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TRADE MARKS ORDINANCE (CAP. 559) APPLICATION FOR REVOCATION OF TRADE MARK 199703862 MARK : CLASS : 18 APPLICANT : Societe Anonyme des Galeries Lafayette OWNER : Lafayette Company Limited STATEMENT OF REASONS FOR DECISION 1. On 7 July 2008, Societe Anonyme des Galeries Lafayette (“the applicant”) applied to the Registrar of Trade Marks (“the Registrar”) to revoke the registration of the trade mark in class 18 under the Trade Marks Ordinance (Cap. 559) (“the Ordinance”) on the ground of non-use. The trade mark is registered in the name of Lafayette Company Limited (“the owner”). 2. The hearing of the application for revocation took place before me on 18 May 2012 and 3 December 2012. Mr Philips B.F. Wong, counsel, instructed by Messrs. Deacons, represented the applicant. The owner appeared in person on 18 May 2012. On 3 December 2012, Mr Felix H. Pao, counsel, instructed by Messrs. Mayer Brown JSM, represented the owner. By way of background, the hearing on 18 May 2012 was part-heard and adjourned to 25 May 2012 for the owner’s then newly appointed solicitors to prepare submissions in reply. However, at the hearing on 25 May 2012, the owner applied for adjournment and leave to file further evidence which was refused by me on the spot. An interlocutory decision in relation to that hearing was issued on 31 May 2012. The owner filed an appeal against my interlocutory decision on 27 June 2012. The appeal was subsequently withdrawn by the owner on 4 October 2012. The part-heard hearing was restored and heard on

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3 December 2012. Registration 3. The registration that the applicant applies to revoke is the trade mark :

(“the suit mark”) with registration number 199703862, registered for “ladies’ handbags”. The suit mark is registered as of 3 January 1991. The actual date of registration is 3 April 1997. Relevant legal provisions 4. Section 52 of the Ordinance provides, inter alia, as follows :

“(2) The registration of a trade mark may be revoked on any of the following grounds, namely-

(a) that the trade mark has not been genuinely used in Hong Kong by the owner or with his consent, in relation to the goods or services for which it is registered, for a continuous period of at least 3 years, and there are no valid reasons for non-use (such as import restrictions on, or other governmental requirements for, goods or services protected by the trade mark);

… (4) Subject to subsection (5), the registration of a trade mark shall not be revoked on the ground mentioned in subsection (2)(a) if the use described in that subsection is commenced or resumed after the expiry of the 3-year period and before the application for revocation is made.

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(5) Any commencement or resumption of the use described in subsection (2)(a) after the expiry of the 3-year period but within the period of 3 months before the making of the application for revocation shall be disregarded unless preparations for the commencement or resumption began before the owner of the registered trade mark became aware that the application might be made.”

Pleadings 5. On 7 July 2008, the applicant filed an application for revocation of the suit mark on the basis of non-use with a statement of grounds. In the statement of grounds, the applicant pleads that it conducted a series of investigations into the extent and manner of use of the suit mark in Hong Kong. It is the applicant’s case that the investigations have revealed that there had been no genuine use in Hong Kong of the suit mark in relation to ladies’ handbags in respect of which the suit mark is registered for a continuous period of 3 years. The applicant claims that the registration of the suit mark should be revoked pursuant to section 52(2)(a) of the Ordinance. The applicant seeks revocation of the suit mark with effect from 5 November 2003, or alternatively 26 February 2004. 6. An amended counter-statement dated 6 January 2009 was filed by the owner. The owner avers that the suit mark was genuinely used in respect of ladies’ handbags in Hong Kong during the period of three years before 30 October 2007 by Life Power Limited with the consent of the owner. Applicant’s evidence 7. Under rule 36 of the Trade Marks Rules (Cap. 559A) (“Rules”), the applicant filed altogether five statutory declarations in support of the application for revocation. Statutory declaration of Chan Kwon Wah, the manager of Kennoway Investigations Limited, together with exhibits, which was declared on 2 July 2008 (“Chan’s statutory declaration”) 8. Mr Chan is the manager of Kennoway Investigations Limited, a limited liability company incorporated and existing under the laws of Hong Kong which carries on business as specialists in investigations concerning the protection of intellectual property rights. According to paragraph 5 of the statutory declaration, on 30 October

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2007, Mr Chan conducted an internet search against the owner. He did not find any telephone numbers on the Hong Kong Internet White Pages or Yellow Pages for the owner. He conducted an updated search on the owner on 25 June 2008. Although he found a reference to a company with a different name “Galeries Lafayette Co. Ltd.”, he did not find any telephone numbers for the owner. On the same day, he also conducted searches of the Trade Development Council and the Asian Sources Media databases and the results were also negative. 9. According to the company search results dated 27 September 2007 and extracts of the company records of the owner dated 30 October 2007, the owner was incorporated on 10 March 1989. It is noted from the company records that the owner passed a special resolution on 10 May 2004 resolving that the owner “will become dormant as from 11 May 2004” and “prior to the company ceasing to be dormant, the directors of the company shall deliver to the Registrar a further special resolution, declaring that the company intends to enter into a relevant accounting transaction.” This special resolution was filed with the Companies Registry on 12 May 2004. 10. Mr Chan also conducted internet searches against Life Power Limited by searching Hong Kong White Pages and Yellow Pages. The Yellow Pages classified the company under “Trading Companies”. He also found Life Power Limited in the database of the Hong Kong Trade Development Council. It is noted from the webpage of the Hong Kong Trade Development Council downloaded on 31 October 2007 that Life Power Limited handled several brands of products but the brand of “Lafayette” or similar names were not found. 11. Mr Chan visited Life Power Limited’s website at www.lifepowerlimited.com on 31 October 2007. The website describes that Life Power Limited’s retail arm is “Lafayette”. In the business history column, it referred to the opening of the Flagship Stores “Lafayette Italian Shoes Specialist Retail Shop” at Minden Plaza 名店街 in 1977 in Hong Kong, the opening of “Lafayette Italian Ladies’ Handbag Specialist Retail Shop and Lafayette Italian Children Shoes Specialist Retail Shop (8 shops)” during 1978 and 1993, and “Lafayette Italian Ladies’ Fashion Retail Shop (2 shops)” during 1978 and 1980. The business history column ended with 2002, and the copyright notice in this website is marked with the year 2003. 12. According to the company search of Life Power Limited conducted on 31 October 2007, Life Power Limited has the same registered address as the owner at 7th Floor, Prosperous Commercial Building, 54-58 Jardine’s Bazaar, Causeway Bay,

