CHRISTIE MANSON & WOODS LTD AND ANOTHER v. CHRITRS (GROUP) LTD AND ANOTHER

HCA 1418/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1418 OF 2011

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J U D G M E N T

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1.  The plaintiffs’ claims are in infringement of registered trade marks and passing-off. They seek summary judgment on liability against the defendants.

BACKKGROUND

2.  P1 is an auction house.  P2 is its Hong Kong subsidiary.  They are respectively the owner and registered licensee of a number of marks “Christie’s 佳士得”, “Christie’s” and “佳士得”, registered in Hong Kong in a number of classes relevant to their business as auctioneers.

3.  D1 was incorporated in Hong Kong in 2008 under its former business name Chritrs Arts Auction Limited 佳士德藝術品拍賣有限公司. 

4.  The defendants have been using their previous company name containing the signs 佳士德 (“Ds’ Chinese sign”) and “Chritrs” (“Ds’ English sign”) to market and provide auctioneering services in places including Hong Kong between 2009 and 2011, and on related documents. 

5.  The defendants admit that D2 directs and controls the business of D1 and is personally involved in its business. Joint liability is not in issue.

6.  On 19 August 2011, the writ of summons was issued for (i) breach of section 18(3) of the Trade Marks Ordinance, Cap 559 (“the Ordinance”); (ii) breach of  section 18(4) of the Ordinance; and (iii) passing-off.  On the day following service of the writ, the defendants have by letter consented to the claim set out in the writ of summons and had agreed to immediately stop using 佳士得 or 佳士德 or any sign consisting of these 2 signs so as to fulfill a settlement (“the letter of consent”).

7.  On 11 November 2011, D1 changed its company name to its present name.

8.  The defendants have applied for and registered the English mark “Chritrs” on 7 November 2011, with the actual date of registration on 31 July 2012.

9.  The defendants admit that the plaintiffs are famous in the auctioneering business and so was/is D1.  D2 claims to be an expert in antiques and have been in the field for over 20 years. The defendants say that they have only used 佳士德 but not 佳士得.  The former mark is not confusingly similar to the latter.  D2 is the registered proprietor of the trade mark “Chritrs”, and using a registered trade mark does not infringe another registered trade mark.  D2 did not register the English mark in bad faith and did not use the marks with intent to defraud.  D2 had warned staff of D1 not to make misrepresentations to customers as to any connection with the plaintiffs and had posted a notice to clarify that the auction was not organized by the plaintiffs.  The defendants also claim to have a defence under section 19 of the Ordinance.  The defendants oppose summary judgment on the ground that they have a credible defence and the case involves material dispute of facts.

APPROPRIATENESS OF SUMMARY JUDGMENT

10.  There is nothing in principle to prevent the granting of summary judgment in intellectual property cases where there is no triable issue, even where the decision involves the making of finely balanced evaluation of qualitative matters by the judge: Tai Shing Diary Ltd v Maersk Hong Kong Ltd [2007] 2 HKC 23,paras 12-14, A Cheung J (as he then was).

11.  The burden remains on the defendants to show triable issues.  Judgment will only be given where the defence put forth is frivolous and practically moonshine: Man Earn Ltd v Wing Ting Fong, CACV 94/1995, 22 November 1995, at para 4, per Godfrey JA.  The court will not embark on a mini-trial on affirmations.  The question to be asked is not whether the defendants’ assertions are to be believed but whether those assertions are believable: Ng Shou Chun v Hung Chun San, CACV 182/1993, 26 January 1994, at para 16, per Godfrey JA.  That question is to be answered not by taking those assertions in isolation but in the context of so much of the background as is either undisputed or beyond reasonable dispute: Re Safe Rich Industries Ltd [1994] HKLY183.

12.  The issue on “likely to cause confusion on the part of the public” is one which has been accepted as being one which will be difficult to determine on a summary judgment application: Bayer Cropscience SA v Agropharm Ltd [2004] EHWC 1661; AAH Pharmaceuticals Ltd v Vantagemax Plc [2002] EWHC 990; Hong Kong Civil Procedure 2012, para 100/3/13.

13.  Examples of where the court refused to enter summary judgment in intellectual property cases are:

(i) Where the court considered that there was an issue as to actual confusion despite 3 specific instances presented before the court:  The General of the Salvation Army v Hong Kong Cat Salvation Army Ltd, CACV 288/2003, 18 June 2003, Woo VP.

