Thursday, 16 December 1999

Sprints Ltd. v Comptroller of Customs

Sprints Ltd. Appellant


(1) Comptroller of Customs and

(2) Chipie Design and Signoles S.A. Respondents






Delivered the 16th December 1999


Present at the hearing:-

Lord Slynn of Hadley

Lord Mackay of Clashfern

Lord Jauncey of Tullichettle

Lord Hope of Craighead

Lord Clyde

[Delivered by Lord Clyde]


The appellant, which is a member of the companies known as the Bourgeon group, applied to the first respondent, who is the Comptroller of Customs in Mauritius, to have the name “Chipie” registered as a trade mark in Mauritius. The application was made before the Act No. 15 of 1993 came into operation and the relevant authority for registration of trade marks was still the Comptroller. The application was opposed by the second respondent, who is the registered owner of the trade mark “Chipie” in a considerable number of countries throughout the world, but not in Mauritius. The first respondent refused registration and the appellant appealed to the Supreme Court. That court refused the appeal and the matter has now come before their Lordships’ Board.

The argument has concerned two particular provisions of the relevant law, sections 4(1) and 10 of the Trade Marks Act. Section 4 provides that an application for registration may be made by any person who has a right to use a trade mark. The phrase “trade mark” is defined and there is no doubt that the name “Chipie” falls within the definition. Section 10 prohibits the registration of a mark upon the ground among others, that the use of it “would by reason of its being calculated to deceive or otherwise” be disentitled to protection in a court. So it follows that a person may have a right to a trade mark, but not be able to achieve the registration of it. On the other hand if he has no right to the mark in question, then he is not entitled to apply for registration and any application which he seeks to make must fail. One situation where it may be found that the applicant does not have a right is where someone else has the right and the property in the trade mark and the applicant has no right derived from him, as by way of licence.

The Comptroller of Customs’ decision in the present case was embodied in a letter dated 22nd September 1992. In that letter he stated his reasons for his decision in these terms:-

“(a) The opponents have proved by documentary evidence that the trade mark ‘chipie’ has been registered in many countries specially in France since 1967 and in UK since 1979,

(b) Copies of catalogues submitted to this office substantiate that the trade mark has been widely advertised since 1987,

(c) Your client has no right to use the said trade mark,

(d) He is not the owner of the trade mark,

(e) Registration of the trade mark in his favour would be inappropriate inasmuch as the trade mark is calculated to deceive.

(f) The trade mark, by reason of its being calculated to deceive, is disentitled to protection in a court.”

It may be noticed that in an affidavit dated 5th February 1993 the Principal Customs and Excise Officer, a Mr. Macdoombe, stated that prior to 22nd September 1992 the second respondent furnished evidence which established that:-

“(a) the second respondent had been using the mark ‘CHIPIE’ extensively well before the applicant,

(b) that the second respondent has secured registration of the mark CHIPIE across the world including the United States, France Britain, Spain, Sweden, Bangkok and Korea,

(c) that the registration of the mark CHIPIE has been secured in relation to the same articles as those sought by the applicant,

(d) that on several occasions, the second respondent has contracted with local enterprises for the manufacture of articles bearing the name ‘CHIPIE’.”

He then set out the same conclusions as were contained in the letter in paragraphs (c) to (f).

The conclusion that the appellant had no right to or property in the mark relates to section 4. The conclusion appears to have followed from the finding that the second respondent had the right and property in the trade mark. The first question in the appeal is accordingly whether that finding was sound.

It should be borne in mind at the outset that what is in issue here is the right to use the mark in Mauritius. The application was for registration in Mauritius and it is in relation to that country that the problem of the right to use the mark has to be addressed. The reference to a right in a trade mark in section 4 is a reference to a common law right. So far as the law in that respect is concerned Lord Morris of Borth-y-Gest observed in BALI Trade Mark [1969] R.P.C. 472 at p. 489:-

“Before 1875, when registration of trade marks began, there could be property in a trade mark: the right of property in a distinctive mark was acquired by a trader merely by using it upon or in connection with his goods irrespective of the length of such user and without proof of recognition by the public as a mark distinctive of the user’s goods: that right of property would be protected by an injunction restraining any other person from using the mark.”

