Sarika Connoisseur Cafe Pte Ltd v Ferrero SpA

10 January 2013

Vikram Ramasamy, Karol Goh

Ferrero SPA (Ferrero) is the proprietor of various registered “Nutella” trade marks (including the “NUTELLA” word mark and the composite “nutella and device” mark) in Singapore (collectively referred to as the “‘Nutella’ marks”). Sarika Connoisseur Café Pte Ltd (“Sarika”) runs The Connoisseur Concerto café outlets in Singapore. Sarika had used the name ‘Nutello’ on its drinks menu.

Ferrero succeeded before the Singapore High Court (the HC) in its claim against Sarika for (i) trade mark infringement under s 27(2)(b) of the Singapore Trade Marks Act (“TMA”); (ii) relief under s 55 of the TMA for protection of well known trade marks; and (iii) passing-off, all in relation to the Nutella marks. This decision was reported in the 4th edition 2011 of the Food Law Digest (Ferrero SPA v Sarika Connoisseur Cafe Pte Ltd [2011] SGHC 176).

Sarika appealed against the decision of the HC to the Singapore Court of Appeal (the CA), the highest court in Singapore. The CA recently affirmed the decision of the HC holding that (a) Sarika was liable for trade mark infringement under Section 27(2)(b) of the Singapore Trade Marks Act (Cap. 332, 2005 Rev. Ed) (the TMA); (b) Ferrero was entitled to injunctive relief under Section 55 of the TMA for protection of well known trade marks; and (c) Sarika had committed the tort of passing off, all in relation to the “Nutella” marks.

Trade Mark Infringement

The CA found that “Nutella” was visually and aurally similar to the “Nutello” sign. However, they were not conceptually similar as “Nutello” and “Nutella” were invented words with no particular idea underlying each of them. Nevertheless, the “Nutella” word mark and the “Nutello” sign were similar on the whole because (a) the visual and aural aspects of similarity were more important than conceptual similarity as “Nutello” and “Nutella” comprised words only, and effectively could only be engaged visually or verbally; and (b) the “Nutella” word mark, being an invented word, was inherently distinctive.

The CA also held that the mark and sign were used on similar goods: the “Nutello” beverage was similar to a “chocolate product” and fell within the “chocolate products” specification for which the “Nutella” word mark was registered. In arriving at its decision, the CA relied on market survey evidence showing that the “Nutello” beverage was in practice regarded as a “chocolate product” by those who had consumed it.

In addition, the CA found that a substantial portion of the relevant public would be confused. In this regard, the parties’ survey evidence showed that approximately 30% of the relevant public was confused. According to the CA, 30% constituted a substantial portion of the relevant public. It added that the degree of similarity between the mark and sign and the highly distinctive nature of the “Nutella” word mark would go no small way in confusing the relevant public. The CA also took into account “extraneous factors” (i.e. matters outside and beyond the marks and the goods themselves) which indicated a likelihood of confusion including (a) the closeness of the parties’ goods as consumption foodstuff; (b) the impression given by the marks that the goods were related as the words “Nutello” and “Nutella” were substantially similar; and (c) that some portion of the relevant public had believed that the goods came from the same source.

In the circumstances, Ferrero’s claim for trade mark infringement was borne out.

Well Known Trade Mark

Section 55 of the TMA grants to proprietors of well known trade marks relief by injunction to restrain the use by anyone else of an identical or similar mark, or the essential part of which mark is identical or similar to the well known mark. On appeal, Sarika did not dispute that “Nutella” was a well known trade mark.

Based on the CA’s finding of similarity of the “Nutello” sign and “Nutella” mark, and that they were used in relation to similar goods, the CA affirmed the HC’s finding that there was well known trade mark infringement under Section 55(2).

The CA also found there was infringement by damaging connection of a well known trade mark under Section 55(3)(a). Section 55(3)(a) requires the proprietor of a well known trade mark to show the following: first, that the defendant’s mark, or an essential part of it, is identical with or similar to the proprietor’s mark; second, that the use by the defendant of its mark would indicate a connection between the goods or services of the defendant with the proprietor; and third, that because of the connection the interests of the proprietor are likely to be damaged.

In addition, the CA found dilution by blurring under Section 55(3)(b)(i). In this regard, the CA held that consumers were likely to draw a “mental link or association” between “Nutello” and “Nutella”. Consequently, using “Nutello” over an extended period of time on Sarika’s drink would create a real and serious likelihood that the distinctiveness of the “Nutella” marks may be weakened or lost in the medium to long term and the said “Nutella” marks would be less able to identify products for which they were registered and used.

Passing Off

In respect of Ferrero’s claim for passing-off, Sarika did not appeal against the HC’s finding that the elements of goodwill and misrepresentation were borne out. As for the element of damage, the CA noted that where the type of damage claimed involved a loss of opportunity or a loss that had yet to manifest in practice, it was not logical to require proof of actual damage as actual, observable damage is not the basis for these types of damage. It was more appropriate to require that a real likelihood of damage be shown.

In the present case, the CA found that Sarika’s use of the “Nutello” sign was likely to restrict Ferrero’s expansion of its product line into the Singapore beverage business. This was because the parties’ fields of business were closely connected and Ferrero had taken “real steps” to expand its product line overseas such as offering a Nutella-based milk shake in France. Therefore, the element of damage was established and Ferrero’s claim in passing off was borne out.

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