(ii) Where there was an issue of fact as to similarity and confusion in the course of trade: Burmah Castrol Chemicals Ltd & anr v Wong Fu & Co Ltd HCA 4546/1991, Godfrey J (as he then was), 18 February 1992, pp 3-4.  In that case the plaintiff’s trade mark was worded “Thioflex” and the defendant’s “Thiolex”.  Godfrey J took the view that the issue required the court to consider evidence as to all the circumstances and that it was not sufficient simply to point to the resemblance between the marks as used and invite the court to enter summary judgment.  Ms Tam SC, rightly in my view, distinguished that case from the present one. There, the court was dealing with marks within the building and civil engineering industry which the learned judge could not claim to be part of. Here, the court may be in a position to resolve the question of resemblance and risk of confusion.

14.  Examples of the court granting summary judgment are:

(i) A situation where an offending sign was used on rice: Kui Yuen Fat Ltd v Reputation Ltd & anor [2005] 1 HKC 123.  The court took the view that even without any instances of actual confusion, any beholder was likely to be confused as to the marks of the parties.

(ii) Tai Shing Diary v Maersk Hong Kong Ltd [2007] 2 HKC 23: breach of copyright where the court compared the diaries produced by the parties and came to the conclusion that the defendant’s diaries were substantial reproduction of the plaintiff’s work and the defendant’s evidence did not provide any arguable evidence to rebut the statutory presumption of originality in the Copyright Ordinance.

15.  I now proceed to analyse the 3 heads of claim.

BREACH OF SECTION 18(3) OF THE ORDINANCE

16.  Section 18(3) of the Ordinance provides as follows:

“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 to the 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.”

17.  The issues of similarity and confusion are also applicable to the cause of action in passing off.

Similarity

18.  The case of Guccio Gucci SpA v Gucci [2009] 5 HKLRD 28, paras 79-82 contains a useful summary of the applicable principles:

“79. The question of similarity between the alleged offending signs and the registered trademarks is closely related to the question of likelihood of confusion. In this regard, I would gratefully adopt the summary of basic principles set out by Kitchin J in his judgment in the case of Julius Sämann Ltd v Tetrosyl Ltd (at para.51):

(a) The likelihood of confusion must be appreciated globally, taking account of all the relevant factors: Sabel BV v Puma AG [1998] 1 CMLR 455 at paras.22-24;

(b) The matter must be judged through the eyes of the average consumer of the goods in issue, who is deemed to be reasonably well informed and reasonably observant and circumspect: Sabel BV v Puma AG at paras.22-24: Lloyd Shuhfabrik Myer & Co GmbH v Klijsen Handel BV [1999] 2 CMLR 1343 at para.26-27;

(c) In order to assess the degree of similarity between the marks concerned the court must determine the degree of visual, aural or conceptual similarity between them and, where appropriate, evaluate the importance to be attached to those different elements taking into account the nature of the goods in question and the circumstances in which they are marketed: Lloyd Shuhfabrik Myer & Co GmbH v Klijsen Handel BV at paras.27-28;

(d) The visual, aural and conceptual similarities of the marks must therefore be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components. The perception of the marks in the mind of the average consumer plays a decisive role in the overall appreciation of the likelihood of confusion: Sabel BV v Puma AG at paras.22-24;

(e) The average consumer normally perceives a mark as a whole and does not proceed to analyse its various details: Sabel BV v Puma AG at paras.22-24;

(f) There is a greater likelihood of confusion where the earlier trademark has a highly distinctive character, either per se or because of the use that has been made of it: Sabel BV v Puma AG at paras.22-24;

(g) The average consumer rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind; further the average consumer’s level of attention is likely to vary according to the category of goods in question: Lloyd Shuhfabrik Myer & Co GmbH v Klijsen Handel BV at paras.26-27;

(h) Appreciation of the likelihood of confusion depends upon the degree of similarity between the goods. A lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods, and vice versa: Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc [1999] 1 CMLR 77 at paras.17-28;

(i) Mere association, in the sense that the later mark brings the earlier mark to mind, is not sufficient for the purpose of the assessment: Sabel BV v Puma AG at para.26;

(j) But the risk that the public might believe that the goods come from the same or economically linked undertakings does constitute a likelihood of confusion within the meaning of the section: Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc at paras.29-30.

80. Principles (i) and (j) above may need some explanation. The ECJ in Sabel BV v Puma AG (at para.10) alluded to three types of association as follows:

… The likelihood of association may arise in three sets of circumstances : (1) where the public confuses the sign and the mark in question (likelihood of direct confusion); (2) where the public makes a connection between the proprietors of the sign and those of the mark and confuses them (likelihood of indirect confusion and association); (3) where the public considers the sign to be similar to the mark and perception of the sign calls to mind the memory of the mark, although the two are not confused (likelihood of association in the strict sense).

