MGA ENTERTAINMENT INC. v. YOKON INTERNATIONAL LTD AND OTHERS

HCA 4380/2003

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 4380 OF 2003

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

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

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

J U D G M E N T

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

1. Toys are always popular at all times.  Popular toys are not just play-things.  They involve enormous amount of business.  Consequently, they would easily attract imitators.  In this case, we are concerned with a line of dolls called “BRATZ”.

BACKGROUND

The “Bratz” dolls

2. The Plaintiff is a company incorporated and existing under the laws of the United States of America carrying on business in the design, manufacture and sale of, inter alia, toys and dolls.  Amongst the Plaintiff’s products, there are a series of fashion dolls known as “BRATZ” dolls.  According to the Plaintiff, the “BRATZ” dolls were originally developed under a distinct theme of denoting hip and cool young adolescent or teenage girls and consisted of four dolls representing different ethnic origins, namely, Cloe (Caucasian), Sasha (Black), Yasmin (Hispanic) and Jade (Asian).  The theme is that they represent 4 best friends in high school who love to trade clothes, shoes and hairdos.  Their accessories are interchangeable and thus they can look different everyday.  Subsequently, two more female dolls, namely, Meygan and Dana, and four male dolls were added to the range.

3. In the USA, the “BRATZ” dolls have brought numerous awards for the Plaintiff.  In 2001, the “BRATZ” line of products won the Toy Industry Association (“TIA”) People’s Choice Toy of the Year Award, the Family Fun Toy of the Year Award and Toy Wishes Hot Pick Award.  In 2002, the “BRATZ” line again won the TIA People’s Choice Toy of the Year Award and the Family Fun Toy of the Year Award.  LIMA, the licensing industry’s official arm, awarded the Plaintiff’s “BRATZ” the best character license of the year as well as the overall best licensed property of the year for 2003.  The “BRATZ” also earned the TIA “Property of the Year” and “Girl Toy of the Year” for 2003, as well as the Family Fun Toy of the Year Award.  MSNBC named “BRATZ” the “Hottest Toy of the Year 2004”, and both the Plaintiff and “BRATZ” received several other accolades in 2004, including the Suppliers Performance Award by Retail Category in the Girls’ Toys Category sponsored by DSN Retailing Toy/Apperel Merchandising.  Additionally, in 2001 and 2002, “BRATZ” related toys won Today’s toy tests.

4. Since their market introduction, the “BRATZ” dolls were sold in more than 52 countries and regions in the world including Hong Kong.  They were first sold in Hong Kong in mid-December 2002 and are available for sale in retail outlets such as Jusco, Toys ‘R’ Us, Sogo, Citi-Store, Seibu, Seiyu and Kalm’s.  Shortly before and after the launch of the “BRATZ” dolls in Hong Kong, the dolls received considerable attention from the media such as Sing Tao Daily and South China Morning Post.  They also have their own website at www.bratzpack.com which is and was at all material times accessible worldwide.  The website also maintains a fan club known as “BRATZ” pack which maintains a list of its members.  The aim of this fan club is to notify its members of new fashion trends that the “BRATZ” dolls will wear themselves and the launch and marketing thereof.

5. Moreover, the Plaintiff is and was at material times the registered proprietor of the trademarks nos.200213329 for “BRATZ and device” and 200309866 for the mark “BRATZ” in plain capital letters, both are registered in Class 28 in respect of dolls and doll accessories.

The Plaintiff’s case

6. The 1^st and 2^nd Defendants are and at all material times were companies incorporated and existing under the laws of Hong Kong.  The 3^rd Defendant is and at all material times was the common director of both the 1^st and 2^nd Defendants which carry on the business of toys manufacturing and trading. 

7. In the Amended Statement of Claim, the Plaintiff claims against the 1^st and 2^nd Defendants for infringement of copyright, infringement of registered trademarks and passing off, and against the 3^rd Defendant as joint tortfeasor who renders himself personally liable together with the 1^st and 2^nd Defendants, all in respect of the alleged infringing/wrongful acts done by the 1^st and 2^nd Defendant, as described herein below.

