Malayan Tobacco Distributor Ltd. vs United Kingdom Tobacco Co. Ltd.

Headnote Court Copy Facts Arguments Court observation Judicial Analysis Case Map Category Hierarchy Table of Content

1933 Supreme(SC) 54

Privy Council At Singapore
Thankerton, Tomlin , Justice Lords Atkin, JJ.
Malayan Tobacco Distributor Ltd. -Appellant
Versus
United Kingdom Tobacco Co. Ltd. -Resopndent
Appeal No. 96 of 1932
Decided On : 14-11-1933

Important Points

In a quia timet passing off action, a strong case for likely confusion is required. If products are physically distinct and the target market can distinguish them, the use of similar terms without proven fraudulent intent does not justify an injunction.

Subject

Intellectual Property - Passing Off

Headnote

(A) Passing off - Injunction - Quia timet action - In the absence of evidence of actual confusion, a strong case must be made to justify a conclusion that confusion will result from the actions of the defendant.

(B) Fraud - A finding of fraud cannot be sustained if no plea of fraud was properly raised on the pleadings, the case was not opened as one of fraud, and no questions were put to witnesses suggesting that fraud was being charged.

(C) Consumer Confusion - In determining whether a mark is calculated to deceive, the court must consider the specific characteristics of the target market, including literacy levels and the physical differences between the products, such as size and color.

Facts of the case:
Two importers of cheap cigarettes marketed products to a consumer base that was largely unable to read English but could recognize numerals. The respondents' cigarettes bore the numerals "21" and were sold at a price of two for one cent. The appellants introduced a brand using the words "twenty-one" and imagery of playing cards. The cigarettes were typically sold loose to consumers, meaning the packaging was not seen at the point of sale. The respondents sought an injunction to restrain the appellants from using the mark "twenty-one" or "21", alleging passing off.

Findings of Court:
The finding of fraud made by the lower courts was unsupported by evidence and improperly pleaded. Consequently, the finding of likely confusion, which was based on the fraudulent intent, was also unsustainable. The products differed in size and color, and the appellants' cigarettes lacked numerals, making confusion unlikely among consumers who are quick to recognize such differences.

Issues: Whether the use of the name "twenty-one" by the appellants was calculated to deceive consumers and lead to the passing off of their goods as those of the respondents, and whether the finding of fraudulent intent was supported by evidence.

Ratio Decidendi: In a quia timet action for passing off, the plaintiff must provide strong evidence that confusion is likely to occur. Where products are physically distinct and the target market is capable of distinguishing them, the use of a similar descriptive term or number does not necessarily constitute passing off, particularly when there is no evidence of fraudulent intent to appropriate goodwill.

Result: Appeal allowed.

Legal Category Hierarchy

Advocates Appeared:
F.F. MacNaghten, Robert Burrell, J. Whitehead, F.E. Bray, Stafford Cripps

Lord Tomlin:-

In this appeal the appellants who are the defendants in the action giving rise to the appeal seek to displace a judgment of the Supreme Court of the Straits Settlements affirmed by the Court of appeal of the Straits Settlements whereby the respondents who are the plaintiffs in the action obtained an injunction against the appellants restraining them from applying the mark or title 'twenty-one' in words or 21' in figures or any similar mark, device or title to any cigarettes manufactured by the appellants or to any cigarettes sold by them or to any carton, box, packet or container known as 'shell and slide' or other container of or for cigarettes manufactured, imported, stocked, sold or exposed for sale by the appellants, or to any box, packet label or wrapper used by the appellants in connexion with the sale of cigarettes unless such cigarettes be manufactured by the respondents, and from passing off by means of the said name, title or device of 'twenty-one' or 21' or any name, mark or title similar thereto, or any other means cigarettes of their own or other manufacture as and for cigarettes of the respondents' manufacture, and whereby also an order was made for the delivery up by the appellants of all offending articles.

Both the appellants and respondents are importers of cigarettes into the Straits Settlements and other parts of Malaya and market, and have marketed numerous brands of cigarettes of different grades, qualities and prices. The present case is concerned only with sales in the Strait Settlements of cheap grades of cigarettes purchased exclusively by Asiatics of whom approximately 80 per cent are Chinese speaking and the remainder mainly Malaya speaking. Most of these customers are unable to read or speak English, though some can recognize English numerals. The course of business in the case of these cheap grades of cigarettes is as follows: The importers sell the cigarettes in bulk packed in tins or packets to dealers, and the latter sell them to coffee-shop keepers and hawkers. The coffee shop keepers and hawkers usually offer them for sale to the ultimate consumers, loose, laid out in trays or plates or in some tin which may be the tin of any brand which the seller has, by him. Thus the consumer so buying does not see the tin, carton or packet in which the cigarettes are packed when sold by the importer to the dealer.

In November 1929, the respondents began to sell cigarettes in tins of 100 which bore a trade mark of crossed swords in gold on a red ground, the words "Golden Sword," and a price indication 2 for 1, meaning thereby two cigarettes for one cent. On the cigarettes themselves there was the trade mark of crossed swords and the numerals 21 printed in red. The appellants or their predecessors in business had for some years had upon the Straits Settlements market brands of cigarettes made up in containers having as a device a picture of playing cards upon them as, for example, a picture of two aces or four aces. In May 1931, the appellants put upon the market in question a new brand of cheap cigarettes at the price of two cigarettes for one cent. These cigarettes were larger and of a lighter colour than the respondents' Golden Sword" cigarettes. The appellants' cigarettes are fastened by crimping while the respondents' cigarettes are fastened by gumming. The appellants' cigarettes were packed in packets of ten. The packet bore a representation of an ace and king of hearts, the hand counting twenty-one in the game of Vingt-et-un and in the corresponding Chinese game of Ban Lak, with the words "twenty-one." The words "twenty-one cigarettes" also appeared in blue upon the cigarettes. The cigarettes were sold to dealers in cartons holding 25 packets. The words "twenty one" appeared on the cartons.

The writ was issued on 2nd June 1931, so that having regard to the short time which had elapsed between the appearance in the market of the appellants' cigarettes and the issue of the writ the action was