WONG TO YICK WOOD LOCK OINTMENT LTD v. HO MIU WAN (trading as SEUIH KAM TONG MEDICINE CO)

HCA1393/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1393 OF 2014

-------------------------

-------------------------

------------------------

DECISION

------------------------

Introduction

1.  The plaintiff brought this action to enforce its intellectual property rights and its now makes an application to strike out the defence of the defendant by its summons dated 25 April 2016 (“the Summons”). Though in the Summons, the plaintiff relies on all the grounds under Order 18. r.19, Rules of the High Court, Mr Pun, for the plaintiff, indicates that he would only seek to invoke the jurisdiction under Order 18 r.19(1)(a) and the inherent jurisdiction of this court.

2.  Hence, to determine this application, I should go no further than the pleadings. Unless this court is satisfied that it is plain and obvious that the defence is defective or unsustainable and/or discloses no defence in law, the court should not exercise its discretion to make any order for striking out.

Pleadings

Plaintiff’s claim

3.  In its Statement of Claim, the plaintiff complains about trade mark infringement and passing off on the part of the defendant in the course her retail business in medical products.

4.  First, the plaintiff is the registered owner of its word mark consisting of three stylized Chinese characters of “黃道益”: .[1] The plaintiff further is the registered owner of its device mark appearing as below:

5.  The plaintiff alleges that the defendant has infringed its two registered marks (collectively “the Marks”) by her dealing in or with medicated balm oil under and by reference to the marks “金牌道益”, “黃道老人” and “黃道人” (collectively “the Infringing Marks”).

6.  The plaintiff avers that the Infringing Marks and the get-up of the defendant’s products are confusingly and/or deceptively similar to the Marks and on products identical to the goods covered by the registration of the Marks. The plaintiff avers that the defendant’s use of the Infringing Marks in the course of her trade in her medicated oil or balm is likely to cause confusion on the part of the public.

7.  The plaintiff further pleads a number of instances of actual deception or confusion caused by the defendant’s use of the Infringing Marks.

8.  In the premises, the plaintiff avers that the defendant has committed trade mark infringement under section 18(3) and (4) of the Trade Marks Ordinance, Cap.559 (“TMO”).

9.  In regard to the tort of passing off, the plaintiff duly pleads the particulars of its alleged goodwill in the Marks and its get-up in respect of its medicated balm or oil products. It relies on more or less the same complaints to support its allegations that the defendant has passed off in Hong Kong its medicated balm or oil as and for the products of the plaintiff and/or endorsed by/associated with the plaintiff.

Defence

10.  The defendant has all along acted in person and she prepared her defence in the Chinese language. It consists of only one single paragraph dealing with both causes of action at the same time. With the assistance of a court interpreter, I have obtained its English translation of the whole text, which is as follows:

“I, Ho Miu Wan, am the operator of Seuih Kam Tong Medicine Company. All along we have been operating business of selling Chinese patent medicines in compliance with the Health Department’s guidelines of sale. We also obtained our products for sale according to the standard of Health Department. We have never received any document from any relevant authorities requiring us to cease the sale of our products with a reason that the names of three medicated ointments, namely Wong To Yan Wood Lock Ointment （黃道人活絡油）, Wong To Lo Yan Wood Lock Ointment (黃道老人活絡油) and Premier To Yick Wood Lock Ointment (金牌道益活絡油) were confused with and similar to the trademark of Wong To Yick Wood Lock Ointment. We are selling our products with explicit guidelines and clear distinctions. We have never confused our customers when selling any product. I have already returned Wong To Lo Yan Wood Lock Ointment (黃道老人活絡油), Wong To Yan Wood Lock Ointment （黃道人活絡油）and Premier To Yick Wood Lock Ointment (金牌道益活絡油) to the manufacturer at the earliest time and stopped the sale of the above three Wood Lock Ointment. I am willing to reach an out-of-court settlement with the legal representative of Wong To Yick Wood Lock Ointment Limited and resolve the dispute.

Defendant: Ho Miu Wan

Dated 10^th October 2014”

Analysis

11.  Mr Pun advances two major arguments in support of this application. First, he points out that the defendant does not expressly traverse the allegations of actual deception and/or confusion and thus she should be taken to have accepted the truth in such allegations. Second, he highlights that the subjective intention of the defendant that no confusion would be caused by virtue of her alleged distinctive matters is irrelevant and it is the objective fact that there has been such confusion that counts.