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Hong Kong (the “Prosperous Commercial Building” is hereinafter referred to as “the premises”). The shares of Life Power Limited are wholly held by Mak Tang Yiu Foon, Edith and Mak Shiu Hung, Anthony, both of whom are directors and shareholders of the owner. 13. On 2 November 2007, Mr Chan made a telephone call to the owner/Life Power Limited (both sharing the same registered address). He spoke to a Ms Yip and indicated that he was interested in obtaining handbags and shoes. Ms Yip confirmed that her company was engaged in importing Italian shoes and handbags and indicated that they acted as a wholesaler and agent for the China market. Since Ms Yip did not appear to be interested in dealing with a local company, she declined to meet with Mr Chan and the call was terminated. Statutory declaration of Chow Lai On, an associate solicitor in Messrs Deacons, solicitors for the applicant, together with exhibits, which was declared on 2 July 2008 (“Chow’s statutory declaration”) 14. Ms Chow visited Life Power Limited’s website at www.lifepowerlimited.com on 5 March 2008. Under the “fashion” section under the “Products” icon, the website (which is updated as of 2003) states that Life Power Limited has operated numerous retail stores and boutiques in Hong Kong and Taiwan under its subsidiary company named “Lafayette” importing top fashion brands from Italy, France and Germany for 20 years. A printout of this webpage is attached as “Exhibit CLO-1”. 15. According to the business registration search results obtained on 7 March 2008 produced as “Exhibit CLO-7” in Chow’s statutory declaration, the owner previously operated nine shops under the name of “Lafayette” (in addition to the registered office). The search results show that all the nine shops had closed down by 8 March 1996. Statutory declaration of James Kennoway Allan, the managing director of Kennoway Investigations Limited, together with exhibits, which was declared on 2 July 2008 (“Mr Allan’s first statutory declaration”) 16. Mr Allan is in the same investigation company as Mr Chan Kwon Wah referred to above. On 14 November 2007, Mr Allan posed as a buyer from Australia and visited the owner/Life Power Limited at the registered office at 7th floor of the

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premises. The door was answered by a Chinese female called “Rebecca” and she said that her principal Edith Mak was out of Hong Kong but she nevertheless allowed him to enter into the premises. Rebecca indicated to Mr Allan that she had been working as Edith Mak’s personal secretary for more than two years. 17. Mr Allan made a reference to the “Lafayette” brand. Rebecca said that “Lafayette” brand had not been used for over five to six years. She also confirmed that the brand was previously used in Hong Kong but the shops had closed down for five or six years and they had not used this brand since then. Mr Allan referred to Life Power Limited and Lafayette on display. Rebecca reiterated that Life Power Limited was set up to specialize in the import and distribution of quality Italian shoes and that “Lafayette” used to be a brand name traded in Hong Kong but she reassured that they, whom Mr Allan understood to be the owner and/or Life Power Limited, had not used the brand for five to six years. The visit was then terminated. Statutory declaration of Lee Siu Ngan, Eleanor, an investigator of Kennoway Investigations Limited, declared on 2 July 2008 (“Lee’s statutory declaration”) 18. Ms Lee is an investigator under the employ of the same Kennoway Investigations Limited. On 31 October 2007, she visited the office of the owner at 7th floor of the premises. She found that two company names, namely “LAFAYETTE CO. LTD.” and “LIFE POWER LTD.”, were shown on the directory on the ground floor and outside the 7th floor unit. 19. The door was answered by a Chinese middle-aged female (subsequently identified as Ms Edith Mak, who is one of the directors and shareholders of the owner). Ms Lee posing as a representative of a trading company explained that she was interested in dealing in handbags and shoes. Ms Mak declined to provide any business card to her and only confirmed that they offered handbags and shoes. The investigation was then terminated. Statutory declaration of Chan Chun Chung Howard, a trainee solicitor of Messrs Deacons, together with exhibits, which was declared on 2 July 2008 20. Mr Chan mainly deposes to the fact that he could not locate any shop with the name “Lafayette” in the area called “Fashion Walk”, which comprised inter alia of the former Minden Plaza at a site visit conducted by himself on 16 January 2008.

