RECKITT & COLMAN (OVERSEAS) LTD AND ANOTHER v. 楊新友 AND ANOTHER

HCA2073/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2073 OF 2008

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REASONS FOR JUDGMENT

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1.  The plaintiffs’ product in the name of Dettol “滴露” has been a household disinfectant for a long time in Hong Kong.  In fact the plaintiffs’ company has promoted and sold their products in this name since 1954.  The plaintiffs’ parent company Reckitt Benckiser Plc. Group has a history of 180 years. 

2.  On 10 April 2006 and 5 February 2007, unbeknown to and without the authority of the plaintiffs, the 2^nd defendant applied and registered the following marks respectively :

(a)  trade mark registration no. 300616022 in respect of the mark  “滴露”; and

(b)  trade mark registration no. 300809136 in respect of the mark “滴露 and device”.

These two marks are collectively referred by the plaintiffs as “the infringing marks”.

3.  The Registrar has published a notice of the aforesaid applications of the 2^nd defendant.  However this notice has escaped the attention of the plaintiffs.

4.  Later on, upon discovery of the infringing marks, the plaintiffs’ solicitors issued a cease and desist letter to the 2^nd defendant on 21 April 2008.  However, two days later on 23 April 2008, the 2^nd defendant assigned the infringing marks to the 1^st defendant who is an individual residing in the Mainland. 

5.  Subsequently the 1^st and 2^nd defendants requested the plaintiff to pay $4 million for the infringing marks and they also threatened to seek an injunction against the marketing of the plaintiffs’ products on the market with such marks.

6.  Accordingly the plaintiffs commenced this action against the defendants on 22 October 2008.  

7.  Thereafter on 17 November 2008, the 1^st defendant commenced another action HCA2334/2008 against the plaintiffs for trademark infringement. 

8.  In this action the plaintiffs applied for summary judgment against the defendants on the ground of passing off. 

9.  Apparently it is common ground between the parties that in order to establish a case of passing off, a plaintiff has to show :

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

(ii)  that the defendant has made a representation (or threatened to make a representation in a quia timet case) 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

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

(See MGA Entertainment Inc. v. Yokon International Limited and Anor, HCA4380/2003, 8 December 2006, Yam J, at para. 52.)

10.  The plaintiff further submitted that alternatively, where a defendant is equipped with an instrument of deception, the court has jurisdiction to grant an injunction against it.  A name or mark which would by reason of similarity to the name or mark of another inherently lead to passing off, is such an instrument.  (See British Telecommunications Plc. v. One in a Million and Ors [1999] F.S.R. 1 at 18.)

11.  In the present case, the plaintiffs’ substantial reputation and goodwill in their marks “Dettol” and “滴露” can hardly be challenged.  Their marks have been available in Hong Kong since 1954.  The Chinese name was originally called “寶劍牌滴露”.  Later on the plaintiffs just used the name “滴露” in their products, e.g. “滴露沐浴液”, “滴露潔手液”, etc.  Advertisements produced by the plaintiffs show that such usage at least appeared from 1999 onward.  In fact it was much earlier as contended by the plaintiffs.  The defendants have not adduced any evidence to challenge the same.

12.  Further the defendants have not denied having the knowledge of the plaintiffs’ goodwill and reputation in marks “Dettol” and “滴露” at the time when they registered the infringing marks. 

13.  Accordingly, the use of the term or the mark “滴露” by the defendants would no doubt cause confusion and deception among the public, thinking that the products so marketed by the defendants are products originated from the plaintiffs or somehow approved by or associated with the plaintiffs.

14.  The defendants alleged that they had already undertaken some preliminary promotional activities in respect of their products bearing the infringing marks.  Even if contrary to their own allegation, they had not undertaken any such promotional activities or used the infringing marks, they have clearly demonstrated an intention to do such acts and a quia timet injunction should be granted against them in any event. 

