Wait, is this Eng the Same as that Eng? – Confusingly Similar Trademarks

By Nadia Syakirah

What’s worse than having a rival noodle shop opening across the street? Having the same name!

In a recent Singapore decision in the case of Eng’s Wantan Noodle Pte Ltd vs Eng’s Char Siew Wantan Mee Pte Ltd [2023] SGHCR 17, it may seem like an interim pre-trial decision in respect of the production of documents and security for costs within an currently still ongoing case of an ordinary infringement and passing off dispute between two businesses that share the same name. In actuality, the dispute runs even longer and deeper than that.

Background

Since early 1980s, Mr. Ng Ba Eng (“Mr. Ng”) had operated a hawker stall selling wanton noodles under the name “Eng’s Char Siew Wan Ton Mee”. Garnering much attention and titled “hawker master” by the locals, Mr. Ng was approached by Mr. Jason Sim (“Jason”), a businessman and subsequently entered a joint venture with Jason in 2012 to incorporate Eng’s Noodles House Pte Ltd. The company’s sole shareholders and directors were Pauline New (“Pauline”), who is Jason’s wife, and Desmond Ng (“Desmond”) the son of the Mr. Ng. Sadly, Mr. Ng passed away the following year in 2013 but the parties continued to trade amicably.

Unfortunately, in 2015, relationship soured between Pauline and Desmond, and the company ceased business on 28 February 2018 as they failed to renew the lease of its premise on time. However, on the same day, Eng’s Wantan Noodle Pte Ltd (“the Plaintiff”) had obtained the lease of the premise with the help of Jason. The Plaintiff is part of the Lao Huo Tang Group of companies (“LHT Group”) and has no association with Mr. Ng’s family. In retaliation, the children of Mr. Ng opened their own business named Eng’s Char Siew Wantan Mee Pte Ltd (“the Defendant”) across the street of the Plaintiff to redeem their father’s reputation. The shareholder’s of the Defendant are Mr. Ng’s daughters (“Eng Sisters”), but their mother and Desmond all work in the restaurant as a family.

Several court actions were commenced between the parties regarding the ownership of the “Eng” trademark. Among the disputes include claims for unlawful conspiracy, oppositions against the Eng Sisters’ trademarks, defamation, groundless threats of infringement and counterclaims for trademark infringement, passing off and well-known marks.

Chapter 1

Was there goodwill to establish passing off?

In 2019, Pauline commenced a common law derivative action against the Eng family in including Desmond, the Eng Sisters, and a minority shareholder of the defunct Joint Venture company for unlawful conspiracy and breach of fiduciary duty. These claims were dismissed by the High Court and the dismissal was upheld on appeal. However, during the trial, one of the Defendants being the Eng Sisters counterclaimed for passing off. Therefore, the trial court had to determine whether the Counterclaim for passing off was established.

To establish their Counterclaim of passing off, three criteria must be satisfied:

Goodwill – simply put, it is the reputation obtained by the business in the course of trade.
Misrepresentation – where the Defendant misrepresents to the public that their goods are the goods of the Plaintiff which causes confusion to members of the public.
Damage suffered due to the misrepresentation.

It was held that there was goodwill in the recipe of Mr. Ng’s wanton noodles. However, once Mr. Ng had passed away and the business had ceased, the goodwill had not transferred to Mr. Ng’s children because the public mostly associated the goodwill with Mr. Ng. At most, the goodwill could have been transferred to Desmond, but Desmond was neither a Plaintiff to the claim for passing off nor was there any assertion that he was the owner of the goodwill.

Further, there was no misrepresentation by Pauline as the proper misrepresentor would have been the Plaintiff (i.e. Eng’s Wantan Noodle Pte Ltd). Therefore, passing off was not established and the Counterclaim was dismissed.

Chapter 2

Opposition against the Eng Sister’s Trademark Applications

At the very same time that the counterclaim for passing off was being heard by the courts, Pauline had also concurrently opposed 3 trademark applications for variations of the “Eng” marks filed by the Eng Sisters at the Intellectual Property Office in Singapore (IPOS). When the Opposition was dismissed by the adjudicator at IPOS, Pauline appealed at the High court.

She had also concomitantly filed an action at IPOS to invalidate the “Eng Chilli mark” which had already been previously registered and owned by the Eng family. The Registrar referred the invalidation case to the High Court. Both the Opposition appeal and the Invalidation action were dismissed by the High Court and a further request for appeal was also dismissed. Therefore, IPOS issued the registration certificates for the 3 marks to the Eng family. As a result, the Eng family now own 4 valid Registered Trademarks.