81. It is only the first two types of association, ie those which give rise to a likelihood of either direct or indirect confusion, that are sufficient for the purpose of infringement. Mere association which the public might make between two trademarks as a result of their analogous semantic content is not in itself a sufficient ground for concluding that there is a likelihood of confusion (See Sabel BV v Puma AG at para.26).

82. As Lewison J explained in the O2 Holdings Ltd v Hutchison 3G Ltd mentioned above (at para.125):

The first kind of confusion takes place where the public considers that the sign and the mark denote a common origin of the goods and services in question.  The second kind of confusion arises where the public considers that there is an economic link or association between the proprietor of the mark and the proprietor of the sign.  The third kind of association is where the [sign] merely calls the mark to mind, without making any linkage between the goods or services offered under the mark and the sign respectively; or without making any economic linkage between the proprietor of the mark and the sign respectively.”

19.  Applying the above principles, I find the Ds’ English sign and Ds’ Chinese sign to be very similar to the plaintiffs’ trade marks, whether used singly or in conjunction:

(i) Visually, the first 2 characters of the Ds' Chinese sign are identical with the plaintiffs’ although the 3^rd Chinese characters of “得” and “德” are clearly distinguishable in terms of their strokes and meaning.

(ii) Although the English spelling of “Christie” and “Chritrs” are different, the 2 marks look alike.

(iii) “Christies 佳士得” and “Chritrs 佳士德” look similar.

(iv) Aurally, there is no difference in pronunciation between 佳士得 and 佳士德 in Cantonese/Putonghua.

(v) “佳士得” and “佳士德” are made up phrases purporting to be Chinese transliteration of the plaintiffs’ English mark.  Ds’ English mark has no proper pronounciation.

(vi) Conceptually, both the plaintiffs and defendants’ marks are related to the auctioneering business.

20.  Ms Wong, counsel for the defendants, submits that the defendants’ signs have a diamond-shaped logo beside them whereas the plaintiffs’ have no logo at all.  The Chinese characters in the plaintiffs’ trade mark are in an artistic calligraphic style.  The orientation of the Chinese characters is different.  The trade marks of both parties, when looked at as a whole, includes both English and Chinese characters, and are noticeably different.

21.  As pointed out by Ms Tam SC, counsel for the plaintiffs, the diamond shaped logo was not referred to in the advertisements or newspaper articles.  There was no evidence that the defendants marketed the logo to gain reputation.  The logo was of relatively little significance because it was the defendants’ signs in words and Chinese pronunciation that formed the distinctive and dominant components and gave the signs their real identity.

22.  Ms Wong also submits that there was no evidence of aural promotion or marketing of the Ds’ Chinese sign.  That in my view is irrelevant because a reader might read the sign to himself.  Moreover, Chinese readers who are unfamiliar with English and have only an imperfect recollection of the plaintiffs’ Chinese mark may consider the term 佳士德 and 佳士得 to mean one and the same entity.  In this respect, one notes that the defendants’ materials and websites contained information largely in Chinese.  The English materials never appeared without Ds’ Chinese sign (except in that notice to the plaintiffs’ customer Mr Zhao who made the enquiry.)

Likelihood of causing confusion

23.  Confusion is a separate question from similarity: Halsbury’s Laws of Hong Kong, para 225.551.  Section 7(2) of the Ordinance provides:

“For greater certainty, in determining for the purposes of this Ordinance whether the use of a sign is likely to cause confusion on the part of the public, the Registrar or the court may take into account all factors relevant in the circumstances, including whether the use is likely to be associated with a registered trade mark.”

24.  The test is whether on the balance of probabilities “a substantial number of members of the public” would be misled into purchasing the defendants’ product in the belief that it was the plaintiffs’: Neutrogena Corp v Golden Ltd [1996] RPC 473, CA; Halsbury’s Laws of Hong Kong, para 225.551, footnote 16.  It involves forming an overall (global) assessment as to whether there is likely to be significant consumer confusion.

25.  It is not necessary to prove actual deception, though evidence of actual confusion is likely to be very persuasive: Kerly’s Law of Trade Marks & Trade Names, 15^th ed,para 14-087.

