BUILDTECH ENTERPRISE INTERNATIONAL LTD AND OTHERS v. OK CONSTRUCTION MATERIALS (SUPPLY) CO LTD

HCIP 14/2021

[2025] HKCFI 1133

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 14 OF 2021

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	IN THE MATTER of the Trade Marks Ordinance (Cap. 559)
	AND IN THE MATTER of Hong Kong Trade Mark Registration No. 302462085 in Class 19 in the name of OK Construction Materials (Supply) Company Limited (可以建材(供應) 有限公司)
	AND IN THE MATTER of an application for a declaration of invalidity of the said registration by (I) Buildtech Enterprise International Limited (俊溢企業國際有限公司); (2) Buildtech Enterprise Limited (俊溢企業有限公司); (3) Chow, Ka Hung周嘉鴻; (4) Chow, Siu Lun (周紹麟) under the said Ordinance ("TMO") pursuant to section 53(3)

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JUDGMENT

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1.  This is the trial of the proceedings brought by the Plaintiffs against the Defendant seeking to invalidate the registration of the Defendant’s Trade Mark No. 302462085 “” (“the Suit Mark”) registered in respect of “坭水批盪膠角條。建築及裝飾用，非金屬嵌角條” (plastering plastic angle beads; for construction and decoration use, non-metal angle beads)(“the Subject Goods”).

2.  One of the main issues in the present case is to identify the party who first used the “OK” mark or pattern in the production of angle beads used for construction works.

3.  It is the Plaintiffs’ case that angle beads incorporating a repetitive pattern of “OK”s (“OK Angle Beads”) had first been designed and manufactured by a Taiwanese supplier, Fu Ming Plastic Company Co Ltd. (富明塑膠有限公司) (“Fu Ming”),which had supplied such OK Angle Beads to the 2^nd Plaintiff first in early 2001 and subsequently to the Defendant in late 2001. The 1^st and 2^nd Plaintiffs have accordingly since 2001 been importing the OK Angle Beads from Taiwan for resale in Hong Kong and have been competing with the Defendant in the sale and supply of building products, materials and accessories including the OK Angle Beads. The Plaintiffs’ case is that the Defendant’s application to register the Suit Mark (“the Subject Application”) was part of the Defendant’s continued efforts to target and unfairly compete with the 1^st and 2^nd Plaintiffs in the trade of OK Angle Beads. The Plaintiffs’ case is that the Defendant’s conduct in this regard departs from accepted standards of ethical behavior or honest commercial and business practices. Hence, the Plaintiffs are seeking to invalidate the registration of the Suit Mark on the ground of bad faith under s 11(5)(b) of the Trade Marks Ordinance, Cap 559 (“TMO”).

4.  Further, the Plaintiffs complain that the registration of the Suit Mark should also be invalidated on the following additional grounds:

(i)    The Suit Mark is not a sign capable of distinguishing any goods of one undertaking from those of other undertakings, thereby failing to satisfy the definition of trade mark under s 3(1) of the TMO.

(ii)   The Suit Mark is devoid of any distinctive character, which is a ground of invalidation under s 11(1)(b) of the TMO.

(iii)  The Suit Mark consists exclusively of sign which may serve, in trade or business, to designate the kind, quality, quantity, intended purpose, value, geographical origin, time of production of goods or rendering of services, or other characteristics of goods or services, which is a ground of invalidation under s 11(c) of the TMO.

(iv)  The Suit Mark consists exclusively of sign which has become customary in the current language or in the honest and established practices of the trade, which is a ground of invalidation under s 11(d) of the TMO.

5.  On the other hand, it is the Defendant’s case that the OK Angle Beads were first created by Mr Wong Kin Pong (“Wong Sr”), sole shareholder and director of the Defendant, who then through Mr Lai Shu Nang (“Lai”), engaged a Taiwanese company, Tian Dih Plastics Enterprise Co Ltd (天第塑膠實業股份有限公司) (“Tian Dih”), and Fu Ming to produce the OK Angle Beads.  The Defendant was the first and only entity in Hong Kong to have continuously, openly and substantially used the Suit Mark in relation to angle beads as a trade mark from 2001 onwards by supplying these custom-made OK Angle Beads to the construction industry, and the Defendant was justified to apply for the registration of the Suit Mark. The Defendant therefore denies that the Subject Application was made in bad faith, and the Defendant further disputes the other grounds of invalidation put forward by the Plaintiffs.

6.  Since this case is fact-sensitive, I would first resolve the factual disputes between the parties before I address the legal principles concerned.

FACTUAL ISSUES

(i)  The undisputed facts

7.  The following facts are not in dispute:

(i)      The Plaintiffs and the Defendant were direct competitors in the sale and supply of, inter alia, products, materials and accessories used in the building and construction trade. Such products included the OK Angle Beads.

(ii)     Angle beads are used in the construction industry to enable plasterers to make corners straight and at right angles. The holes in the beads allow mortar or plaster to seep through. This helps the beads stick to the wall when being fitted and provides a sharp right-angled edge finish to the entire length of the comer of the walls.

(iii)    On 8 August 2001, the Defendant filed an application to register as a trade mark a representation of an angle bead bearing 4 repetitions of the “OK” pattern in Class 19 in respect of “moldings, not of metal for building” under application number No 200112903 ("the 4 OKs Application"). The 4 OKs Application was refused.

(iv)    On 23 April 2002, the Defendant filed an application to register as a trade mark a representation of a stylized “OK” device (“the Stylized OK Device”) in Class 19 in respect of “mouldings (nonmetallic) for building”. The mark was entered into the register in Part B on evidence of use on 26 February 2004 (Registration No 2004B02430).

(v)     On 21 November 2008, the Defendant applied for and on 30 January 2009 obtained registration of a design featuring angle beads with, inter alia, 4 and 7 repetitions of the “OK” pattern for “Angle bead for building works” (Registration Nos 0802778.9 M001-0802778.9M003).

(vi)    The Defendant made a complaint to the Customs and Excise Department (“C&E”) about the alleged infringement of copyright in respect of 2 drawings by the 2^nd Plaintiff, and as a result the C&E conducted a raid of the 2^nd Plaintiff’s premises on 18 May 2010 (“the 2010 Raid”). No prosecution was brought by the C&E following the 2010 Raid.

(vii)   On 10 December 2012, the Defendant made the Subject Application to register the Suit Mark consisting of a row of 7 “OK” devices in class 19 in respect of the Subject Goods. The Suit Mark was entered into the register on 24 April 2015 (Registration No 302462085).

(viii)  On 29 November 2019, upon a complaint lodged by the Defendant, the C&E conducted another raid search (“the 2019 Raid”) on the business premises of the 1^st Plaintiff for plastic angle beads suspected of bearing a forged trade mark, namely “OK”.

(ii)    The factual witnesses in support of the Plaintiffs’ case

8.  The following witnesses testified in the trial in support of the Plaintiffs’ case:[1]

(i)      Mr Chow Ka Hung (“Chow Jr”), the 3^rd Plaintiff herein and  the owner of the 1^st Plaintiff;

(ii)     Mr Hong Shi Ming (洪世明) (“Hong”), the former owner and director of Fu Ming;

(iii)    Ms Hong Wen Chi (洪雯琪) (“Ms Hong”), the daughter of Hong.

(iv)    Mr Zhang Rui He (張瑞和) (“Zhang”), the owner and director of Li Talu Company Limited (日足企業有限公司) (“Li Talu”); and

(v)     Mr Lin Yen Hsu (林彥旭) (“Lin”), the owner and director of Tian Dih.

9.  Apart from these witnesses, Mr Chow Siu Lun (“Chow Sr”), the 4^th Plaintiff herein and the father of Chow Jr, also gave an oral deposition in front of myself on 18 October 2021. Since Chow Sr was by then suffering from a critical illness, the Plaintiffs made an application before me for Chow Sr to give an oral deposition. I agreed. Since I am the trial judge, it would be desirable for me to hear his oral deposition in court. I therefore did so. Chow Sr passed away before the trial.

10.  Hong is one of the most important witnesses for the Plaintiffs’ case.

11.  Hong was previously the owner and director of Fu Ming, a Taiwanese company mainly engaged in the business of designing, manufacturing and selling angle beads for use in the construction industry. Fu Ming was incorporated on 20 October 1994 and ceased operation on 30 June 2003, and its business was taken over by Hang Feng Enterprise Co., Ltd. (珩峰企業有限公司) ("Hang Feng"), a company owned by his son.

12.  According to Hong, he personally created an original angle bead design consisting of a continuous pattern of "OK" letters with perforations (“the OK Pattern”) along the length of the angle bead. He instructed a mould and die maker called “金鋒線切企業社” ("Kam Fung") to prepare production moulds and cutting dies and manufacture the angle beads according to his design. Fu Ming started to develop its “OK” perforated plastic angle bead moulds in around July 2000 and finished the mould testing steps in November 2000. The drawing for the “OK” die was completed and provided by Mr Lin Jian Zhong (林建中) (“Lin JZ”) of Kam Fung (“Lam”) on 27 November 2000.    Formal production started in around December 2000 and the products were distributed in Taiwan and also exported to Hong Kong.