8. The Plaintiff now applies for summary judgment under Order 14 against the 1^st, 2^nd and 3^rd Defendants. 

9. In this application for summary judgment, Mr. John Yan S.C. appearing with Mr. Colin Shipp, Counsel for the Plaintiff, indicated that the claim for infringement of copyright would not be pursued for summary judgment purpose.  Hence, this application only concerns with the Plaintiff’s claims against the Defendants in respect of the remaining two causes of action, namely, infringement of registered trade marks and passing off.

The alleged infringing/wrongful acts of the Defendants

10. The Plaintiff came to have knowledge of the alleged infringing/wrongful acts of the 1^st and 2^nd Defendants based on the documents obtained in another previous High Court Action No.3242 of 2003 (“HCA 3242”) against a toy trading company named “Union Top (H.K.) Co. Ltd.” (“Union Top”) which was commenced by the same Plaintiff.  In that HCA 3242, I made an Anton Pillar Order together with interim injunction on 28^th August 2003 which was amended on 29 August 2003.  The said Anton Pillar Order was executed on 29^th and 30^th August 2003 by the Plaintiff’s solicitors at the office of Union Top.

11. From the documents disclosed during the execution of the said Anton Pillar Order, the Plaintiff’s solicitors found a photograph of three dolls in packaging bearing false trademark “BRATZ and device” marked Y1288-2DD and 1D1987WB in one of the computers in Union Top’s office, all appear to be very similar to the Plaintiff’s “BRATZ” dolls and their packaging.

12. The Plaintiff further discovered the following articles :

(a)   a product item list in the office of Union Top showing that the maker and the maker no. in respect of item no.1D1987WB described as “12” BRATZ FASHION GIRLS, 4 ASST” to be GOLDEN CITY (the 2^nd Defendant herein) and Y1288-1DD respectively; and

(b)   actual samples of four dolls (“the alleged Infringing Dolls”) in the packaging bearing the false trademark “BRATZ and device” (“the alleged Infringing Packaging”).  The four  alleged Infringing Dolls in the alleged Infringing Packaging were hidden in the false ceiling in a showroom of Union Top’s office.

13. The following documents were also found during the execution of the said Anton Pillar Order :-

(a)   a purchase order numbered Order No. 03010045-15(B) dated 20 January 2003 from Union Top to the 1^st Defendant, for the order of 1,824 pieces of the alleged Infringing Dolls described as “12” BRATZ FASHION GIRLS, 4 ASST” with item no. 1D1987 WB; Vendor and Customer Reference Code Y1288-2DD; Packaging; Each in Window Box, for the amount of HK$15,655.39;

(b)   an invoice no. YI-03-0003, for Order No. 03010045-15(B), dated 29 February 2003 issued by the 1^st Defendant to Union Top in respect of 1,824 (152 dozen) pieces of the Infringing Dolls described as “12” FASHION GIRL” with item no. (Packing) Y1288-2DD; for the amount of HK$15,655.39;

(c)   a receipt numbered 0054 issued by the 1^st Defendant to Union Top for receipt of the amount of HK$15,655.39 in payment of invoice no. YI-03-0003;

(d)   a Supplier Payment Statement and Bank Payment Voucher of Union Top, in relation to the 1^st Defendant, contract 03010045-15, Invoice Number YI-03-0003, Invoice Date 29th February 2003 for the invoice amount of HK$15,655.39; and

(e)   a purchase order 03070069-04(LA) dated 10th August 2003 from Union Top to the 2^nd Defendant, to the attention to the name of the 3^rd Defendant, in respect of 720 pieces of the alleged Infringing Dolls described as “!2” BRATZ FASHION GIRLS, 4 ASST”; Vendor GH125; Item Number “ID1987WB” with Vendor Reference No. and Customer Reference Code: Y1288-2DD, by the 2^nd Defendant to Union Top.