Their Lordships adopt that as an accurate statement of the position at common law. Accordingly what is required in the present case is evidence of user of the mark by the second respondents in Mauritius. Moreover while, as was indicated in the passage quoted, the length of the user may be immaterial this is particularly the case where the mark is already in use as a trade mark by a trader elsewhere in the world. Proprietorship of the mark can then be proved by a minimal user in the country where the mark is proposed to be registered. A limited user in the UK, even without any public user, has been sufficient to stop the registration in the UK of a mark owned by a foreign firm (In the Matter of a Trade Mark of the New Atlas Rubber Co. Ltd. (1918) 35 R.P.C. 269). The general proposition is vouched by a number of cases in other jurisdictions, such as The Seven Up Company v. O.T. Ltd. (1947) 75 C.L.R. 203, 211, Thunderbird Products Corporation v. Thunderbird Marine Products Pty. Ltd. [1974] 131 C.L.R. 592, Pioneer Hi-Bred Corn Co. v. Hy-Line Chicks Pty. Ltd. [1979] R.P.C. 410, Karu Pty. Ltd. v. Jose (1994) 30 I.P.R. 407, and Hong Kong Caterers Ltd. v. Maxim’s Ltd. [1983] H.K.L.R. 287, 296.

It is evident from the material produced before the Comptroller that the second respondent had been using the trade mark “Chipie” in many countries throughout the world before the appellant began to use it in Mauritius. Indeed the second respondent produced a lengthy list of the registrations it had made of the mark in a wide range of countries. Of particular significance is the fact that these countries included several with which Mauritius has particularly close connections, such as the United Kingdom, France, South Africa and countries in the Far East. That user and those registrations related to the same kind of goods as those in respect of which the appellant was seeking to register the mark. The Comptroller of Customs was unquestionably entitled to hold as he did that the second respondent had been using the mark extensively well before the appellant.

The next question accordingly is whether there is evidence to prove at least a minimal user of the second respondent’s mark in Mauritius. From the material which was placed before the Comptroller it is clear that labels displaying the name “Chipie” were sent to Mauritius by the second respondent and applied to garments manufactured in Mauritius by a firm called Cogimex (Mtius) Ltd. This was clearly done on a significant scale. Furthermore there was a number of invoices produced relating to sales transactions passing between the second respondent and Cogimex in the course of which the former used the name “Chipie”. Mr. Rivalland stated on affidavit that Cogimex supplied the second respondent with “Chipie” trousers, jeans and jackets from 1987 to 1991. A question was raised by counsel for the appellants regarding the propriety of taking account of manufacturing work where such work was carried out within an exclusive export zone, that is to say a zone set apart for the purposes of fiscal provisions in which goods manufactured exclusively for the export market could be carried on. But that has not been presented as a live question in the present case and there is no finding that in fact the manufacture on which the second respondents found was conducted in such a zone. A broader issue was raised whether manufacture for export would qualify as a user for the relevant purpose. In that connection it was pointed out that there was no equivalent to section 31 of the Trade Marks Act 1938 in Mauritius. But in In re Evans Sons, Lescher and Webb Ltd. (1934) 51 R.P.C. 423 it was held that an intention to apply a mark to goods which were to be exported was sufficient to make the mark one which was used or proposed to be used for the purposes of registration in the UK, so that the fact that the goods in question were for export was recognised as not being of consequence even before the introduction of section 31. It appears that section 31 was rather to affirm the existing law than to innovate upon it Carnival Cruise Lines Inc. v. Sitmar Cruises Ltd. (1994) 120 A.L.R. 495, Gummow J. at p. 511.

Their Lordships are satisfied that the foregoing activities amounted to a user of the second respondent’s mark in Mauritius since 1987, that is before the appellant began to use it, and that that user was quite sufficient to give the second appellant the right to the mark in Mauritius so as to make it impossible for the appellant to claim a right for the purposes of section 4(1). That the appellant has developed an association with the “Chipie” mark for itself since 1990 provides no counter to the second respondent’s position. The rights of the legal owner of the mark cannot be ousted by the efforts of his rival to appropriate the mark. It has not been suggested that the appellant was an honest concurrent user of the mark.