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Owner’s evidence 21. Under rule 37 of the Rules, the owner filed evidence of the use made of the suit mark by way of a statutory declaration of Mak Tang Yiu Foon Edith, the director of the owner, together with exhibits, which was declared on 31 December 2008 (“Mrs Mak’s first statutory declaration”). 22. Mrs Mak says in her statutory declaration that she and her husband are the only shareholders and directors of both the owner and Life Power Limited. They carry on the business of trading, including trading in leather goods, through these two companies at the offices situated at 5th and 7th floors of the premises. Some photos showing the signages of “Lafayette” at the entrances of both floors of the premises were attached at “Exhibit-2”. She states that the signages have always been placed in those same positions since they first occupied 5th and 7th floors of the premises in 1993 up to the date of making the statutory declaration in December 2008. The signages are conspicuous and can easily be seen and noticed by any visitors and passers by. 23. Mrs Mak avers that she and her husband have been dealing in leather goods, including ladies’ handbags, under and by reference to the suit mark since 1993 at 5th and 7th floors of the premises and at different Lafayette retail shops in Hong Kong. As a result of the weak Hong Kong economy following the SARS outbreak in 2003, they had to close down all the Lafayette retail outlets in February 2004 and switched the owner to dormant company status to save unnecessary additional business expenses of running both the owner and Life Power Limited in parallel. However, Mrs Mak says they never had any intention to give up the Lafayette brand and have, in fact, never stopped using the suit mark in relation to ladies’ handbags at 5th and 7th floors of the premises. 24. Copies of some cash sales memos which are alleged to evidence the sales of shoes and handbags at 5th and 7th floors of the premises for the years 2004, 2005 and 2006 were produced at “Exhibit-3”. “Exhibit-4” contains photos of some ladies’ handbags and shoes bearing the suit mark. Some stationery and accessories bearing the suit mark were attached at “Exhibit-5”. Applicant’s additional evidence 25. Under rule 38(1) of the Rules, the applicant may file additional evidence in support of his application. The same Mr James Kennoway Allan filed his second

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statutory declaration which was declared on 25 June 2009. Pinpointing to the question of whether Rebecca had told him that the “Lafayette” brand had not been used for over five or six years in his personal visit on 14 November 2007 referred to in his first statutory declaration, Mr Allan says that upon returning to the office following the investigation on 14 November 2007 he immediately dictated the field report for his secretary to type. A copy of the field report on file at his office was produced at exhibit “JKA-2”. Owner’s further evidence 26. Leave was granted to the owner under rule 38(4) of the Rules to file further evidence. The owner altogether filed two statutory declarations as further evidence. The first one was made by Rebecca, Yip Chui Wan, the secretary of Life Power Limited, which was declared on 8 July 2009. She says that she was hired by Life Power Limited on 11 April 2005 as secretary, a limited company in Hong Kong which specializes in retailing and wholesaling of Italian shoes in Hong Kong and China. The main purpose of her statutory declaration is to state the contents of her conversation with Mr Allan regarding his visit on 14 November 2007. She deposes to the fact that she had no knowledge of the Lafayette business both before and after the closure of the Lafayette shops. She only knew that occasionally, there were sales of handbags and shoes stocks at their 5th Floor Lafayette office, and such activities did not concern her work duties. 27. On 14 November 2007, when Mr Allan visited their office, Ms Yip answered the door. She avers that Mr Allan, who claimed to be a buyer from Australia, asked her where he could buy “Lafayette” shoes, pointing to their logo “Lafayette” clearly fixed on the wooden panel at the entrance lobby of their office. She immediately replied to Mr Allan that they did not have retail shop of “Lafayette” anymore in Hong Kong, and if he would like to buy their shoes, he had to visit their shops in China, like in Beijing, because all she knew was that Lafayette shops had been closed. Ms Yip declares that she did not say “the Lafayette brand was not used for five to six years”. The words “five to six years” were only put into her mouth by Mr Allan. 28. I would like to mention that Ms Yip’s evidence is concerned with use of the suit mark on shoes rather than ladies’ handbags being the subject goods in the present proceedings.

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29. Mrs Mak also filed her second statutory declaration which was declared on 13 July 2009. She mainly declares that Rebecca Yip is not her personal secretary but the secretary of Life Power Limited. Rebecca Yip has no knowledge whatsoever about Lafayette’s business, nor any trade mark or brands matters. Preliminary issue 30. One week before the hearing on 11 May 2012, the applicant sent a draft amended statement of grounds to the Registrar which was copied to the owner. 31. At the hearing on 18 May 2012, Mr Wong for the applicant applied for leave under rule 92 of the Rules to amend the statement of grounds as per the draft. 32. The effect of the proposed amendment is to amend the effective date of revocation in paragraph 9 of the original statement of grounds from 26 February 2004 to 27 February 2007 and to add a new paragraph 9A regarding the additional alternative plea of the effective date of 30 October 2007, which is the date of investigation. 33. Mr Wong submitted that the proposed amendments should not be controversial and will not cause prejudice to the owner. The proposed amendment in paragraph 9 serves to correct an obvious typo in the effective date. 26 February 2004 was the date when the owner ceased its business previously carried on at 7th floor of the premises as clearly reflected in the copies of the business registration search results referred to in paragraph 11 of Chow’s statutory declaration. The applicant’s alternative case is that the suit mark has not been used since that date. As such, the suit mark registration should be revoked with effect from 27 February 2007, that is, three years after 26 February 2004. The applicant’s said alternative case has clearly been stated in paragraph 20 of Chow’s statutory declaration filed in July 2008 and the owner should have notice of that since then. Accordingly, no prejudice will be caused to the owner because of the proposed amendment. 34. In respect of the second proposed amendment, this is to cover another alternative case of the applicant, that is, the suit mark registration should be revoked with effect from 30 October 2007. This alternative case of the applicant has already been mentioned in paragraph 5 of the original statement of grounds. It is clear from paragraph 3 of the amended counter-statement that the owner knew very well that this is the period they have to tackle with. The owner has also adduced evidence to address the relevant period (see paragraph 3 of Mrs Mak’s first statutory declaration)