13.  The first Hong Kong shipment of angle beads that bore the OK Pattern was sent to the 2^nd Plaintiff in around mid-February 2001 through an export agent called Li Talu. Li Talu was the agent for handling the sales to the Hong Kong market.

14.  To his knowledge, nobody else had ever designed or manufactured angle beads that bore the OK Pattern previously and thus he considered the OK Pattern to be Fu Ming's property.

15.  Hang Feng took over Fu Ming's business on 24 April 2002. With Hong’s consent, Hang Feng has been manufacturing angle beads (including the angle beads that bear the OK Pattern) used in the construction industry for years until to date.

16.  He also explained how he came to use the letters “OK” in the angle beads. Though he does not know English, he learnt the word “OK” from television programme. When he first produced the OK Angle Beads, he had not given much thought as to making “OK” a brand of such products. He wanted to register the OK Pattern but was told that it was not registrable. However, as he was the person who first designed and manufactured the OK Angle Beads in Taiwan, he genuinely believes that he is the person entitled to supply such products and the Defendant does not have the right to register the Suit Mark in Hong Kong.

17.  He also produced and supplied angle beads bearing the letters “FM” (being the initials of Fu Ming) and “O”.

18.  According to Hong, he has the blueprint of one of the earliest dies for punching the holes in the OK Pattern. The earliest die for cutting the “OK” Pattern included a somewhat square-ish “O” which was used in the trial production in around August 2000. Subsequently, the pattern evolved into a round “O” and became one of the patterns in the evolution of the OK Pattern.  The OK Pattern on the angle beads sold by Fu Ming to the 2^nd Plaintiff and to the Defendant also bore a round “O”.

19.  Wong Sr had gone to Taiwan in 2001 with a view to purchase some ready-made angle beads. He denied that Wong Sr had instructed Fu Ming to manufacture angle beads with the OK Pattern, or had instructed Fu Ming to produce any mould for the production of the OK Angle Beads, whether through a person known as Lai or otherwise. Fu Ming started to supply angle beads to the Defendant in late 2001. However, due to dispute over certain shipment of goods, neither Fu Ming or Hang Feng had any business dealings with the Defendant after 2002. The letter of undertaking dated 19 April 2001 allegedly issued by Fu Ming (“the April 2001 Undertaking”) is a false document, and he had not received any payment from Wong Sr for the production of the moulds for the OK Angle Beads.

20.  Hong’s daughter, Ms Hong, also testified in court. Her evidence basically corroborates that of Hong. She denied Wong Sr’s allegation that she had accompanied him to the airport during his Taiwan trip or had discussed any personal matters with him.

21.  Zhang, who is the owner and director of Li Talu, also testified in support of the Plaintiffs’ case. He confirmed Hong’s evidence that it was Hong who first designed, manufactured and sold the OK Angle Beads. It was through Li Talu that Hong sold the OK Angle Beads to the Plaintiffs. Hang Feng also appointed Li Talu to be the agent for the sale of the OK Angle Beads to Taiwan, Hong Kong, Macau and Singapore.

22.  Subsequently, Lin of Tian Dih, which was another Taiwanese company, asked him whether Tian Dih could be permitted to manufacture and supply the OK Angle Beads. With the consent of Hang Feng, Li Talu in June 2007 allowed Tian Dih to manufacture and supply the OK Angle Beads to one Putzpro Enterprise Limited (晉基企業有限公司) (“Putzpro”). From 2014 to at least 2018, Tian Dih also supplied the OK Angle Beads to the 2^nd Plaintiff through Li Talu.

23.  In January 2008, Li Talu appointed the 2^nd Plaintiff to be the sales agent of the OK Angle Beads in Hong Kong. For the OK Angle Beads sold by Li Talu, they had always been manufactured and supplied by Fu Ming, Hang Feng and Tian Dih. 

24.  Zhang recalled that Lai, who was a highly skilled technician, did call him and said he would introduce Wong Sr to him. Lai also asked him not to tell Chow Sr about this.

25.  Another key person in these alleged dealings, Lin of Tian Dih, also testified at the trial.  He refused to come to Hong Kong to testify in person because of political concern, and the court had allowed him to testify via video conferencing facility.

26.  According to Lin, Tian Dih had been supplying products to the Defendant from 2002 to 12 March 2008. In 2002, the Defendant had shown the OK Angle Beads manufactured by Hang Feng to him and asked him whether he could supply the same products. At that time, he knew that the design of the OK Angle Beads belonged to Fu Ming (which was later transferred to Hang Feng), as the OK Angle Beads were first supplied by Fu Ming in the market. He therefore asked Hong for permission to produce the OK Angle Beads. Hong agreed. The Defendant then placed an order for the supply of OK Angle Beads with Tian Dih. He continued to supply OK Angle Beads to the Defendant until 2008.   From 2008 to at least 2018, Tian Dih supplied the OK Angle Beads to Putzpro. From 2014 to at least 2018, Tian Dih supplied the OK Angle Beads to the Plaintiffs.

27.  In respect of Wong Sr’s allegation that Tian Dih had agreed to supply the OK Angle Beads to the Defendant in accordance with the technical drawings supplied by Wong Sr as early as March 2000, Lin denied the same. By that time, Tian Dih was still operating under its previous name (i.e. 冠宇國際開發有限公司), and Tian Dih had not engaged in the business of supplying plastic products until Tian Dih changed to its present name on 3 April 2001. He did not know Lai. The respective letters of guarantee dated 12 July 2000 (“the July 2000 Guarantee”) and 23 March 2001 (“the March 2001 Guarantee”) purportedly issued by Tian Dih are also fabricated documents. The company chops on these documents are not genuine, as the name Tian Dih had not been used before 3 April 2001. He also showed the court the genuine company chop of Tian Dih, which appeared in the receipt of the mould costs from the Defendant covering the period from November 2001 to March 2002. He also denied the account given by Wong Sr as to why Tian Dih and the Defendant terminated their business relationship in 2008.

28.  As mentioned above, the 4^th Plaintiff, Chow Sr, had given an oral deposition to the court. According to him, he had been involved in the building construction industry for over 40 years. The 2^nd Plaintiff was incorporated in 1999 to carry on the business previously conducted by his brother’s company, i.e. Anwell Enterprise (International) Co Ltd (“Anwell Enterprise”). The 2^nd Plaintiff had since been engaged extensively in the sale and supply of angle heads. Later, the 1^st Plaintiff was incorporated on 12 April 2002 by his son for the development of the family business. For the purpose of setting up a separate company for importing and selling building products of various kinds, particularly machinery for building work, Putzpro was incorporated on 10 January 2003.

29.  Chow Sr gave an account about the development of the plastic angle beads, and how Anwell Enterprise came to sell the plastic angle beads back in 1990s.

30.  His family member had visited Fu Ming’s factory back in 1994. In late 1990s, he and Lai (who was his uncle) also paid a visit to Fu Ming’s factory. By that time, they were looking for a better range of angle beads and mortar machines for sale. Between 1995 and 1999, all goods and materials purchased from overseas by Anwell Enterprise were sourced through Li Talu. By that time, the products were sold under the “Anwell” brand. He also told the court why their relationship with Lai deteriorated in 2001.

31.  In late 2000 or early 2001, Fu Ming started to produce the OK Angle Beads. The 2^nd Plaintiff sourced the OK Angle Beads through Li Talu in early 2001, and the 2^nd Plaintiff commenced to market the OK Angle Beads under the brand name of “Anwell”. There were at least 2 other Taiwanese companies supplying the OK Angle Beads with the consent of Fu Ming: Hang Feng and Tian Dih. Chow Sr believed that, since 2006, the Defendant obtained its supply of the OK Angle Bead from another manufacturer in Taiwan known as “丞風塑膠企業有限公司” (“Sheng Feng”). Chow Sr frankly admitted that the Defendant had made a lot of effort to promote the OK Angle Beads, yet Fu Ming was the entity that first designed and supplied the OK Angle Beads in the market.

32.  Chow Sr also gave his account about the 2010 Raid and the 2019 Raid. He also listed out the documents that he had produced to C&E to substantiate the Plaintiffs’ defence to the Defendant’s complaints. He denied any wrongdoing on the part of the Plaintiffs. He also explained why the Subject Application was made in bad faith.

33.  Chow Jr also testified in court. He first worked as an apprentice in his father’s company, i.e. the 2^nd Plaintiff. In 2002, he set up his own company, i.e. the 1^st Plaintiff, and operated a business similar to that of the 2^nd Plaintiff but specializing in different products. The Plaintiffs supplied various goods used for construction works, and angle beads only accounted for a small fraction of their business. The most successful angle beads sold by the Plaintiffs were dual-coloured angle beads (which were designed by Chow Sr), and the quantity of the OK Angle Beads sold by the Plaintiffs was not significant. It was Putzpro that bought the OK Angle Beads from a factory called Tian Dih in Taiwan from about 2008 until 2018 or 2019 and imported them into Hong Kong for sale to the Plaintiffs. Chow Jr frankly admitted that his father made all the major decisions in the running of his business in particular in the early stage, and his involvement in the early operation of the business was small.