There was moreover some evidence which would support the conclusion that sales had been made in Mauritius of garments bearing the second respondent’s mark. In the evidence on affidavit by Mr. Rivalland, the agent and attorney for the second respondent, it was claimed that Cogimex used to supply garments under the name “Chipie” to two shops owned by a Miss Merven in Mauritius, the “Chipie” boutique at Grand Bay and another shop at Curepipe, where they were sold to members of the public. On the other hand it appears that the sales may have been of articles, which also bore the name “Chipie”, made by Bourgeon Garments Ltd., a company associated with the appellant. Records prepared in connection with the receivership of Cogimex appear to support the proposition that Cogimex were selling articles manufactured under the second respondent’s mark, but no sufficient explanation of the documents has been given to enable a confident conclusion to be drawn. In the absence of clear findings in fact on the point their Lordships are not prepared to hold that it was established that sales were made in Mauritius under the second respondent’s mark. But the other evidence is in any event sufficient to establish their right for the purposes of section 4(1).

It was submitted by the appellant that the acceptance of the application by the Comptroller of Customs gave some support to the appellant’s case. The point may have greater relevance to the argument under section 10 than the argument under section 4(1), but their Lordships consider that in whichever context it is used the point cannot carry any significant weight. The Act makes no provision for the making of any particular inquiries or investigations before the acceptance of an application. It enables the Comptroller to reject at the outset any application which he can immediately see will be inappropriate for registration, but does not envisage that he will form any considered view at that stage on such matters as whether the applicant truly does have a right to the mark or whether its use will lead to confusion. The process for remedy in the event of refusal at this initial stage involves the applicant and the Comptroller, but no third parties. The Comptroller may make a conditional acceptance but it does not seem that that is what he did in the present case. In Mr. Macdoombe’s affidavit of 5th February 1993 he admits that the application was initially accepted but adds that the applicant was requested to give notice of the application in the Gazette and in two daily newspapers. That was however in accordance with the statutory requirement in section 4B(1), as introduced by the Trade Marks (Amendment) Act 1970. Their Lordships do not consider that any such significance can be put upon the acceptance of the application by the Comptroller as to outweigh the evidence of user by the second respondent.

In the judgment of the Supreme Court of 8th March 1996 it is narrated that the main thrust of the appellant’s argument was that the second respondent had not registered the name in Mauritius and that its use of the name worldwide would still debar it from protection in Mauritius. The Court then discusses the “Crazy Horse” case (Alain Bernardin et Compagnie v. Pavilion Properties Ltd. [1967] R.P.C. 581, Maxim’s Ltd. v. Dye [1978] 2 All E.R. 55 and a passage from the United Kingdom Trade Mark Handbook. The Court then concludes with the following paragraph:-

“The evidence before us shows that the second respondent has not only secured extensive registration of the mark ‘Chipie’ worldwide but has also had extensive use of the mark throughout the world. We are satisfied from the evidence and the principles referred to above that the second respondent has acquired a proprietary interest in the trade mark ‘Chipie’.”

The Court thereafter turned to the question whether the use of the mark was likely to deceive. That was plainly related to section 10.

There is some room for argument upon the precise analysis of the judgment, and in particular of the passage just quoted. The problem is aggravated by the absence of any clear findings in fact, and it is matter for regret that the procedure has been such that there is no clear record of the findings in fact which the Comptroller of Customs must have made, nor of the view which the Supreme Court precisely took of the facts either as found by the Comptroller or as assessed by themselves. It appears that the second respondent moved for leave to put in further evidence before the Supreme Court, being affidavits which had been produced in other proceedings where an injunction had been sought. The motion to bring forward this further material was refused by the Supreme Court and that court proceeded upon the material which was before the Comptroller of Customs. A quantity of documentation has been put before their Lordships’ Board, but this seems for the most part to have emanated from the second respondent. It appears from the letter of 22nd September 1992 from the Comptroller that four batches of daily sales records were returned by the Comptroller to the appellants. This was presumably material which was before the Comptroller as evidence to support the appellant’s case. But whatever the substance of it may have been it was not now founded upon and the extent to which it did support the appellants remains obscure. A clear statement of the facts would have significantly assisted in the resolution of the appeal.