12.  It should be borne in mind that in the first place this application is to strike out a defence and not an application for judgment on admission based on Order 18 r.13. Further, though the same rules of pleadings govern the defence prepared by a defendant acting in person, I would not take a pedantic approach to strike out her defence merely on pleading points if such deficiencies are capable of being cured by amendments.

13.  In particular, Mr Pun agrees that a bare assertion made by the defendant in her defence that the Infringing Marks and the get-up of the defendant’s products have never caused confusion in the market would suffice. Whilst I accept that the defendant has not made such an assertion explicitly but I believe it is only the flip side of her assertion that the defendant has never confused its customers when selling its products. I do not think I can adopt such a blinkered approach here.

14.  What boils down to in this matter is whether the defendant’s alleged explicit guidelines and clear distinctions (“Defendant’s Distinctive Matters”) suffice to exclude her liability of trade mark infringement and/or passing off. I shall deal with each of the causes of action in turn.

Trade mark infringement

15.  It is imperative to examine the pleaded case of trade mark infringement. It is based on both sections 18(3) and (4) of the TMO. They provide:

S.18 (3) A person infringes a registered trade mark if-

▪   (a) he uses in the course of trade or business a sign which is similar trade mark in relation to goods or services which are identical or similar to those for which it is registered; and

▪   (b) the use of the sign in relation to those goods or services is likely to cause confusion on the part of the public.

S.18(4) A person infringes a registered trade mark if-

▪   (a) he uses in the course of trade or business a sign which is identical or similar to the trade mark in relation to goods or services which are not identical or similar to those for which the trade mark is registered;

▪   (b) the trade mark is entitled to protection under the Paris Convention as a well-known trade mark; and

▪   (c) the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.

16.  I shall first deal with the claim based on section 18(3). Having regard to the defence, I believe that the following observation of the learned editors in Kerly’s Law of Trade Marks and Trade Names (15^th Ed., 2011) at §14-088 serves to be a helpful starting point:

“The statutory protection is absolute in the sense that the user cannot escape by showing that by something outside his sign itself he has distinguished his goods or services from those of the registered proprietor.”

17.  The learned editors refer to a number of authorities to illustrate the foregoing principles. I need only refer to two of them.

18.  First, in Aktiebolaget Volvo and Anor. v Heritage (Leicester) Limited [2000] F.S.R. 253, the claimants owned various registered trade marks including the word “Volvo” registered in respect of, among other things, the maintenance and repair of vehicles. The defendant used to be the authorized dealer of the claimants licensed to use the Volvo mark. After the revocation of the dealership, the defendant continued to use a word mark of “Volvo” in a similar style albeit in conjunction with the words “independent” and “specialist” in much smaller print. Mr Justice Rattee found in a summary judgment application that the infringement under section 10(1) of the Trade Marks Act 1994 (on which section 18(1) of the TMO is modeled) proved.    

19.  Mr Justice Rattee held that in the case of a word trade mark, all that was necessary to constitute prime facie infringement under section 10(1) was the use of the identical word in the course of the trade as a distinct word, whether with or without other words or material added to it.

20.  In Julius Samaan Ltd v Tetrosyl Ltd [2006] E.T.M.R.75, the claimants were the owners of certain registered marks comprising the outline of a stylized fir or pine tree on a base. Such marks were used in respect of their air freshener products commonly used in motor cars over the years. The defendant began to market an air fresheners for cars in the shape of a fir tree decked out festively with snow and flashing lights which could be switched on and off. The claimants alleged that the sale of the defendant’s products amounted to an infringement of their marks under sections 10(2)(b) and (3) of the Trade Marks Act 1994 (on which sections 18(3) and (4) of the TMO are modeled) and to passing off.