(iii)  The factual witnesses in support of the Defendant’s case

34.  The following witnesses testified in support of the defence case:[2]

(i)      Wong Sr;

(ii)     Mr Wong Wai Cheung (“Wong Jr”), the son of Wong Sr and the manager of the Defendant;

(iii)    Mr Tse Chun Yuen (謝振源) (“Tse”), a person engaged in the trade of the supply of construction materials and has known Wong Sr for a long time;

(iv)    Mr Lam Kin Wah (“Lam”), a person engaged in the trade of the supply of construction materials and has known Wong Sr for a long time;

(v)     Mr Sin Fook Ling (單福靈) (“Sin”), a retired mason and has known Wong Sr for a long time; and

(vi)    Mr Wong Keng Chiu (黃鏡釗) (“Wong”), a person previously engaged in the printing business.

35.  Wong Sr is the most important witness for the Defendant’s case. According to him, he first designed and created the OK Angle Beads and sourced them from Taiwan.

36.  Wong Sr gave an account of the businesses that he had engaged throughout the years, including, inter alia, provision of cleaning and transportation services, trading of seafood and supply of construction materials. According to him, the logo of the stylized “OK” mark (i.e. the Stylized OK Device) was first created by him in the early 1990’s. He used that mark together with the word “可以” (meaning “can do”). Since around 2000, he started to refer himself as “OK Wong”.  According to him, he was well known in the construction industry as "OK Wong" and "OK" was synonymous with him and the Defendant's products. He also gave an account as to how he came to develop the OK Angle Beads. He also discussed the idea of producing the OK Angle Beads with Sin.

37.  Wong Sr also testified in his witness statement that:

(i)      In around 1999, he started to work at a company known as Grand Tender Limited (宏昌泰有限公司) (“Grand Tender”), which was a famous supplier for construction materials and Tse was one of the proprietors. During his employment, he mentioned the idea of producing the OK Angle Beads to Grand Tender but its management was not interested. He tendered his resignation in April 2000.

(ii)     He first drew the Stylised OK Device and asked for Lai’s help in taking it to Taiwan to be used in the manufacture of the OK Angle Beads. However, based on the feedback from the Taiwanese manufacturers and on Lai’s suggestion, he used a standard straight font for the “OK” perforations, using a ruler to revise his initial rough sketch. His evidence was that he had drawn the “OK” mark using that ruler, but that it was only after testing of the samples supplied by Tian Dih and on the advice of Tse that he had replaced the letter “O” with the number “0” on the ruler instead.

(iii)    Lai said he would send Wong Sr’s design and drawings to his contacts in Taiwan to interest them in producing the OK Angle Beads for Wong Sr.

(iv)    In around March 2000, Wong Sr received a call from Lin who introduced himself as owner of Tian Dih, a manufacturer specializing in producing plastic angle beads, saying he had received from his contacts in the industry Wong Sr’s “OK” design and Lai’s telephone number. During this call, Lin said he was able to manufacture the OK Angle Beads in accordance with Wong Sr’s specification and drawings, and he also offered to execute a letter of guarantee in Wong Sr’s favour. Having told Lai about the call and discussed this with him, Wong Sr agreed to work with Tian Dih and left it to Lai to help finalise all the business details about the cooperation with Tian Dih including the terms and conditions in actual logistics.

(v)     In early May to late June 2000, Lai told Wong Sr that his another contact in Taiwan, Fu Ming, had finished making mould drawings but needed to be paid the mould money upfront.

(vi)    In around June 2000, Wong Sr received a set of drawings from Lin through Lai which were “highly similar to the Defendant’s present products”. Wong Sr agreed to pay Tian Dih the mould money immediately through Lai.

(vii)   In July 2000, Wong Sr received the first letter of guarantee dated 12 July 2000, i.e. the July 2000 Guarantee, as well as sample of angle beads from Lin of Tian Dih. Unlike in the case of the drawings, Wong Sr did not say he had received these through Lai.

(viii)  Wong Sr tested Tian Dih’s samples with his team of advisers including Sin and Tse. Having tested the samples, the points which needed to be improved were communicated to Tian Dih, the moulds were then altered and the revised samples were sent for further testing. This was repeated a number of times until Wong Sr was happy with the samples provided by Tian Dih. One change was made to the design of the letter “O” (which had the plastic piece in the center of the letter), with this being replaced by the number “0” as described in sub-paragraph (ii) above.

(ix)   Tian Dih started to supply the OK Angle Beads at around that time. Small orders were placed.

(x)    Fu Ming’s progress lagged behind that of Tian Dih. The first batch from Fu Ming arrived in early 2001. Wong Sr was not happy with these because the letter “O” was of a square-ish shape and had a piece of plastic in its center. Wong Sr requested Fu Ming to simply follow Tian Dih’s design.  Wong Sr repeated that Fu Ming’s moulds had been copied from those of Tian Dih.

(xi)   Wong Sr received some supplies of the OK Angle Beads from Tian Dih from orders placed in early 2001. These were sold by the Defendant from March to September 2001. Tian Dih executed a further guarantee in favour of the Defendant on 23 March 2001, i.e. the March 2000 Guarantee.

(xii)  As orders started coming in, to focus on this new business, the Defendant was established on 12 March 2001.

(xiii) Wong Sr conducted business with Tian Dih and Fu Ming concurrently for a few years.

38.  Wong Sr also gave an account about his dealings with Fu Ming, and how Fu Ming came to execute the April 2001 Undertaking. According to Wong Sr, Hong acknowledged to him that all rights in the moulds and the OK Angle Beads belonged to the Defendant. He also recalled a conversation on personal matters with Hong’s daughter during his trip to Taiwan in November 2001. After that trip, his relationship with Hong deteriorated, mainly because of the quality of the angle beads supplied by Hong. Wong Sr therefore relied more on Tian Dih for the supply of the OK Angle Beads. Wong Sr ceased to have any business relationship with Fu Ming or Hang Feng in around 2004. He demanded Hong to return the moulds for the OK Angle Beads, but Hong said that the moulds were lost during a landslide incident. He did not believe Hong to be an honest businessman.

39.  The quality of the OK Angle Beads supplied by Tian Dih also deteriorated starting from about 2004. Wong Sr reduced the quantities of the OK Angle Beads ordered from Tian Dih, and their business relationship terminated in around 2008. Wong Sr engaged another manufacturer, Sheng Feng, to supply the OK Angle Beads to the Defendant.

40.  Wong Sr then found out about the sale of the OK Angle Beads by the Plaintiffs. He also told the court about his relationship with Chow Sr throughout the years and how they became business rivals in the plastic angle beads industry. He also gave his own account of the 2010 Raid and the 2019 Raid.

41.  Wong Jr also testified in court in support of the Defendant’s case. However, since Wong Jr only joined the Defendant in 2009, he had no personal knowledge of the matters prior to 2009. His evidence is therefore of limited value and it does not add any weight to the testimony of Wong Sr.

42.  Another witness for the Defendant’s case was Tse. According to Tse, he has known Wong Sr for a long time. Tse has been engaging in the masonry construction work business for many years. According to him, it was Wong Sr’s idea to develop the OK Angle Beads. He heard that Wong Sr had engaged a manufacturer in Taiwan to supply him with the OK Angle Beads designed by him. Tse did give advice to Wong Sr about the design of the OK Angle Beads. Before that, he had not heard about any other manufacturers supplying similar OK Angle Beads in the market.

43.  Lam is the managing director of one of the Defendant’s alleged earliest authorised dealers of the OK Angle Beads. According to him, “OK” brand angle beads was the most famous brand amongst all other angle beads in Hong Kong, and the OK Angle Beads supplied by the Defendant were always of good and consistent quality. He confirmed that Wong Sr’s angle beads were the first plastic angle beads bearing perforations of alphabet letters he had ever seen. During the decades he spent in the industry, he had not seen anyone else other than the Defendant selling the OK Angle Beads. However, when he was cross-examined further on this issue, he admitted that he did not know whether there were any other companies selling the OK Angle Beads.

44.  Sin, who is a 83-year-old retired mason, told the court how Wong Sr conceived the idea to use “OK” as perforations on angle beads. He also confirmed that he was the one who introduced Lai to Wong Sr.

45.  Wong was involved in the printing business. According to Wong, Wong Sr did come to him in around 1993 or 1994 for the production of a name card bearing the Stylized OK Device.

(iv)  Assessment of the evidence

46.  The most important witnesses in the present case must be Chow Sr, Hong and Wong Sr. Chow Jr and Wong Jr were not directly involved in the dealings between the parties in the critical period from 2000 to 2002, and so their evidence does not add very much weight to the testimony of their respective fathers. Zhang and Lin were involved in the dealings in the critical period, and as further demonstrated below, there is documentary evidence supporting their testimony. For Tse and Sin, they gave evidence supporting the testimony of Wong Sr. For Wong, he testified that Wong Sr had been using the Stylized OK Device for his name card way back in 1993 or 1994.