26.  On what constitutes a substantial number of members of the public, the Court of Appeal in the Neutrogena case says, at pp 481-482:

“It is, of course, the effect on the goodwill of Neutrogena which matters. It is not a defence to passing off that many of a defendant’s sales do not cause deception or confusion. There is passing off even if most of the people are not fooled most of the time but enough are for enough of the time. By “enough” I mean a substantial number of the plaintiff’s customers or potential customers deceived for there to be a real effect on the plaintiff's trade or goodwill. In this case (where most of these are probably not confused) the crucial question is whether or not the plaintiffs have established a sufficient degree of confusion and deception to take the case above a de minimis level[1]. For there are always some people who are confused and even when products and names are well-differentiated, mistakes do occur.”

27.  The matter must be judged through the eyes of the average consumer of the goods in issue who is deemed to be reasonably well informed and reasonably conversant and circumspect: Guccio Gucci SpA v Gucci, at para 79(b) cited above.

28.  A global assessment of the likelihood of confusion implies some interdependence between the relevant factors, and in particular a similarity between the trade marks and between these goods or services. Accordingly, a lesser degree of similarity between these goods or services may be offset by a greater degree of similarity between the marks, and vice versa. See Canon Kabushiki Kaisha v Metro Goldwyn Mayer Inc [1999] RPC 117 at p 132.

29.  In the present case, the services and goods on which the plaintiffs’ and defendants’ marks are used are both in the auctioneering business. Accordingly, there is nothing to offset the high degree of similarity in considering the likely confusing effects in the use of the defendants’ signs.

30.  On the issue of confusion, the plaintiffs have adduced 5 heads of evidence:

(i) The defendants’ own act of posting up a notice outside the entrance at an auction venue, allegedly to avoid confusion.

(ii) Conversations between the plaintiffs’ investigators at one of the auctions held by the defendants showing that a number of attendees were confused as to the defendants’ connection with the plaintiffs.

(iii) An inquiry from customers who sought clarification as to connection between the defendants and plaintiffs.

(iv) Media’s confusion of the Chinese marks of the parties.

(v) The admission of the defendants.

(i) Defendants’ posting up of a notice outside the entrance at an auction venue, allegedly to avoid confusion

31.  The notice (of an unidentified date) allegedly stated that the auction was not organized by the plaintiffs.  The plaintiffs say that it was an admission that the Ds’ English sign and Ds’ Chinese sign are similar or confusing to those of the plaintiffs. 

32.  The defendants say that they recognize the plaintiffs as famous, but D1 was famous too.  Given the concern of the plaintiffs in placing 2 clarification notices on the newspapers in February 2009 and November 2010 and the issuance of the cease and desist letter dated 4 May 2011, Ms Wong submits that it was a matter of caution that D1 posted up such a notice to allay the concern of the plaintiffs as well as to maintain the goodwill of D1.  This was counsel’s submission and not the defendants’ case on affirmation.  However, the sufficiency of such notice, coupled with D2’s warning to his colleagues not to make false representation to customers, remain arguable issues of fact.

 (ii) Conversations between the plaintiffs’ investigators and attendees at an auction.

33.  Ms Wong submits that the plaintiffs’ reliance on the several exchanges with a few “attendees” at the auctions to substantiate their case on confusion could by no means represent confusion of a “substantial proportion of the public”. 

“The average consumer test is conceptually different from the ‘substantial proportion of the public’ test applied in passing-off cases, but in the end they come to the same thing. If a ‘substantial proportion’ of the relevant consumers are likely to be confused, so will the average consumer and vice versa. Both approaches guard against too ‘nanny’ a view of protection; to confuse only the careless or stupid is not enough.

The correct test is whether there is a risk that the public might believe that the goods or services in question come from the same or economically linked undertakings.” Kerly’s, 14-090 and 091.

34.  I do not think the law is entirely concerned with the number of the public members confused. 

35.  Ms Wong further makes the point that one of the basic rules for conducting a survey, in order for it to have probative value, is that the questions asked must not be leading in nature but must be open-ended.  The requirements are:

“The basic rules for the conduct of a survey, in order for it to be probative, were set out by Whitford J. in Imperial v Philip Morris [1984] R.P.C. 293 at 302-303. The requirements are:

(1) All surveys conducted, their methodology and results must be disclosed.

(2) The totality of all answers must be disclosed.

(3) The questions asked must not be leading.

(4) The questions asked must not lead the interviewee into a field of speculation upon which he would not otherwise have embarked.

(5) Exact answers and not abbreviations must be provided.

(6) Coding must be accurately carried out, and the coding methods disclosed.

(7) The instructions given to the interviewers must be disclosed.”