14. It is also noted that the name of the 3^rd Defendant appears on most of the discovered documents that passed between Union Top and the 1^st and 2^nd Defendants.

15. As a result of these discoveries, the Plaintiff commenced the present action.  The particulars of Infringement of Trade Marks and wrongful passing off acts are pleaded by the Plaintiff in its Amended Statement of Claim as follows :-

(a)   The authorization and manufacture by the 1^st Defendant of 1,842 pieces of Infringing Dolls packaged in Infringing Packaging under invoice no. YI-03-2003 dated 29 February 2003 issued by the 1^st Defendant to Union Top (H.K.) Ltd. (“Union Top”).

(b)   The sale or supply of 1,842 pieces of Infringing Dolls packaged in Infringing Packaging under invoice no. YI-03-2003 dated 29 February 2003 issued by the 1^st Defendant to Union Top.

(c)   The sale or supply of 720 pieces of Infringing Dolls packaged in Infringing Packaging by the 2^nd Defendant to Union Top under a purchase order 03070069-04 (A) dated 10 August 2003.

The alleged Infringing Dolls and Packaging

16. The alleged Infringing Dolls and Packaging together with the Plaintiff’s Dolls and Packaging were produced to the Court at the hearing.  I had the opportunity to examine them in details, including the size and colours of their heads, surface decoration and body of the respective dolls, and the appearance, colours and position of the words, pictures and devices appearing on the respective packaging.

17. After my examination, I have no hesitation to find that the alleged Infringing Dolls and alleged Infringing Packaging closely resemble the Plaintiff’s Dolls and Packaging.  In fact, the same words “BRATZ” appear in an extremely similar manner on both the alleged Infringing Packaging and the Plaintiff’s Packaging. 

The Defence of the Defendants

18. By their Defence, the Defendants denied that they had passed off the Plaintiff’s “BRATZ” dolls and packaging and put the Plaintiff in strict proof thereof.  They also denied that they had infringed the registered trade marks of the Plaintiff saying that the registration of the relevant trade marks are invalid and, again, put the Plaintiff in strict proof thereof.  The Defence, in my view, is no more than a bare denial.  At the hearing, Mr. C.W. Ling, Counsel for the Defendants, did not deny the similarity for the purpose of infringement but relied on other defences.

19. By the affirmation filed by the 3^rd Defendant for and on behalf of all the three Defendants, the 1^st Defendant denied that it had manufactured the alleged Infringing Dolls and/or Packaging.  However, it was admitted that it had sold and/or supplied to Union Top 1,824 pieces of alleged Infringing Dolls in alleged Infringing Packaging.

20. The 2^nd Defendant denied that it had sold and/or supplied any alleged Infringing Dolls to Union Top.  The 3^rd Defendant said in his affirmation that in about early August 2003, several months after the 1^st Defendant sold and/or supplied the 1,824 pieces of the alleged Infringing Dolls to Union Top, he received from Union Top a purchase order placed with the 2^nd Defendant for the alleged Infringing Dolls.  The reason why Union Top placed an order with the 2^nd Defendant instead of the 1^st Defendant was that, according to him, it was the decision of the family that the 2^nd Defendant would take over all the business of the 1^st Defendant, and therefore after March 2003 all of the 1^st Defendant’s customers, including Union Top, were told that all future orders should be placed with the 2^nd Defendant instead of the 1^st Defendant.

21. After the 3^rd Defendant enquired with a Mr. Ong, one of the 1^st Defendant’s Mainland supplies (and presumably the 2^nd Defendant’s supplier as well, at latest, after March 2003) who supplied the alleged Infringing Dolls to the 1^st Defendant, as to whether there was remaining stock for that product for the alleged Infringing Dolls.  The 3^rd Defendant was informed by Mr. Ong that the alleged Infringing Dolls were out of stock and therefore the 3^rd Defendant told Union Top that the purchase order could not be accepted.  According to him, there was never any actual transaction between Union Top and the 2^nd Defendant.