15.  In any event the infringing marks constitute instruments of deception as they were registered with the deliberate purpose to deceive the public and make them believe that products bearing such marks but belong to the defendants, are products of or associated with the plaintiffs.

16.  Mr Benny Kong of solicitors who originally appeared for the defendants submitted in a short written submission that the plaintiffs had failed to prove sufficient degree of misrepresentation.  I do not accept such a submission by reason of the aforesaid matters.  In any event the intention to use such infringing marks is so obvious that a quia timet injunction should be granted.

17.  The only other submission made by Mr Kong for the defendants is that the plaintiffs have no exclusive use of the terms “Dettol滴露” in Hong Kong since members of the trade and public in Hong Kong and elsewhere have extensively referred disinfectant as “Dettol” and vice versa.  To my mind this is only because the term “Dettol” has been used extensively elsewhere, say in England, and in Hong Kong since 1954.  Thus members of the public and people in the trade refer disinfectant as “Dettol” or vice versa.  This would only prove the long and outstanding reputation and goodwill of the plaintiffs in their products bearing the marks “Dettol” or “滴露”.  In fact whenever anyone used “Dettol” to commit suicide, it would only be reported that the victim “drank Dettol” or in Chinese “飲滴露” and not “飲寶劍牌滴露”.

18.  Mr Gary Lam of counsel only received instructions to appear for the defendants shortly before the hearing.  He submitted a much more detail written submissions.  However I do not accept that the defendants’ Marks are not identical.  There is no triable issue here.

19.  Secondly, it is very clear that there is misrepresentation by using the marks “滴露” and there is no triable issue of fact here either. 

20.  Mr Lam also submitted at length that the law on extra-territorial goodwill is not settled.  However, the plaintiffs do not rely on goodwill in other territories like the Mainland at all.

21.  Mr Lam further submitted that the issue of whether there is confusion is a triable issue.  However the 1^st defendant in his own pleadings in trade mark opposition proceedings pleaded that :

“But the opposed party’s trade mark ‘滴露’ is exactly the same as the opponent’s trade mark.  The two marks are so similar that their characters are in the same type with the same order … The public will be cheated …”

This is an admission of the 1^st defendant himself in the other proceedings.  Thus the defendants’ submission is wholly unmeritorious.  In the end I do not find any triable issue in this case as far as the liability of the defendants are concerned. 

22.  The plaintiffs will no doubt suffer loss and damage or are likely to suffer loss and damage because of the wrongful activities of the defendants.  Accordingly I am satisfied that the plaintiffs have established a plain and obvious case of passing off.

23.  It is also clear from the evidence of those acts complained of by the plaintiffs, that the defendants’ acts were made pursuant to a common design between the 1^st and 2^nd defendants.  Alternatively the acts of the 1^st defendant were procured by the 2^nd defendant and both of them should be held liable for such acts.  Those allegations were made specifically in the Statement of Claim.  The plaintiffs have filed a lot of evidence showing the intricate relationship between the two defendants.  The defendants have not filed any evidence in opposition.  They have not even denied such allegations. 

24.  Thus the plaintiffs have clearly proven a case of conspiracy and joint tortfeasorship. 

Conclusion

25.  In the end the plaintiffs are entitled to summary judgment to be entered against the defendants.

26.  The plaintiffs also applied for costs on indemnity basis.  I acceded to their application.  The demand of $4 million from the plaintiffs is an unwarranted demand with malice.  The defendants even commenced another action as aforesaid.  It was dismissed when the 1^st defendant could not pay into court an adjudged amount by way of security for costs.  On Monday 2 March 2009, the defendants’ solicitors indicated that the defendants would not be contesting the plaintiffs’ application for summary judgment.  However shortly afterwards, the defendants changed their mind and instructed counsel to oppose this application.  The defendants’ opposition is entirely without merit.  The plaintiffs are entitled to costs of the action and this application on indemnity basis.  They are summarily assessed at $540,000.