Kerly’s Law of Trade Marks and Trade Names, 15^th ed, at para 21-024

“There is an important point in many of the cases where a selection of members of the public are called to give evidence. It concerns the issue of whether they can be relied upon as in some way representative of the views of a wider group, often the general public. In the context of a witness collection exercise, the claimant is not seeking to establish some statistically significant result which can be extrapolated from the sample to the wider population. In those cases where a judge has relied on the evidence of “live” members of the public, it occurs because the judge forms the view that they are normal people and broadly representative. …” (at para 21-028)

“In the absence of evidence which persuades the Court that the “live” members of the public are in some way representative, their evidence may be disregarded. …” (at para 21-029)

36.  I do not regard the evidence adduced by the plaintiffs under this head as in the nature of a survey or witness collection exercise. The investigation purported to be conversations between a stranger (the investigator) and other strangers (the attendees) outside the auction venue. If those asked at the venue of auction indicated their confusion, whether the attendees had attended the auction was irrelevant: Kerly’s, para 9-101.  I agree with Ms Wong that the identity, background and purpose of attendance of the attendees were unknown.  So were the criteria for selection of the attendees.  However, those matters go to the weight rather than admissibility of the evidence. 

37.  My views of the exchanges between the plaintiffs’ investigators and the attendees are as follows:

(a) In relation to male E, leading questions were asked as to whether 佳士德 was famous and was a foreign company.  However, male E volunteered to state that it was a UK company as famous as Sotheby’s (which the court can take judicial notice of, is a famous auction house).  I accept it was evidence of confusion.

(b) In relation to male H, all questions asked were leading.  H offered one remark – that 佳士德 was a branch of a foreign company. 

(c) In relation to male G and Mr Choi, all that the exchanges established was that 佳士德 was famous and was a foreign company.  There was a reference to 佳士德 being as famous as Sotheby.  I accept it was evidence of confusion.

(d) In relation to Mr Lee, his answers showed confusion with 佳士得 in Hong Kong, which was one of the 2 most famous, the other being Sotheby’s.  Mr Lee considered that 佳士得 had an office in London and a Hong Kong branch.  This was another piece of confusion.

(e) Male E’s answers were equivocal.  He was not even sure if there was only one 佳士德, the one which was famous.

(f) Mr Poon said that 佳士德 was famous and had held international auctions.  Given that D1 claimed itself to be famous and had held auctions in several countries, this could have been a reference to D1.

(g) Another Mr Lee said that 佳士德 had many centres in England, other countries, and even Hong Kong and Taiwan.

38.  I take on board Ms Wong’s comments that leading questions had been asked of the attendees.  Save for (a), (c) and (d), the answers were equivocal and merely showed佳士得/佳士德 to be famous, and/or was a foreign company.  That could be a reference to D1 who claim to be famous too, and had held auctions in various places.  There was little available to assess if the attendees in question were the average consumers or had called the plaintiffs’ marks to mind.  There are, I find, issues of fact as to likelihood of confusion under this head of evidence.

(iii)  An inquiry from customers who sought clarification as to connection between the defendants and plaintiffs

39.  Only 1  customer sought clarification, in September 2010, as to whether an email from D1 advertising its auctioneering service in Hong Kong originated from Christie’s.  It showed confusion in relation to the English but not Chinese marks.

(iv)  Media’s  confusion of the Chinese marks of the parties

40.  One 李八方 wrote in an internet article dated 9 November 2010 on the plaintiffs’ clarification notice on the preceding day warning customers that D1 was not related to the plaintiffs. He/she also reported on the comment of someone purportedly from 佳士德 who said that D1 had nothing to do with 佳士得; that they (presumably meaning 佳士得) had complained to the international internet association about Chritrs’ passing off but judgment was in favour of Chritrs.

41.  I do not think that article showed confusion of the writer or the reader.

42.  A clear piece of evidence of media confusion of the Chinese marks was that 羊城晚報mistakenly reporting on 16 August 2011 on the auction by 佳士德 to be that of 佳士得.  The same newspaper actually used both Chinese marks in the same article.  An apology notice was given on 18 August 2011.

(v)  Admission of the defendants

43.  The letter of consent was a clear piece of evidence of the defendants’ admission of similarity of the parties’ trade marks and likelihood of confusion caused by the defendants’ signs, and so the defendants had better stop using them.

44.  In summary, I find three actual confusions of Ds’ Chinese sign at the auction venue, one customer confusion as to Ds’ English sign and one press confusion as to Ds’ Chinese sign.  Given that the plaintiffs were aware of the defendants’ infringement of trade marks since January 2009, the evidence now before the court (excluding item (v)) as to confusion cannot be said to be substantial or weighty or representative of the views of the average consumer for there to be a real effect on the plaintiffs’ goodwill: Neutrogena case.  If the evidence has stopped at the cumulative effect of the 4 heads of evidence (excluding item (v)), I am of the view that the risk of confusion is an issue to be tried in this case.