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and accordingly, there should not be any prejudice caused to the owner because of the proposed amendment. 35. In reply, Mrs Mak indicated that the owner objected to the late amendments of the statement of grounds which were sent to them less than a working week before the hearing date. Mrs Mak said that due to busy business trips and commitments, there was no sufficient time for the owner to study the proposed amendments submitted by the applicant. 36. In my judgment, under rule 92 of the Rules, any document filed with the Registrar may, at the discretion of the Registrar, be amended on such terms as the Registrar may direct. 37. Having heard the submissions of both parties, I decided to grant leave to the applicant to amend the statement of grounds as per the draft submitted in order to let the real matters in contention between the parties be taken before the tribunal at the present hearing with costs of the application for amendment be to the owner.

38. It is noted that the proposed amended relevant periods were in fact raised at the original pleadings and evidence stage. 39. Following the proposed amendments, for the purpose of section 52(2)(a) of the Ordinance, it is necessary to consider whether the suit mark has been genuinely used in Hong Kong by the owner or with its consent in respect of the goods for which the suit mark is registered during the following periods :

(a) the three-year period beginning on 5 November 2000 (old period); (b) the three-year period beginning on 27 February 2004; (c) the three-year period beginning on 30 October 2004; (“the relevant periods”).

40. Moreover, since according to section 52(4) of the Ordinance, genuine use of the suit mark after the expiry of the relevant periods but before the application for revocation date may, subject to the provisions of section 52(5) of the Ordinance, save the suit mark from being revoked, it may also be necessary to consider whether there

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was genuine use of the suit mark during the following periods :

(a) 5 November 2003 to 6 July 2008 (old period); (b) 27 February 2007 to 6 July 2008; (c) 30 October 2007 to 6 July 2008.

41. It is alleged in paragraph 7 of Mrs Mak’s first statutory declaration that the owner has been dealing in leather goods, including ladies’ handbags, under and by reference to the suit mark since 1993 at 5th and 7th floors of the premises and from 1993 to February 2004 at different Lafayette retail outlets. The owner asserts that they have never stopped using the suit mark in relation to ladies’ handbags at 5th and 7th floors of the premises (at least up to the date of the making of owner’s statutory declaration in December 2008). Therefore, the evidence of use submitted in the owner’s statutory declaration should have covered all the new periods triggered off by the proposed amendments. By allowing the proposed amendments, there is no need on the part of the owner to adduce new evidence apart from those originally filed. The relevant periods of non-use 42. According to the amended statement of grounds, it is necessary to consider whether the suit mark has been genuinely used in Hong Kong by the owner or with its consent in respect of the goods for which the suit mark is registered during the following periods :

(a) the three-year period from 5 November 2000 (“the first relevant period”); (b) the three-year period from 27 February 2004 (“the second relevant

period”); (c) the three-year period from 30 October 2004 (“the third relevant period”).

43. Moreover, since according to section 52(4) of the Ordinance, genuine use of the suit mark after the expiry of the relevant period of the non-use but before the revocation application date may, subject to the provisions of section 52(5) of the Ordinance, save the suit mark from being revoked, it may also be necessary to consider whether there was genuine use of the suit mark during the following periods :

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(a) from 5 November 2003 to 6 July 2008; (b) from 27 February 2007 to 6 July 2008; (c) from 30 October 2007 to 6 July 2008; (“the subsequent periods”).

Burden of proving use 44. Section 82(1) of the Ordinance provides that :

“If, in any civil proceedings under this Ordinance in which the owner of a registered trade mark is a party, a question arises as to the use to which the trade mark has been put, the burden of proving that use shall lie with the owner.”

45. Accordingly, the burden of proving that the suit mark has been put to genuine use in Hong Kong in relation to ladies’ handbags during the relevant periods and the subsequent periods lies with the owner. Genuine use 46. What constitutes genuine use has been considered in a number of cases including Ansul BV v Ajax Brandbeveiliging BV [2005] Ch 97 (“Ansul”), La Mer Technology Inc v Laboratoires Goemar SA [2004] F.S.R. 38 (“La Mer”), Laboratoire de la Mer Trade Mark [2006] F.S.R. 5 (“Laboratoire”) and Brands Inc Ltd v Kabushiki Kaisha Regal Corp [2006] HKEC 2313 (HCMP 754/2006) (“Brands”). According to these cases:

• Genuine use does not include token use for the sole purpose of preserving the rights conferred by that mark (La Mer, paragraph 27).

• It entails use of the mark on the market for the goods or services protected

by that mark and not just internal use by the undertaking concerned (Ansul, paragraph 37).

• Use of the mark must relate to goods or services already marketed or

about to be marketed and for which preparations by the undertaking to

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secure customers are under way, particularly in the form of advertising campaigns (Ansul, paragraph 37).

• When assessing whether use of a trade mark is genuine, regard must be

had to all the facts and circumstances relevant to establishing whether the commercial use of the mark is real in the course of trade, particularly whether such use is viewed as warranted in the economic sector concerned to maintain or create a share in the market for the goods or services protected by the mark, the nature of those goods or services, the characteristics of the market and the scale and frequency of use of the mark (La Mer, paragraph 27).

