International report – Appeal court rules on AMC v AMC

Audience Motivation Company Asia Pte Ltd was an events management company that was incorporated in Singapore in 2000. Its main area of business involves the management of marketing events such as corporate sale launches, media launches and corporate road shows. AMC Live Group China (S) Pte Ltd was incorporated in Singapore in 2012, it is a part of a group of companies that provide event and concert management services across different countries, on which AMC Live was incorporated to operate in Singapore.

Audience Motivation brought two actions against AMC Live: an action for trademark infringement under Section 27(2)(B) of the Trademarks Act  and an action for passing off. In response, AMC Live claimed that it was entitled to the own-name defence pursuant to Section 28(1)(a) of the act.

Audience Motivation’s marks and AMC Live’s marks had the same specifications within Classes 35 and 41. Their marks are shown below.

Audience Motivation trademarks	AMC Live trademarks
AMC Asia mark	AMC Group mark
Human exclamation mark	AMC Live mark

Decision
The Singapore Court of Appeal upheld Audience Motivation’s claims of trademark infringement and passing off. The court also held that AMC Live would not be entitled to the own-name defence with respect to the infringement claim.

Prima facie infringement of trademark
The appeal court found that there was prima facie infringement of Audience Motivation’s mark because:

• the marks were visually and aurally similar;
• the services provided by both parties were similar, as seen from the same specifications within Classes 35 and 41 for both marks; and
• there was a likelihood of confusion, evidenced by testimonies from Audience Motivation clientele.

Passing off
The appeal court also found that the three elements for passing off had been satisfied, as follows:

• Audience Motivation had goodwill in its business due to its long period of operations, as well as evidence of its profits from 2008 to 2012 and sales from 2005 to 2012.
• There was misrepresentation as the AMC mark, the AMC Asia name and the marks incorporating AMC were distinctive of Audience Motivation’s business. Further, the use by AMC Live of similar marks would cause relevant segments of the public to believe that the parties were the same company.
• There was damage in the form of a restriction on natural expansions, since both businesses were closely involved in event management.

The appeal court clarified that the inquiry of “whether the mark was associated with Audience Motivation’s business at the goodwill stage” should be carried out at the misrepresentation stage in order to prevent conflation of what amounted to ‘goodwill’ when deciding on whether there was damage to goodwill.

For the goodwill element, the appeal court also clarified that the main question to ask was whether goodwill existed in Audience Motivation’s business, as opposed to whether there was goodwill in a specific mark. 

For the misrepresentation element, the appeal court held that there should be an inquiry as to whether there was sufficient association between the plaintiff’s goodwill and its “identifiers”. These identifiers need not be restricted to registered marks used in a singular manner, but rather can include unregistered and similar marks used in the past, or a variation of the name or mark.

Own-name defence pursuant to Section 28(1)(a)
The appeal court held that the own-name defence should be available for both the use of a corporate name and one’s own name. The court also held that a finding of “honest practice” requires both an objective and a subjective inquiry. The objective inquiry requires the court to consider the standards and practices that are commonly applied in the industry or business, including the following factors:

• the nature of the use complained of, in particular the extent to which it is used as a trademark for the defendant’s goods or services;
• whether there has been actual confusion; and
• whether the defendant’s use of the sign interferes with the owner’s ability to exploit the trademark.

On the other hand, the subjective inquiry requires the court to consider whether the defendant had honest intentions when using its own name, including the following factors:

• the origins of the mark or name and how it was created; and
• whether the defendant:
  • knew about the existence of the trademark;
  • had relied on competent legal advice based on proper instructions when it had used the mark;
  • knew that the trademark owner objected to the use of the mark, or appreciated that there was a likelihood that the owner would object;
  • knew that there was a likelihood of confusion;
  • knew about any actual confusion; and
  • had sufficient justifications for using the sign.

Both inquiries are necessary, but not in themselves sufficient conditions that must be satisfied. Despite establishing the test for honest practice, the court had left open the question of whether a finding of misrepresentation would automatically preclude the operation of the own-name defence.

In dictum, the appeal court also provided the provisional view that the own-name defence should not be available for passing off since passing off has the greater requirement of misrepresentation. As such, finding that the misrepresentation element had been satisfied would automatically preclude the use of the own-name defence.

Applying both the objective and subjective inquiries, the court held that AMC Live could not avail of the own-name defence because:

• AMC Live’s mark had led to actual deception as established from the testimonies by the customers of Audience Motivation;
• AMC Live did not have honest intentions, evinced by the fact that AMC Live:
  • had no reason as to why it adopted the name AMC;
  • failed to justify the similarities in the marks;
  • organised corporate events in direct competition with Audience Motivation;
  • seemed to base its mark on the marks of Audience Motivation; and
  • was found to have forged its own poster.

Comment
Passing off
The case has provided clarification on the law of passing off, allowing greater analytical clarity when applying the classical trinity for passing off. It has also evinced a broader approach when considering whether there was a sufficient association between the plaintiff’s goodwill and its identifiers.

Own-name defence
The case has also led to developments regarding the own-name defence, with the appeal court holding that the defence applies to both a company’s name and an individual’s own name. The court has also rightfully precluded other embellishments of the name from the defence.

Aligning itself with the approach evinced by recent UK case law, the appeal court has also adopted a stricter test vis-à-vis the defence, requiring the defendant to prove both “honest use” and “honest practice”. This development is welcome since it is aligned with the narrow scope and object of the defence, which is to provide for genuine cases of the use of one’s own name, despite being found to have infringed the rights of a registered trademark owner.

Misrepresentation should not automatically preclude operation of own-name defence
The appeal court did not provide a definitive answer to the question of whether a finding of misrepresentation automatically precludes the defence. However, the answer should be no. To answer the question in the affirmative would be legally incoherent. Contrary to dictum in the case, a finding of misrepresentation does not necessarily mean that the use of one’s own name is not in accordance with standards and practices in the industry or business.