TSIT WING (HONG KONG) CO LTD AND OTHERS v. TWG TEA CO PTE LTD AND ANOTHER

HCA 2210/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2210 OF 2011

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REASONS FOR DECISIONS

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1.  This case has been fixed for trial to commence on 19 June 2013 with 14 days reserved. In the hearing on 1 March 2013, I made a number of decisions relating to the requests for discovery and interrogatories and the filing of witness statements. I now give my reasons for these decisions.

Specific discovery of letters of objections in respect of the defendants’ trade mark applications

2.  The plaintiffs seek specific discovery of the letters of objections issued by the trade mark offices against the defendants’ trade mark applications in jurisdictions where the objections were based on any of the 2^nd plaintiff’s trade marks bearing “TWG” (“the Letters of Objections”).

3.  In this action, the plaintiffs are claiming damages against the defendants for trade mark infringement and passing off for, inter alia, selling “TWG Tea” and other related products in the defendants’ tea salon in the IFC Mall in Central.

4.  In the hearing, Mr Shipp, counsel for the defendants, confirms that the particulars of the trade mark registrations in other jurisdictions or the co-existing registrations of the plaintiffs’ and the defendants’ trade marks in other jurisdictions are generally irrelevant for the court to consider the test of likelihood of confusion under ss 12 and 18 of the Trade Marks Ordinance, cap. 559 (“the TMO”), and the defendants are not relying on the co-existence of registrations to argue that the parties’ trade marks are distinguishable and the confusion is unlikely for the purpose of determining the trade mark infringement and passing off claims in Hong Kong.  In such circumstances, the Letters of Objections are not relevant for this particular purpose.

5.  Despite such crucial confirmation by the defendants, the Letters of Objections may still be relevant to other issues in the case.

6.  In §49 of the Re-Amended Statement of Claim, the plaintiffs aver that the defendants have set about their business plans in Hong Kong with full knowledge of the conflict and the likelihood of confusion between the use of the parties’ trade marks and well knowing the objections likely to be taken by the plaintiffs in relation to any proposed use in Hong Kong of any sign incorporating “TWG” as a dominant element.  In support of such allegation, the plaintiffs rely on, inter alia, the following 2 incidents:

(i)   the 1^st defendant sought the consent from the plaintiffs to use the “TWG” mark in South Korea in early 2011 (§§36, 37 and 50(1) of the Re-Amended Statement of Claim); and

(ii)   the parties had certain discussions about the use of the parties’ trade marks in Hong Kong in late 2011 (§§50(2) to 50(6) of the Re-Amended Statement of Claim).

7.  In reply to such averment, the defendants plead in §44 of the Re-Amended Defence that the defendants’ knowledge and intent are irrelevant to the issues of trade mark infringement and passing off.  But the matter does not end here.  The defendants plead in the alternative in §42(a) that, by reason of the co-existence of registrations of the parties’ trade marks in other jurisdictions including the Mainland, Taiwan and Singapore, there has been no issue of consent required in South Korea as alleged by the plaintiffs. In other words, since there are co-existing registrations in these jurisdictions, the defendants genuinely believed that the parties’ trade marks could co-exist in the same market without any confusion and there was no need for the defendants to seek the plaintiffs’ consent for the use of the defendants’ trade marks in South Korea (see also: §10 of the 4^th Affirmation of Tang Wai Shan Alice filed on behalf of the defendants).

8.  The plaintiffs complain that the defendants have not revealed the whole truth to the court.  The defendants have omitted to make reference to many more other jurisdictions where their attempts to register the “TWG” mark were met with obstacles by reason of the plaintiffs’ “TWG” earlier registrations or applications.  If there were indeed such obstacles, it is not open to the defendants to say that they genuinely believed that the parties’ trade marks could co-exist without any confusion.  Hence, in order to determine the merits of the defendants’ allegation, they should disclose the Letters of Objections (if any) so that the whole picture can be presented to the court for consideration.

9.  At this stage, the court is not able to make a final determination about the relevance of the South Korea incident, or whether the defendants’ knowledge and intent are relevant to any issues in the case. However, since the defendants have elected to rely on the co-existence of registrations to answer the plaintiffs’ allegations about knowledge and intent, the court should proceed on the basis that it remains a live issue in the case. The defendants should therefore disclose documents which are relevant to such issue, including the Letters of Objections, so that the court can have the full picture to determine the merits of the defendants’ allegation about the co-existence of registrations.  I so ordered in the hearing.

10.  Before I leave this subject, I must stress once again that the co-existence of registrations is only relevant to the issue of knowledge and intent as mentioned above.  Based on the defendants’ clarification mentioned earlier, it is not open to the defendants to rely on the co-existence of registrations to argue that the parties’ trade marks are distinguishable and confusion is unlikely for the purpose of determining the trade mark infringement and passing off claims in Hong Kong.

Interrogatories about the defendants’ sales figures

11.  The plaintiffs are also asking, by way of interrogatories, for the breakdown of the sales figures of the defendants by jurisdiction (including Hong Kong as one), in respect of each trade channel (wholesale and retail) in the period from 2008 to 2011.   There is no serious dispute between the parties about this application.

12.  In §§28 and 32(e) of the Re-Amended Defence, the defendants plead that they enjoy international reputation and goodwill, including in Hong Kong, in relation to the name “TWG Tea” and the defendants’ trade marks.

