WONG TO YICK WOOD LOCK OINTMENT LTD v. SINGAPORE MEDICINE CO. 星洲藥業 (a firm) AND OTHERS

HCA 600/2014
HCA 595/2014

[2021] HKCFI 920

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 600 OF 2014 AND 595 OF 2014

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J U D G M E N T

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A. INTRODUCTION

A1.    The claims

1.  The plaintiff claims against the defendants for:

(1)  Passing-off; and

(2)  Trade mark infringement under section 18(3) and (4) of the Trade Marks Ordinance, Cap 559 (“TMO”).

2.  The plaintiff seeks injunctions against the defendants together with ancillary orders including delivery up, discovery and an enquiry as to damages or an account of profits.

A2.    The plaintiff

3.  The plaintiff was incorporated on 22 July 1988 to take over the business previously carried on and the goodwill previously built up and owned by Wong To Yick through business carried on by him under the trading names “中國跌打風濕醫館 (黃道益醫館) WONG TO YICK CLINIC” established in July 1967 and “China Medical Laboratory 中國醫館製藥廠” established in 1982 (the “Plaintiff’s Predecessor”).

4.  The sole business of the Plaintiff’s Predecessor and the plaintiff was and is the manufacture and marketing of a medicated balm under the name “Wong To Yick Wood Lock Medicated Balm 黃道益活絡油” (the “Plaintiff’s Product”). 

A3.    The defendants

5.  The 5^th defendant (“Law”) and the 6^th defendant (“Mrs Law”) are husband and wife respectively and the 7^th defendant (“Ms Law”) is their daughter.

6.  The 1^st defendant is a partnership trading under the name of Singapore Medicine Co 星洲藥業 carrying on business in the manufacture and sale of Chinese medicinal products including medicated oils and balm.  The 2^nd defendant, the 3^rd defendant and the 5^th defendant have been the partners or the sole proprietor of the business of the 1^st defendant during various periods of time.

7.  The 2^nd defendant and the 3^rd defendant are distributors of Chinese medicinal oils or balm.  The 4^th defendant is a manufacturer and distributor of Chinese medicinal products including medicated oils and balm.

8.  Law is a director and shareholder of the 2^nd to 4^th defendants, whereas Mrs Law is the company secretary of the 2^nd defendant and the 4^th defendant, and a shareholder and director of the 3^rd defendant.  Law and his wife direct, control and are personally involved in the business activities and operations of the 1^st to 4^th defendants.

9.  Ms Law has since 23 April 2012 adopted the trading name of Nanyang (Singapore) Trading Co and has carried on business in the distribution and sale of Chinese medicinal oils or balm.  Ms Law is also a shareholder of the 2^nd defendant.

A4.    The Plaintiff’s Get-up of “黄道益活絡油”

10.  Since 1968, the Plaintiff’s Product has been manufactured and marketed under and by reference to the names and/or marks “黄道益” and/or “黄道益活絡油” (the “Plaintiff’s Marks”) in a distinctive get-up.  Over the years, the get-up (the “Plaintiff’s Get-up”) has been revised from time to time but certain distinctive features since 1980s remain unchanged.  Selected versions of the packaging are reproduced below for easy reference.

1986 Revised Packaging

1993 Packaging

 

2001 Packaging

 

2009 Packaging

11.  Over the years, the Plaintiff’s Marks and the Plaintiff’s Get-up have been used and promoted extensively in Hong Kong, in other countries around the world, and in particular, on mainland China by the plaintiff and the Plaintiff’s Predecessor.  The sales turnover of the Plaintiff’s Product between 1 April 2012 and 31 March 2013 at wholesale level was HK$496.1 million.  

A5.    The plaintiff’s registered trade mark

12.  The plaintiff is the registered proprietor of the following trade marks in Hong Kong (the “Registered Trade Marks”):

1995B09582		07-12-1991
300721764		14-09-2006

13.  It has been held by this court that substantial goodwill subsists in the marks “Wong To Yick”, “黃道益”, the distinctive get-up and the Registered Trade Marks: Wong To Yick Wood Lock Ointment Ltd v Sky Harvest Medicine Co Ltd [2018] 3 HKLRD 506, at paragraphs 1 and 2.