45.  The admission in (v) is, however, weighty in showing the guilt of the defendants. 

46.  There is also some absence of evidence that is worth mentioning.  There is a deafening silence as to how the defendants’ signs came to be adopted in the first place, in a business identical to the plaintiffs’.  There was no explanation as to why the unpronounceable name “Christrs” was adopted and bore such visual similarity to the plaintiffs’ English mark. Christrs was not even a transliteration of Ds’ Chinese sign. 

47.  Further, the defendants have not provided evidence as to how they tried to distinguish themselves from the plaintiffs.  What was claimed as clarification by D2 was merely responding to questions from 李八方 (see para 40 above).  Even that, as Ms Tam SC describes, was an exploitation by D2 of the opportunity to assert a right to continue using the offending signs.  There was no evidence of active steps taken by the defendants to clarify the confusion created by their marks.

48.  I agree with Ms Tam SC that the “absent evidence” leads the court to draw the adverse inference that the use of the defendants’ signs in the same business as the plaintiffs’ was done with the intent to create direct confusion in the minds of the public.  That was so whether the defendants’ signs were used singly or jointly.

49.  The actual confusions (though limited) considered with the absent evidence point clearly to a case of infringement of section 18(3) of the Ordinance. 

BREACH OF SECTION 18(4)OF THE ORDINANCE

50.  Section 18(4) of the Ordinance refers to a type of infringement which can be established without any actual confusion being demonstrated:

“(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.”

51.  Under sub-section 18(4)(a), although the wording suggests that the application of the sub-section is confined to the use of the similar mark on goods or services “not identical or similar” to those for which the well-known mark is registered, it has been authoritatively decided that it ought to be read to apply to the use by the defendant on goods and services “whether or not similar or identical”: Adidas-Salomon AG v Fitness World Trading Ltd  [2004] FSR 21,paras 13-22.

52.  Section 18(4)(a) was clearly fulfilled having regard to the above analyses on similarity.

53.  To satisfy section 18(4)(b), section 4(1) provides that

“4(1) References in this Ordinance to a trade mark which is entitled to protection under the Paris Convention as a well-known trade mark shall be construed as references to a trade mark which is well known in Hong Kong and which is the trade mark of a person who–

(a) is a national of, or is domiciled or ordinarily resident in, a Paris Convention country or WTO member;

(b) has a right of abode in Hong Kong; or

(c) has a real and effective industrial or commercial establishment in a Paris Convention country, a WTO member or Hong Kong,

whether or not that person carries on business in Hong Kong or owns any goodwill in a business in Hong Kong.

(2) In determining for the purposes of subsection (1) whether a trade mark is well known in Hong Kong, the Registrar or the court shall have regard to Schedule 2.

(3) References in this Ordinance to the owner of a well-known trade mark shall be construed in accordance with subsection (1).”

54.  Ms Wong submits that there is no evidence that meets the requirements under section 18(4)(b).  I disagree.  P1 is the owner of the trade marks.  It is a UK company and hence of a Paris Convention country and member of WTO.  It has a real and effective industrial or commercial establishment in UK and Hong Kong.  The plaintiffs fall within section 4(1)(c).  The plaintiffs’ trade marks are entitled to protection. 

55.  As to whether those trade marks are famous, Schedule 2 of the Ordinance sets out the factors for consideration:

“ 1(1) In determining for the purposes of section 4 (meaning of "well-known trade mark") whether a trade mark is well known in Hong Kong, the Registrar or the court shall take into account any factors from which it may be inferred that the trade mark is well known in Hong Kong.

(2) In particular, the Registrar or the court shall consider any information submitted to the Registrar or the court from which it may be inferred that the trade mark is, or is not, well known in Hong Kong, including, but not limited to, information concerning the following–

(a) the degree of knowledge or recognition of the trade mark in the relevant sectors of the public;

(b) the duration, extent and geographical area of any use of the trade mark;

(c) the duration, extent and geographical area of any promotion of the trade mark, including advertising or publicity and the presentation, at fairs or exhibitions, of the goods or services to which the trade mark applies;

(d) the duration and geographical area of any registrations, or any applications for registration, of the trade mark, to the extent that they reflect use or recognition of the trade mark;

(e) the record of successful enforcement of rights in the trade mark, in particular, the extent to which the trade mark has been recognized as a well-known trade mark by competent authorities in foreign jurisdictions; and

(f) the value associated with the trade mark.”