47.  Having carefully considered the evidence, I resolve the factual disputes in favour of the Plaintiffs on the balance of probabilities. My reasons are as follows.

48.  First, Wong Sr’s above account is directly contradicted by what he himself had said in the witness statements he had made to the C&E on 28 May 2010^[3]; 8 June 2010^[4] and 2 June 2020 ^[5], in which he said that Tian Dih only started to supply the OK Angle Beads to him from about 2002. Wong Sr has provided no credible explanation for this fundamental contradiction between what he had said in 2010 (and repeated in 2020) with his account in his witness statement.

49.  Mr Yan SC, counsel for the Plaintiffs, submits that Wong Sr had fabricated the account of having first sourced the OK Angle Beads from Tian Dih from 2000 in order to account for the two purported guarantees, i.e. the July 2000 Guarantee and the March 2001 Guarantee. Wong Sr’s witness statement was made on 3 August 2021. At that point in time, the Plaintiffs had not yet found or produced the evidence that Tian Dih’s web address “www.tiandih.com.tw” was not registered until 22 June 2001.^[6] According to the Plaintiffs’ case, this proves that the said two purported guarantees cannot be genuine as Tian Dih could not have issued guarantees bearing that web address and the email address “td@tiandih.com.tw” on the purported dates thereof.  As pointed out by Mr Yan, Wong Sr and the Defendant must accordingly have thought that they might be able to get away with fabricating the false account in his witness statement. There is certainly weight in Mr Yan’s submissions.

50.  Since Wong Sr had been asked to account for something which happened many years ago, Ms Tam SC, counsel for the Defendant, tries to explain the inconsistency by reason of Wong Sr’s advanced age and his poor hearing, eyesight and memory. However, I still find it hard to accept that the mistake is a genuine one. It has been clear from the outset that the Defendant’s case is premised on the fact that Wong Sr was the first person who designed the OK Angle Beads and started the production thereof. Under such circumstances, it is difficult to explain why, in a much earlier time in 2010 and 2020 when he made the statements to the C&E, he stated clearly that Tian Dih started to supply the OK Angle Bead to the Defendant in 2002.

51.  Ms Tam further submits that there is no inconsistency when Wong Sr stated in his statements that Tian Dih started to produce the OK Angle Beads in 2002. In any event, the questions by the C&E officers were directed at who the primary supplier of the OK Angle Beads was at the relevant time, not the precise chronology of the first orders placed by Wong Sr with each manufacturer. His account had all along been clear to the C&E officers as he had supplied to the C&E the July 2000 Guarantee, the March 2001 Guarantee and the payment acknowledgment issued by Tian Dih on 26 November 2001. All these show that Wong Sr was not focusing on the specific sequence when he gave the statements to the C&E.

52.  Despite Ms Tam’s able submissions, I do not share the same observation.Not only had Wong Sr signed to acknowledge that he understood the importance of telling the truth and the possibility of him being prosecuted if he did not, it is clear that the importance of the sequence of events had been highlighted and drawn to Wong Sr’s attention before he answered question (1) in his 8 June 2010 statement, as he had initialed against the words “分別先後” (in the respective sequence) which had been specifically added to question (1). Further, it is only when someone is not telling the truth that there are inconsistencies between the accounts he or she was giving at different times and the documents he or she produced.

53.  Second, the Plaintiffs’ case that Hong was the first person designing and producing the OK Angle Beads is supported by various documentary evidence:

(i)      the design drawing for the production of the OK Angle Beads with a square-ish “O” dated 27 November 2000;

(ii)     Kam Fung’s invoice issued to Fu Ming dated 19 December 2000 for the production of the mould;

(iii)    the set of documents relating to the first sale and supply of the OK Angle Beads by Li Talu to the 2^nd Plaintiff in February 2001 including Fu Ming’s delivery note, Li Talu’s export declaration, commercial invoice, payment note (請款單) and Li Talu’s bank passbook evidencing the payment from the 2^nd Plaintiff, which clearly show that it was Fu Ming which first shipped and supplied the OK Angle Beads to the 2^nd Plaintiff in Hong Kong through Li Talu in early February 2001;

(iv)    the Distributorship Agreement between Hang Feng and Li Talu for the period October 2002 to September 2012, the Distributorship Agreement between Li Talu and the 2^nd Plaintiff for the period January 2008 to September 2012 and the Distributorship Agreement between Tian Dih and Putzpro Enterprise Limited dated 12 June 2008 which had been presented to the C&E on the day of the raid against the 2^nd Plaintiff;

(v)     the declaration of Lin JZ of Kam Fung made on 21 Jun 2010, in which Lin JZ had declared, inter alia, that the OK Angle Beads had been designed by Fu Ming in July 2000;

(vi)    C&E’s letter dated 29 February 2012 to Li Talu and Zhang’s email in reply thereto dated 13 March 2012 in which he had stated, inter alia, that the original creator of the OK Angle Beads was Hang Feng; and

(vii)   C&E’s letter dated 29 February 2012 to Tian Dih and Lin’s reply thereto in which he had stated, inter alia, that the OK markings were not the subject of any copyright registration in Taiwan and were widely used on angle beads.

54.  Third, though the Defendant has produced the purported July 2000 Guarantee and March 2001 Guarantee with a view to support that Wong Sr had engaged Tian Dih to produce the OK Angle Beads back in 2000, such documents do not sit well with the documentary evidence showing that: (i) the name Tian Dih was only first used in April 2001; and (ii) Tian Dih only applied to use the domain name “tiandih.com.tw” on 22 June 2001. The Defendant cannot offer any explanation as to why Lin would have put the non-existent web and email addresses on these documents. Further, there is no evidence that Lin or Tian Dih had started to engage in the manufacture of plastic angle beads as early as in 2000. 

55.  Fourth, another troubling aspect of the Defendant’s case is the total absence of documentation (with the exception of the disputed guarantees as mentioned in the preceding paragraph) evidencing what Wong Sr claimed to have occurred from March 2000 to early 2001. In fact, the earliest documentary evidence of Tian Dih engaging in business with the Defendant only relates to payments received by Tian Dih from the Defendant in November 2001 and other dates in January to March 2002.

56.  As rightly pointed out by Mr Yan, there are a number of notable instances of Wong Sr’s unexplained and inexplicable failure to produce any earlier documents:

(i)      In his witness statement^[7], Wong Sr claimed to have received a set of drawings from Tian Dih (which were highly similar to the Defendant’s present products) in around June 2000 and that Lai said it should not be difficult to produce angle beads using the moulds made from the drawings. He then allegedly agreed to immediately pay the mould money to Tian Dih through Lai. Based on Wong Sr’s account, these drawings were the only drawings of the OK Angle Beads he had ever received from Tian Dih, and yet he has not produced and provided no explanation as to why he has not produced them and what has become of them.

(ii)     In his witness statement^[8], Wong Sr claimed that Tian Dih started to supply angle beads “at around that time” and to have placed small orders with Tian Dih. Again, Wong Sr has not produced a single document relating to and evidencing these orders, supplies and shipments and has provided no explanation as to why he has not produced them.

(iii)    In his witness statement^[9], Wong Sr claimed that he was able to get some orders of the OK Angle Beads from Tian Dih based on orders which would have been placed in early 2001. Again, Wong Sr has not produced a single document relating to and evidencing these orders, supplies and shipments and has provided no explanation as to why he has not produced them.

57.  Instead, Wong Sr has only produced a bundle of invoices and delivery orders^[10] which he claimed related to the OK Angle Beads (implicitly those allegedly supplied by Tian Dih) supplied to various companies. However, these documents do not add any weight to the defence case. The evidence clearly shows that Wong Sr and the Defendant have used “OK 牌” (“OK” brand) on all sorts of products not just the OK Angle Beads. The evidence also shows that Wong Sr and the Defendant had been dealing in generic angle beads around the date of the Defendant’s incorporation in March 2001 and for a certain period thereafter, and so these documents may just relate to the sales of these items. Indeed, if there were sales of the OK Angle Beads by that time, it is difficult to explain why Wong Sr could not have produced further documents evidencing his ordering, purchase and sourcing of such angle beads from Tian Dih.

58.  Ms Tam submits that Wong Sr had not been asked specifically the whereabouts of the alleged missing documents. If he had been asked and had explained that he had none to produce, it would have been entirely understandable that they had been lost due to the passage of time. However, the court has to weight the evidence in determining who first designed and produced the OK Angle Beads. It has been clear from the outset that what happened between 2000 and 2002 would be crucial in determining this important issue. As mentioned above, there were a lot of documents which could have been produced to substantiate the Defendant’s case, and the lack of documentary evidence in this regard certainly undermine the credibility of the defence case.