B.     THE PLAINTIFF’S CASE

B1.    Passing-off and trade mark infringement by the defendants

14.  The 1^st defendant and the 4^th defendant have manufactured and the 2^nd defendant, the 3^rd defendant and the 7^th defendant have distributed and sold the following medicated balm in get-ups and under names or marks which infringe the Registered Trade Marks and which are so deceptively similar to the Plaintiff’s Marks and the Plaintiff’s Get-up that their use by the defendants constitute acts of passing-off (the“Infringing Products”):

(1)  Against the 1^st defendant:

(a)  “黃道人” and/or “黃道人 活絡油” – Annex B & C hereto;

(b)  “黃道老人” and/or “黃道老人 活絡油” – Annex D hereto;

(2)  Against the 4^th defendant:

(a)  “黃道老人” and/or “黃道老人 活絡油” – Annex E, F, G hereto;

(b)  “黃道老人” 南洋 活絡油 – Annex H hereto;

(3)  Against the 2^nd defendant and the 3^rd defendant:

(a)  “黃道人” and/or “黃道人 活絡油” and “黃道老人” and/or “黃道老人 活絡油” – Annex B, C, D hereto;

(4)  Against the 7^th defendant:

(a)  All of the Infringing Products – Annexes B to H hereto.

The names and/or marks “黃道人” and/or “黃道人 活絡油” and “黃道老人” and/or “黃道老人 活絡油” are hereinafter referred to as the“Infringing Marks”.

15.  Further, after the issue of the Writs herein, Mrs Law on 27 May 2014 applied to register the mark “黃道” in Class 5 of the Register of Trade Marks under trade mark application number 303009177.  Mrs Law withdrew the application in March 2019 after opposition from the plaintiff.  

16.  Between April and October 2016 and unknown to the plaintiff, Mrs Law applied to register the following marks in Class 5 of the Register of Trade Marks.  Insofar as the plaintiff is aware, Mrs Law subsequently withdrew most of the applications in 2017 and 2018. 

Trademark Application No.	Class	Applicant	Status
303738772	5	高惠萍	Withdrawn
303738781	5	高惠萍	Withdrawn
303945817	5	高惠萍	Pending decision
303945826	5	高惠萍	No record

17.  Mrs Law made another application to register the mark  under application 303945835 and according to the latest search, the status of the application is pending.  

18.  The 4^th defendant made an application to register the packaging on 15 June 2006 under trade mark application 300659241 and was subsequently withdrawn after opposition from the plaintiff in 2018.

19.  The plaintiff submits that the said trade mark applications hereinabove are instruments of deception in that they are inherently deceptive by carrying indicia so close to the Plaintiff’s Marks, the Plaintiff’s Get-up and the Registered Trade Marks that they are bound to deceive, intended to mislead members of the public in Hong Kong, to believe, contrary to the fact, that products bearing the said marks are the products of and/or products licensed and/or endorsed by the plaintiff and/or associated with the plaintiff.

B2.    Intention to deceive

20.  It is the plaintiff’s case that the defendants have deliberately and intentionally set out to deceive members of the public in Hong Kong and, in particular, visitors from mainland China to believe that the Infringing Products are the products of and/or products licensed and/or endorsed by the plaintiff and/or associated with the plaintiff by reason of the following:

(1)  The plaintiff relies on the extensive use and promotion of the Plaintiff’s Product over the years as a result of which a very strong reputation and goodwill has been established that is attached to the Plaintiff’s Marks and the Plaintiff’s Get-up.  The defendants being in the same trade, must have been fully aware of the Plaintiff’s Product, the Plaintiff’s Marks and the Plaintiff’s Get-up.  

(2)  Each of the Infringing marks are closely similar to the Plaintiff’s Marks and are used in a manner and context, on products, and on packaging materials identical or closely similar to the Plaintiff’s Marks.  The inference therefore arises that the Infringing Marks must have been adopted by the defendants with the deliberate intention for the Infringing Marks to cause confusion and deception amongst members of the public who know of the Plaintiff’s Product by reference to the Plaintiff’s Marks.