• Even if use of a mark is not quantitatively significant, it may be sufficient

to qualify as genuine use if it is deemed to be justified, in the economic sector concerned, for the purpose of preserving or creating market share for the goods or services protected by the mark (La Mer, paragraph 21).

• What matters are the objective circumstances of each case, and not the

owner’s commercial intention, purpose or motivation (Laboratoire, paragraph 34).

• What is essential (other than where section 52(3)(b) of Cap. 559 is

applicable) is that the mark should have been used by being exposed to third parties (other than the owner or his licensees or agents) on a market in Hong Kong for goods or services of a type in respect of which the mark was registered. The need for exposure on such a market follows from the fact that to be used as a trade mark, the mark must be used in such a way as to act as a badge of origin, or a guarantee of the source or origin of the relevant goods or services (Brands, paragraph 18).

The first relevant period of non-use 47. At the outset, I shall deal with the first relevant period of non-use relied upon by the applicant. It is the owner’s original case that Mrs Mak and her husband, being the only shareholders and directors of both the owner and Life Power Limited, carry on the business of trading in ladies’ handbags under and by reference to the suit mark through the two companies at 5th and 7th floors of the premises from 1993 to the date of application for revocation and at different Lafayette retail shops in Hong Kong

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from 1993 to February 2004 (paragraphs 6 and 7 of Mrs Mak’s first statutory declaration). 48. Mr Wong has launched various attacks on the evidence of use filed by the owner. Mr Wong submitted that whilst the owner may have operated nine shops under the name “Lafayette Italian Ladies’ Handbags Specialist Retail Shop and Lafayette Italian Children Shoes Specialist Retail Shop” and “Lafayette Italian Ladies’ Fashion Retail Shop” in the past (in addition to the registered office at 7th floor of the premises), the indisputable evidence is that all those nine retail outlets have closed down by 8 March 1996. This is yet to mention that there is no evidence showing the use of the suit mark in relation to ladies’ handbags in those nine outlets. Whilst the records of the Business Registration Office of the Inland Revenue Department show that the registered office of the owner at 7th floor of the premises only ceased operation on 26 February 2004, there is no evidence that this address has ever been used as a retail outlet or anything other than the registered office of the owner or Life Power Limited. In fact, the investigation conducted by the applicant shows that this was highly unlikely to be the case. 49. In any event, Mr Wong submitted, despite the express challenge by the applicant, the owner has not adduced a single piece of documentary evidence showing use of the suit mark during the first relevant period. 50. I wish to point out that, as a matter of fact, in the reply submissions for the owner made at the hearing on 3 December 2012, Mr Pao admitted that the owner did not produce any evidence of use of the suit mark prior to 2003. Mr Pao contended that the owner ceased its business activities under the name “Lafayette” on or about 26 February 2004 and became a dormant company as from 11 May 2004. After cessation of the owner’s business in early 2004, the suit mark has been used in relation to ladies’ handbags by Life Power Limited with the consent of the owner. He submitted that the owner’s evidence has shown genuine use of the suit mark in relation to ladies’ handbags in Hong Kong during the second and third relevant periods only, not the first relevant period. 51. Having considered the submissions of the parties, I find that the owner has failed to discharge the burden of showing genuine use of the suit mark in Hong Kong in relation to ladies’ handbags during the first relevant period. 52. I am then left with the question whether, between 5 November 2003 and

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6 July 2008, the owner or Life Power Limited has resumed use of the suit mark in relation to ladies’ handbags in Hong Kong under section 52(4) of the Ordinance to save the suit mark from being revoked. 53. The owner’s evidence relied on by Mr Pao includes paragraph 8 of Mrs Mak’s first statutory declaration in which she states that “… as at today [31 December 2008], we are still selling shoes and ladies’ handbags under and by reference to the Trade Mark [the suit mark] at the Premises …” and photographs of some of the products bearing the suit mark produced by Mrs Mak at “Exhibit-4”. Mr Pao also placed emphasis on samples of cash sales memos in respect of ladies’ handbags for the years 2004, 2005 and 2006. Mr Pao submitted that no company name appears on the sales memos, but the suit mark and the addresses of Life Power Limited were printed on the top of each sales memo. He admitted that no brand name for products was mentioned on the sales memos. Only product codes and descriptions were recorded. Without the further evidence that will allow the owner to match the codes on the sales memos against an internal list of product codes and then trace the same all the way back to the various Lafayette purchase orders from Italy, Mr Pao indicated that the owner cannot submit with conclusiveness that all the products mentioned in the sales memos were ladies’ handbags bearing the suit mark. What the owner is able to submit is that Mrs Mak has exercised her best endeavour in the compilation of the sales memos for years 2004, 2005 and 2006 honestly believing that they related to sales in Hong Kong by Life Power Limited of ladies’ handbags bearing the suit mark. 54. Mr Pao pointed out that the owner further produced samples of hang-tags and price labels that were used on ladies’ handbags at “Exhibit-5” to Mrs Mak’s first statutory declaration. It was the contention of Mr Pao that the use of the suit mark on hang-tags, price labels and the sales memos with the addresses of Life Power Limited is a clear statement made to the consumer that Life Power Limited is vouching for the quality of the ladies’ handbags and is responsible for these products. Use of the suit mark on a sales memo equals to the use of the suit mark as a mark in relation to ladies’ handbags by Life Power Limited. In this case, the ladies’ handbags were made by some unknown Italian manufacturer. The consumers look to the supplier to guarantee quality of the goods. 55. So far as the evidence of three commercial investigators, one solicitor and one trainee solicitor relied on by the applicant is concerned, Mr Pao argued that for the most part, the evidence consists of search results of various public records in respect of

