The dramatic growth of electronic healthcare products in Singapore over the past 5 years created a fertile ground for copycat companies to spring up and wage guerilla warfare against established companies (and IP owners) for market share. The recent Singapore High Court decision of OTO Bodycare Pte Ltd v Hiew Keat Foong  SGHC 133 reinforces the advantage IP owners have over these copycats.
The Plaintiff’s Trademark and Goodwill
The Plaintiff is in the business of importing, marketing and distributing fitness, health and body care products since 1993 and is the proprietor of the registered trademark “OTO” in Class 10 for, inter alia massage apparatus.
The Plaintiff had since 1993 marketed its products under the trademark “OTO” being represented initially in italicized form and set in horizontally striped block letters in a rectangular background. Later in 1999 the Plaintiff changed the representation of the trademark by setting the words “OTO” in prominent, plain white block text with horizontal stripes on the lower half of the letters, set in a green box. In addition the Plaintiff used the word “Bodycare” in plain white block text set out in smaller type than the word “OTO” in a red box below the said green box (“new OTO Bodycare trademark”). The new OTO Bodycare trademark is pending registration.
In 2002, the Plaintiff imported into Singapore an electrical reflexology apparatus, which was designed and patented in Korea by a Korean manufacturer in collaboration with a medical equipment company. The Plaintiff obtained the rights to market the apparatus in Singapore under its own “OTO” trademark. The Plaintiff coined the word “Electro-Reflexologist” for this apparatus and was also known as ER839 (“ER839 apparatus”).
When the product was launched in Singapore in June 2002, the Plaintiff claimed that it was one of the first electrical reflexology products in the market. There was extensive advertising and promotion by the Plaintiff through various channels costing S$ 1,857,000. The sales grew exponentially and between June 2002 and April 2004 more than 75,000 units were sold, with total revenue of S$ 28 million. Based on this the Plaintiff claimed that it had developed goodwill and reputation not only in respect of the trademarks “OTO”, “OTO Bodycare” but also the word “Electro-Reflexologist” and the distinctive shape and get-up of the apparatus.
The Defendant’s Background
The Defendant was a sole proprietor and was in the business of selling foot reflexology apparatus known as HL1016 (“HL1016 apparatus”). The Defendant marketed this apparatus by way of posters with the words “OTC BODYCARE” with “OTC” in white set in a black box with horizontal stripes running through the letters. The letters were in a plain, bold typeface such that the letter “C” appeared like the letter “O”. The letters “TM” appeared in white as a superscript to “OTC” and the word “BODYCARE” was also in white set against a green background with the word “JAPAN” in small black type below it. The Defendant started selling the HL1016 apparatus in January 2004.
The Plaintiff’s Case
In December 2003, it came to the Plaintiff’s attention that the Defendant was selling a foot reflexology apparatus. In establishing their case for infringement of trademark and passing off, the Plaintiff pointed out the various similarities that appeared in both the Plaintiff and Defendant’s products, including:
The design of the Defendant’s product was identical or substantially similar in shape, design and get-up to the Plaintiff’s product and this also extended to the packaging, as the name of the product was positioned at the top right hand corner, and the lines used to describe the virtues of the Defendant’s product was identical to that of the Plaintiff’s product except for three added lines.
The colour scheme of the Defendant’s posters were identical to that of the Plaintiff except that the colours were interchanged.
The words “OTC” that appeared on the Defendant’s posters and the layout in which these posters were pasted across the top glass panel of the Defendant’s premises were deceptively similar to the Plaintiff’s trademark and the new OTO Bodycare trademark.
The use of the words “Electro-Relaxologist” was visually and phonetically similar to the Plaintiff’s “Electro-Reflexologist”.
That the Defendant had in fact copied the text box with descriptive words of the Plaintiff’s product on a side panel of the box but replaced the word “Reflex” with “Relax” rendering the sentences meaningless. However, at two points, the word “Reflex” was overlooked and maintained in the text.
The instruction manual inside the Plaintiff’s packaging was copied by the Defendant to the extent the six typographical error made by the Plaintiff were repeated by the Defendant.
Interestingly, in establishing the element of “likelihood of confusion”, the Plaintiff engaged a company specializing in undertaking consumers’ research reports to carry out a market survey to assess the likelihood of confusion amongst consumers between the Plaintiff’s “OTO Electro-Reflexologist” and the Defendant’s “HL Electro-Relaxologist” by determining the recognition of the form factor of the Plaintiff’s ER 839 apparatus and of the name “Electro-Reflexologist”. After conducting interviews of 400 consumers who had purchased an OTO machine in the preceding twelve months, it was found that when shown photographs of OTO and HL outer packaging, 32% of the interviewees felt that they would confuse the two brands. The Plaintiff also commissioned a firm of licensed private investigators to check on the defendant’s commercial activities.
The Defendant’s Case
On the allegation of passing off, the Defendant argued the following:-
That the design, shape and get-up of the HL1016 apparatus were different from the ER839 apparatus. Unlike the HL1016 apparatus, the Plaintiff’s ER839 apparatus did not have a liquid crystal display (LCD) panel as well as infrared footpads and the footpads were in different shapes.
