RBJL successfully opposed trade mark application for “恒源祥 & Device” based on bad faith 03/12/2012 RBJL successfully opposed trade mark application
for “恒源祥 & Device” based on bad faith

On 2nd November 2012, the Trade Mark Registrar issued a decision in favour of our client, HYX China (Group) Co., Ltd (“HYX”), in proceedings where HYX was the opponent. This decision came nearly 6 years after the application was filed for   the“image” mark (the “Suit Mark”) by Hon Man Ching (“the Applicant”).


HYX was established in Shanghai in 1927 and has expanded into one of the largest consumers of wool in the world. It is also one of the world’s largest producers of hand-knitted woolen yarn, with more than 10 wholly owned subsidiaries, 100 associated factories and over 8,000 sales channels in China. HYX was also an official sponsor of the Beijing Olympics held in 2008. “恒源祥” (transliterated as “Heng Yuan Xiang”) is used not only as a brand name by HYX but is also used as HYX’s mark. Currently, HYX has 46 registered marks in the PRC and HYX obtained its first trade mark registration “恒源祥絨線商店” (transliterated as “Heng Yuan Xiang Rong Xian Shang Dian”) in 1989. Suffice it to say, “恒源祥” is a well-known trade mark in the PRC.


During the opposition proceedings, the Applicant argued that the Chinese characters “恒源祥” are very common and are widely used in trade names and business logos. However, the Applicant failed to provide any concrete examples of such use, and the only examples provided were in fact companies of HYX. On behalf of HYX, we submitted that HYX’s mark, “恒源祥”, has no recognised meaning, such that it would be impossible for someone to come up with identical Chinese characters and then used in an identical sequence. We further submitted that the Applicant has a history of copying other marks. In the case of The Applicant v Hongdou Group Corporation (HCMP 2148 of 2005), (where we also acted for the Hongdou Group Corporation), wherein the Applicant was also found to have obtained registration of the Chinese transliteration of the “Hongdou” mark in bad faith, the Applicant was found by the court to be a dishonest person.


The Registrar held that the promotional expenditures and advertising materials provided by HYX showed that it has a substantial business presence in the PRC and that HYX’s mark has acquired a reputation there in relation to woollen products. The Registrar concurred with us that there was nothing common in putting the three characters “恒源祥” in its particular sequence. The Registrar also held that the Applicant failed to account for adopting “Heng Yuan Xiang” as the English transliteration of “恒源祥” given that Cantonese, and not Putonghua, is the common dialect of Hong Kong.


The Registrar noted the striking similarities between “image” (the “Other Mark”) which was filed by the Applicant, HKTMA No. 200302479 (this registration had earlier been cancelled on the challenge of HYX based on non-use) and the Baby Head Mark (“image”) of HYX. The baby head devices in both marks are the same. Whilst there are differences in that the Other Mark has an additional sheep head device and “1927” on it, however besides these two differences, the Other Mark and the Baby Head Mark differ only in terms of the configuration of their components. The Registrar noted that the number “1927” in the Other Mark increases the possibility that it shares the same origin with the Baby Head Mark and/or other HYX Marks as this was the year that HYX was established. The Registrar therefore came to the conclusion that the Applicant has twice deliberately copied the HYX marks, both in the registration of the Other Mark and the Suit Mark, and that the Applicant desired to prevent HYX from freely using its marks in Hong Kong. Thus, it was held that the registration of the Suit Mark was made in bad faith, and therefore was precluded under section 11(5)(b) of the Trade Marks Ordinance. 



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