59.  Fifth, though Lai had passed away, it was clear from the outset that Lai would be an important witness in support of the Defendant’s case in the dispute between the Plaintiffs and the Defendant. Chow Sr had, in response to Wong Sr’s copyright complaint to the C&E in 2010, presented documentary evidence from the Taiwanese witnesses that the OK Angle Beads had been first designed and made by Hong of Fu Ming and that Chow Sr and his companies had purchased them from Li Talu (which had sourced them from Fu Ming and Hang Feng) and Tian Dih. Indeed, Wong Sr’s statements to the C&E show that he was already well aware of this soon after the raid. Since it is Wong Sr’s position that he had no knowledge of what had gone on in Taiwan as he had left the matters to Lai, if Wong Sr’s account were true, the obvious and natural thing for him to have done was to seek clarification from Lai regarding what the Taiwanese parties had said and to request Lai to make a statement to the C&E to rebut the allegations of the Taiwanese parties. However, he had not done so.

60.  Ms Tam submits that there is some evidence to show that Lai had moved to live in the Mainland before he died. Be that as it may, Lai was an important witness in support of the Defendant’s case. Knowing the seriousness of the allegations of the Taiwanese parties and given the ease of travel and communication between the Mainland and Hong Kong (even in 2000s), I still find it hard to understand why Lai could not have made a statement clarifying what happened in the crucial period from 2000 to 2002.

61.  Sixth, I find that the story given by Wong Sr as to his first contact with Tian Dih to be a rather odd one. According to Wong Sr, Lin had called him out of the blue in March 2000 to introduce himself and Tian Dih as a manufacturer specializing in producing plastic angle beads. With such an odd approach from a stranger, Wong Sr should have asked Lai to find out more about Lin and Tian Dih. During cross-examination, Wong Sr for the first time claimed that, Lai told him he had made enquires as to the existence of Lin and Tian Dih. Yet only very vague information was supplied to Wong Sr. Ms Tam submits that he was entrepreneurial, adventurous and ambitious by that time, but I still find it strange that Wong Sr would have conducted business with such a stranger without further background verification.

62.  Indeed, I find the Plaintiffs’ witnesses to be truthful and reliable witnesses.

63.  Hong is a simple and unsophisticated businessman. He is not highly educated, and he paid little attention to legal niceties such as intellectual property rights.  As he was the person who first designed and sold the OK Angle Beads, he considered himself as the owner of the “design rights” associated with the “OK” perforations in the use of angle beads. Indeed, whether any one owns or has sought to build up goodwill in the “OK” perforation has never been an issue in the present case. It has been consistently the position of the Taiwanese entitles that the OK Angle Beads were first created and produced by Fu Ming, but as this could not be registered, other manufacturers of angle beads in Taiwan had also produced and marketed the same. Hong also frankly admitted that Fu Ming was closed down because of certain tax issues with the Taiwanese authority.

64.  Ms Tam submits that Hong was argumentative and evasive and he had an inventory of pre-formulated answers which he would deploy in response to questions which he perceived to be too probing. I disagree. Hong is a simple person.  He was the head of a local village who does not possess the sophistication of an urban businessman. He did not understand why the legal process is so complicated, and that is why he did not have the patience of being cross-examined for such a long period of time. However, I do not consider that these would undermine the credibility of his testimony in any way. On the other hand, I accept him to be a simple and frank person who does not have the sophistication of fabricating a whole series of lies for the relatively marginal benefit of his or his son’s business. The reason why I say “relatively marginal benefit” is because the present litigation only concerns the use of the Suit Mark in Hong Kong whilst the Plaintiffs’ business is mainly based in Taiwan.

65.  I also do not accept Ms Tam’s criticism that there is any confusion or inconsistency in his evidence. There is no issue about the close relationship between Fu Ming and Hang Feng and there is no point for Hong to have understated his role in Hang Feng. As Chow Sr was only one of his customers, it is only natural that he could not recall the exact number of times they met. Hence, Ms Tam’s observations would not affect the credibility of his evidence.

66.  Ms Tam submits that Hong’s account about getting his inspiration about the use of “OK” from the television programme is incredible. Hong is a man who knows very little English, and he said he forgot when he was asked if he remembered which two letters were perforated by Fu Ming. Further, there was no point for him to have spent additional money to create a new specification of angle beads bearing “OK” perforations.

67.  I disagree. Hong is a simple person. Though he does not know much English, he relied on television programme as the source of inspiration to create the OK Angle Beads. Given “OK” is a versatile expression used by people of different backgrounds and cultures to signify assent, agreement, approval or acknowledgement (which all indicate something positive), it is possible for non-English speaking person like Hong to have come up with the idea of using “OK” in the design of angle bead. Further, Hong had already explained that no additional costs would have to be incurred for creating the OK Angle Beads as there would have to be moulds manufactured for beads with other perforations. Having expressed his view as someone who had experience in mould making, there is nothing illogical about his answer.

68.  I also accept Zhang to be a truthful witness. He is a more independent witness and there is nothing for me to doubt the credibility of his evidence. In particular, his evidence is supported by an agency contract made between Hang Feng and Li Talu in 2002 bearing the latter’s fax number. Again there is nothing for me to doubt the authenticity of such document.

69.  Ms Tam attacks the credibility of Zhang’s evidence by saying that Zhang was eager to impress the court of his pivotal role in the export of angle beads and how wrong Wong Sr was in disrespecting his status as the export agent. However, I doubt whether these reasons alone, even if they were true, would have motivated Zhang to give a false account in support of Hong’s evidence. As compared with Wong Sr or even Hong, there is much less reason for Zhang to have fabricated the evidence in support of the Plaintiffs’ case.

70.  Lin has been cross-examined in length about his evidence of the production of the moulds for the Defendant in 2001 and 2002 and the change of his business to the supply of plastic products and the change of the name to “Tian Dih” in April 2001. His evidence has remained unshaken and I accept Lin to be a reliable witness. Ms Tam tries to discredit Lin’s evidence by saying that Tian Dih could not have started his plastic angle beads business so abruptly in April 2001 with no prior preparatory work or research. Nevertheless, Lin did provide a detailed account as to how he had switched to the angle beads business in 2001, and the documentary evidence about the change of name of his business also corroborates his account in this regard.

71.  Lin’s evidence that he only started to supply the OK Angle Beads to the Defendant from 2002 is consistent with what Wong Sr said in his witness statements made to the C&E on 28 May 2010, 8 June 2010 and 2 June 2020, in which Wong Sr said that he had started to source the OK Angle Beads from Tian Dih because there were quality problems with Hang Feng’s OK Angle Beads. It is also consistent with Hong’s evidence that Hang Feng ceased to deal with Wong Sr and the Defendant after Hang Feng’s last shipment to the Defendant in 2002 because, whilst Hang Feng had agreed to a price deduction on condition that Wong Sr would return the alleged sub-standard products to Taiwan, Wong Sr had failed to do so. Indeed, the documents show that after Hang Feng had agreed to the price deduction, the remittance of the discounted price was made on 9 October 2002 and Wong Sr had written “新辦事項, 悉隨專便, 絕不強求” (new matter, entirely at your discretion, absolutely no pressure) on the copy of the Remittance Application. Thereafter, the Defendant started to place the order for the OK Angle Beads from Tian Dih.

72.  Further, Ms Tam’s criticism of Lin’s evidence also has little merit. It is only natural that, after so many years, Lin would not be able to recall the exact reason as to why he did not try to find out how Wong Sr came to know about his newly established factory.

73.  In an attempt to discredit the Plaintiffs’ witnesses, Ms Tam tries to rely on the various letters written by Tian Dih and Hong on behalf of Hang Feng purportedly apologizing for the quality of the goods they supplied. Ms Tam submits that these letters tend to support that Fu Ming, Hang Feng and Tian Dih were only original equipment manufacturers (OEMs) and the Defendant was the only entity which had exercised quality control over the OK Angle Beads. I disagree. Hong and Lin, the evidence of which I accept as the truth, had already explained how they came to supply the OK Angle Beads to the Defendant. The parties might have adopted an attitude with a view to appease the Defendant to avoid further conflicts, and I do not find that there is anything in these letters indicating that Wong Sr was the first person designing or producing the OK Angle Beads.

74.  On the other hand, I have grave reservation about the credibility of the Defendant’s witnesses.

75.  I have already explained above as to why I find Wong Sr’s account to be unreliable. Ms Tam submits that Wong Sr’s story should be believed as there is evidence to support his case, such as: (i) Wong Sr’s diary entry recording a dinner with Chow Sr and Lai on 25 May 2000; and (ii) Wong Sr’s diary entry for 1 August 2001 recording a dinner with Hong in Hong Kong. However, given the queries about the genuineness of the July 2000 Guarantee and the March 2001 Guarantee, I have grave reservation as to whether these diary entries were indeed true. Even if they were, these entries tell the court very little about the contents of the discussions at these meetings. Hence, I do not find that these diary entries can take the Defendant’s case any further.

