PT Permona v Shanghai Tobacco Group and Another [2001] SGHC 359

Case Details

• Citation: [2001] SGHC 359
• Court: High Court of the Republic of Singapore
• Decision Date: 30 November 2001
• Coram: Woo Bih Li JC
• Case Number: Originating Motion No 600024 of 2001
• Hearing Date(s): 5 June 2001
• Claimants / Plaintiffs: PT Permona
• Respondent / Defendant: Shanghai Tobacco Group; China Import and Export Shanghai Corporation
• Counsel for Claimants: Paul Teo Kwan Soon (Drew & Napier LLC)
• Counsel for Respondent: Anjali Iyer, Farah Namazie and Johnny Yom (Haq Namazie & Selvam)
• Practice Areas: Trade Marks; Opposition; Intellectual Property

Summary

The decision in PT Permona v Shanghai Tobacco Group and Another [2001] SGHC 359 serves as a definitive exploration of the "proprietorship" requirement under Section 12(1) of the Trade Marks Act (Cap 332, 1992 Rev Ed). The dispute centered on an application by PT Permona, an Indonesian entity, to register the mark "CHUNG HWA" for cigarettes and tobacco products in Singapore. This application was vigorously opposed by two Chinese entities—Shanghai Tobacco Group and China Import and Export Shanghai Corporation—who asserted long-standing use and reputation in the "CHUNGHWA" brand, a mark synonymous with high-end Chinese tobacco products manufactured since the early 1950s.

The High Court, presided over by Woo Bih Li JC, dismissed the appeal by PT Permona against the Registrar's decision to allow the opposition. The core of the judgment rests on the finding that PT Permona was not a bona fide proprietor of the mark. The court determined that the applicant had engaged in a "blatant attempt" to copy and misappropriate the opponents' mark, which had already established a significant presence in the region, including Singapore, through its distributor Paradise Trading Pte Ltd. This case reinforces the principle that the threshold for claiming proprietorship under Section 12(1) is not merely a matter of being the first to file in a jurisdiction, but requires a legitimate claim to ownership that is not vitiated by bad faith or the misappropriation of another's intellectual property, even if that other mark is not yet registered in Singapore.

Doctrinally, the judgment is significant for its application of the "copying" test established in earlier precedents. The court looked beyond the technicalities of registration to the underlying conduct of the applicant. By scrutinizing the applicant's purported justification for choosing the "CHUNG HWA" mark—which Permona claimed was based on a general reference to Chinese culture—the court found the explanation to be disingenuous. The court's analysis confirms that where an applicant copies a mark known to belong to another, they cannot claim to be the proprietor, thereby failing a fundamental prerequisite for registration.

Furthermore, the case provides a detailed examination of the evidentiary requirements for establishing reputation and use under Section 15 of the Trade Marks Act. While the opponents' evidence regarding historical registrations and exact advertising spend was subject to intense scrutiny and some skepticism, the cumulative weight of their sales figures—amounting to over S$121.6 million in the region—and their established distribution network in Singapore were sufficient to support the opposition. The judgment thus serves as a critical reminder to practitioners regarding the standard of proof required in opposition proceedings and the high risk associated with adopting marks that bear a striking resemblance to established foreign brands.

