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Friday, 2 June 2017

Should the court be indifferent to consumer indifference regarding the mark?

Kat friend Shawn Poon from One Legal LLC in Singapore reports below on an interesting decision by the Court of Appeal in Singapore on consumer “indifference” to the mark used.

A consumer purchasing a product typically considers various factors when arriving at a purchasing decision, with one such factor being the trademark used. Its importance to the purchasing decision may well depend on the nature of the products being purchased. In the case of luxury products, trade marks are usually of paramount importance since much of the appeal of the product may lie in the trade mark itself. However, for many other products, this may not be the case, with the major considerations relating to price and attributes. Here, we say that consumers are “indifferent” to the mark used.

The impact of such consumer indifference in determining whether there is a likelihood of confusion under Section 8(2)(b) of the Trade Marks Act was discussed in the recent decision of the Singapore Court of Appeal (CA) in Ceramiche Caesar SpA v Caesarstone Sdot-Yam Ltd. The CA overturned the High Court Judge’s decision and accepted the opposition by the proprietor of the earlier mark against the registration of the later mark for Class 19 goods.

Under the Singapore law approach to Section 8(2)(b), the court first determines whether the marks are similar. If so, it proceeds to consider whether there is the requisite likelihood of confusion on the part of consumers. As for similarity, the CA overruled the Judge’s finding of dissimilarity by the High Court, holding that the competing marks were similar. Having regard to the common denominator between the marks, the word "Caesar", the CA considered whether the addition of the device  “” and the word “stone” served to sufficiently distinguish the later mark from the earlier one.

In determining the similarity of marks, the court considers all three aspects of similarity: visual, aural and conceptual similarity. The High Court had held that the marks were aurally and conceptually similar as the dominant element of both marks was identical, i.e. “Caesar”. The CA took a diametrically opposed view on visual similarity. While the High Court found that the device was visually prominent in that it appeared at the beginning of the later mark and it was not allusive or descriptive of the word “caesarstone” or the claimed goods, the CA found the device to be an insignificant component of the later mark, because:

(a) the device does not constitute a major part of the later mark;

(b) the device, being a series of three crescents:
(i) is simple and will not evoke any particular concept for the consumer; and

(ii) is likely to be perceived as a decorative element rather than one indicating commercial origin.
The High Court found that the word “caesarstone”, as a unique juxtaposition of the two constituent words, was distinctive as a whole. It therefore ruled that the word “stone” played an essential part in the overall impression conveyed by the later mark. In contrast, the CA disagreed and ruled that the word “stone”, being descriptive of the claimed goods and therefore not the dominant element of the later mark, did not serve to distinguish the two marks. As a result, the CA found that the marks were visually, aurally, and conceptually similar.

As for likelihood of confusion, the later mark was sought to be registered for tiles, floor coverings, flooring, ceilings, profiles and floor skirting boards, and slabs and tiles formed of stone. The CA agreed that consumers of these goods were likely to be indifferent towards the marks used, as they would focus on the price and attributes of the goods rather than the marks. If such was the case, the issue was whether a likelihood of confusion could still arise.

The High Court below reasoned that there could be no confusion as to trade origin if consumers purchased the goods without paying attention to the marks. However, the CA disagreed and held that consumer indifference to the marks used did not preclude a likelihood of confusion. It gave the example of a consumer whose research for affordable non-slip tiles led him to the opponent’s tiles whose mark he then remembered. When the purchaser subsequently made his purchase and he saw the applicant’s tiles with the mark, he confused them for the opponent’s tiles, due to the similarity of marks. The CA therefore reasoned that such a consumer would be confused as to origin, even though he was indifferent to the marks being used.

The CA held that in fact consumer indifference to the marks used would cause consumers to pay less attention to the differences between the marks, pointing towards a likelihood of confusion. In so ruling, the CA’s finding regarding consumer indifference played a significant role in relation to two well-established factors considered in the confusion enquiry.

First, it is well-established under the law of Singapore that the more expensive or personal the goods are, the less the likelihood of confusion (as more care is taken in the purchase). Here, the CA found that the greater care exercised related not to the differences between the two competing marks but to the price and attributes of the goods, due precisely to consumer indifference to the two marks. As such, the CA, contrary to the High Court, did not find the expensive and personal nature of the goods to be a factor pointing away from confusion.

Second, it is recognized under the law of Singapore that the presence of specialist assistance might reduce the likelihood of confusion. While the CA accepted that end consumers will purchase the goods with specialist assistance, it found that such assistance did not reduce the likelihood of confusion, since such assistance would not involve discussions regarding trade origin. The CA therefore concluded that there was a likelihood of confusion by virtue of the marks and goods.

From the CA’s reasoning, it therefore appears that a finding of consumer indifference towards the marks forms a significant impediment to nullify the effect of other well-established factors which reduce the likelihood of confusion. Arguably, this impediment applies only where consumers are absolutely indifferent to the marks used.

Where consumers consider the marks used as a factor in their purchasing decision (however minor), if greater care and attention is afforded to the purchase (e.g. where the goods are expensive), such greater care and attention will be afforded to each of the factors considered including the marks used. The impediment arises when the marks used is not even a factor that is considered (i.e. absolute indifference).

We also highlight that a court may find it difficult to ascertain the level of importance which consumers place on the marks, especially since some consumers (e.g. the brand conscious) may place greater emphasis than others. Further, taking the CA’s example, it is submitted that (contrary to the CA’s reasoning) the consumer may not have been “indifferent” to the marks used.

While he may have initially been indifferent to the marks used when conducting his research, as his focus was on the price and attributes of the goods, once he decided to purchase good X (because it allegedly matched his price and attribute requirements), he was no longer “indifferent” to the marks used, since he wished to choose the mark that functioned as a badge of quality for him.

Finally, it is submitted that the CA’s reasoning is based heavily on the specific facts of this case (purchase of building tiles), and later tribunals should be slow to import the CA’s findings to dissimilar facts.

Photo by on lower left by Usien

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