76.  For Tse, since he did not know about what happened in the market in Taiwan at the relevant time, his evidence is of limited value in the present case. In any event, the evidence shows that Tse was prepared to exaggerate his evidence in order to support his “friend’s” case. He initially claimed that he did not know Chow Sr’s companies were also supplying the OK Angle Beads.  However,he was forced to resile from such denial when he was confronted with clear documentation showing that he had personally placed an order for the OK Angle Beads with the 1^st Plaintiff in 2008 and had signed cheques for the payment of the same. He further admitted that there were subsequent purchases of the OK Angle Beads from Chow Sr’s companies but he claimed to have forgotten whether there had been earlier purchases. He also admitted that the Defendant was not the only company selling the OK Angle Beads because Chow Sr’s companies were also doing so.

77.  In trying to explain away such inconsistency, Tse said that he did not know if Chow Sr’s companies were the authorized dealers of the Defendant. I agree with Mr Yan that such explanation is clearly disingenuous as:

(i)      It is common ground that Wong Sr and Chow Sr have been competitors in the trade for many years.

(ii)     Tse himself admitted that he had known both Wong Sr and Chow Sr for at least 20 years. As such, and being the honorary president of the Hong Kong Construction Sub-Contractors Association (香港建造業分包商聯會) in whose publications the Defendant had placed advertisements setting out the Defendant’s authorized dealers, it is incredible that Tse would not have known that Chow Sr’s companies were not the authorized dealers of the Defendant.

(iii)    Tse admitted in his testimony that when Wong Sr sold the OK Angle Beads to him, they were referred to as “OK 牌膠角條” (“OK” brand plastic angle beads). But when Chow Sr’s companies sold OK Angle Beads to him, he knew that they were sold under “安威牌” (“Anwell” brand).

78.  For these reasons, I do not accept Tse as a reliable witness.

79.  Lam was not involved in the dealings between Wong Sr and the Taiwanese parties, and so his evidence is of limited value in the present case. In any event, Mr Yan has rightly highlighted two features of his testimony which cast doubt on the credibility of his evidence:

(i)      Lam testified in his witness statement[11] that the trade and the customers would refer the plastic angles beads of the Defendant as “OK膠角條” (OK plastic angle bead). But during cross-examination, he agreed that it was because when the plastic angle beads were sold, the packaging bore the Stylised OK Device and people knew that all the products of the Defendant were referred to as “OK牌” (OK brand) products. In other words, the Defendant’s angle beads might just be generic angle beads sold under the brand name “OK”.

(ii)     Lam testified in his witness statement[12] that he started to do business with Wong Sr in late 1999 or early 2000 when his company first tried out selling generic angle beads supplied by Wong Sr (bearing only perforations which were round-shaped). However, during cross-examination, he said that the Defendant was already there when he did business with Wong Sr. Since the Defendant was only incorporated on 12 March 2001, it is clear that Lam only started to have business dealings with Wong Sr after 12 March 2001. Accordingly, as at that date and for a certain period thereafter, the Defendant and Wong Sr were dealing in generic angle beads.

80.  Hence, Lam’s evidence cannot assist the Defendant’s case.

81.  For Sin, since he was not involved in Wong Sr’s dealings with the Taiwanese factories, his evidence is of limited value in the determination of the factual disputes between the Plaintiffs and the Defendant. His evidence adds no weight to the oral testimony of Wong Sr.

82.  Finally for Wong, there is nothing for the court to doubt the credibility of his evidence and Wong Sr might have used “OK” or the Stylized OK Device for his business in the early 1990s. However, it is one thing to say that Wong Sr did use the Stylized OK Device or such trade name for his business (not by then related to the supply of angle beads or construction materials), it is another to say that Wong Sr was the person who first designed, produced or supplied the OK Angle Beads.

83.  Ms Tam submits that, since Wong Sr had all along been using the trade name “OK” for his business, he had every reason to use a repetition of “OK” as a trade mark on a new angle bead product. Be that as it may, it was possible that Wong Sr might have come across the OK Angle Beads in the market. Thinking that such product did fit his business which had been using “OK” as a trade name, he decided to ride on this product. I find that it was the case here.

84.  For the above reasons, I accept the Plaintiffs’ case on the factual issues on the balance of probabilities.

BAD FAITH GROUND UNDER S 11(5)(b)

(i)  The legal principles

85.  There is no serious dispute about the legal principles for the bad faith ground as succinctly summarized in the following authorities: Wong To Yick Wood Lock Ointment Ltd v Nippon Taisun (HK) Ltd[13],   Owndays Co., Ltd. & Anor v Professional Optometrist Limited & Ors[14], and Lidl Great Britain Ltd v Tesco Stores Ltd[15]. In short, bad faith includes not just dishonesty but also some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area being examined. The tribunal must first ascertain what the defendant knew about the matters in question and then decide whether, in the light of that knowledge, the defendant’s conduct is dishonest (or otherwise falls short of the standards of acceptable commercial behaviour) judged by ordinary standards of honest people.  The applicant’s own standards of honesty (or acceptable commercial behaviour) are irrelevant to the enquiry.

86.  In the Agreed List of Issues, the parties have listed out a number of factual issues which would be relevant in determining whether the Suit Mark should be invalidated on the bad faith ground. I now address those listed issues.

(ii)    Whether it was Hong or Wong Sr who created the OK Angle Beads?

87.  In determining the bad faith ground, one of the crucial factual issues is to identify the person that created the OK Angle Beads. As I prefer to accept the evidence of Hong (and indeed that of the other Plaintiffs’ witnesses) over that of Wong Sr for the reasons given above, I find that it was Hong of Fu Ming who first came up with the design of the OK Angle Beads in 2000 and started supplying them to the 2^nd Plaintiff through Li Talu in February 2001. Further, I reject the evidence of Wong Sr and accept the evidence of Lin that Tian Dih first started to deal with the Defendant in November 2001. Wong Sr asked Lin whether Tian Dih would supply the OK Angle Beads to the Defendant, and Tian Dih first supplied such products to the Defendant in 2002.

(iii)   Whether the Plaintiffs have been using the design of the Suit Mark in Hong Kong continuously upon and in relation to angle beads, specifically the OK Angle Beads, as a trade mark or at all for resale to professional customers in the building and construction trade?; And if they have, since when?

88.  From the evidence, it is clear that the Plaintiffs and their related company (i.e. Putzpro) have, at various times, been continuously sourcing from Taiwan and offering for sale and selling the OK Angle Beads since the 2^nd Plaintiff’s very first purchase of such OK Angle Beads (initially created, produced and supplied by Fu Ming) from Li Talu in February 2001. The documents in February 2001 clearly show that the parties were dealing with “OK” angle beads. Since there is no evidence that the parties had by that time used “OK” as a brand, the reference to “OK” angle beads in these documents must mean the OK Angle Beads as a product.

89.  There is also ample evidence, including the testimony of the various witnesses, the distributorship agreements, product catalogues and price lists, to support the continuous sourcing, sales and supply of the OK Angle Beads after the first sale in February 2001. Indeed, large quantities of the OK Angle Beads were seized by the C&E during the 2010 Raid and the 2019 Raid.

90.  Ms Tam submits that Chow Sr actually admitted that it was only from 2008 that the 2^nd Plaintiff started to import angle beads from Tian Dih, which was roughly when the relationship between Tian Dih and the Defendant turned sour. Chow Sr also admitted that the OK Angle Beads only accounted for a small portion of the Plaintiffs’ business. As there is no independent evidence of offer for sale or sale between 2001 and 2008 and between 2010 and 2018 by the Plaintiffs, there was no continuous sourcing, sales or supply of the OK Angle Beads by the Plaintiffs in Hong Kong.

91.  However, I agree with Mr Yan that the Defendant has only cited part of the evidence. It has all along been the evidence of the Plaintiffs’ witnesses that the Plaintiffs had been selling the OK Angle Beads in Hong Kong since February 2001. Even Tse accepted that he had been buying the OK Angle Beads from Chow Sr’s companies from 2008, and Wong Sr admitted that the Plaintiffs had been selling the OK Angle Beads for a long time. Hence, even if the sale of the OK Angle Beads only accounted for a small portion of the Plaintiffs’ business, one cannot deny that there has been continuous sales of the OK Angle Beads by the Plaintiffs since 2001. Given that the Plaintiffs and the Defendant were close rivals in the same industry, it would be difficult for me to accept that Wong Sr or the Defendant was not aware of such continuous sales by the Plaintiffs.

92.  The next question is whether the Plaintiffs have been using the design of the Suit Mark in relation to angle beads as a trade mark. It is true from the evidence of Hong that he had not given a lot of thoughts as to using the design of the repeated “OK”s perforation as a trade mark of the OK Angle Beads. However, as mentioned in §63 above, whether any one owns or has sought to build up goodwill in the “OK” perforation, or whether any one has made trade mark use of the “OK” design have never been a material issue in the present case. Nevertheless, with the passage of time, trade users might have identified the angle beads with a repeated “OK” pattern as indicating certain origin of the goods. At the relevant times, people in the trade, at least in Hong Kong, would probably have known that there were OK Angle Beads marketed by the Plaintiffs and the Defendant. But as I will further elaborate below, whether the Plaintiffs’ continuous sales of the OK Angle Beads amount to trade mark use of the Suit Mark is not a material issue in determining the question of bad faith.