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the owner and Life Power Limited. Such evidence seldom, if ever, discloses the full picture. The public records would not have disclosed the fact that Life Power Limited had to take up the additional responsibility of retail sales in Hong Kong from early 2004 because the common directors of the owner and Life Power Limited had to reduce the administrative costs of the two companies due to the economic downturn. Mr Pao emphasized that such public record evidence per se does not support an allegation that the owner has not genuinely used the suit mark in relation to ladies’ handbags in Hong Kong for a continuous period of three years within the alleged relevant periods referred to by the applicant. 56. Mr Pao contended that it should be recognized that in all cases where commercial investigators were instructed, the investigators knew from their instructions that their clients were looking for certain answers and their services were required to deliver the expected answers if at all possible. Investigations within such parameters are not conducive to the production of a balanced and objective report. A common shortcoming of such investigation report is the treatment and interpretation of the responses or answers to leading questions which would inevitably be put to the subject under investigation at some stage. The flaw in the investigators’ evidence is that they have only visited the registered office of Life Power Limited at 7th floor of the premises before the revocation application date of 7 July 2008. They have never paid a visit to the sales office of Life Power Limited on the 5th floor of the premises. The investigators’ evidence should therefore be read with caution. 57. For the applicant, Mr Wong submitted that most of the allegations of use made by the owner or Life Power Limited are mere assertions and should be disregarded. Turning to the actual evidence filed, Mr Wong argued that the signage of “Lafayette” at the entrances of both the 5th and 7th floors of the premises per se does not prove anything. The evidence does not show use of the suit mark in relation to ladies’ handbags. The signage was simply used as a company name. Mr Wong contended that the purpose of a company, trade or shop name is not, of itself, to distinguish goods or services. The purpose of a company name is to identify a company, whereas the purpose of a trade name or shop name is to designate a business which is being carried on. Accordingly, where the use of a company name, trade name or shop name is limited to identifying a company or designating a business which is being carried on, such use cannot be considered as being “in relation to the subject goods ladies’ handbags” (MOBILE PLANET Trade Mark, decision of UK Trade Marks Registry, 1 November 2007, paragraph 24, citing the ECJ judgment in Celine SARL v Celine SA, case C-17/06).

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58. As regards the cash sales memos, Mr Wong submitted that they do not show any use of the suit mark in relation to ladies’ handbags. First, there is no evidence as to what marks had been applied to the products under those sales memos. Mrs Mak just states in paragraph 8 of her first statutory declaration that “Exhibit-3 are copies of some sales memos evidencing the sales of shoes and handbags at the premises during the years 2004, 2005 and 2006.” There is no mention at all that the ladies’ handbags bear the suit mark. Second, it is not known to whom those products were sold to, that is, whether they were sold to the general public in Hong Kong. In particular, there is no evidence to suggest that the registered office of Life Power Limited had ever been used as a retail outlet open to the general public. In fact, the investigation conducted by the applicant shows that this was highly unlikely to be the case. Bearing in mind that genuine use of a trade mark cannot be proved by means of probabilities or suppositions, but must be demonstrated by solid and objective evidence of the effective and sufficient use of the trade mark on the market concerned, the owner has simply failed to discharge the burden. It was the contention of Mr Wong that the cash sales memos adduced by the owner must be viewed with extreme skepticism. Apart from those handwritten documents, the owner has failed to produce any purchase orders, delivery notes, accounting records and other collaborating documents to show or support the sale of ladies’ handbags bearing the suit mark in Hong Kong. No evidence was adduced to show that the items under the cash sales memos actually bear the suit mark. 59. Mr Wong moved on to analyse the last set of evidence of use submitted by the owner. Mr Wong submitted that the photographs of products produced under “Exhibit-4” to Mrs Mak’s first statutory declaration do not bear any date. There is also no evidence as to the place where those products were available. A number of items bearing the suit mark were mentioned in paragraph 9 of Mrs Mak’s first statutory declaration and produced at “Exhibit-5”. Evidence is wanting as to when and where those items mentioned were produced and/or used. The sample internal transfer form and envelopes are blank forms and are internal documents at best. Not a single piece of documentary evidence has been produced regarding the production and/or use of those items. 60. In paragraph 9(g) of Mrs Mak’s first statutory declaration, Mrs Mak deposes that “Lafayette” internal transfer form was used for delivering goods to their clients. However, Mr Wong pointed out that the only internal transfer form produced at “Exhibit-5” is a blank one. Throughout the period before the date of the application for revocation, not one single piece of filled in internal transfer form has been adduced