Their Lordships understand from the critical passage in the judgment that the Supreme Court were considering the application of section 4(1). What they held was that the second respondents had a proprietary interest in the trade mark in Mauritius. Thus it would follow that the appellants did not have a right to use it and were disentitled to make an application under section 4(1). When the court refers to the evidence they were presumably referring to the evidence of the use of the mark in Mauritius and the reputation which the second respondents enjoyed in respect of it there. It may well be that in referring to the extensive use of the mark by the second respondents throughout the world they intended within that to include the element of user within Mauritius. Their Lordships are in any event entirely satisfied that a conclusion that the second respondents had a prior claim to the mark in Mauritius and that the appellants did not have any right to it was a conclusion which they were amply justified in reaching.

As an alternative to that approach their Lordships consider that the appeal would also fail in respect of the provision in section 10 that the use of the mark by the appellants was calculated to deceive. That last phrase is to be understood as meaning that it would be likely to deceive. Section 10 requires the Comptroller to refuse registration on a variety of grounds. These grounds generally are designed for the protection of the public or in the interest of the public. They are not primarily designed in the interest of those who may be using or wishing to use a trade mark. Thus the consideration behind the provision is the avoidance of anything which might be offensive or prejudicial from the public point of view. The only head which is relevant to the present case is that of the risk of public confusion, that members of the public may mistakenly believe that particular goods are the product of a particular business enterprise because they bear a trade mark which they associate with that enterprise, whereas in fact the mark is that of another enterprise. The standard to be achieved in order to meet the requirement of the section is that by reason of the likelihood of confusion the use of the mark would be disentitled to protection in a court of justice. As was recognised in BALI Trade Mark, all that is required to be proved for the purposes of the rejection of a registration is the probability of deception or confusion, which is more readily established than what would be required for a case of passing off. In BALI Trade Mark [1969] R.P.C. 472 Lord Upjohn observed at page 496:-

“It is sufficient if the result of the registration of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products come from the same source.”

In many cases the problem in this context is one of comparing two marks which are not identical but have a degree of similarity such as may, or may not, give rise to confusion. In the present case no such question arises because the names are identical. In that respect the risk of confusion is immediate and obvious. But the argument here is to the effect that the second respondent has not used his mark in Mauritius and so is not entitled to protection in Mauritius.

If the matter depended upon user there was, as their Lordships have already held, evidence of user by the second respondent in Mauritius. But even if the matter is approached under section 10 on the assumption that that evidence was inadequate their Lordships are still persuaded that registration would require to be refused under section 10. In order to create the risk of confusion there must essentially be a knowledge on the part of the public of the mark with which the confusion may occur. In many cases user may well be the means of establishing the reputation of the mark in a particular country and at a period when international travel and intercommunication was less intensive than it has now come to be user in the locality would be the ordinary or even the only way of establishing the local reputation. But it is essentially the reputation of the mark which will give rise to possible confusion and in light of the growth in international commerce and communication it may now be possible in the case of an internationally established trade mark to proceed upon evidence of its notoriety in a country even without any actual user of the mark there. In Keraion Trade Mark [1977] R.P.C. 588, 593 Mr. Moorby looked for use or reputation in the mark as bases for an attack under section 11 of the Trade Marks Act 1938 and quoted from the 10th edition of Kerly that before section 11 can be applied “it must be established that the opponents’ mark is known to a substantial number of persons of persons in the United Kingdom …”. The point has been developed in a number of Australian decisions. In The Kendall Co. v. Mulsyn Paint and Chemicals (1963) 109 C.L.R. 300 it was recognised that the requisite knowledge of the mark as distinguishing a particular trader’s goods did not necessarily have to be “knowledge obtained from experience in or in relation to the Australian market, the manner in which, or the source from which, knowledge has been acquired is, in my opinion, immaterial” (per Kitto J. at p. 305). That observation was followed by Richardson J. in Pioneer Hi-Bred Corn Co. v. Hy-Line Chicks Pty. Ltd. [1979] R.P.C. 410, at p. 432. The point has also been taken in a case in Singapore, Tiffany & Co. v. Fabriques de Tabac Reunies SA [1999] 3 S.L.R. 147, where registration of a trade mark was refused under section 15 of the Trade Marks Act, which is in terms comparable with that of section 10 of the Mauritian Act. It was held that there was no need to show use of the mark in Singapore since members of the public would be aware of foreign marks even if they had not been previously used in Singapore. Yong Pung How C.J. observed at p. 159:-

“… the fact is that confusion or deception have no borders and can arise as easily from knowledge, cognisance or awareness of an international reputation.”