That in the advertisements, the Defendant referred his machine as “HL” and not “Electro-Relaxologist” or “OTC Bodycare Japan”.
That the term “Electro-Reflexologist” was descriptive of the Plaintiff’s ER839 apparatus in terms of purpose or use i.e. that the apparatus worked in electricity and was based on the principles of reflexology.
That the Plaintiff’s advertisement focused on its “OTO Bodycare” mark and not on “Electro-Reflexologist”.
That the Plaintiff did not have an exclusive product design in Singapore and in Malaysia and that there were other brands of such machines using an identical design.
That the Defendant had a different sales and marketing concept from the Plaintiff’s marketing strategy which did not in any way represent the Defendant’s HL1016 apparatus as the Plaintiff’s ER839 apparatus.
That the Plaintiff did not incur any damage and loss in business profits as the Plaintiff’s sales of its ER839 apparatus increased from 50,000 in December 2003 to 70,000 in January 2004 and then to 100,000 in March 2004.
The Court’s findings
At the close of the five-day hearing, Justice Tay Yong Kwang ruled in favour of the Plaintiff. The Defendant was also ordered to pay 50% of the Plaintiff’s legal costs.
The Court found that the Defendant’s mark was similar to the trademark “OTO”. This was as the Court felt that there was too much coincidence that the Defendant’s mark had the same two letters as the Plaintiff’s trademark, the third letter was dressed up remarkably like the letter “O” and there were horizontal stripes in the middle portion of the letters. The mere fact that the Plaintiff’s “OTO” was in italicized form while the Defendant’s “OTC” was not did not make a significant difference in visual impact.
The Court also applied the “imperfect recollection” test and found that anyone looking at the Defendant’s mark without close scrutiny, whether due to distance or shortness of time, would have thought that they had seen the letters “OTO”. The fact there were other words below did not detract from the fact that the top three letters were in bold print and that they were the words, which were distinctive and would register with the viewer.
Further as the Defendant had used its mark on foot massage apparatus and the Plaintiff’s trademark was registered for the same apparatus, the Court held it was used for identical goods for which the Plaintiff’s trademark was registered.
The Court went on to hold that the Plaintiff had to prove “a likelihood of confusion” and not “actual confusion” and here the Defendant had chosen a name that was deceptively presented to resemble “OTO”, and so what was important was whether the customers saw “OTO” when the letters were actually “OTC” disguised to look like “OTO”. The Court therefore applied an objective test, and held that without doubt confusion arose and that confusion was shown by customers asking whether the machine that was sold by the Defendant was an “OTO” product or not. Once that happens it does not matter whether the Defendant’s sales staff tried to explain that their product was not “OTO”, as the public were already confused. Therefore the Court found that there was trademark infringement.
The Plaintiff’s claim for passing off was based on the Defendant’s use of the words “OTC Bodycare” and “Electro-Relaxologist” as well as the similarities in shape, design, packaging and overall get-up between the Defendant’s HL1016 machine and the Plaintiff’s ER839 machine.
To succeed in a passing off claim, the Plaintiff had to show that it had the necessary goodwill, that there was misrepresentation by the Defendant and that damages were suffered as a result. The Court found that the Plaintiff had goodwill in the words “OTO” and “OTO Bodycare” as it had used them for a number of years and had advertised extensively, and that the Defendant’s use of “OTC” and “OTC Bodycare” was therefore a misrepresentation on the part of the Defendant and there was passing off by the Defendant as long as those terms were used in connection with the Defendant’s apparatus.
However as to the term “Electro–Reflexologist” which the Plaintiff claimed was associated with them and no other, the Court held that it was not proved that the public, on seeing or hearing the Plaintiff’s term would associate the same with the Plaintiff. As to the packaging box, the Court held that while there were certain similarities, there were also visual differences to distinguish the Defendant’s packaging from the Plaintiff’s.
With regards to the design and shape of the apparatus, the Court held that the public’s usual question on whether the Defendant’s apparatus was an “OTO” product was due to the fact that the public were more familiar of the “OTO” name rather than due to the recognition of the design and shape of the apparatus. Therefore, the Court held that there was no goodwill and reputation in “Electro-Reflexologist” or in the shape, design and sales methodology of the Plaintiff’s product.
The Court held that the Defendant committed an act of infringement of the Plaintiff’s “OTO” trademark and that the Defendant committed an act of passing off when using the “OTC” or “OTC Bodycare” marks and therefore, the Court granted a permanent injunction against the Defendant restraining the Defendant from infringing the Plaintiff’s trademark and from passing off his product as the Plaintiff’s and for damages to be assessed.
The exponential growth of the lifestyle and healthcare products market in Singapore was bound to lure copycats into the business. It is notable that the Plaintiff had prepared themselves thoroughly before enforcing their IP rights. The use of a specialist firm to carry out consumer research reports on ‘likelihood of confusion’ was critical to securing a favorable judgment. The decision, which received widespread publicity in the media, will go a long way to encourage registration and enforcement of IP rights in the industry and deter future copycats. The Defendant was made to pay dearly for, in the learned judges words, “…his corrupted creativity”.