Timeline of Events

1. 18 January 1968: A pagoda device trade mark was allegedly registered in Singapore through a Hong Kong distributor, though the details of this registration remained a point of contention during the proceedings.
2. 1 January 1985: Paradise Trading Pte Ltd began its involvement in the distribution of the opponents' tobacco products.
3. 15 May 1989: Commencement of significant sales activities for the "CHUNGHWA" brand in the Singapore region.
4. 24 May 1989: Further documentation of sales and distribution efforts by Paradise Trading Pte Ltd.
5. 25 March 1994: Records indicate ongoing commercial activity and brand promotion by the opponents.
6. 29 January 1996: PT Permona filed an application to register the "CHUNG HWA" trade mark in Singapore for cigarettes and tobacco products.
7. 17 December 1996: Procedural developments regarding the examination of Permona's application.
8. 3 April 1998: Permona's trade mark application was advertised in the Singapore Government Gazette following acceptance with a disclaimer on the word "CHUNG".
9. 26 June 1998: Shanghai Tobacco Group and China Import and Export Shanghai Corporation filed a Notice of Opposition against Permona's application.
10. 24 August 1998: Filing of further evidence and grounds for opposition by the respondents.
11. 11 November 1998: Procedural milestones in the opposition process before the Registrar.
12. 19 November 1998: Submission of statutory declarations and evidence of use by the opponents.
13. 20 January 1999: Further evidence submitted regarding the reputation of the "CHUNGHWA" mark.
14. 25 January 1999: Additional documentation filed in support of the opposition.
15. 2 February 1999: Permona filed evidence in support of its application and in response to the opposition.
16. 12 April 1999: Further procedural steps in the Registrar's hearing.
17. 17 August 1999: Continued exchange of evidence between the parties.
18. 21 August 1999: Final evidence submissions prior to the substantive hearing.
19. 26 April 2001: Commencement of the hearing before the Registrar.
20. 5 June 2001: Resumption of the opposition proceedings, including the oral evidence of Mr. Cheng Kwee Kiang.
21. 10 August 2001: The Registrar (Ms. Lee) allowed the opposition, refusing Permona's application.
22. 22 October 2001: The High Court dismissed Permona's appeal against the Registrar's decision.
23. 30 November 2001: Delivery of the full judgment by Woo Bih Li JC.

What Were the Facts of This Case?

PT Permona, an Indonesian company, sought to enter the Singapore tobacco market by registering the trade mark "CHUNG HWA" (in block letters) for cigarettes and tobacco products. The application, filed on 29 January 1996, was initially accepted by the Registrar with a disclaimer on the word "CHUNG" and subsequently advertised in the Government Gazette on 3 April 1998. The mark was intended for use on cigarette packaging that Permona claimed was designed to appeal to the Chinese-majority population of Singapore. Permona's justification for the mark was that "CHUNG HWA" referred generally to Chinese culture and heritage, making it a commercially attractive brand for the local demographic.

The application was met with a formal opposition from two Chinese entities: Shanghai Tobacco Group and China Import and Export Shanghai Corporation (CTIESC). The opponents are state-owned enterprises in the People's Republic of China responsible for the manufacture and export of "CHUNGHWA" cigarettes. They asserted that the "CHUNGHWA" brand had been manufactured in China since 1973 and was one of the most prestigious cigarette brands in the country. The brand featured a distinctive packaging design including the Chinese characters for "Chunghwa," the English transliteration "CHUNGHWA," and a "pagoda device" depicting the Tiananmen gate.

The opponents' case for opposition was built on three primary pillars: prior use and reputation in Singapore, an earlier registration of a related device mark, and the allegation that Permona was not the true proprietor of the mark. They claimed that through their Singapore distributor, Paradise Trading Pte Ltd (and its director, Mr. Cheng Kwee Kiang), they had sold "CHUNGHWA" cigarettes in Singapore and the surrounding region since at least 1989. They provided evidence of sales figures totaling approximately S$121.6 million for the period between 1989 and 1998. Furthermore, they claimed to have spent significant sums on advertising—initially stated as US$1 million, though later clarified to be closer to S$160,000 for the period leading up to the relevant date in 1996.

A significant factual dispute arose regarding the "pagoda device" mark. The opponents claimed this mark had been registered in Singapore as early as 18 January 1968 by a Hong Kong-based distributor. However, the documentary evidence for this registration was fragmented. The court noted that the 1968 registration appeared to have had the Chinese characters deleted at some point, and the exact chain of title from the original registrant to the current opponents was not entirely clear. Despite these evidentiary gaps, the opponents maintained that the "CHUNGHWA" brand was well-known among cigarette smokers in Singapore long before Permona's 1996 application.