22. The 3^rd Defendant said in details about his family background leading to the incorporation of the 1^st and 2^nd Defendants.  He admitted that he is and at all material times was a director of both the 1^st and 2^nd Defendants.  He, however, denied that he had any actual knowledge that the alleged Infringing Dolls were infringing items.  He said that he worked for the 1^st and 2^nd Defendants as a sales executive.  During the discharge of his duties, he was just asked by Mr. Wong Fei, his elder brother, to receive the latest product samples from their regular suppliers and show them to the regular customers, without any selection on his part at all.  He described his work in the 1^st Defendant as a fairly mechanical process which did not require any judgment or discretion.  He said he never decided for the 1^st Defendant what product to sell and what not to sell.

23. I shall now deal with each of the causes of action and the defences raised thereto.

INFRINGEMENT OF REGISTERED TRADE MARKS

24. It is not in dispute that the Plaintiff is and was at all material times the owner of the trade marks “BRATZ and device” and “BRATZ” in Hong Kong under Trade Mark Registration Nos. 200213329 and 200309866 respectively in Class 28 in respect of dolls and dolls accessories registered on 2 August 2001 and 5 February 2002 respectively (“the Trade Marks”).

Validity of the Trade Marks

25. Mr. Ling submitted that the registration of the Trade Marks were invalid.  The essential submissions put forward by Mr. Ling were that the Trade Marks contained the word “BRATZ” as their core or sole element and that the word “BRATZ” was a play on the word “BRATS” which, in its ordinary English meaning, meant “a child” and especially “an ill-behaved child”.  He submitted that the word “BRATZ” contained an obvious and direct reference to the character of the goods and the word “BRATZ” could be used to designate the characteristic of the Plaintiff’s dolls namely, to describe their image as ill-behaved children, an objection under section 11(1)(c) of the Trade Marks Ordinance (“the Ordinance”).  Finally, he submitted that the Trade Marks were devoid of any distinct character, an objection under section 11(1)(b) of the Ordinance.

26. Section 80 of the Ordinance provides that :-

“In any proceedings for rectification of the register, the registration of a person as owner of a trade mark shall be prima facie evidence of the validity of the original registration and of any subsequent or other transmission of it.”

27. Hence, the burden is on the Defendants to show that the Trade Marks are invalid. 

28. Having considered the submissions put forward by Mr. Ling and Mr. Yan, I am unable to agree to Mr. Ling’s submissions that the registration of the Trade Marks are invalid.

29. In “Doublemint” case [2004] RPC 18, Advocate General Jacobs said the followings :-

“ A18      In BABY-DRY, the interpretation of Art.7(1)(c) of the Regulations (which is equivalent to section 11(1)(c) of the Ordinance) was in issue in the context of a mark having features in some ways comparable to those of “Doublemint”.  Following a refusal of registration as a Community trade mark, the Court of First Instance essentially confirmed the Board of Appeal’s view that since the words “baby” and “dry” can both be used to describe characteristics of babies’ nappies, a mark consisting of nothing other than those words cannot by virtue of Art.7(1)(c), be registered for such goods.

A19        In my Opinion in the ensuing appeal to the Court of Justice, I took the view, first, that a Community trade mark may include descriptive terms but may not consist exclusively of them.  I then considered that the brand name “Baby-Dry” contained elements additional to the descriptive terms “baby” and “dry”: extreme ellipsis, unusual structure and resistance to any intuitive grammatical analysis that would make the meaning immediately clear.  In addition, “Baby-Dry” was an invented term and as such less likely to be used descriptively in trade and could moreover allude to many very different types of product, lessening its descriptiveness in relation to babies’ nappies.  Failure to take such factors into account was an error in law.