(iv)   Whether the Defendant has been using the Suit Mark in Hong Kong continuously upon and in relation to angle beads, specifically the OK Angle Beads, as a trade mark or at all for resale to professional customers in the building and construction trade?; And if it has, since when?

93.  There is no dispute that the Defendant has been marketing and selling the OK Angle Beads since 2001.

94.  At the trial, the Plaintiffs have raised a point that, while the Defendant had sold strips of angle beads bearing innumerable “OK” perforations, there was no use of separate groups of 7 “OK” perforations as shown in the Suit Mark by the Defendant.  Mr Yan tries to rely on this point to argue that the Suit Application (and indeed the application for the 7OKs RD as hereinafter defined[16]) was made in bad faith.[17]

95.  On this particular issue, I find that there is no documentary evidence to show that the Defendant had used or sold products with separate groups of 7 “OK” perforations as shown in the Suit Mark. Even the Defendant’s own publicity, marketing and packaging materials show that there was no such case. Indeed, a lot of such materials show that the Defendant only used the Stylized OK Device.

(v)    Whether the knowledge or consent of Fu Ming and/or its successor was necessary for the Subject Application for registration of the Suit Mark in Hong Kong as a trade mark?; And if so, whether they had granted any right to the Defendant to apply for registration of the Suit Mark in Hong Kong as a trade mark?

96.  There is no dispute that neither Fu Ming nor its successor Hang Feng had granted any right to the Defendant to apply for registration of the Suit Mark. However, as shown in the analysis below, whether there was indeed such grant of right is not relevant in the determination of the bad faith issue.

(vi)    Whether the Defendant had knowledge of any of the matters as particularized in §4(b) of the Re-Amended Originating Summons as at the date of application for registration of the Suit Mark, namely 10 December 2012?

97.  As I accept the evidence of the Plaintiffs’ witnesses, coupled with the unchallenged fact that the Plaintiffs and the Defendant had been in direct competition with each other for all the time since early 2000s, Wong Sr must have known the Plaintiffs had been buying angle bead products made by Fu Ming, or subsequently by Hang Feng and Tian Dih, including beads with the “OK” pattern, for import into Hong Kong continuously since that time. In any event, from 2010 the latest, the Defendant must have known about this by reason of the evidence which had been presented by Chow Sr and the Plaintiffs’ witnesses to the C&E in response to Wong Sr’s copyright complaint leading to the 2010 Raid. Hence, there is no issue that the Defendant had the relevant knowledge at the date when it applied to register the Suit Mark in 2012 (“the Application Date”). Indeed, when asked if he agreed that the Plaintiffs sold the OK Angle Beads from 2008 to 2010 during re-examination, Wong Sr accepted that the Plaintiffs had been selling the OK Angle Beads for a long time.

(vii)   Whether the Plaintiffs had, prior to the Subject Application, been competitors with the Defendant in the sale and supply of, inter alia, products, materials and accessories used in the building and construction trade including the OK Angle Beads in Hong Kong?; And if so, since when?

98.  The answer to the first question must be in the affirmative. Further, as the objective documentary evidence clearly shows that: (i) the 2^nd Plaintiff had first sourced and obtained supplies of the OK Angle Beads from Li Talu from February 2001 (before the Defendant was even incorporated); and (ii) the Defendant had commenced purchasing and importing OK Angle Beads from Fu Ming in late 2001, the Plaintiffs had been competitors with the Defendant in the sale of OK Angle Beads since late 2001.

(viii)  Whether the Subject Application was intended to target and unfairly compete with the Plaintiffs in the trade of the OK Angle Beads in Hong Kong?

99.  This is one of the main issues in determining whether the Subject Application was made in bad faith.

100.  Mr Yan submits that the Subject Application was part of the Defendant’s continued efforts to target and unfairly compete with the Plaintiffs in the trade of the OK Angle Beads in Hong Kong:

(i)      Since early 2000s, the Plaintiffs and the Defendant had been direct competitors in the sale and supply of, inter alia, products, materials and accessories used in the building and construction trade including the OK Angle Beads in Hong Kong.

(ii)     On Wong Sr’s own evidence, he had, in 2008, seen the OK Angle Beads featured in the 2^nd Plaintiff’s 2007 and 2008 product catalogues. The 2008 catalogue featured a photograph of a strip of “A1” OK Angle Beads with 7 repeated “OK” perforations placed alongside a cross-section drawing illustrating an “A1” angle bead with underhooks.

(iii)    On 21 November 2008, the Defendant applied to register a design of an angle bead. The illustrations of the design applied for included a photograph of a strip of OK Angle Beads with 7 repeated “OK” perforations and a cross-section drawing illustrating an “A1” angle bead with underhooks just like the one shown in the 2^nd Plaintiff’s 2008 catalogue. This could hardly have been coincidental and must have been copied or imitated from the 2^nd Plaintiff’s catalogue. Wong Sr’s claim that he only so happened to have provided a strip of OK Angle Beads with 7 repeated “OK” perforations to the solicitor is wholly unconvincing and incredible.

(iv)    Wong Sr’s purported explanation about the registered design referred to in the previous paragraph (“the 7 OKs RD”) is unconvincing in the light of yet another registered design applied for by the Defendant on 2 December 2008, just over a week later. This registered design (“the Dual-Coloured Angle Bead RD”) was for the design of a dual-coloured angle bead which, on Chow Sr’s undisputed evidence, had been personally conceived by him and had been the subject matter of 2 prior registered designs registered by the 2^nd Plaintiff. Such dual-coloured angle bead had also been featured in the 2^nd Plaintiff’s 2008 catalogue.

(v)     Wong Sr’s own testimony was that he had never sold dual-coloured angle beads of the type shown in the Dual-Coloured Angle Bead RD, that he had known all along that the 2^nd Plaintiff had been marketing such angle beads and that he had not designed these dual-coloured angle beads. However, when he was asked why he had applied for the Dual-Coloured Angle Bead RD despite his not having sold or designed the dual-coloured angle beads of the type shown therein, he said he could not provide any explanation.

(vi)    Despite Wong Sr’s denials under cross-examination, he must have known that both the 7 OKs RD and the Dual-Coloured Angle Bead RD were invalid. Wong Sr must have decided to apply to register these registered designs in order to deploy them to impress or frighten unsuspecting customers into thinking that the Defendant owned the rights in such designs.

(vii)   Accordingly, the Defendant never sought to rely upon them after they were granted in 2009 to take action against Chow Sr or his companies. Instead, in 2010, Wong Sr chose to target Chow Sr and the 2^nd Plantiff by making unmeritorious complaint of copyright infringement against them to the C&E. Wong Sr also sought to cause maximum damage and embarrassment to Chow Sr by spreading rumours that Chow Sr had been put in prison.

(viii)  Having failed in their efforts to target Chow Sr’s (and his companies’) trade in the OK Angle Beads by making the complaint of copyright infringement, Wong Sr and the Defendant then sought another way to target them by applying to register the Suit Mark:

(a)  The Defendant filed the Subject Application on 10 December 2012, just over 2 weeks after the 2010 C&E matter had been finally concluded by the hearing on 21 November 2012 of C&E’s summons applying for disposal of 22 boxes of the OK Angle Beads which did not belong to the 2^nd Plaintiff.

(b)  Under cross-examination, Wong Sr could provide no reason for adopting 7 “OK”s for the Suit Mark. In particular, the Defendant had never made use of separate groups of 7 “OK” perforations.

(c)  Whilst the Defendant applied for registration of a trade mark in Taiwan a few months before the Application Date and when the Defendant applied for registration of a trade mark in the Mainland a couple of months after the Application Date, neither application was for registration of the Suit Mark. When asked why he did not apply for registrations of the Suit Mark in Mainland and Taiwan when he had applied for registration of the Stylised OK Device in those jurisdictions, his answer was that he did not know, and that the lawyer did not apply for him so there was no registration. He further explained that it was because he had no market in the Mainland or Taiwan. However, if there was indeed no market, it is difficult to explain why the Defendant would have applied for registration of the Stylised OK Device in the first place.

101.  Under such circumstances, Mr Yan submits that Wong Sr must have decided to apply to register 7 “OK”s as a trade mark only in Hong Kong for the same reason that he had applied for the 7 OKs RD, that he had seen and knew that the 2^nd Plaintiff was using a representation of a strip of OK Angle Beads with 7 repeated “OK” perforations in its product catalogues, and wanted to target the 2^nd Plaintiff and Chow Sr’s companies. The Defendant’s intention must have been to take advantage of the rights conferred by the registration of the Suit Mark to compete unfairly with its long-time competitors, namely Chow Sr’s companies, and to prevent them from further dealing in the OK Angle Beads. Mr Yan further argues that the purpose of the Defendant’s registration was to obtain a monopoly in Hong Kong over the OK Angle Beads through the Suit Mark, adverse to the interests of Chow Sr’s companies and also those of their suppliers, namely Li Talu, Hang Feng and Tian Dih. As Wong Sr was aware of the following at the Application Date: (i) that it was Fu Ming who originated the design of the OK Angle Beads; and (ii) that Li Talu, Fu Ming, Hang Feng and Tian Dih had been supplying the OK Angle Beads to Chow Sr’s companies for marketing and sale in Hong Kong for over 11 years by the Application Date, the Subject Application was made in bad faith.