Permona, in its defense, argued that it had independently conceived the "CHUNG HWA" mark. They contended that the opponents had failed to prove sufficient use of the mark in Singapore to establish a reputation that would lead to a likelihood of confusion. Permona also challenged the opponents' sales and advertising figures, pointing out that much of the sales were for "re-export" or duty-free consumption, which they argued did not constitute "use" in the Singapore domestic market. They further relied on the fact that their application was for the words "CHUNG HWA" in block letters, whereas the opponents' primary use involved a combination of Chinese characters and a specific device.

The Registrar, after hearing oral evidence from Mr. Cheng Kwee Kiang and reviewing the extensive statutory declarations, found in favor of the opponents. The Registrar concluded that Permona's attempt to register the mark was not bona fide and that there was a likelihood of confusion among the public. Permona subsequently appealed this decision to the High Court, leading to the present judgment.

What Were the Key Legal Issues?

The appeal before the High Court necessitated a resolution of several critical legal issues under the Trade Marks Act (Cap 332, 1992 Rev Ed):

• Proprietorship under Section 12(1): The primary issue was whether PT Permona could legitimately claim to be the "proprietor" of the "CHUNG HWA" mark. This involved determining whether Permona had independently conceived the mark or had misappropriated it from the opponents. The court had to decide if the act of "copying" a foreign mark, even one not yet registered or widely used in Singapore, precluded a claim of proprietorship.
• Likelihood of Confusion under Section 15(1): The court had to determine whether the registration of Permona's "CHUNG HWA" mark would be "disentitled to protection in a court of justice" by reason of its being likely to deceive or cause confusion. This required an assessment of the opponents' reputation in Singapore as of the application date (29 January 1996) and whether the similarity between "CHUNG HWA" and "CHUNGHWA" would mislead consumers.
• Descriptive and Geographical Nature under Section 10(1)(d): A secondary issue was whether the mark "CHUNG HWA" was inherently unregistrable because it had a direct reference to the character or quality of the goods (by implying they were Chinese) or was a geographical name (referring to China).
• Evidence of Use and Reputation: The court had to evaluate the quality and sufficiency of the opponents' evidence, specifically whether sales for re-export and duty-free markets constituted "use" in Singapore for the purposes of establishing reputation under the Act.

How Did the Court Analyse the Issues?

The court’s analysis began with the threshold requirement of proprietorship under Section 12(1) of the Trade Marks Act. Woo Bih Li JC emphasized that the right to register a mark is contingent upon the applicant being the bona fide proprietor. Relying on the Court of Appeal's decision in Tiffany & Co v Fabriques de Tabac Reunies SA [1999] 3 SLR 147, the court noted that Section 12(1) "does not cover a person who copies another's mark, even if the latter mark is not in use in the jurisdiction" (at [48]).

In applying this test, the court scrutinized Permona's explanation for adopting the "CHUNG HWA" mark. Permona claimed the mark was chosen because it represented Chinese culture and would appeal to Singaporeans. The court found this explanation entirely unconvincing. The court observed that "CHUNGHWA" was a well-established and famous brand of cigarettes in China and the region. The phonetic and literal identity between Permona's "CHUNG HWA" and the opponents' "CHUNGHWA" was too striking to be coincidental. The court stated:

"It was clear to me that this was a blatant attempt by Permona to copy and misappropriate the Opponents CHUNGHWA." (at [61])

The court rejected Permona's reliance on Future Enterprises Pte Ltd v Tong Seng Produce Pte Ltd [1998] 1 SLR 1012, distinguishing it on the facts. In Future Enterprises, the marks were not identical and there was no clear evidence of copying. In contrast, the court found that Permona had deliberately targeted the opponents' brand identity. Consequently, Permona failed the Section 12(1) requirement, which alone was sufficient to dismiss the appeal.

Despite the finding on proprietorship, the court proceeded to analyze the opposition under Section 15(1). This section prohibits the registration of marks that are likely to deceive or cause confusion. The court evaluated the opponents' reputation in Singapore as of 29 January 1996. While the court was critical of the opponents' initial claim of US$1 million in advertising spend—finding that the actual spend in the relevant period was approximately S$160,000—it held that the sales figures were more telling. The opponents had demonstrated sales of S$121.6 million in the region through Paradise Trading Pte Ltd. Even if a significant portion of these sales were for re-export, the court found that the presence of the goods in Singapore and the activities of the local distributor created a sufficient reputation.