A20       In its judgment the Court stated that the purpose of Art.7(1)(c) was to prevent registration of signs or indications which, being no different from the usual way of designating the relevant goods or services or their characteristics, could not fulfil the function of identifying the undertaking that markets them.  Such signs and indications were those which may serve in normal usage from a consumer’s point of view to designate those goods or services, directly or by reference to an essential characteristic.  A mark composed of such signs or indications should not be refused if it included other signs or indications or if the purely descriptive signs or indications were presented or configured in a manner that distinguished the resultant whole from the usual way of designating the goods or services concerned or their essential characteristics.”

30. In my view, similar to the mark “BABY-DRY” in the “Doublemint” case in the context of trade mark registration, “BRATZ” is not devoid of any distinctive character under section 11(1)(b) of the Ordinance.  In particular, in respect of the trade mark “BRATZ and device” with Trade Mark Registration no.200213329, it is crystal clear that the mark does not consist exclusively of a descriptive element (even assuming that “BRATZ” is descriptive of the goods in respect of which the mark is registered, which I do not consider to be the case and this will be dealt with later).  The mark clearly consists of other elements such as the particular manner in which the mark is represented and the ring device.

31. Further, while there is a dispute between parties as to the image of the Plaintiff’s Dolls represented – ill-behaved or rebellious young girls as suggested by the Defendants as opposed to hit and cool young adolescent or teenage girls as suggested by the Plaintiff, I consider that the proper question to be considered when considering whether the registration of a mark is objectionable under section 11(1)(c) of the Ordinance is whether it is descriptive of the goods in respect of which the mark is registered.  The question is, however, not whether the mark is descriptive of that which is represented by the goods in respect of which the mark is registered.  Even if I accept that the word “BRATZ” is a play of the word “BRATS”, it may only be descriptive of children or girls, but clearly not of dolls or dolls accessories.

32. Hence, the registration of the Trade Marks cannot be invalid for the aforesaid reasons and there is no triable issue in this regard.

Infringement of the Trade Marks by the 1^st Defendant

33. Both the alleged Infringing Packaging and the Plaintiff’s Packaging bear the word “BRATZ”.  Thus, the 1^st Defendant, by providing samples and selling the 1,842 alleged Infringing Dolls in alleged Infringing Packaging to Union Top, through the 3^rd Defendant as its sales executive, clearly infringed the Trade Marks under Section 27(1) of the old Trade Marks Ordinance Cap.43.

Infringement of the Trade Marks by the 2^nd Defendant

34. According to the 3^rd Defendant’s affirmation, the 2^nd Defendant had no actual transaction with Union Top in respect of the alleged Infringing Dolls, although a purchase order was placed by Union Top to the 2^nd Defendant in respect of the same.  He denied that the 2^nd Defendant had provided any samples to Union Top.  Except this bare assertion of denial, the 3^rd Defendant did not produce any other concrete evidence.

35. As for the Plaintiff’s evidence, I have before me the affirmation of William Fan filed in HCA 3242 as an exhibit to the 2^nd affirmation of Lee Shiu Cheung for the Plaintiff.  Paragraph 33 of William Fan’s affirmation reads :-

“33. Rejina Chan [a solicitor of the Plaintiff’s solicitors] saw Mr. Lee in Showroom B and asked whether any sample of the photographed items were available, Mr. Lee answered that all available samples were on display in the showrooms and that the samples requested were not available.  Unable to obtain samples of the dolls in the photographs, Rejina Chan went out and asked Ms. Ho for the Vendor reference of 18#y1288-1DD (which was the code printed next on the top of the photo of “BRATZ” dolls – Item 1d1987wb) whereupon Ms. Ho answered that the company was called Golden City but that since no order had been placed with Golden City (yet), no factory folder on Golden City had been opened.  Rejina Chan asked Ms. Cheung for the corresponding particulars of Golden City and Ms. Cheung wrote down such contact reference for Rejina Chan.”

