LEE YUEN HOUSEWARES CO LTD v. MOK WING KUN STEPHEN t/a WING TUNG & CO

HCA 1560/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1560 OF 2005

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

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

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

REASONS  FOR  DECISION

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

1. This is an action for infringement of copyright commenced by writ issued on 10 August 2005.  The plaintiff’s claim is that the defendant has infringed its copyright in certain cookie cutters by issuing infringing copies to the public, and for importing infringing copies into Hong Kong and exporting them from Hong Kong to France.

2. By summons dated 17 August 2006, the plaintiff seeks summary judgment against the defendant for permanent injunction restraining the defendant from infringing the plaintiff’s copyright, delivery up of infringing copies and related tools, and discovery of persons to whom the defendant had sold or distributed or offered to sell or supply the infringing copies and sources of the infringing copies sold by the defendant. The summons also seeks liberty to elect between an enquiry as to damages or an account of profits.

3. The plaintiff’s claim is in relation to five designs of cookie cutters. The five designs in question are :

(1)	“Foot”, model no 70620,
(2)	“Butterfly”, model no 70497
(3)	“Vehicle” model no 70421
(4)	“Bear and Heart” model no 70422
(5)	“Leaf” model no 70222.

4. By its Statement of Claim filed on 25 August 2005, the plaintiff claims both primary and secondary infringement against the defendant. For primary infringement, the claim is based on the issuance of the alleged infringing copies of the plaintiff’s cookie cutters to the public.  In relation to secondary infringement, import into HK and export to France of infringing copies are relied upon.

5. At the conclusion of the hearing before me on 23 November 2006, I gave final judgment in the plaintiff’s favour for its claim on primary infringement, and granted the plaintiff the injunctive relief and the discovery sought. I was prepared to give unconditional leave to defend the secondary infringement claim whereupon the plaintiff immediately elected for an account of profits on the primary infringement claim and abandoned the claimed for secondary infringement. I also ordered that the plaintiff should have 80% of its costs of the application and the action, to be taxed if not agreed.

6. I now set out the reasons why I so ordered.

Grounds of Defence

7. In broad terms, the grounds of defence relied on by the defendant are as follows.

8. The defendant denies that there has been any infringement of the plaintiff’s copyright. This is put in two ways. First, the defendant denies that the plaintiff was the owner of the copyright in the cookie cutters. Secondly, the defendant contends that the plaintiff has not  proved issuance of any infringing copies to the public to constitute primary infringement.

9. Originally, in relation to secondary infringement, the defendant denies knowledge.  The defendant also denies that the plaintiff has suffered any damage. But since the plaintiff no longer pursues the secondary infringement issue, and has elected for an account of profits, it is not necessary for me to go into these matters any further.

10. Thus the main issues before me are:

 

(1)	whether the plaintiff has proved that it owns the copyright in the cookie cutters in question;
(2)	whether the offending articles are copied from the plaintiff’s copyrighted products; and
(3)	whether there is any arguable defence open to the defendant that he has issued the alleged infringing copies to the public so as to constitute primary infringement.

11. I now turn to each of these issues.

Plaintiff’s copyright in the cookie cutters

12. The cookie cutters come in a set, with each set housed in a round container with a lid and a base. Printed on the inside bottom plate of the base of the container are colourful images of objects which correspond with the shapes of the cookie cutters in the set, except for the “Foot” set in which the cookie cutters are in the shape of a baby foot, while the printing on the bottom plate is a design with a foot printed inside many irregular and differently coloured shapes.

13. In support of its ownership of copyright in the cookie cutters, the plaintiff adduced affidavit evidence from Mr Hui Chung Hing, Timy. Mr Hui was the Assistant Merchandising Manager of the plaintiff and who deposed to the fact that he was the employee of the plaintiff who designed and created the drawings for the cookie cutters.  Mr Hui is also able to produce the original design drawings of most of the cookie cutters.  Some of the original drawings have been lost but in the light of those which are available I have no doubt that Mr Hui’s evidence is true.  Since Mr Hui produced the designs in his capacity as the plaintiff’s employee, the plaintiff was the owner of the copyright in those designs.

14. Despite an attempt to suggest that the designs of the cookie cutters are common and arguably not original, there is no credible evidence to contradict Mr Hui’s evidence.

15. In particular, I am satisfied that there the plaintiff has proved that it is the copyright owner and there is no arguable defence otherwise.

Copying

16. Although Mr Vincent Lam, counsel for the defendant, did not accept that the alleged infringing cookie cutters sold by the defendant were copied from the plaintiff’s products, there can be no doubt that that must have been the case.

17. Good quality coloured photographs of the plaintiff’s cookie cutters and the corresponding sets sold by the defendant have been exhibited before me, and I have examined the actual articles.