102.  I accept Mr Yan’s submissions. In determining whether the Subject Application was made in bad faith, the court has to examine the conducts of the parties over the years before the Application Date.  The evidence shows that the Defendant fully knew that the Plaintiffs and the Defendant had been competitors in the sale of the OK Angle Beads. Irrespective of whether the Defendant had copied the materials in the 2^nd Plaintiff’s 2008 catalogue in applying for the 7 OKs RD, it is beyond dispute that the dual-coloured angle bead was the product first marketed by the Plaintiffs (in fact it was the most successful product of the Plaintiffs), and yet the Defendant applied to register the design for such product with no legitimate reason as to why it did so.

103.  With a view to explain this, Wong Sr said that he had left it to a lawyer with the surname “Ting” to handle registration matters and was not fully apprised of what the lawyer had done. Given that Wong Sr was by then a businessman with considerable experience, I do not accept that his lawyer would have applied for registration of the design of a successful product of his competitors without his knowledge.   Further, according to Wong Sr, he had never sold the dual-coloured angle beads. If that were true, it is difficult to explain the queries as to: (i) why Wong Sr sought to register the Dual-Coloured Angle Bead RD; and (ii) how the lawyer came to know about the dual-coloured angle beads. Indeed, the Plaintiffs had raised the complaint about the registration of the Dual-Coloured Angle Bead RD very early in Chow Sr’s affirmation, and it is difficult to understand why the Defendant had only revealed the evidence relating to the handling of the application by lawyer “Ting” for the first time in his oral testimony. This certainly undermines the credibility of Wong Sr’s explanation.

104.  The fact that the Defendant had only applied for the registration of the Stylised OK Device in Taiwan (but not the Suit Mark with 7 repeated “OK” perforations) is also consistent with the Plaintiffs’ case that Wong Sr and the Defendant all along knew that there had been a lot of suppliers in Taiwan producing and suppling the OK Angle Beads.

105.  After the C&E decided not to make any prosecution against the 2^nd Plaintiff following the 2010 Raid, the Defendant then made the Subject Application with a view to stop the Plaintiffs from continuing to sell the OK Angle Beads. As the Defendant and Wong Sr should have known that it was Fu Ming that first designed and marketed the OK Angle Beads and the Plaintiffs had been selling the OK Angle Beads for many years, irrespective of whether such continuous sales amount to trade mark use, the Subject Application must have been targeted unfairly against the Plaintiffs and certainly falls short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the trade.

106.  There is also an issue as to the response of the respective parties in respect of the sale of the OK Angle Beads by the counter party. The Defendant claimed that it was only aware of the sale of the OK Angle Beads by the Plaintiffs by reference to their catalogues in 2008. This cannot be true, as I accept the Plaintiffs’ witnesses that Hong had been supplying the OK Beads to the Plaintiffs as early as February 2001. Given that the Plaintiffs and the Defendant were close competitors, it was unlikely that, even the quantity of the sale might not be substantial, the Defendant was not aware of the sale of the OK Beads by the Plaintiffs before 2008. Under such circumstances, it begs the question as to why the Defendant had not taken steps against the Plaintiffs much earlier.

107.  On the other hand, Ms Tam complains that the Plaintiffs had not taken any steps to stop the Defendant from selling the OK Angle Beads since 2001. However, such complaint is a non-starter. Hong did not believe that he had any legal right in registering the “OK” pattern or its design, and so obviously no one would have any protest against the Defendant for its sale of the OK Angle Beads. Again as pointed out by Mr Yan, whether Hong had any intellectual property right in respect of the “OK” pattern or its design is not a material issue. The question here is: knowing that Hong was the first person who designed and produced and the OK Angle Beads and that the Plaintiffs had been selling such angle heads for a long time, whether the Subject Application, with a view to obtain a monopoly in the sale of the OK Angle Beads in Hong Kong targeting the Plaintiffs, was made in bad faith? In my judgment, the answer must be in the affirmative.

108.  Ms Tam argues that since Wong Sr had been the only one in Hong Kong using the Suit Mark as a trade mark of the Defendant’s OK Angle Beads, he genuinely believed that the registration of the Suit Mark was a legitimate measure to protect the Defendant’s right. However, such argument has failed to take into account the competition between the Plaintiffs and the Defendant and their conducts throughout the years, in particular: (i) Fu Ming was the first entity designing and marketing the OK Angle Beads; (ii) the Plaintiffs have been sourcing the OK Angle Beads from Taiwan for sale in Hong Kong for many years; and (iii) Wong Sr had been trying to obtain registration of the design of his competitor’s products.

109.  For the above reasons, I find that the Subject Application was made in bad faith. Accordingly, I make an order invalidating the registration of the Suit Mark.

OTHER GROUNDS FOR INVALIDATING THE REGISTRATION OF THE SUIT MARK

110.  It is quite unnecessary for me to deal with the other grounds for invalidating the registration of the Suit Mark. However, if this case goes elsewhere and a contrary view is taken about my finding on the bad faith ground, it is desirable for me to deal with the merits of the other grounds as well.

111.  In his final submissions, Mr Yan mainly relies on ss 11(b) and (c) of the TMO. According to him, the Suit Mark is descriptive of the quality and characteristics of the Subject Goods, namely the angle beads, and is devoid of distinctiveness. He relies on the case of “ok.” Mark[18], in which the European Union Intellectual Property Office refused an application to register the mark “ok” holding, inter alia, that “it is the Office’s belief that the relevant consumer will simply and straightforwardly understand the term “ok.” as a banal slogan, the function of which merely serves to highlight positive aspects of the goods concerned, namely that they are good.”  The Suit Mark consists of the representation of part of an OK Angle Bead showing 7 repetitions of “OK” which would, if noticed by average consumers of the Subject Goods, simply convey the message that the Subject Goods are of satisfactory or acceptable quality or that they are good. The Suit Mark is therefore descriptive and indistinctive of the Subject Goods, and incapable of distinguishing the Subject Goods of one undertaking from the other undertakings. Furthermore, the Defendant had previously made an unsuccessful application to register a very similar mark consisting of the representation of part of an OK Angle Bead showing 4 repetitions of “OK” (i.e. the 4 OKs Application), and there is no substantial distinction between the two applications.

112.  Further, Mr Yan submits that there is no evidence on acquired distinctiveness. As there is no evidence of any use of separate groups of “OK”s pattern or perforations by the Defendant, there is no use of the Suit Mark that helps to acquire its necessary distinctiveness.

113.  Despite Mr Yan’s able submissions, I do not find in favour of the Plaintiffs on the other grounds of invalidation.

114.  First, the Suit Mark in the present case is not simply one “OK” but a repetition of 7 “OK”s.  Unlike a single “OK”, a repetition of 7 “OK”s has a certain degree of inherent distinctiveness. It cannot be regarded as a descriptive mark.

115.  Further, the way the Suit Mark has been used by the Defendant and indeed the Plaintiffs in the course of trade is by perforating “OK” shape and applying them continuously along the length of a plastic angle bead.  Though there may not have been use of groups of specific 7 “OK”s, average consumers, consisting of those in the Hong Kong construction industry, in particular masons, contractors and project managers, probably would have associated a mark with numerous repetition of “OK” as indicating certain origin of the goods. Indeed, though Hong had not given a lot of thought as to the use of numerous “OK”s as a trade mark, the Plaintiff’s witnesses agreed that the people in the trade in Taiwan, by looking at the repeated “OK”s pattern on the angle beads, could tell that the angle beads came from Fu Ming. In Hong Kong, trader users would probably have associated products with such kind of pattern with the Plaintiffs and the Defendant. Hence, no matter who owned the goodwill associated with the Suit Mark, such mark did acquire a certain degree of distinctiveness thereby making it capable of being registered as a trade mark.

116.  I also do not find that the case of “ok.” Mark[19] can assist the Plaintiffs’ objection. It is generally unhelpful to rely on cases dealing with different average consumers and different subject goods.  After all, that case is not about a mark with numerous repetition of “OK”s. Further, I would not attach any weight to the result of the 4 OKs Application. The decision made by the Registrar of Trade Marks, in particular one made without proper arguments or consideration of the evidence advanced by the parties, is not binding on this court. In any event, the Registrar allowed the registration of the Suit Mark in 2012.

117.  I do not think I need to deal with the other grounds of invalidation under s 3(1), s11(1)(a) and s 11(1)(d) of the TMO. The Suit Mark is certainly not a generic mark by reason of the matters mentioned above.

118.  For the above reasons, I would not invalidate the registration of the Suit Mark based on the other grounds.

119.  Hence I make an order invalidating the registration of the Suit Mark based on the bad faith ground. I also make an order nisi that the costs of the present proceedings be to the Plaintiffs with certificate for 2 counsel, which shall be made absolute 14 days after the date of the handing down of this Judgment.