21.  Mr Justice Kitchin found the registered marks of the claimants and the sign of the defendant to be confusingly similar and empathetically rejected the relevance of such distinguishing materials the defendant applied to its products outside the actual sign itself. The judge in his finding of trade mark infringement (but not passing off) simply ignored the box in which the defendant’s products were sold, the use of the words “Lumberjack Flashing air freshener” and all the particular circumstances in which the defendant’s products were marketed. The judge made it clear that the court must consider the likelihood of confusion arising from the use by the defendant of the offending sign, discounting added matters or circumstances.

22.  In light of these principles, I proceed to examine the sustainability of the defence. I note that the defendant has not provided any details about the Defendant’s Distinctive Matters but one thing is beyond dispute. The Defendant’s Distinctive Matters are only extraneous to the Infringing Marks themselves. Thus, the defendant cannot rely on the Defendant’s Distinctive Matters to suggest that there could be neither any actual confusion nor a likelihood of confusion.

23.  A further point to be noted is that the defendant’s averment that she has not received any actual complaint of confusion is not relevant and cannot afford her a valid defence in law. First of all, actual confusion could be caused without her knowledge. More importantly, it suffices for the plaintiff to prove the use of the defendant’s mark gives rise to a likelihood of confusion though there is not a single instance of actual confusion.

24.  As regards the plaintiff’s claim based on section 18(3), confusion is not a necessary ingredient to establish infringement thereunder at all. Mr Pun helpfully stresses that it is sufficient if the plaintiff can prove that the use of the defendant’s sign would give rise to a link with the plaintiff’s trade mark in the mind of the relevant public. The fact that for an average consumer of the earlier mark would be “brought to mind” by the later mark is itself tantamount to the establishment of a link between the two marks: Intel Corporation Inc. v CPM United Kingdom Ltd [2009] RPC 15 at §AG46.

25.  It is clear to me that nothing the defendant says in her defence can avert liability under this provision. She merely denies any misleading use of her marks and get-up of the packaging of her products.      

26.  In the premises, I conclude that the pleading of the defendant discloses no valid defence in law insofar as the plaintiff’s trade mark infringement claim is concerned. It is a plain and obvious case that I should exercise my discretion to strike it out and enter judgment against the defendant in respect of the plaintiff’s trade mark infringement claim.

Passing off

27.  I should give the defendant’s defence to this cause of action a separate consideration. I should remind myself of the essential elements of this tort authoritatively summarized by Lord Oliver in Reckitt & Colman Products Ltd v Borden Inc [1990] R.P.C. 341. One of them is, as adopted by Gault PNJ in Re Ping An Securities Ltd [2009] 12 HKCFAR 808 at §17, that the plaintiff must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff.

28.  In my judgment, the defence invites a debate as to whether there is such a misrepresentation on the part of the defendant. All the circumstances of the trade of her products to which the Infringing Marks are applied including the Defendant’s Distinctive Matters have to be considered:  Julius Samaan Ltd v Tetrosyl Ltd, supra. This is a triable issue in my view. I do not find it a clear case that I should dismiss the defendant’s contention in the defence without further ado.

29.  I therefore come to the conclusion that the plaintiff’s application to strike out the defence to its claim of passing off should be dismissed.

Conclusion and Dispositions

30.  To conclude, I accede to the plaintiff’s application in regard to its claim of trade mark infringement under sections 18(3) and (4) of the TMO, to which the defence fails to disclose a defence valid in law. I am satisfied that it is a plain and obvious case that the defence vis a vis this infringement claim should be struck out. The plaintiff may enter judgment against the defendant in respect of its trade mark infringement claim.

31.  On the other hand, I dismiss the plaintiff’s application to strike out the defendant’s defence to its passing off claim.

32.  Costs should follow the event. The plaintiff has succeeded in obtaining judgment in respect of its trade mark infringement claim and should be allowed to recover its costs from the defendant. However, I should take into account the fact that its claims consist of two causes of action and the plaintiff is now only entitled to enter judgment against the defendant in respect of one of them only. The defendant is allowed to defend the remaining one if she so wishes.

33.  In the circumstances, I make an order nisi that the defendant should pay 70% of the plaintiff’s costs of this action including such costs of and incidental to the Summons, to be taxed if not agreed.

34.  The defendant will be notified by my assistant that an arrangement can be made for her so that she can be explained this Decision in the Chinese language within 7 days hereof.

35.  Lastly, I thank Mr Pun for his assistance in this matter.