18. In relation to “Foot”, “Butterfly” and “Bear and Heart”, the two sets of products are virtually identical in every way. In relation to “Leaf”, save that the leaves in the infringing set had veins printed on them while the leaves on the plaintiff’s set are plain, and that the colours of the leaves are different, the schematic design of the two sets are almost identical. Lastly, in relation to “Vehicle”, the differences in the two sets lie in the colours of the printed images on the bottom plate. In terms of schematic design and layout the two sets are exactly the same.

19. In my judgment, there could not be any reasonable dispute that the sets sold by the defendant were copied or substantially copied from the plaintiff’s sets.

Primary infringement

20. The main issue on primary infringement centres on whether the plaintiff has proved a prima facie case of issuance of the infringing copies to the public within the meaning of section 24 of the Copyright Ordinance.

21. Mr Philips Wong, counsel for the plaintiff, submitted that by paragraph 6 of his Defence the defendant has admitted issuing, selling, importing and exporting the infringing cookie cutters, hence once it is established that the plaintiff is the copyright owner there is no defence to the primary infringement claim.

22. Mr Lam on behalf of the defendant denied that there has been such admission.  He contended that the defendant only admitted that he was in the business of issuing to the public, selling, importing and exporting cookie cutters generally, not the infringing copies referred to in para 6 of the Statement of Claim.

23. Paragraph 6 of the Defence was in answer to paragraph 6 of the Statement of Claim and the material parts of these paragraphs are in the following terms :

Statement of Claim paragraph 6 :

“From a date presently unknown to the Plaintiff but prior to the issue of the Writ herein, the Defendant has infringed the Plaintiff’s copyright in the Copyright Works by, without the licence or authority of the Plaintiff, issuing to the public, selling, offering or exposing for sale, possessing for the purpose of, in the course of, or in connection with trade or business, distributing importing into and/or exporting from Hong Kong cookie cutters which are or which incorporates parts which are reproductions or reproductions of substantial parts of the Copyright Works and each of them …”

Defence paragraph 6 :

“Save it is admitted that the Defendant had issued to the public, sold, offered or exposed for sale, possessed for the purpose of, in the course of, or in connection with trade or business, distributed imported into and/or exported from Hong Kong cookie cutters, each and every allegation in paragraph 6 is denied. In particular, it is denied that (1) the Defendant had infringed the Plaintiff’s copyright as alleged or at all; and (2) the Defendant’s cookie cutters incorporate component parts which are reproductions or reproductions of substantial parts of the Copyright Works or any of them.”

24. I can see considerable force in Mr Wong’s submission that any reasonable person reading these paragraphs in context would have understood the defendant as having admitted issuance and sale (as well as other acts), but denying infringement.

25. Nevertheless, I am prepared to proceed on the basis that issuance to the public is an issue open to the defendant.

26. Both counsel referred me to Copinger and Skone James on Copyright, 15^th ed, paragraphs 7-79 to 7-81. It is reasonable clear from these passages that “issuance to the public” under section 24 (which is materially the same as section 18 of the English CPDA 1988) requires putting infringing copies into distribution in Hong Kong for the first time : see Copinger paragraph 7-79 to 7-80 at pp 426-427, and that it is the producer or importer at the head of the distribution chain who is the person responsible for primary act of infringement of issuing copies to the public : Copinger paragraph 7-80 at p 428.

27. In the instant case, there is uncontroverted evidence that :

(1)	one Premier Merchandises Limited (“Premier”) obtained samples of the infringing copies from the defendant;
(2)	Premier then placed orders with the defendant for the infringing copies which were on-sold to Premier’s customer in France;
(3)	the defendant himself obtained the infringing copies from a Mr Chu who was based on the Mainland; and
(4)	after proceedings had commenced, the defendant through his solicitors confirmed in open correspondence that he had ceased issuing to the public, selling, dealing, offering or exposing for sale, importing and exporting of the alleged copyrighted work of the plaintiff save and except retaining samples of the alleged infringing works for litigation purposes.

28. In the light of such evidence, it is clear that the defendant put the infringing copies into circulation in Hong Kong by offering to sell and in fact selling them to Premier.

29. I am therefore satisfied that the plaintiff has sufficiently proved primary infringement by the defendant and that there is no bona fide defence open to the defendant.

Result

30. Accordingly, the plaintiff has established its claim for primary infringement.  That being the case, the plaintiff is entitled to permanent injunctive relief as sought in paragraphs (1) to (4) of its summons, as well as the disclosure sought in paragraphs (5) and (8).

31. As the plaintiff has elected to pursue an account of profits in relation to the primary infringement claim, I would so order in terms of paragraphs (6) and (7) of the summons save that for paragraph (6), the words “elect between an enquiry as to damages and” in the 1st line and the words after “hereof” in the 3^rd line up to the end of that paragraph be deleted.

32. As to costs, since the plaintiff is substantially successful it should have its costs of the application and the action. However, it should not have the entirety of its costs because the secondary infringement claim was abandoned only after I have delivered my decision.

33. Considering the matter in the round, I think it is fair that the plaintiff should have 80% of its costs of this application and the action, to be taxed if not agreed.