In the case of Guy Neale and others v Nine Squares Pty Ltd, the Court of Appeals in Singapore held that Singapore marks were merely held on an express trust by Nine Squares.
By way of background, Mr. Neale and others including Aki, Kadek, WH Trading and WH Investments (hereinafter referred as “the Appellants”) ran a famous restaurant in tourist island of Bali, Indonesia. The Appellants were owners of Ku De Ta Bali trade mark and were members of a Partnership Company that ran the business for the Appellants.
The Partnership brought Nine Square (hereinafter referred to as “the Respondent”) for using the name or marks ‘Ku De Ta’ (hereinafter referred as “the ‘Ku De Ta’ name or mark”) and damages for passing off.
During the original proceedings in the Singapore High Court, the High Court had held that the ‘Ku De Ta’ name or mark was held by Respondent on trust for the Partnership and they must return or transfer it back the Partnership. However, the High Court had refused to invalidate the Respondent’s registered Singapore trade marks for Ku De Ta (hereinafter referred as “the Respondent’s Singapore Trade Marks”).
Feeling aggrieved, the Appellants had filed an appeal against the decision of the High Court from not revoking the Respondent’s Singapore Trade Marks.
The Court of Appeal considered issues with regards to the “Ku De Ta” name or mark prior to registration belongs to the Respondent or whether the Respondent’s Singapore Trade Marks were on an express or constructive trust for the Partnership.
The Court of Appeal had noted that the Appellants had argued that the use of license of the name “Ku De Ta” should be given to Partnership as the Respondent failed to register the Respondent’s Singapore Trade Marks in the name of the Partnership. The Appellants had pointed out that the Respondent intended to profit from the use of the Respondent’s Singapore Trade Marks by registering them under their name. The Appellants also argued that the registration of the Respondent’s Singapore Trade Marks was done in bad faith.
The Appellants argued that the court should impose a constructive trust for the Singapore Marks since the Defendant breached fiduciary duties and misappropriated the Partnership’s property.
However, the Court of Appeal had noted that there is no misappropriated partnership property that causes Respondent to register the Respondent’s Singapore Trade Marks. The Court of Appeal held that there is the Defendant did not usurp the Respondent’s Singapore Trade Marks which allegedly belong to the Partnership since the Respondent’s Singapore Trade Marks were registered in Singapore prior to the registration of the Partnership in Singapore. The Court of Appeal also held that the Appellants failed to prove constructive trust that has been imposed in respect of the Respondent’s Singapore Trade Marks.
With regards to invalidation of the Respondent’s Singapore Trade Marks, the Court of Appeal held that there was no bad faith, passing off or neither earlier mark being registered. The Court of Appeal held that there is “no substantial goodwill” for Ku De Ta and had noted that there is no earlier trade mark Ku De Ta mark registered in other countries like Indonesia where the restaurant and bar business was originally started by the Appellants.
In the judgment, the Court of Appeal held that the name “Ku De Ta” belongs to Partnership and they were given the rights to develop the name in and outside Bali. However, the Court of Appeal also held that the Respondent had created an express trust over both the Respondent’s Singapore Trade Marks and Partnership for the registration of both marks.
The Court of Appeal held that all benefits made by the Respondent in respect of Respondent’s Singapore Trade Marks were held on trust for the Partnership.