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by the owner or Life Power Limited. As to paragraph 9(h) of Mrs Mak’s first statutory declaration, Mrs Mak says that they had been using and giving to clients “Lafayette” paper bags in gold and white stripes from 1993 till the date of making the statutory declaration in December 2008. At the hearing on 18 May 2012, Mrs Mak produced an original paper bag referred to in paragraph 9(h) of her first statutory declaration for Mr Wong’s examination on the spot. 61. After inspection, Mr Wong submitted that on the sides of the paper bag produced, there are printed names of two shops. According to the business registration records, the shop at Pedder Street ceased business in 1989 and another one at Paterson Street ceased business in July 1992 or September 1994. The telephone numbers of the shops contain seven digits instead of eight digits. One can see from the calendar cards at “Exhibit-5” to Mrs Mak’s first statutory declaration that the calendar card for 1994 bears a telephone number with seven digits whereas the telephone numbers on the calendar cards from 1995 onwards all bear eight digits. As a result, Mr Wong deduced that the paper bag referred to in paragraph 9(h) of Mrs Mak’s first statutory declaration should have been used before 1994. It is highly unlikely that they were used by the owner or Life Power Limited at the date of making the statutory declaration in December 2008. I totally accept Mr Wong’s deduction in this regard. 62. Further, Mr Wong submitted that the owner has not adduced any promotional materials or sales figures in respect of ladies’ handbags bearing the suit mark in Hong Kong between 5 November 2003 and 6 July 2008, or indeed over any other periods. 63. Mr Wong went on to submit that the whole circumstances become more suspicious when the undisputed evidence shows that the owner has gone dormant since 11 May 2004. It is also suspicious that Life Power Limited carried on business under the name of Lafayette without a business registration. 64. In conclusion, Mr Wong submitted that the suit mark should be revoked with effect from 5 November 2003. 65. Having carefully gone through counsel’s submissions and all the evidence filed by the applicant and the owner, at the outset, I would like to set out my findings on some background facts. It is common ground between the parties that the owner ceased its business activities under the name “Lafayette” on or about 26 February 2004

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and became a dormant company as from 11 May 2004. Regarding Life Power Limited, Mr Pao submitted that it carries on a similar leather goods business at the premises (both the 5th and 7th floors). The evidence relied upon by him in support of this allegation is the mere assertion in paragraph 6 of Mrs Mak’s first statutory declaration and “Exhibit 2” which contains photos showing the signage of “Lafayette” at the entrances on both floors of the premises. I note that there is a date of 17 November 2008 printed below the photos at “Exhibit-2” which is after the date of the application for revocation. I consider that some more solid and objective evidence regarding the status and business of Life Power Limited has been submitted by the applicant. 66. According to paragraph 15 of Chan’s statutory declaration and “Exhibit CKW-7”, as at 31 October 2007, the Yellow Pages classified Life Power Limited under “trading companies”. The printout of the Trade Development Council’s website printed on 31 October 2007 shows that Life Power Limited handled several brands of footwear products but the name of “Lafayette” is not included. The website also mentions that Life Power Limited is an importer of handbags from Italy but no brand name is shown. As per paragraph 17 of Chan’s statutory declaration and “Exhibit CKW-8”, the printout of the website of Life Power Limited downloaded on 31 October 2007 describes that Life Power Limited’s retail arm is “Lafayette”. The business history column on the website ended with 2002, and the copyright notice in this website is marked with the year 2003. Further, it is stated in paragraph 4 of Chow’s statutory declaration that she visited Life Power Limited’s website on 5 March 2008. Under the “fashion” section under the “Products” icon, the website which is updated as of 2003 states that Life Power Limited has operated numerous retail stores and boutiques in Hong Kong and Taiwan under its subsidiary company named “Lafayette” importing top fashion brands from Italy, France and Germany for 20 years. Copies of business registration search dated 7 March 2008 are produced at “Exhibit CLO-9”. 67. According to the business registration search results, the business address of Life Power Limited was changed to 7th floor of the premises on 8 February 1994. The nature of business stated on the business registration record is “trading” (“Exhibit CLO-9”) whereas for all the closed down Lafayette shops, the nature of business stated on the business registration records is “retail and trading” (“Exhibit CLO-7”) . The only branch recorded was carried on under the name of “ALTOS” but it ceased business on 1 July 1992. In my view, gathering from the website and records evidence as set out above, Life Power Limited is a trading company.

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68. Against the above background, Mr Pao submitted that after cessation of the owner’s business in early 2004, the suit mark has been used in relation to ladies’ handbags by Life Power Limited with the consent of the owner. Ladies’ handbags under and by reference to the suit mark had been sold by Life Power Limited at the premises (both the 5th and 7th floors). To recap, Mr Pao also pointed out that the flaw in the investigators’ evidence is that they have only visited the registered office of Life Power Limited at 7th floor of the premises before the application date of 7 July 2008. They have never paid a visit to the sales office of Life Power Limited on the 5th floor of the same building. 69. Having evaluated the evidence carefully and critically, I have to say that how the so-called sales office of Life Power Limited on the 5th floor of the premises came out is a bit suspicious. All the official company search and business registration search records of the owner and Life Power Limited, the printout of the Trade Development Council’s website downloaded on 31 October 2007 in relation to Life Power Limited (a branch office in Italy is mentioned) only show the address at 7th floor of the premises. The business card of Mrs Mak under the company Life Power Limited given to Mr Allan during the visit on 14 November 2007 at exhibit “JKA-1” to Mr Allan’s first statutory declaration only bears the address at 7th floor of the premises as the Hong Kong office and another address in Italy as Italy office which is consistent with the data shown on the website of the Trade Development Council. According to paragraph 4 of Lee’s statutory declaration, when she visited the 7th floor of the premises on 31 October 2007, she noticed that two company names, Lafayette Co Ltd (the owner) and Life Power Ltd, were shown on the directory on the ground floor and outside the 7th floor unit. 70. Some calendar cards of Lafayette Co Ltd were produced at “Exhibit 5” to Mrs Mak’s first statutory declaration. The calendar cards for 1995, 1997, 1998, 1999, 2000, 2001, 2002, 2003 and 2006 all show the address at 7th floor of the premises only without mentioning the 5th floor. It is interesting to note that the calendar cards for 2007 and 2008 only show an address in Guangzhou without any Hong Kong address at all. In addition, I note from the field report contained in exhibit “JKA-2” to Mr Allan’s second statutory declaration that Rebecca Yip told Mr Allan that Life Power Limited had been set up to specialize in the supply of imported shoes to outlets in China. Rebecca reiterated that Life Power Limited had been set up to specialize in the import and distribution of quality Italian shoes. They do not offer any other products. Therefore, speaking for myself, the address at 5th floor of the premises as the sales office of Life Power Limited was not apparent in the course of investigations conducted

