PETER BAUSER. FOTO-ELEKTRONIK AND ANOTHER v. PREMIER CAMERA TAIWAN LIMITED

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JUDGMENT

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Kempster, J.A.:

1. This is an appeal from a judgment of Deputy Judge Nazareth refusing to grant an interlocutory order restraining the defendants from infringing the copyright claimed by the plaintiffs in certain drawings apt for the moulding and manufacture of miniature cameras and requiring them to furnish on oath particulars of buyers and sellers. Instead directions were given to facilitate a speedy trial.

2. The learned Deputy Judge's refusal resulted from his findings, following a three day hearing in Chambers largely devoted to argument on discretionary bars to relief, that the plaintiffs had disentitled themselves to intervention by the Court by delay, involving prejudice to the defendants, and by failing to demonstrate what practitioners in the Courts of Equity have historically described as "clean hands." He considered that they had not fully disclosed all relevant facts and matters in their affidavits.

3. The first plaintiff sues as the successor in title of the German Corporation in which the relevant copyrights are said to have vested when the drawings were made and the second plaintiffs, a Hong Kong corporation, sue as their exclusive licensees. The finding that there was a serious question to be tried as between them and the defendants is put in issue, by Respondents' Notice, only insofar as it is contended that there is no evidence satisfying section 3(2) and (3) of the Copyright Act 1956 to show that copyright in the drawings ever came into existence at all. Having regard to the extensions to this section provided by The Copyright (International Conventions) Order 1979 (S.I. 1979 No. 1715) in due course applied to Hong Kong; to the evidence before us and to the civil burden of proof we find that such challenge fails. The existence of copyright in the drawings was also put in issue below so as to displace the presumption arising by reason of section 20(1)(a).

4. Delay in instituting proceedings may be found if a particular construction, giving the plaintiffs notice of infringement as from September 1983, is put on certain letters and telexes passing betwen the parties. On 16th June 1983 the second plaintiffs licenced the defendants, a Taiwanese corporation, to assemble in Taiwan, in accordance with parts and drawings provided, cameras solely for and on behalf of the Hong Kong Company. Apparently 20,000 cameras were to be made in the first instance and the defendants' telex of 18th October 1983 confirms this figure. On 2nd September 1983 the defendants telexed the second plaintiffs referring to an oral discussion to the apparent effect that they would buy tooling to produce cameras similar to those they were making for the second plaintiffs for their own purposes and that the second plaintiffs were to provide written authorisation for the use of relevant parts in the production of the cameras. On September 17th following the second plaintiffs authorised the defendants to assemble the cameras "on our behalf". Nonetheless, claiming the plaintiffs' licence so to do, the defendants have since manufactured cameras in accordance with the relevant drawings on a large scale, exported them through but not, with trifling exceptions, to Hong Kong and openly exhibited them at exhibitions held in Nevada in April and in Cologne in October of 1984. Representatives of the second plaintiffs saw these exhibits and conversations between them and the representatives of the defendants, the terms of which are in issue, ensued. Indeed, by telex dated 3rd June 1984 the defendants offered to sell cameras to the second plaintiffs but there was no indication that they were infringing copies. In May 1984 the first plaintiffs predecessors in title had complained in writing of infringement by the defendants and the defendants, also in writing, had challenged the complainants' "patent rights'''. However, nothing that could be regarded as an infringement of the copyrights alleged took place within this jurisdiction to the knowledge of the plaintiffs until, having seen an advertisement in a trade paper, they placed a trap order leading to a token importation in March of this year. The writ was issued on the 9th of that month. The second plaintiffs had meanwhile terminated the June 1983 licences, without explanation, on 9th November 1984 but negotiations continued between the parties as a telex from the defendants to the second plaintiffs dated the 27th of that month indicates. We cannot find in the circumstances presently disclosed unexplained or culpable delay by the plaintiffs in placing a trap order so as here to assert their rights let alone acquiescence to infringement by the defendants. We make no finding on the critical issues as to whether or not the defendants were entitled to do as they did or knew that their conduct would have constituted an infringement had it taken place within Hong Kong.

5. As to "clean hands" and non-disclosure the plaintiffs' evidence is contradictory in its description of the status of the first plaintiff and as regards ownership of the copyrights. The orders of June 16th 1983 are referred to only in the letter of 17th March 1983. There is no reference to their own infringement of certain related. Kodak patents. These discrepancies and omissions are, perhaps, unfortunate but certainly no more while the Kodak matter has no relevance to the plaintiffs' claim to protection for what they assert to be their own intellectual property rights save to explain why they needed to sub-contract work to Taiwan in the first place. It is true to say, however, that paragraph 13 of Mr. Kohl's affirmation of 13th March 1985 is somewhat disingenuous. All in all we cannot find the material findings of the learned Deputy Judge inhibiting the grant of relief sustainable. That being so he has erred in principle in the exercise of his discretion and the matter is at large for us to determine on well known principles.

6. "Success at trial" submit the plaintiffs "will avail us nothing since an award of damages for infringement, conversion and breaches of contract meanwhile occuring will be irrecoverable against Taiwanese defendants who, albeit they have submitted to the jurisdiction, have no assets in this Territory." It is common ground between the parties, though we express no opinion in this regard, that transshipment in Hong Kong waters constitutes importation within the meaning of section 5(2) and that an order of this Court would be effective. No offer by the defendants to bring monies within the jurisdiction, to keep accounts or to cease trading through Hong Kong has been forthcoming.

7. On the other side of the coin the disclosure of the names of buyers and sellers is not required as a matter of urgency and could not be enforced while the defendants contend that the plaintiffs are in no position to honour the cross-undertaking as to the substantial damage which the defendants would sustain were an interlocutory injunction to be granted. which would be required as a condition for the grant of such relief. The first plaintiff himself is outside the jurisdiction and has deposed to no assets within it The accounts furnished by the second plaintiffs and in particular the so called "balance sheet" are really not susceptible of proper analysis so as to constitute any evidence of their ability to honour an undertaking. This is a lacuna which could so easily have been filled had the second plaintiffs been in a position so to do.

8. We are not prepared on the basis of incomplete and contested evidence to make any finding as to the relative strength of the cases of the parties to this litigation and find ourselves unpersuaded that prior to trial which, if the parties apply themselves, may well take place before the end of the year, this Court should do other than preserve the status quo as at the time immediately preceding the institution of proceedings. At such time both plaintiffs and defendants had established businesses involving the buying and selling of cameras worldwide; such cameras being manufactured substantially in accordance with the same drawings. For the foregoing reasons which, we would emphasise, are different from those upon which the learned Deputy Judge based his decision, we would dismiss this appeal.

9. In conclusion we think it appropriate to express the view, based on experience not only of the large bundle of sometimes illegible documents put before us in this appeal, that an appropriate equivalent of the Practice Direction appearing in 1983 1 WLR 922 might well be helpful in Hong Kong.