56.  The defendants admitted on affirmation that the plaintiffs are very famous.  However, it is submitted by Ms Wong that the defence did not admit that the plaintiffs’ had substantial reputation and goodwill in Hong Kong. The affidavit of the plaintiffs just repeated the averment but did not provide support.  Ms Wong also submits that being famous was not equivalent to being well-known in Hong Kong.  She submits that the admission was a casual remark and there was no specification of when the plaintiffs became famous.

57.  With respect, paras 12-15 of the plaintiffs’ supporting affirmation referred specifically to the goodwill and reputation of the plaintiffs.  I am unable to see the distinction between being famous and well-known.  The defendants’ admission was very clear.  It was up to the defendants to condescend upon particulars when they raise an issue; they failed to do so.  I find the plaintiffs’ trade marks to be well-known in Hong Kong.

58.  Ms Wong submits that the questions of similarity and confusion of the marks, and whether the plaintiffs’ trade marks are entitled to protection under the Paris Convention are questions of fact that may even need expert evidence.  I only agree to the extent that these are questions of fact, but not that expert evidence is required.  Whether two marks are deceptively similar is for the judge to decide and he is entitled to make a decision based on his own experience even in the absence of evidence: Kerly’s, paras 18-235, 18-237, fn 596.

59.  The finding of unfair advantage or detriment under section 18(4)(c) depends on the consumer finding some link between the 2 marks by the relevant section of the public, even though the similarity did not confuse them.  The threshold is lower than there being a likelihood of confusion: Intel Corporation v PM United Kingdom Ltd [2009] RPC 15,page 495, para 30.  The establishment of such a link must be assessed globally: Intel, page 496, at para 41.  The more distinctive the earlier mark, the more likely the link is established and for there to be detriment found: Intel, at pp 497 and 499, paras 51-55, 69.

60.  The fact that for the average consumer, who is reasonably well informed and reasonably observant and circumspect, the later mark calls the earlier mark with a reputation to mind is tantamount to the existence of such a link between the conflicting marks.  In a case where confusion is established, there must a fortiori be the necessary “link” established.

61.  To those who make the connection, the offending signs are misappropriating the cachet which is attached to the well-known mark, and taking advantage of the goodwill which attaches to it: Hasbro Inc & ors v 123 Nahrmittel GmbH & Marketing Promotional Service Ltd,paras 218 and 219.

“…where a third party attempts, through the use of a sign similar to a mark with a reputation, to ride on the coat-tails of that mark in order to benefit from its power of attraction, its reputation and its prestige, and to exploit, without paying any financial compensation and without being required to make efforts of his own in that regard, the marketing effort expended by the proprietor of that mark in order to create and maintain the image of that mark, the advantage resulting from such use must be considered to be an advantage that has been unfairly taken of the distinctive character or the repute of that mark.” L’Oreal SA v Bellure NV [2010] RPC1,para 49.

62.  The plaintiffs’ marks arouse immediate association with the auction business and expensive items for auction.  The use of the defendants’ signs in the auctioneering business calls to mind the plaintiffs’ marks.  The defendants were taking unfair advantage of and misappropriating the cachet attached to the repute of the plaintiffs’ trade marks.  That clearly caused detriment to the plaintiffs.

63.  The burden of showing due cause in section 18(4)(c) is on the proprietor of the later mark: Intel Corp v CPM United Kingdom Ltd [2009] PRC 15at page 496.  The meaning of “without due cause” has been considered in O2 Holdings Ltd v Hutchison 3G Ltd [2006] RPC 29, para 137:

“The words ‘without due cause’ govern both the use of the sign, and the taking of unfair advantage: Premier Brands at 790. Quite what amounts to due cause is not easy to identify. But in Premier Brands Neuberger J said that the issue was not whether the defendant could be said to be acting ‘in good faith’ or ‘for good and honest commercial reasons’. He cited with apparent approval a statement by the Benelux Court to the following effect:

What this require, as a rule, is that the user (of the mark) is under such a compulsion to use this very mark that he cannot honestly be asked to refrain from doing so regardless of the damage the owner of the mark would suffer from such use, or that the user is entitled to the use of the mark in his own right and does not have to yield this right to that of the owner of the mark …”

64.  Where due cause is not shown, the advantage must be deemed to be unfair: L’Oreal v Bellure [2010] RPC 1 at para AG103-108; judgment of European Court of Justice at para 49 (P 10). 

65.  There is no attempt to demonstrate any “cause” in using such closely resembling marks when D2 admitted that the plaintiffs were famous.  See in particular paras 46-48 above.  There is nothing to rebut the deemed unfair advantage gained by the defendants.

