GEMOLOGY HEADQUARTERS INTERNATIONAL, LLC v. GEMOLOGICAL INSTITUTE OF AMERICA, INC.

HCMP 1456/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO1456 OF 2014

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D E C I S I O N

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1.  This is the appellant’s application to seek leave under Order 55 rule 7(2) to adduce further evidence and under Order 38 rule 2(3) to cross-examine the deponents of Statutory Declarations filed in the opposition proceedings.

2.  It is not disputed that the court does have power to give leave to file further evidence and to cross-examine deponents, but such power is rarely exercised.

Application to adduce further evidence

3.  The principles for granting leave to adduce further evidence have been set out in the case of Hunt-Wesson Inc’s Trade Mark Application [1996] RPC 233 at 242 (the “Swiss Miss” case) decided by Laddie J.  In summary, the following factors are relevant to the exercise of the court’s discretion:

(a) Whether the evidence could have been filed earlier and, if so, how much earlier.

(b) If it could have been, what explanation for the late filing has been offered to explain the delay.

(c) The nature of the mark.

(d) The nature of the objections to it.

(e) The potential significance of the new evidence.

(f) Whether or not the other side will be significantly prejudiced by the admission of the evidence in a way which cannot be compensated, egby an order for costs.

4.  Further, in Dualit Ltd v Rowlett Catering Appliances Ltd [1999] FSR 865, by the same learned Judge, it has been said that the onus was on the applicant to justify the exercise of the court’s discretion in its favour, and merely showing the evidence sought to be introduced was relevant is not enough.  At page 870 of the decision, it is stated that thus:

“… it is not enough simply to allow in any evidence which can be argued to be relevant and in effect to allow in any evidence which is relevant. If such a low hurdle is imposed, other applicants and opponents will no doubt look at the decision adverse to them in the Registry, redesign their evidence and start again on appeal. But proceedings before the Registry are not a dry run to test out the evidence to see which parts can be criticised so that the evidence can then be perfected for the purpose of the proper run before the High Court. It is important for parties to realise that the function of the Registry is to examine applications and to consider oppositions, and that they must put before the Registry the material which is to be relied upon in support of their cases.

In my view, it is just as important that it is brought home to litigants that they must put the best evidence available to them before the Registry as it is to ensure that the appeal is a fair resolution of the dispute between the parties.  It appears to me, therefore, that it is still necessary for the court to consider the issue of how important the evidence is, whether it could have been put in earlier and why it was not and the weight that evidence is likely to have at the appeal.”

5.  In the present application, the appellant seeks to adduce 5 classes of new evidence.  I pause to say, there is no supporting affidavit in support of the present application and I can only rely on the submission of Miss Mok given at the bar table.

6.  Class (a) was an overseas decision of opposition filed by the respondent against the GHI mark handed down after the date of the evidence in the opposition in the form of Statutory Declaration of one Nachum Krasnianski (previous evidence).  I was informed that the decision was not yet handed down at the date of the hearing before Mr Frederick Wong for the Registrar.  In my view, Miss Mok for the appellant has not begun to show the relevance of this overseas decision.  I am told that there had been lots of concurrent proceedings in jurisdictions worldwide.  The appellant had attempted to put in decisions of other jurisdictions before Mr Wong on the day of the hearing, but subsequently they were withdrawn.  Regardless of the failure to put in the evidence formally at that hearing, I am unable to see the relevance of decisions of these overseas jurisdictions.  The Registrar’s decision is often based on the law in Hong Kong and the circumstances in Hong Kong.  I am also told that the practice of the Trade Marks Registry is to refuse to have regard to decisions in other jurisdictions.

7.  In the premises, relevance not having been shown, it is not necessary to consider exercise of discretion to grant leave to adduce such evidence. 

8.  As regards classes (b) to (e), I say at the outset that the appellant has not even attempted to address requirements (a) and (b) in the Swiss Miss case.  It has not been explained whether the evidence sought to be adduced under classes (b) to (e) could have been filed earlier, and if it could have been, what the explanation for the failure to file had been.

9.  Class (b) concerns evidence relating to the practice of people purchasing diamonds in Hong Kong.  Such evidence was not relevant to the decision of the Registrar.  The appellant, at the time before the hearing, did not consider it necessary to file evidence along this line or to rebut what was adduced by the respondent at that hearing.  If this submission is to be accepted, clearly the appeal would be on a point of law as to whether or not the Registrar had rightly admitted and considered what should have been inadmissible evidence.  It will not be appropriate for the appellant to adduce irrelevant evidence in an appeal to show that the Registrar had wrongly relied on irrelevant evidence.

