Two for the price of one: When do R&D activities amount to 'genuine use in the course of trade'; when is partial revocation appropriate?

 

Genuine use and partial revocation remain challenging trade mark issues. Kat friends Karen Lai and Joshua Kwan discuss a fascinating recent case from Singapore that had the opportunity to address both.

Can R&D activities amount to genuine use of a trade mark in the course of trade? This question was considered recently in the decision in Singapore of Baidu Europe B.V. v Baidu Online Network Technology (Beijing) Co., Ltd. [2021] SGIPOS 8.

Here, the Intellectual Property Office of Singapore ("IPOS") found that, even absent any evidence of actual sales, R&D activities and collaborative projects by a mark proprietor can amount to genuine use of the mark in the course of trade. IPOS also reiterated that the objective of a partial revocation is to obtain a "fair specification" that provides the mark proprietor with a commercially sensible zone of exclusivity.

Facts

Baidu Online Network Technology (Beijing) Co., Ltd, the registered proprietor, is a Chinese company engaging in Chinese web-related goods, such as a Chinese language search engine, websites, audio files and images. The register proprietor owns the trade mark "", registered in Singapore in Classes 38 and 42.

On 23 October 2018, the Applicant, Baidu Europe B.V., a company registered in the Netherlands providing internet services, focusing on software consultancy, computerisation and web-portal design, applied for the revocation of the registered mark on the ground of non-use under Sections 22(1)(a) and (b) of the Singapore Trade Marks Act ("TMA"). The Applicant also relied on Section 22(6) TMA for partial revocation of the registered mark on the basis that the mark has not been put to actual use in respect of some of the goods and services.

Decision

With respect to the non-use revocation, its resolution ultimately boiled down to whether there had been 'genuine use of the mark in the course of trade'. In particular, there were two main events of 'use' to be considered:

(a) the registered proprietor's collaboration with the Agency for Science Technology and Research ("A*STAR"); and

(b) the registered proprietor's collaboration with the Singapore Tourism Board.

Collaboration with A*STAR -- Together with A*STAR, the registered proprietor's sister company, Baidu (Hong Kong) Limited, opened a joint research development facility in Singapore to undertake R&D facilities and collaborative projects relating to the services for which the mark is registered.

While the Applicant claimed that such use of the registered mark in R&D activities was not genuine because it was non-commercial, IPOS dismissed this argument for the following reasons.

Firstly, genuine use can be established even if there is no evidence of actual sales. The concern is whether there is a genuine intention to engage in commercial activities under the registered mark, rather than token use for the sole purpose of preserving the registration. IPOS held that the R&D activities undertaken pursuant to the collaboration with A*STAR constitute a "condition precedent to the launch of new or enhanced products by the registered proprietor", akin to pre-sales activities.

As such, where the objective of R&D activities is for the economic enhancement of the registered proprietor, such activities fall within the meaning of 'genuine use in the course of trade'.

Secondly, the research development facility had produced successful results in certain speaker verification technology and language processing technologies. These results were published in several articles in which the registered mark was clearly displayed. As such, they are akin to the use of the registered mark on promotional materials.

Lastly, Singapore has always sought to encourage and attract R&D activities within its territory. A finding that genuine R&D activities do not amount to 'genuine use in the course of trade' would be inimical to this objective.

Collaboration with the Singapore Tourism Board -- IPOS also considered the memorandum of co-operation between Baidu (Hong Kong) Limited and the Singapore Tourism Board to promote Singapore as a preferred destination for Chinese visitors. This involved, amongst other things, the use of data analysis to "engage digitally savvy visitors and encourage them to share their trip experiences in Singapore".

To this end, the Applicant argued that such co-operation cannot be said to be evidence of use, because it was for internal purposes only and for the benefit of Chinese, rather than Singapore, consumers. IPOS disagreed, reasoning that: (i) an external party (i.e., the Singapore Tourism Board) is involved; and (ii) the data was intended to benefit Chinese consumers while in Singapore.

That said, IPOS found that these instances of use were in relation to Class 42 and not to Class 38. As such, the revocation succeeded in relation to Class 38 only.

Partial Revocation

As for Class 42, the Applicant sought a partial revocation, arguing that the registered mark had been used in respect of "providing search engines for the internet", but not for the other specifications in Class 42.

Here, IPOS reiterated that the objective of partial revocation is not to define with exact precision the exact range of goods or services for which the mark proprietor has actually used its mark. Rather, it is to achieve a "fair specification" that provides the mark proprietor with a commercially sensible zone of exclusivity associated with the meaning of the words used by the trade mark framework to classify the goods and services in which the mark is registered.

As such, IPOS held that the specifications under Class 42 should be kept intact in order to provide the registered proprietor with a commercially sensible zone of exclusivity. This is so, because IPOS found that the Applicant had indeed engaged in technical project studies and the conversion of data/documents from physical to electronic media, and these necessarily covered various other specifications in Class 42.

Comments

This decision still leaves open interesting questions about the extent to which R&D activities can constitute genuine use in the course of trade. For instance, what if the R&D activities undertaken did not involve an external party? Could this still constitute a pre-trade activity that is intended for the economic enhancement of a company? While "curiosity killed the cat", these kats will be curious to see how a future court/tribunal will rule on such issues.

Picture on right is by Berdea and licensed under the Creative Commons Attribution-Share Alike 3.0 Unported license

Picture on left is from Brockhaus and Efron Encyclopedic Dictionary (1890—1907)and is in the public domain