66.  I am satisfied that there was infringement under section 18(4).

DEFENCE UNDER SECTION 19 OF THE ORDINANCE

67.  The defendants rely on section 19(2) which provides that:

“A registered trade mark is not infringed by the use of another registered trade mark in relation to goods or services for which the latter is registered (but see section 53(9) for the effect of a declaration of invalidity of registration).”

68.  The actual registration of the Ds’ English mark (not even the Chinese mark) was only on 31 July 2012.  All the acts complained of occurred before the date of application for registration (which was nearly 3 months after the writ was issued).  Accordingly the defence under section 19(2) is unsustainable.

PASSING OFF

69.  The 3 elements of the law of passing off are (i) goodwill acquired by the plaintiff in his goods, name and mark; (ii) misrepresentation by the defendant leading to confusion (or deception); and (iii) damage to the plaintiffs: Clerk and Lindsell on Torts, 20^th ed, para 26-03. 

70.  There is no question of goodwill, the plaintiffs’ marks being famous and in use for years. 

71.  As regards misrepresentation, it has been stated that

“The misrepresentation in passing-off is almost always conveyed by the defendant adopting for his own goods or business some material such as a name, mark, get up or other sign which is deceptively similar to material distinctive of the claimant.” Wadlow, The Law of Passing-off,4^th ed, para 1-015.

72.  It is well settled that evidence of actual confusion is not a precondition to a finding of misrepresentation.  The court may rely on likelihood of confusion in respect of the use of the offending marks: Guccio Gucci SpA,at paras 128, 136 and 137.  If intent to deceive is proved, it is a short step to proving that the intent has been successful.

73.  The same analyses on confusion above apply. 

74.  The claim that the defendants were famous for antique auctions in Taiwan, Singapore and USA, even if established, cannot assist the defendants, because goodwill as proprietary right is territorial: Wadlow, The Law of Passing off, 4^th ed,para 3-079.

75.  The confusion was clearly of a type damaging to the plaintiffs’ valuable goodwill.  The plaintiffs have substantial investment in advertisement, promotion and marketing.  Their trade marks are distinctive of the services of the plaintiffs.  The defendants’ continued use of their marks will dilute the distinctiveness of the plaintiffs’ trade marks.

76.  Registration of the defendants’ English trade mark does not affect the plaintiffs’ cause of action in passing off.  Section 10(3) of the Ordinance provides that:

“10(3) No proceedings lie to prevent, or to recover damages for, the infringement of an unregistered trade mark but nothing in this Ordinance affects the law relating to passing off.”

77.  I am satisfied that all the elements for passing-off have been established in this case.

SUMMARY ON LIABILITY

78.  There are no triable issues shown.  The defence is practically moonshine.  The plaintiffs have established their case under section 18(3), 18(4) of the Ordinance and in passing off.

RELIEFS

79.  One head of reliefs is injunction restraining the defendants from infringing the plaintiffs’ trade marks or passing off.  It needs to be justified: Hong Kong Civil Procedure 2012, para 14/4/8.

80.  The defendants aver that after changing to its present name on 11 November 2011, D1 has never done auctions.  Ms Wong submits that there is no evidence that the defendants are engaging in similar business with the plaintiffs. 

81.  The new name with the addition of the word “Group” cannot assist in dispelling the effect of confusion.  D1’s webpage shows the signs of Chritrs, 佳士德 and 佳德 being used side by side/interchangeably, alongside Chritrs to maintain the effect of confusion.  D2’s affirmation to the fact of ceasing auctioneering since D1’s change of name was, in my view, done with the intention of fending off any injunctive relief.  Further, D2 has caused another company to be incorporated under the name of “Chritrs Auction Ltd 佳德拍賣有限公司 on 18 October 2011, shortly before D1 changed its name, with the same registered address as D1 and with D2 as the sole shareholder and director.  The name of the new company with the nature of business in auctioneering continue to create confusion. 

82.  In the premises, the grant of injunctive relief is just and necessary to protect the interest of the plaintiffs.

83.  There was damage to the goodwill and reputation of the plaintiffs to which the plaintiffs are entitled to damages to be assessed.

CONCLUSION

84.  I give judgment on liability to the plaintiffs in terms of paragraphs 1-6 of the Summons.  Under paragraph 3, the delivery up on oath of any infringing articles should be done within 21 days (unless the parties agree to some other time frame before sealing of the judgment).

COSTS

85.  I make an order nisi that costs should follow the event and be to the plaintiffs, summarily assessed in the sum of $400,000.

86.  I thank counsel for their very able arguments.