36. Further, from the samples of the alleged Infringing Dolls and the alleged infringing Packaging produced, it can be seen at the back of two of those 4 samples put in front of me, the following is marked on a white label :-

“GH125 Golden City Toys”

37. At the back of the other 2 samples, the item numbers “Y1288-1DD” and “Y1288-2DD” are marked on pale yellow labels respectively.

38. A product item list (“the List”) was discovered in the office of Union Top and produced as one of the exhibits to the Plaintiff’s affirmation.  In the List, the number Y1288-1DD appeared and it refereed to the maker as “GOLDEN CITY” (the 2^nd Defendant herein).  The corresponding Description is “12” BRATZ FASHION GIRLS, 4 ASST”.

39. Thus, it is plain and obvious that those 4 samples were provided and/or supplied by the 2^nd Defendant to Union Top.  By doing so, the 2^nd Defendant used in the course of trade or business signs which are identical to or nearly resemble the Plaintiff’s Trade Marks. This is an act of infringement under section 18(1) of the new Trade Marks Ordinance Cap.559. 

40. Mr. Ling however submitted that the Plaintiff’s pleaded case against the 2^nd Defendant was only the sale or supply of 720 Infringing Dolls packaged in Infringing Packaging under purchase order 03070069-04(A) dated 10 August 2003 and therefore the provision of samples is not part of the Plaintiff’s pleaded case.

41. However, in the commercial activity between two parties, the provision of samples was intended as a first step leading to the sale of goods.  This actually led to the aforesaid purchase order placed by Union Top with the 2^nd Defendant.  This is an incident of sale or intended to be so albeit the 2^nd Defendant said there and then that they had run out of stock.  In any event, this is an incident of supply of the infringing dolls.

42. Consequently, for the aforesaid reasons, the 2^nd Defendant has no defence to the Plaintiff’s claim at all.

Infringement of the Trade Marks by the 3^rd Defendant

43. The Plaintiff’s case against the 3^rd Defendant is that he directed and procured the acts of the 1^st and 2^nd Defendants about which the Plaintiff complained.

44. On the other hand, the 3^rd Defendant defended by saying that he was a director in name only acting according to the instructions of his brother Wong Fei and he was a mere sales executive having no part in deciding what product to sell.  Besides, he also said that he had never heard of “BRATZ” dolls until mid/late 2003.

45. The 3^rd Defendant alleged that he had only received salary from another company called Wing Fung Hing International Ltd (“WFH”) and none other.  He also alleged that he had never received any dividend from either the 1^st or 2^nd Defendants.  In support to his allegation, he produced a document which he claimed to be his tax return for the year 2003.  However, as a matter of fact, the document was indeed the return filed by WFH but not his own return.  From this document, one is unable to see any evidence to support that the 3^rd Defendant did not receive any dividends or salary from the 1^st and 2^nd Defendants, nor can one possibly see that the 3^rd Defendant is only a shareholder and director in name only acting according to the instructions of Wong Fei.

46. The assertions made by the 3^rd Defendant are just bare assertions.  The 3^rd Defendant simply has no concrete evidence to support his allegations.

47. On the other hand, the evidence put forward by the Plaintiff is clear.  As seen from the annual return of the 1^st Defendant, the registered office of the 1^st Defendant is the residential address of the 3^rd Defendant.  If, as alleged, the 3^rd Defendant was only a nominee of Wong Fei and played such a minor role in the 1^st and 2^nd Defendants, there is no reason why Wong Fei’s address was not used as the registered office of the 1^st Defendant.

48. Another important observation is that the 3^rd Defendant’s name appears on all the invoices and purchase orders that passed between Union Top and the 1^st and 2^nd Defendants.  On the other hand, Wong Fei’s name did not appear on any of the papers.