The court also considered the oral evidence of Mr. Cheng Kwee Kiang. Although Permona's counsel attempted to discredit Mr. Cheng by highlighting inconsistencies in his testimony regarding the 1968 registration and the exact nature of the "use," the court found him to be a generally credible witness regarding the commercial reality of the "CHUNGHWA" brand's presence in Singapore. The court concluded that a substantial number of persons in the relevant trade and the public would be confused if Permona were allowed to register an identical mark for the same goods.

Regarding Section 10(1)(d), the opponents argued that "CHUNG HWA" (meaning China) was a geographical name or descriptive of the goods' origin. While the court did not find it necessary to make a final ruling on this point given the findings on Sections 12(1) and 15, it noted the potential merit in the argument that the mark lacked distinctiveness because it pointed directly to the Chinese origin of the tobacco.

Finally, the court addressed the "pagoda device" registration from 1968. While the opponents could not produce a perfect paper trail for the registration of the Chinese characters, the court held that the long-standing use of the device in conjunction with the name "CHUNGHWA" reinforced the opponents' claim to the mark's reputation. The court found that the opponents had successfully discharged the burden of proving that Permona's mark would cause confusion.

What Was the Outcome?

The High Court dismissed the appeal filed by PT Permona in its entirety. The court upheld the decision of the Registrar of Trade Marks to allow the opposition and refuse the registration of the "CHUNG HWA" mark. The operative conclusion of the court was summarized as follows:

"Permona appealed against this decision and on 22 October 2001, I dismissed the appeal." (at [8])

The court's orders resulted in the following:

• Refusal of Registration: PT Permona's application (filed on 29 January 1996) for the trade mark "CHUNG HWA" in Class 34 was officially refused.
• Validation of Opposition: The opposition brought by Shanghai Tobacco Group and China Import and Export Shanghai Corporation was successful on the grounds of lack of proprietorship (Section 12(1)) and likelihood of confusion (Section 15).
• Costs: As the unsuccessful party, PT Permona was ordered to bear the costs of the appeal. The court did not find any reason to depart from the standard principle that costs follow the event.
• Finality: The judgment affirmed that the "CHUNGHWA" brand, as used by the Chinese state-owned entities, was entitled to protection against misappropriation in Singapore, notwithstanding the technical flaws in the opponents' historical registration evidence.

The dismissal of the appeal meant that Permona could not proceed with the use of the "CHUNG HWA" mark in Singapore for tobacco products, effectively protecting the market position of the respondents' established brand.

Why Does This Case Matter?

The judgment in PT Permona v Shanghai Tobacco Group is a cornerstone of Singapore trade mark law, particularly regarding the "bona fide proprietorship" requirement. It clarifies that the Singapore legal system will not permit the registration of marks that are clearly "stolen" from foreign entities, even if those foreign entities have not yet secured a registration in Singapore. This provides a vital safeguard for international brand owners against "trade mark squatting" or the opportunistic registration of famous foreign marks by local or regional actors.

For practitioners, the case emphasizes that Section 12(1) is a powerful tool that can be invoked independently of Section 15. While Section 15 requires proof of a likelihood of confusion (which often necessitates extensive evidence of local reputation), Section 12(1) focuses on the conduct and intent of the applicant. If it can be shown that the applicant copied the mark, the application can be defeated regardless of whether the opponent has established a massive reputation in Singapore. This "copying" threshold is lower and more direct than the "confusion" threshold, making it a critical line of attack in opposition proceedings.

The case also provides important guidance on the evidentiary weight of "re-export" sales. The court's willingness to consider sales made through Singapore distributors for the regional market as evidence of "use" and "reputation" is significant. It acknowledges Singapore's role as a regional trading hub and suggests that brand reputation can be established through transit and distribution activities, not just domestic retail consumption. This is particularly relevant for luxury goods and commodities like tobacco and alcohol, which are frequently traded through Singapore's free trade zones.