13.  In §§15 to 17 of the witness statement of Law Beng Chong, Gary (“Gary Law”), Gary Law provides the sales figures of the defendants’ TWG tea from 2008 (or 2009) to 2011 by reference to the following categories:

(i)   the sales channels including: (a) TWG tea salons and boutiques; (b) hotels, restaurants and airlines; and (c) corporate; and

(ii)   different geographical areas in the world including: (a) America; (b) Asia and Australasia; (iii) Europe; and (iv) Africa and Middle East.

14.  In trade mark infringement and passing off claims, there is no specific defence in law such as “international goodwill”. Apparently, the defendants are claiming that at the date of the writ, as their goods bearing those marks or their business operated by reference to those marks and traded outside Hong Kong are so well-known amongst Hong Kong public, they were distinguishable by themselves and no confusion could arise amongst a substantial number of members of the Hong Kong public.  In determining whether there was any such “overflowing” of the defendants’ international reputation into Hong Kong, it is necessary, says the plaintiffs, to examine the extent and nature of the alleged international reputation by reference to specific territories and trade channels.

15.  I agree.  However, since the defendants have made certain clarifications as to how they would run their defence at the trial, the scope of the interrogatories has to be modified accordingly.

16.  In the hearing, the defendants confirm that, in respect of the defendants’ reliance on the alleged international reputation and goodwill, they will only rely on the matters particularized under §§28 (a) to (d) of the Re-Amended Defence and will only rely on such reputation and goodwill existing at the material time in Hong Kong alone.  In other words, no matter what goodwill or reputation that the defendants enjoy outside Hong Kong, the members of the public in Hong Kong only get to know the defendants’ goodwill and reputation through the channels particularised in §§28 (a) to (d) of the Re-Amended Defence.  Further, the defendants agree to supply the sales figures to support the allegations contained therein by way of affidavit within 21 days.  In the case of any disagreement between the parties about the sufficiency of the particulars supplied, they are at liberty to make further application to the court.

17.  In view of the defendants’ clarification, the interrogatories would have to be limited to the particulars contained in §§28 (a) to (d) of the Re-Amended Defence.  The parties have no serious dispute about such issue.

Filing of further witness statements

18.  I then turn to the defendants’ application to file further witness statements.  In the hearing, I granted leave to the defendants to file the following witness statements:

(i)   3^rd witness statement of Wu Wilson Wai Sun;

(ii)   witness statement of Jin Hao Low;

(iii)   witness statement of Tang Wai Shan Alice;

(iv)   witness statement of Patricia Yin Shan Woo;

(v)   3^rd witness statement of Gary Lam subject to the deletion of §§13 to 21 of the statement; and

(vi)   witness statement of Kee Leng Tan.

19.  These witness statements mainly contain evidence relating to the likelihood of confusion arising from the defendants’ use of “TWG” trade marks in Hong Kong.  Undoubtedly, whether there is any likelihood of confusion is the crux issue in the plaintiffs’ trade mark infringement and passing off claims, and so the defendants should be given the opportunity to file further evidence to address such key issue of the case.

20.  I agree that the witness statements could have been filed earlier.  However, there is still some time before the commencement of the trial, and so the trial date would not be jeopardised by the filing of the additional witness statements.  Further, provided that the plaintiffs are given the opportunity to file further witness statements in reply, the plaintiffs should suffer no great prejudice by filing of these new witness statements.  Finally, by reason of the order for speedy trial, the parties have to face a very tight time schedule for the preparation of the trial.  In such circumstances, some allowance should be given to the parties and it is only fair to allow the defendants to present further evidence relating to the key issue of the case.  Hence, subject to the exception mentioned below, I exercised the discretion to allow the filing of the additional witness statements by the defendants.

21.  Despite that, I exclude §§13 to 21 of the 3^rd witness statement of Gary Lam.  These paragraphs consist purely of comments, opinion and arguments.  I agree with Ms Tam, SC, counsel for the plaintiffs, that these comments in the nature of opinion and submissions have no place in the witness statements.

22.  The defendants also seek leave to adduce the 3^rd witness statement of Miranda Barnes, who is the wife of one of the founders of the defendants’ business.  I agree with Ms Tam that Madam Barnes is trying to give expert opinion and comments as some kind of “branding expert” in her 3^rd witness statement.  Without first obtaining leave from the court for the filing of expert evidence, such kind of evidence should not be allowed to be included in a factual witness statement.

23.  In support of the application to file such witness statement, Mr Shipp submits that the evidence is only tendered to rebut the “branding” evidence put forward and relied upon by the plaintiffs.  As the plaintiffs’ witness statements do contain similar expert opinion and comments, the defendants should be given the opportunity to rebut such evidence at the trial.

24.  Despite the able submission of Mr Shipp, this is not the correct approach.  Without first obtaining the leave of the court to file expert evidence, both sides should not be allowed to adduce such evidence at the trial.  If the plaintiffs’ witness statements do contain such kind of evidence, the defendants should take out an appropriate application to strike out the relevant parts of the witness statements or to ask the trial judge to ignore such evidence at the trial.  It is certainly not a justification for the defendants to file expert evidence or comments without the leave of the court. Hence, I refused the defendants’ application to file the 3^rd witness statement of Madam Barnes.

25.  These are the reasons for the decisions I made in the hearing on 1 March 2013.