27 October 2006Commissioner for TransportTransport DepartmentVehicle Registration Marks Unit, Licensing SectionRoom 506-5085/F, Harcourt House39 Gloucester RoadWan ChaiHong KongAttention: Ms Anny LODear Ms Lo,Personalized Vehicle Registration MarksThank you for your letter of 9 October which has been considered by the Chamber whose members remain concerned about the PVRMs Scheme.The Chamber is of the view that it is a matter of good sense that the Commissioner for Transport should exercise his discretion against potentially objectionable PVRM applications to avoid unnecessary conflicts and litigation and even bad publicity internationally, at least in those straightforward cases where the applicant is clearly attempting to free-ride on or take unfair advantage of other people's trade mark. To comment specifically on your letter:(1) The legal advice you have referred to does not seem to have covered all aspects of intellectual property disputes, the notable omission being passing-off and non-trade-mark-use infringement. The Government also seems to have completely ruled out the possibility that the PVRMs can be used in the course of a trade or business where the practice of some local motor vehicle agents suggests the contrary. We note that your statement that "...it is unlikely that the use of a PVRM could constitute an infringement....." and this is by no means definitive.The legislative papers suggest that one of the reasons replied on by the Commissioner to dismiss the possibility of trade mark infringement is that PVRMs are not "used as trademarks for goods and services". However, under the current Trade Marks Ordinance which came into effect on 4 April 2003, "use as a trade mark" is no longer a pre-requisite for trade mark infringement, as opposed to the old law. The current law is therefore generally thought to be wide enough to cover the so-called "non-trade-mark-use infringement". The crux of non-trade-mark-use infringement is to protect the tarnishment or dilution of the reputation of a well-known trade mark even though there may only be a minimum likelihood of confusion created by the use of an identical/similar mark as to the source of trade. In the UK (being influenced by its European counterparts), there is a trend that the courts have become more readily in recognising such rights of a trade mark owner. In Hong Kong, as far as we are aware, this issue has not been judicially tested but there is at least an arguable case when someone is plainly attempting to free-ride on others' trade marks. We believe that the Commissioner should be able to see the strength of the above arguments especially in the case of motor vehicle agents who are reported to have acquired a number of PVRMs with a view to trading. (2) The Commissioner repeatedly says that there are no grounds under Regulation 12F(2) of the Road Traffic (Registration and Licensing of Vehicles) Regulations to refuse a PVRM application on the basis of trademark existence or infringement. We do not believe this is a correct view as Regulation 12F(1) does confer an absolute discretion to determine whether to accept or refuse a PVRM application, and what is set out in Regulation 12 F (2) is just a non-exhaustive list of the grounds for refusal. The Commissioner's discretion is reinforced by Regulation 12L(1), which gives a general discretion to cancel the allocation of a PVRM if it is satisfied that the PVRM is not/no longer "appropriate" for allocation.Some members of the Chamber Legal Committee believe that the Commissioner should as a matter of public policy screen out those PVRM applications (not being made/authorised by the relevant right holders) which are very likely to cause intellectual property disputes. The Commissioner, in this view, should be minded to adopt a more constructive approach in dealing with such applications and exercise the discretion which he possesses under the legislation.(3) Whilst it is understood from a practical point of view that the Commissioner cannot be expected to pro-actively verify trade mark existence in each and every PVRM application and look into the motives of the applicants, the Commissioner should at least operate a "watch list" of registered trade marks upon request or notification of the relevant right holders.(4) There is also one glaring preferential weakness in the Ordinance in that, whilst grounds for refusal include a mark which "... is likely to cause a reasonable person to believe that the motor vehicle on which the registration mark is displayed belongs to or the person using the vehicle represents any of ... (i) the Hong Kong Garrison or any office set up by the Central People's Government in HK (ii) the Government (iii) any public body (iv) any country or the government of any country (vi) an international organization...." This clearly shows that the Government is concerned about marks like PLA, PRC, HKSAR, SFC, HKMA, ICAC, WHO, WTO etc and this is entirely reasonable. Why the Government would, on the other hand, allow marks including PCCW, TVB, HKU, HSBC, KPMG, SONY etc which will have the same potential adverse effect on the private sector is a mystery to us. At this moment, we do not rule out the possibility of moving for a legislative amendment to address this flaw and we understand that queries were raised at the LegCo meeting on 18 October on the PVRM scheme.We are sure that, in the event that an infringement arises out of the use of a PVRM, the Commissioner would not wish to be sued as a joint tortfeasor, and the HKSAR government would want to avoid any embarrassment arising there from.From our own research, conferring a general discretion (without expressly referring to intellectual property issues) on the administrative body in dealing with PVRM-type applications seems also to be the case in Canada, Australia and New Zealand, although certain statutes in those jurisdictions expressly provide that potentially "confusing" (New Zealand) or "misleading" (Ontario) registration marks can be refused. The most explicit protection on trade mark owners is provided by the Northern Territory of Australia, where an administrative guideline stipulates that a personalised number plate cannot adopt a corporate company name, e.g. QANTAS, unless authorised by the company concerned and displayed on a vehicle registered in that company's name.In the circumstances, we would invite the Commissioner to reconsider his position and, in particular, his duty to exercise discretion to disallow known brands from being auctioned.We note that the next auction is scheduled to take place on 28 October when some major brand names are included and we await your reply as a matter of urgency.Yours sincerelyDavid O'Rearfor Chairman, Legal CommitteeHong Kong General Chamber of Commerce
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