest transshipment port in the world, which unfortunately means it is transshipping a vast quantity of counterfeit goods - probably unknown to it.  Singapore earns a lot of money from this, charging shipping lines and storage charges for containers.

Meanwhile with no customs recordal and limited ex officio action, it is up to brand owners to try and divine what counterfeit goods are passing through Singapore and report it to Customs. And then engage in pricey civil litigation to detain and destroy goods. Clearly a civil court seizure system is inappropriate for what is essentially a volume problem - vast quantities of counterfeit goods passing through Singapore en route to other ports worldwide.

What Singapore needs to do is conduct effective Customs risk assessment analysis and intercept suspect shipments passing through the port, then report to IP owners. But first establish a system whereby once illicit counterfeit goods are identified then upon notification to the shipper to justify why the goods are not fake (in which case it can go to court - very rare), then the goods should be destroyed.

Then Singapore can rightly claim to be the region's IP hub. Right now the issue of transhipment causes more than a whiff of suspicion from brand owners.

 



 

Bali's KU DE TA finally wins back its name

The consortium of Indonesian and foreign entrepreneurs that established the iconic Bali beach club concept and ended up suing in Singapore have won on appeal. At issue is how an informal business group did not control and manage their brand as their business grew. This allowed to one of them to give a license for the brand, leading to a rival multi million dollar KU DE TA club atop the Marina Bay Sands casino in Singapore.

A group of businessmen came up with the concept for and established the original KU DE TA beach club in Bali in 2000. It became the leading venue on this island. They had only a basic contract and various of them began registering trademarks with little consistency abroad. Some marks ended up in a company called Nine Squares run by several of the partners. Later on other businessmen secured a spurious license from Nine Squares and opened the club at the Marina Bay Sands.

Litigation started in 2010. One case involved whether the Singapore KU DE TA marks were held by their owner Nine Squares on trust for the original partners. If not it was argued they were invalid. There were also disputes elsewhere. The final appeal dealt with the strength and validity of the license to the club operator in Singapore.

Meanwhile the Singapore business and other KU DE TA trademarks had been acquired by LV Capital Asia the investment arm of LVMH, who announced extravagant global expansion plans for the brand. Rather curious of a leading brand owner, given the suspicious brand background.

The final appeal decision in late May ruled the license illegal and an earlier decision had ruled that the partners were the true owners of the trademarks. So the court found the Singapore club had infringed the partners trademarks and other rights. That will leads to a large damages claim and a large payment of their costs.

The Singapore club will be rebranded CE LA VI, a play on the French C'est La Vie.  The Hong Kong club due to open next month will also adopt the new name.  No doubt the investors carefully planned a fall back position were they to lose.

 

The KU DE TA owners should recover a lot of money, although their legal fees will have been extraordinary. Hopefully now the partners can rebuild this brand into the global business it perhaps deserves.

 

 

 

Singapore's coup over Indonesia's Ku De Ta

Ku De Ta is one of Indonesia's top brands; the legendary Bali beach club and nightspot, where beautiful people sunbake, eat, drink and party to dance music. Its brand problems are a different sort of fame. See here for a previous post setting out the background.

In short the Indonesian Ku De Ta owners brought cases in Singapore based on their well known mark, against the Singapore registered trademark owner, Nine Squares (an Australian Company) who licensed the mark to one Chris Au (believed to be involved in the Indonesian operation originally) who in turn assigned this right to use to the Defendant operator, Ku De Ta SG Pte Ltd. They operate a huge Ku De Ta club atop the Marina Bay Sands casino, perhaps the premier nightspot location in Singapore.

The Indonesian owner recently lost the case. It seems to be on the technicality that they could not prove Ku De Ta was famous in Singapore by 2004 (when Chris Au applied for the mark).  The best guess is there are 2 fundamental problems:

- a group of 'partners' did not agree who owned what in the early 2000s and one of them registered the brand elsewhere, speculatively.
- they did not get organized to manage and protect the brand when they set up

They are appealing but counsel Singapore familiar with the case say they probably will not win.

Meanwhile, French luxury company LVMH's Venture capital arm is buying KDT Singapore. They plan to renovate the Singapore club, open in Hong Kong and take the Ku De Ta brand global. Nine Squares already registered the mark in Hong Kong and elsewhere.

This is a text book example of how to lose the global potential of a brand by failing to manage and invest in it at the start.
 

A nutty Singapore court decision

IP Komodo doesn't focus much on issues in the city state because it is a sophisticated well developed IP jurisdiction. But there are some cases so sweet you cannot ignore them. Or perhaps it is just their susceptibility to puns.

Sarika Cafe launched a hot chocolate beverage served in a shot glass under the 'Nutello' sign, which contained espresso, milk powder, cocoa powder and Nutella spread. It was described as  “An Espresso with lashings of Nutella - perfect for cocoa lovers!” Ferrero, owners of the NUTELLA brand sued in the High Court and on appeal.

The courts both held marks were visually and aurally similar. The goods were similar (the product even had Ferrero's spread as an ingredient). Survey evidence showed a 30% level of confusion. If one took a holistic approach, confusion seemed likely. There was well known infringement because the misrepresentation caused damage so dilution through blurring was found. There was also passing off. Damage didn't necessarily mean lost money, but lost future opportunities too. 

All in all an excellent comprehensive textbook analysis of trademark and passing of rules. Or put another way the decision is a delicious analysis of similar mark - similar goods confusion. Along with a tasty determination on well known trademark law. A very satisfying concoction of trademark principles.

A more detailed report on the case from Singapore IP firm One Legal, in World Trademark review is here.

Bali's Ku De Ta fights with Singapore trademark pirates

It is more common to find Singaporean businesses complaining about trademark piracy in Indonesia. But Bali's hippest beach club, bar and restaurant Ku De Ta (left) was annoyed to find a replica Ku De Ta open atop the prestigious Marina Bay Sands Integrated Resort in Singapore(below). 

So the Indonesian Ku De Ta owners brought cases in Singapore based on their well known mark, against the Singapore registered trademark owner, Nine Squares (an Australian Company) who licensed use the mark to one Chris Au who in turn assigned this right to use to the Defendant operator, Ku De Ta SG Pte Ltd.

 
The cases are for invalidation of the mark, as well as an injunction to restrain use. It involves both the restaurant / club in the Marina Bay Sands resort and it's website http://www.kudeta.com.sg/.  The case is being contested, because the operators and the registrant differ. At least one of the parties is suspected to have a connection to the Bali business. Since separate invalidation proceedings from the infringement case have been brought, the defendant in the litigation sought to have the injunction case struck out with a preliminary application, although unsuccessfully. Presumably too much has been invested with such a high profile operation in Singapore's premier resort for the defendant to walk away. 

The Bali business which is widely known throughout the Asian beach and club scene, appears to have a strong case given the common law protections for reputation in Singapore. But the defendants may have too much at stake to give up quickly. As one Bali hotelier put it to IP Komodo, if only they had registered their marks properly in the first place around the region in which they are so well known, the trouble, legal costs and wasted energy of litigation against a trademark copycat might have been avoided.