Chapter 3

Well, what about infringement?

During the course of the numerous court proceedings the Eng family had, through its solicitors, issued various letters threatening commencing proceedings for trademark infringement and passing off to numerous parties including the Plaintiff, various companies within the LHT Group which own the Plaintiff and the Landlord of the Plaintiff’s premises where the restaurant is trading. Upon the success of the Eng family in securing and defending their trademarks, the Eng family had been interviewed by the News Straits Times, where they released a statement that they intend to sue the Plaintiff, second Plaintiff and Pauline for infringement. The Eng Family had also reproduced the newspaper article as a poster and displayed the same in front of their shop and juxtaposed pictures of their shop with the caption “REAL and Only” against the pictures of plaintiff’s shopfront with the word “counterfeit” in the poster. The poster also mentioned that those customers had suffered food poisoning at the Plaintiff’s shop.

This was the final straw that broke the Camel’s back and the Plaintiff’s filed a lawsuit against the Eng family for making groundless threats of trademark infringement proceedings and defamation. The Eng family then counterclaimed for trademark infringement, passing off and for well-known trademarks. The proceedings were still ongoing and were fixed for trial in January and February 2024 respectively.

The current decision relates to the parties’ requests for production of certain documents and security for costs against the Eng family for the counterclaim. In deciding against ordering security for costs against the Eng family, the court evaluated the evidence and concluded that based on the merits of the counterclaim, the Eng family’s counterclaim for infringement has a reasonably good prospect of success.

In deciding that the counterclaim for trademark infringement by the Eng family had merit, the court took into account the provisions for trademark infringement. Under section 27 of the Singapore Trade Marks Act 1998, a person infringes a registered trademark if the person uses an identical mark to the registered trademark in the course of trade for identical goods or services without the consent of the owner of the registered trademark.

In the present case, the High Court assessed the evidence and highlighted numerous factors that will favour the Eng family at trial including the facts that both businesses shared the same denominator (i.e. the word “Eng’s”), sold identical goods (namely wanton noodles) and provided identical services (as a restaurant). There was also evidence of the public being confused between both businesses.

The Plaintiff relied on the defence under section 28(1) of the Singapore Trade Marks Act 1998 which states that there is no infringement if the person uses its own name or the name of the person’s business. As the Plaintiff’s business is Eng’s Wantan Noodle Pte Ltd, this defence should apply. However, it should also be noted that section 28(1) also states that the use should be “in accordance with honest practices”.

In assessing the Plaintiff’s defence, the court highlighted that there was enough evidence to show that the use of the name “Eng’s” was not done in accordance with honest practices by Pauline and Jason. Among them were:

Pauline and Jason had helped to set up and manage the Plaintiff.
Jason assisted in obtaining the lease of Mr. Ng’s store for the Plaintiff.
Pauline had informed accountants she hired for Mr. Ng’s business that the shareholders of Mr. Ng’s business was opening a new store near to Mr. Ng’s store.
Pauline used the same telephone number as Mr. Ng’s business which customers used to call to order from Mr. Ng.

The Plaintiff also argued that they had used the mark “Eng’s” first prior to the Defendant as they had used it from March to April 2018 while the Defendant registered their mark in June 2018. However, this may not hold through as the Defendant can argue that its predecessor (Mr. Ng) had used the mark “Eng’s” since 1980s. The court asserted it would be an uphill task for the Plaintiff to show that it had been using the marks before the predecessor in title which was Mr. Eng. Based on all the factors highlighted above, the court declined to order costs against the Plaintiff. Following the decision of the Honourable Judge in the interim hearing above, the parties had entered into a private settlement agreement and the Plaintiff changed their business name from “Eng’s Wantan Noodle” to “Rong’s Wantan Noodle”.

Conclusion

This case shows how imperative it is to determine who owns the trademark when a partnership or joint venture is entered into. Disputing the ownership when the partnership or joint venture falls through will only lead to a messy court action. Businesses, particularly family businesses, should also bear in mind that goodwill will not transfer to its successor and that the successor needs to ensure the public would also associate the goodwill with the successor.

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KASS

Communications at KASS International Sdn Bhd

KASS International is an established Intellectual Property Firm which offers a one-stop solution for IP matters in Malaysia, South East Asia, and worldwide.