49. Moreover, it is simply inconceivable that 3^rd Defendant had only heard of “BRATZ” dolls in mid/late 2003.  The goodwill of the “BRATZ” dolls in Hong Kong had been well established at the time the 1^st Defendant sold the 1,842 pieces of alleged Infringing Dolls to Union Top.  As a person working in the toys industry since 1995 or 1996 (as said by him in his affirmation), the 3^rd Defendant must have a lot more updated knowledge and information of toys than the average people in Hong Kong.

50. From the evidence before me, I do not think there was a fair or reasonable possibility of the 3^rd Defendant having a bona fide defence.  I therefore conclude that the 3^rd Defendant is liable as a joint tortfeasor with the 1^st and 2^nd Defendants. 

51. Having concluded that all the three Defendants had infringed the Trade Marks of the Plaintiff, I shall from now on refer to the alleged Infringing Dolls and alleged Infringing Packaging as “Infringing Dolls” and “Infringing Packaging” respectively.

PASSING OFF

52. The other cause of action against the Defendants is passing off.  Mr. Yan has helpfully summarized the law regarding the tort of passing off.  The three essential elements which must be established by a plaintiff are as follows :-

(a)   that the plaintiff enjoys reputation and goodwill in the name, mark or indicia which it wishes to prevent the defendant from using;

(b)   that the defendant has made a misrepresentation which was likely to lead members of the public to believe that his business, goods or services are the business, goods or services of the plaintiff; and

(c)   that the plaintiff was suffering and was likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation.

Did the Plaintiff enjoy reputation and goodwill in the name, mark or indicia which it wished to prevent the Defendants from using?

53. Mr. Ling submitted that it was only less than two months later than the launch of “BRATZ” dolls in Hong Kong that the 1^st Defendant sold the 1,842 Infringing Dolls to Union Top and therefore there were triable issues as to :-

(1)   whether “BRATZ” had by then become sufficiently well-known amongst members of the purchasing public; and

(2)   whether the mark was sufficiently distinctive despite its descriptive content so as to distinguish the Plaintiff’s goods from other similar goods in the minds of the purchasing public.

54. In respect of (1), I do not consider that there exists such triable issue for the following reasons. 

55. In the first place, the “BRATZ” dolls were promoted and sold not only in Hong Kong but worldwide.  They have won numerous awards in the toys industry.  They also have their own website which is accessible worldwide.  Their reputation and goodwill in Hong Kong could not have just started to be built up after they first sold in Hong Kong.  This is supported by the newspaper article of Sing Tao Daily which was issued on 13^th December 2002, a date before the “BRATZ” dolls were first sold in Hong Kong.  The article mentioned that the “BRATZ” dolls were the best selling dolls in the United States of America.  Photographs and description of the “BRATZ” dolls were given in the article.

56. Secondly, even if assuming the goodwill and reputation of “BRATZ” dolls only started to be built up after its launch in Hong Kong (which I do not consider to be the case), I still find that they had built up sufficient goodwill and reputation by the time the 1^st Defendant sold and/or supplied the Infringing Dolls to Union Top.

57. In this regard, it should be noted that it is established law that it is possible for goodwill in a new kind of business to be built up in a short period of time.  In Stannard v. Reay [1967] RPC 589 at 592, Buckley J. said that :-

“As regards the goodwill which the plaintiffs did or did not have at the time when the defendants started their fish and chip business in November 1966, Mr. Monckton says with great force that the plaintiffs then had only been trading for some three weeks, or perhaps rather more if one does not take the defendant’s business as effectively under way until rather later than 5^th November 1966, and that that would be a very short time in which to acquire a goodwill of any value connected with a trade name.  It would seem from the evidence that probably the plaintiffs were the only people in the Isle of Wight carrying on this sort of trade in this sort of way at the time when they began their business in October 1966.  There is no suggestion that there were any other mobile fish and chip vans then operating in the Isle of Wight, and, although a period of three, four or five weeks may be a short time in which to build up a goodwill associated with a particular trade name, it does not seem to me to be by any means impossible to suppose that amongst those members of the public who enjoy fish and chips and who find it convenient to be able to buy them ready cooked and supplied at convenient places where they can go and collect them a new business of this kind might not attract to itself considerable notice and trade within quite a short time, and I think that there is to some extent supported by the evidence of the first plaintiff to the effect that in the first complete week of trading after the plaintiff’s had put their fish and chip van to the road, that is to say, the week ending 26^th November 1966, the takings of the fish and chip van amounted to ￡129 7s 6d., and in the next week to ￡138 16. 10d., and in the third week to ￡133 12s. 3½d., amounts which seem to me to be substantial sums to be taken by one van in a business of this kind.”