Furthermore, the judgment highlights the court's pragmatic approach to imperfect evidence. Despite the opponents' inability to provide a seamless history of their 1968 registration and their initial overstatement of advertising expenses, the court looked at the "commercial reality." The fact that a state-owned enterprise had been producing a famous brand for decades and had a long-standing distribution relationship in Singapore outweighed the technical deficiencies in their documentation. This suggests that in trade mark disputes, the court will prioritize the substantive truth of brand ownership and market presence over procedural or clerical errors in historical records.

Finally, the case serves as a warning to applicants who attempt to justify the adoption of similar marks using broad cultural or linguistic excuses. The court's dismissal of Permona's "Chinese culture" argument shows that such justifications will be closely scrutinized. If the "coincidence" of choosing a mark identical to a famous foreign brand is too great, the court will likely infer copying, leading to a failure of the proprietorship test. This reinforces the need for thorough trade mark searches and the selection of truly original marks for new market entries.

Practice Pointers

• Proprietorship as a Threshold: Always evaluate whether an applicant can truly claim to be the "proprietor" under Section 12(1). If there is evidence of copying, this can be a more straightforward ground for opposition than proving a likelihood of confusion under Section 15.
• Scrutinize the Origin of the Mark: When defending an application, ensure the client has a credible, documented history of how the mark was conceived. Vague references to "culture" or "common words" will be insufficient if the mark is identical to an established foreign brand.
• Evidence of Use in Hub Markets: For marks used in Singapore, do not discount sales for re-export or duty-free markets. These activities contribute to the reputation of the mark and can be used to satisfy the requirements of Section 15.
• Credibility of Witnesses: In opposition hearings, the testimony of long-term distributors (like Mr. Cheng Kwee Kiang) can be pivotal. Ensure such witnesses are well-prepared to discuss the commercial history of the brand, even if they cannot explain every historical legal filing.
• Advertising Spend vs. Sales Figures: While advertising spend is a common metric for reputation, actual sales figures (especially in the millions) often carry more weight with the court. Ensure that sales data is clearly broken down by year and region.
• Beware of "Blatant Copying": If a client's mark is a near-identical transliteration or translation of a famous foreign mark, advise them of the high risk of a Section 12(1) challenge. The court's "blatant attempt to copy" finding is a difficult hurdle to overcome on appeal.
• Historical Registrations: Even if a client's historical registration has gaps or errors (like the deleted Chinese characters in the 1968 pagoda mark), it can still serve as valuable evidence of the "intent" to use the mark and the "long-standing" nature of the claim.

Subsequent Treatment

The ratio in PT Permona regarding the "copying" of foreign marks and the resulting lack of proprietorship has been consistently followed in Singapore trade mark jurisprudence. It reinforces the "Tiffany" principle that the first person to use or register a mark in Singapore is not necessarily the proprietor if they have misappropriated the mark from another. Later cases have used PT Permona to justify a rigorous inquiry into the bona fides of applicants who adopt marks with a pre-existing international reputation, ensuring that Singapore's trade mark register is not used to facilitate intellectual property theft.

Legislation Referenced

• Trade Marks Act (Cap 332, 1992 Rev Ed), Section 12(1)
• Trade Marks Act (Cap 332, 1992 Rev Ed), Section 15(1)
• Trade Marks Act (Cap 332, 1992 Rev Ed), Section 10(1)(d)
• Trade Marks Act (Cap 332, 1992 Rev Ed), Section 12(2)
• Trade Marks Act (Cap 332, 1992 Rev Ed), Section 76

Cases Cited

• Applied: Tiffany & Co v Fabriques de Tabac Reunies SA [1999] 3 SLR 147
• Distinguished: Future Enterprises Pte Ltd v Tong Seng Produce Pte Ltd [1998] 1 SLR 1012
• Referred to: Vitamins Application [1951] RPC 1
• Referred to: Brown Shoes Application [1959] RPC 29

Source Documents

• Original Judgment PDF
• eLitigation Case Summary