Court of Appeal strips High Court NAKED decision

The Hong Kong Court of Appeal has overturned a High Court decision to uphold the registrar of trademarks' 2008 refusal to register the trademark NAKED for condoms.

In 2006 Creative Resources LLC filed a trademark application for the mark NAKED for condoms in International Class 10. The registrar refused the application on the grounds that:

• The mark consisted exclusively of a sign that may serve to designate the characteristics of the goods (contrary to Section 11(1)(c) of the Trademarks Ordinance Cap 559).
• The mark was devoid of any distinctive character (contrary to Section 11(1)(b) of the ordinance).

At the Trademarks Registry’s formal hearing in 2008, the registrar held that consumers would perceive the term "naked" to be descriptive of the naked feeling or sensation experienced when using the condoms; as the mark was perceived to describe a characteristic of the goods, it was unlikely to be regarded by consumers as a badge of trade origin.

In January 2009, on appeal to the High Court, Creative Resources successfully argued that the word “naked” was more suggestive than descriptive when used in relation to condoms (for further details please see "NAKED mark declared registrable for condoms on appeal"). The judge, having applied the principles of the threefold test advocated by Advocate General Jacobs in OHIM v WM Wrigley Jr Company ([2004] RPC 18), overturned the registrar’s decision on the grounds that: 

• The word “naked” bore no direct relation to condoms.
• There was no immediate discernable link between the state of nakedness and the characteristics of a condom.

However, the registry has claimed victory. In January 2010 the Court of Appeal upheld the registrar’s earlier decision to refuse the mark, having found the registrar’s reasons for refusal to be sound. The Court of Appeal judgment criticised the High Court judge for failing to refer to the fact that the threefold test in the Wrigley case was not taken up in the judgment of the court, and for failing to consider the observations of the registrar regarding the POSTKANTOOR case.

Preferring first to consider the mark’s distinctiveness under Section 11(1)(b) of the ordinance, the appeal court upheld the registrar’s finding that the NAKED mark could not function as a trademark in guaranteeing the identity of the origin of the goods. Particular reference was made to the judicial discretion of the registrar and the registrar’s extensive experience in the field of trademarks. In light of this, the registrar’s opinion should be fully and carefully considered and should not have been overruled simply because the judge had reached a different conclusion from the registrar.

The appeal court held that the high court judge had applied his own views to find the mark suggestive rather than descriptive under Section 11(1)(c) of the ordinance, and had wrongly concluded that it followed that the mark did not contravene Section 11(1)(b) of the ordinance regarding distinctiveness.

The appeal court found that the registrar had applied all the correct tests. Thus the judge, having failed to consider the registrar’s opinion and the reasons expressed for the decision, had interfered with the registrar’s discretion without grounds.