Singapore High Court assesses goodwill for "St. Regis" in Singapore

27 November 2012

Joyce Ang

Staywell Hospitality Group Pty Ltd V Starwood Hotels & Resorts Worldwide, Inc And Another [2012] SGHC 204

Staywell Hospitality Group Pty Ltd (Staywell) is an Australian company which operates the “Park Regis” hotel brand. In 2010, Staywell opened a hotel in Singapore in 2010 called Park Regis Singapore.

In Singapore, Starwood Hotel & Resorts Worldwide, Inc (Starwood) and Sheraton International Inc (Sheraton) operate a hotel in Singapore called “The St. Regis Singapore” which officially opened on 20 April 2008.

On 3 March 2008, Staywell applied to register “Park Regis” (series of 2 marks) (the Opposed Mark) in Singapore for, amongst others, business management, business administration, office functions and provision of office facilities and hospitality services. Starwood and Sheraton (Opponents) jointly opposed the registration of the Opposed Mark. At first instance, with regard to the ground of opposition under passing off, the Principal Assistant Registrar of Trade Marks (PAR) held that the Opponents failed to prove that, at the relevant date for assessment, i.e., 8 March 2008, the Singapore public had goodwill attached to the “ST. REGIS” brand and held that the ground of opposition under passing off failed.

The matter went on appeal before the High Court in April this year.

As at 3 March 2008, The St Regis Singapore had not yet officially opened. The Opponents therefore relied on the case of CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 2 SLR 550 (the Millenia Case) to argue that their pre-opening activities were sufficient to establish goodwill attached to “ST. REGIS” as at 3 March 2008.

In the Millenia Case, the Singapore Court of Appeal concluded that, whilst goodwill is normally generated from trading, in appropriate cases, pre-trading activities – depending on the nature and intensity of the activities in question – could also generate goodwill.

The High Court in the present case considered the pre-trading activities carried out by the Respondents in the Millenia Case before 17 October 1995, i.e., the relevant date for assessment in that case: The Respondents held topping up ceremonies on 17 October 1994 and 17 April 1995; since December 1994, even though their complex had not opened yet, they organised pre-launch publicity events, sales and marketing campaigns and generated press releases to advertise and promote their brand name; they even held celebrations for successfully leasing 50% of the floor space in Millenia Tower on 17 April 1995; all of which generated widespread media coverage for their brand name. Furthermore, the brand name had generated actual custom and income for the Respondents through pre-opening room reservations since April 1995.

Justice Judith Prakash found that the pre-opening activities undertaken by the Opponents in the present case were not significant enough to bring it within the exception created by the Millenia Case:-

 In the absence of figures for actual earnings of The St. Regis Singapore (specifically) and direct evidence showing that The St. Regis Singapore was accepting room reservations, during the period from the soft launch until 3 March 2008, the judge held that the evidence relating to the international reputation of the “ST. REGIS” brand and the Opponent’s total net worldwide revenue for hotel bookings was too broad and did not specifically indicate the attractive force of “ST. REGIS” in Singapore.

 The judge also found that evidence on the advertisement and promotion of “ST. REGIS” in the media – whilst indicative of the Opponents’ marketing efforts – do not evidence actual income or custom brought in by the “ST. REGIS” name.

 The evidence showing many visitors to the St. Regis’ website in 2008 from a Singaporean IP address was not persuasive as it did not indicate how much of the traffic happened before 3 March 2008.

 Even though the Opponents showed that they had secured restaurant tenants by December 2007, the judge did not deem the restaurant tenants as constituting the necessary custom which the “ST. REGIS” name has to attract in order to establish goodwill: The custom that the “ST. REGIS” name needs to attract should comprises room reservations and convention bookings, being the Opponents’ primary business).

 The judge found that the Opponents’ much-publicised job fair to hire hotel staff for St. Regis Hotel Singapore neither qualified as a business activity in itself nor as a revenue-generating preparatory act which would help to draw the conclusion that business activities had fully commenced.

 Lastly, the judge rejected that the custom for “St. Regis Residences” would be sufficient to establish goodwill for “ST. REGIS” in relation to the specific business of providing temporary accommodation and found that, in any event, there was no evidence that purchasers of “St. Regis Residences” bought the apartments because they were next to or linked with the hotel.

The High Court therefore upheld the PAR’s finding that there was no goodwill attached to the “ST. REGIS” brand in Singapore as of 3 March 2008.

Whilst the Millenia Case created the exception that pre-trading activities could generate goodwill (in contrast with the strict requirement for a claimant to show proof of business within the jurisdiction to which goodwill can attach), the present case clarifies that not every pre-opening activity undertaken by the claimant will qualify as the relevant pre-trading activity: One of the key considerations would be whether the a particular pre-opening activity had generated actual income or custom for the claimant.

This article was written by:


Joyce Ang
Partner
joyce.ang@twobirds.com

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