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by the applicant before the date of the application for revocation. It therefore explains why the investigators did not pay a visit there. 71. As I see it, the address at 5th floor of the premises only appears on the cash sales memos at “Exhibit 3” and on two name cards in relation to “利宜” and “Lafayette Club” at “Exhibit 5” to Mrs Mak’s first statutory declaration declared on 31 December 2008 which is some time after the various investigations in 2007 and 2008 and the date of the application for revocation of 7 July 2008. However, the company name of Life Power Limited cannot be found on either the cash sales memos or the name cards. Furthermore, Rebecca Yip states in her statutory declaration that she was hired by Life Power Limited as “secretary” in 2005. She only knows that occasionally, there were sales of handbags and shoe stocks at “5th floor Lafayette office”. There is no mention at all of a sales office of Life Power Limited at 5th floor of the premises. That said, even if I accept that there is a separate sales office of Life Power Limited at 5th floor of the premises, the crux of the matter is whether the owner has shown evidence of genuine use of the suit mark in relation to ladies’ handbags at 5th and/or 7th floors of the premises by Life Power Limited as alleged. 72. Going back to the evidence submitted by the owner to support use of the suit mark by Life Power Limited, I accept Mr Wong’s submissions that the signage of “Lafayette” at the entrances on both the 5th floor and 7th floor of the premises (even unchallenged as facts) per se does not prove that there had been use of the suit mark in relation to ladies’ handbags. Overall, I also accept Mr Wong’s arguments in relation to the evidence of the cash sales memos, photographs of the products and evidence at “Exhibit-5”. I would just like to supplement a few points in respect of the cash sales memos. First, not all the submitted cash sales memos have product descriptions. For those with product descriptions, some are related to sock, wallet, key bags, shoes, bags, bracelet and belt, not all related to ladies’ handbags. The addressees of all the cash sales memos are left in blank and thus unknown. 73. Mr Pao on his part somehow accepted that the owner cannot submit with conclusiveness that all the products mentioned in the sales memos were ladies’ handbags bearing the suit mark. The owner is only able to submit that Mrs Mak has exercised her best endeavour in the compilation of these sales memos honestly believing that they related to sales in Hong Kong by Life Power Limited of ladies’ handbags bearing the suit mark. On a balance of probabilities, I am not convinced that the products mentioned in the cash sales memos were ladies’ handbags bearing the suit mark when I take into account the totality of both the applicant’s and the owner’s

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evidence in the present case which I have analyzed in details above and the parties’ submissions. 74. In conclusion, I do not find that between 5 November 2003 and 6 July 2008, the owner or Life Power Limited had resumed use of the suit mark in relation to ladies’ handbags in Hong Kong under section 52(4) of the Ordinance so that the suit mark can be saved from being revoked. 75. As the owner has failed to discharge the burden of showing genuine use of the suit mark in Hong Kong in relation to ladies’ handbags from the commencement of the first relevant period on 5 November 2000 up to 6 July 2008, there is no need for me to consider the second and third relevant periods further. Conclusion 76. The registration of the suit mark is revoked with effect from 5 November 2003. Costs 77. Mr Wong submitted that in so far as the present proceedings are concerned, there are altogether three hearings. For the hearing on 18 May 2012, I have made an order that costs be in the cause. Mr Wong indicated that the applicant is content with that order. As to the second hearing on 25 May 2012, I have made an order that costs of the adjourned hearing on 25 May be to the applicant in any event irrespective of the outcome of the present proceedings because of the owner’s application for adjournment made on 18 May 2012. Turning to the costs of the restored hearing on 3 December 2012, Mr Wong contended that irrespective of the outcome of the present proceedings, the applicant should have costs of the hearing on 3 December 2012 because the hearing on that day was caused solely by the owner’s indication that they intended to appeal against my interlocutory decision in refusing its application for further adjournment and for leave to file further evidence on 25 May 2012. But for the intended appeal of the owner against my interlocutory decision, the whole hearing should have been concluded on 25 May 2012 and hence the applicant would not have incurred the costs for the hearing on 3 December 2012. The owner has subsequently withdrawn their appeal which indicates that the appeal should not have been brought in the first place. 78. In my judgment, while I am of the view that the second hearing on 25

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May 2012 was caused by the owner’s application for adjournment on the first day of hearing on 18 May 2012, I do not consider that the hearing on 3 December 2012 was caused by the wrongdoing of the owner on the second day of hearing since the main reason for adjournment was for the owner to file an appeal against my interlocutory decision. The owner has the right to do so. I have no choice but to adjourn the proceedings pending their appeal against my interlocutory decision. There was nobody’s fault so far as that adjournment pending appeal is concerned. I therefore consider that the costs on 3 December 2012 should also be costs in the cause. 79. As the application for revocation is successful, I accordingly order that the owner pays the costs of these proceedings. 80. Subject to any representations as to amount of costs or calling for special treatment, which either party makes within one month from the date of this decision, costs will be calculated with reference to the usual scale in Part I of the First Schedule to Order 62 of the Rules of the High Court (Cap. 4) as applied to trade mark matters, unless otherwise agreed between the parties.

(Ms Fanny Pang) p. Registrar of Trade Marks

7 January 2013