10.  In addition, the submission of Miss Mok showed that there had been a change of mind in the appellant as it had made a deliberate decision not to adduce rebuttal evidence before the Registrar, but now considers it fit to do so on appeal.

11.  Class (c) concerns the respondent’s promotion of its GIA marks alongside gemological laboratory with similar names.  It is said that there was some ulterior motive in what the respondent had done.

12.  With respect to Miss Mok, ulterior motive was not a relevant consideration before the Registrar.  This she very fairly admits.  If so, this class of evidence cannot be relevant on appeal.

13.  Class (d) concerns evidence in relation to business relationship between the respondent and parties which filed evidence for the respondent.  It is submitted that such evidence is to be filed in response to comments made in the decision of Mr Wong to show that the Registrar had erred in fact to rely on the respondent’s evidence when finding similarity between the appellant’s and the respondent’s marks.

14.  In my view, this clearly violated the principle in the case of Dualit. Clearly, the appellant as the losing party wishes to redesign its evidence having regard to the adverse decision against it and adduced new evidence on appeal.

15.  In any case, the purpose of adducing this class of evidence is to show that one Mr Chan and one Mr Zion were not impartial witnesses.  That, in my view, went to credibility of those witnesses, and findings on credibility is within the precinct of power of the Registrar.  On appeal, the appellant may, of course, seek to argue that the Registrar had erred in law in considering the evidence of those two witnesses.  But surely, this argument is not to be advanced with the existence of new evidence on appeal going to credibility of those two witnesses.

16.  Class (e) concerns the names and co-existence of other gemological bodies in Hong Kong.  It is said that this is to be filed in response to comments made in Mr Wong’s decision to show that the Registrar had erred in fact when finding that there was confusion between the appellant and the respondent’s marks.

17.  Again, the attempt to adduce new evidence clearly violated the principle of Dualit, in that the appellant wishes to redesign its evidence having regard to the adverse decision against it.  The evidence was not before the Registrar.  Miss Mok also informs this court that such evidence was not considered to be relevant at the time of the hearing due to the limited presence of the appellant in Hong Kong.  Mr Hughes corrected her to say that it was not limited presence, but non-existence in Hong Kong.

18.  Be that as it may, Miss Mok’s submission shows at best an error of judgment on the part of the appellant in deciding what evidence to put before the Registrar.  It is not a ground for seeking leave to adduce fresh evidence on appeal.

19.  In summary, the appellant has not begun to show why it needed to adduce evidence at this point of time after the decision was made, nor had it begun to show the potential relevance, let alone significance of the new evidence.  Requirement (e) in the Swiss Miss case has not been satisfied.

20.  Requirement (f) in the Swiss Miss case is not something that an applicant can freely use to override the other requirements in the Swiss Miss case.  Otherwise, to put it bluntly, an applicant can simply buy an opportunity to adduce new evidence.  This cannot be fair and just to the opponent.  It would also further delay the hearing of the appeal and require unnecessary costs to be incurred.

21.  In summary, no good reason has been made out for the court to exercise the discretion to grant leave to the appellant to adduce new evidence on the appeal.

Application to cross-examine deponents

22.  Miss Mok has since clarified that she only wishes to cross-examine Mr Chan and Mr Zion at the hearing of the appeal.  The power to cross-examine deponents on appeal can be found in paragraph 100/3/8 of the Hong Kong Civil Procedure 2014.  However, this power is exercised very rarely.

23.  Miss Mok seeks to justify her application by saying that the cross-examination will concern the ulterior motive of those two witnesses.  As the above analysis under leave to adduce new evidence has already discussed, ulterior motive of the two witnesses is not relevant and goes to credibility of those witnesses. There was no reason why the appellant did not seek to cross-examine those two witnesses before the Registrar. 

24.  In J Sainsbury Limited’s Application [1981] FSR 406 at 407, it has been stated that if there is good reason for wanting to cross-examine a deponent, the proper time to do so is before the superintending examiner and not on appeal.

25.  There was no reason why the appellant did not cross-examine Mr Chan and Mr Zion or seek leave to do so before the Registrar.  The application to cross-examine witnesses is not made out.

26.  I therefore dismiss these two applications by the appellant.