58. The newspaper articles showed that the Plaintiff’s “BRATZ” dolls earned substantial reputation and goodwill by January 2003.  The 19^th January 2003 issue of South China Morning Post reported that the “BRATZ” dolls were the world’s top selling toys and had outsold BARBIE dolls.  It further reported that they had been a big hit in Hong Kong since their launch in December 2002.  Although there was no evidence before me as to the sales volume of the “BRATZ” dolls in December 2002 and January 2003 (which I was told is highly confidential information of the Plaintiff), I am satisfied that the Plaintiff enjoyed reputation and goodwill in “BRATZ” dolls which it wished to prevent the Defendants from using.  There is no triable issue in this aspect.

59. In respect of (2) I have concluded in this judgment earlier that the Trade Marks are distinctive and not descriptive.  I therefore conclude that there is again no triable issue in this regard.

Had the Defendants made a misrepresentation which was likely to lead members of the public to believe that his business, goods or services are the business, goods or services of the Plaintiff?

60. In Chelsea Man Menswear Ltd. v. Chelsea Girl Ltd. [1985] FSR 567, Whitford J said at 571 that :

“In passing off proceedings as in cases of infringement of registered trade mark the use of a mark by A upon the same goods as those in respect of which B has established a reputation will be restrained if A’s mark is not identical provided it so closely resembles B’s mark as to be calculated to deceive or cause confusion in the course of trade.  Here we have two identical marks which are going to be used in connection with identical businesses and on identical goods.  I would say without the need for any evidence at all that it seems to me to be apparent that if reputation is established confusion and deception must result.”

61. I have concluded that the reputation and goodwill of the Plaintiff’s Dolls have been established and that the Infringing Dolls and Packaging closely resemble the Plaintiff’s Dolls and Packaging, and the fact that the marks are identical and used in respect of identical goods (i.e. dolls), it is clear that the 1^st Defendant had made misrepresentation misleading the members of the public.

62. Since the 2^nd and 3^rd Defendants infringed the Trade Marks, this, together with my previous analysis of misrepresentation, leads me to the conclusion that there was such kind of misrepresentation made by the 2^nd and 3^rd Defendants.

Was the Plaintiff suffering and was likely to suffer damage by reason of the erroneous belief engendered by the Defendants’ misrepresentation?

63. The “BRATZ” dolls are known worldwide, it goes without saying that the Plaintiff will clearly suffer damage by reason of the Defendant’s aforesaid misrepresentation.

64. There is no triable issue in whatever aspect in respect of passing off.

Conclusion

65. For the aforesaid reasons, in my view, there is no triable issue in respect of the Plaintiff’s claim for infringement of the Trade Marks and passing off against all three Defendants.  It is very clear that the 1^st, 2^nd and 3^rd Defendants are all liable for the same. 

66. Consequently, I allow the Plaintiff’s application for summary judgment against the 1^st, 2^nd and 3^rd Defendants and I make an order in terms of paragraphs 2 to 5 (which concern with infringement of trade marks and passing off only but not on the ground of infringement of copyright) and paragraphs 7 and 8 of the Plaintiff’s Order 14 Summons.  There shall also be an order nisi that the costs of this action including the costs of and occasioned by this application be to the Plaintiff, to be taxed if not agreed.