The attention of their Lordships was drawn to a passage in the speech of Lord Upjohn in BALI (at p. 495) where under reference to section 11 of the Trade Marks Act 1938 his Lordship stated that in relation to the words “disentitled to protection in a court of justice” there must be proved not merely a likelihood of deception or confusion but also a user at the relevant time by the owner of the mark which the court would protect. Indeed he stated that an objector to an application for registration can only prove the practical likelihood of confusion to the public by proving the existing user by another which is likely to cause confusion. He then referred to a passage in the judgment of Evershed J. in Smith Hayden & Co.’s Application (1945) 63 R.P.C. 97 where the judge had had regard to the reputation acquired by the name “Hovis”. Lord Upjohn said that the words should have been “the user of” and not “the reputation acquired by”. But Lord Upjohn immediately pointed out that in the case in question there was no difference between the two expressions because “the household word of Hovis was involved”. In MACY’S Trade Mark [1989] R.P.C. 546 at p. 551 Mr. Egan quoted at length the passage in Lord Upjohn’s speech where this point occurs and concluded that Lord Upjohn explicitly distinguishes between reputation and use. The present appellant sought to create a distinction between the case of a household word in regard to which no evidence of use might be needed and other cases where the reputation required to be proved by user. But the point is not one to be usefully resolved by introducing a category of “household words”. In some cases the necessary knowledge and reputation will require to depend upon actual user in the country in question. But there can be other cases where the international character of the business enjoys a sufficient notoriety within the country as to make user unnecessary. Those cases will require to be supported by evidence of the international reputation within the country in question and the mark in issue in such cases may or may not be usefully identified as qualifying as a household word. Lord Upjohn’s emphasis on user was criticised in Pioneer Hi-Bred Corn Co. and in Tiffany & Co., the view being expressed in the latter case that the proposition that proof of an existing user in the relevant country is a prerequisite for a practical likelihood of confusion can no longer hold true in light of the changes in technology and communication which have occurred over the years since the BALI case. But in light of Lord Upjohn’s recognition that at least in relation to a household word there was no difference between reputation and user their Lordships do not understand that user was seen even at the time of BALI as a universal prerequisite for the establishment of a likelihood of confusion. Furthermore there seems to their Lordships to be force in the point developed in Pioneer Hi-Bred Corn Co. that the purpose of the reference to disentitlement in a court of justice was to secure the position of an honest concurrent user and does not necessarily entail all the ingredients necessary for the protection of a mark at common law. Certainly in the context of the present case it would not be correct to require user as an essential element to be proved by an objector to registration under section 10. A sufficiency of reputation of the second respondent’s mark in Mauritius would suffice. It should be added that in the course of the argument mention was made of the “Crazy Horse” case, but that case was concerned with the distinct issue of passing-off and does not require to be explored

in the present context.

The question then comes to be one of fact, and here again the absence of clear findings is matter for regret. Certainly there was evidence contained in the affidavit by Mr. Rivalland that the trade name “Chipie” was popularised in Mauritius, although he states that as something of which he has been informed and does not speak from his own knowledge. But there was a substantial quantity of documentary evidence in the shape of journals evidently available in Mauritius in which the second respondent’s mark was advertised in connection with a variety of clothing. From all that appears the denial on behalf of the appellant of Mr. Rivalland’s statement of the popularisation of the mark was unsupported by any detail. It may also be noted that the name “Chipie” was used in connection with each of the two shops operated by Miss Merven. Their Lordships would if necessary be prepared to accept that the second respondent had established the reputation of its trade mark in Mauritius before the appellant started to use the same name. Indeed one may well wonder why the appellant chose to use the particular name unless that name already had a commercial value and a public notoriety in Mauritius. On this approach the appellant would also fail under section 10.

For the foregoing reasons their Lordships dismiss the appeal with costs.