(3)  Further, the get-ups of the Infringing Products are confusingly and deceptively similar to the Plaintiff’s Get-up and could not have been created without directly copying the Plaintiff’s Get-up with the deliberate intention that such get-ups would cause confusion and deception amongst members of the public who know of the Plaintiff’s Product by reference to the appearance of the Plaintiff’s Get-up.  The plaintiff relies on the overwhelming similarities of the get-ups of the Infringing Products and the Plaintiff’s Get-up as standing in strong contrast with the packaging of other 活絡油 products of a similar nature manufactured by the 1^st defendant and the 4^th defendant respectively not imitating the Plaintiff’s Get-up, which adopt a diverse range of designs significantly different from the Plaintiff’s Get-up.  

(4)  Further, neither the Infringing Mark “黃道老人” nor “黃道人” has otherwise been known in Hong Kong as the name of any person having any practice or knowledge in the relevant area of Chinese medicine, namely bone-setting or herbal medicine.  On the other hand, both the Infringing Marks “黃道老人” and “黃道人” duplicate the name and mark of the Plaintiff’s Product “黃道益” in respect of the first two characters, and the rest of character(s) of the said two Infringing Marks purely denotes the generic notion of “old man” and “man” respectively, which, when used together with the two characters “黃道”, are likely to indicate a connection or an association with the name and mark of the Plaintiff’s Product “黃道益”. 

B3.    Similar facts evidence

21.  In civil cases the courts will admit evidence of “similar facts” if it is logically probative, that is if it is logically relevant in determining the matter which is in issue: provided that it is not oppressive or unfair to the other side and also that the other side has fair notice of it and is able to deal with it.  Therefore, whether the similarity between the Plaintiff’s Product and the Infringing Products is due to copying or a coincidence, it is relevant to know that the defendants have copied other products in the past: Mood Music Publishing Co Ltd v De Wolfe Ltd [1976] FSR 149 at 152; Copinger & Skone James onCopyright, 17^th ed, Vol 1 at 21-393.

22.  In HCMP 2026/1998 concerning an application by Ms Law Oi Ying (the sister of Law) to expunge a device trade mark comprising the picture of an ancient Chinese-style 3-legged covered cauldron registered in the name of the 4^th defendant, Law as the 4^th defendant’s director admitted that the said device mark was copied from a trade mark used by a third party on its medicated oil product, namely, Lou Fu Mountain Hundred Grass Oil (羅浮山百草油).

23.  In HCA 1719/2010 regarding a claim brought by Pan Chung Pat Wo Tong (Hong Kong) Limited against Law who was trading as the 1^st defendant at the material time for trademark infringement and passing-off, Law made the concession that the 1^st defendant’s infringing product complained of was confusingly similar to the medicated oil 華陀油 (Wah Tor Yeow (Oil)) manufactured by Pan Chung Pat Wo Tong (Hong Kong) Limited and the “關陀像” mark adopted by Law on the said infringing product was confusingly similar to the Registered Trade Mark No 199708190 belonging to Pan Chung Pat Wo Tong (Hong Kong) Limited.  One of the issues for trial was whether Law acted in bad faith when he applied for registration of the mark “百和堂”.  Law elected not to give any evidence or call any witnesses.  Before closing submissions, Law submitted to Judgment. 

B4.    Instances of deception

24.  There have been instances of deception caused by the use of “黃道老人” on medicated balm in the market.

B5.    Joint tortfeasors

25.  It is the plaintiff’s case that each of the acts complained of against the 1^st to 4^th defendants was directed, authorised, counselled or procured to be done by both Law and Mrs Law who render themselves jointly and severally liable for the infringing acts of the 1^st defendant to the 4^th defendant.

26.  Alternatively, all the defendants committed the acts complained of pursuant to a common design and each of them should be liable as joint-tortfeasors.

C.     THE DEFENDANTS’ PLEADED CASE

C1.    The Plaintiff’s Get-up consists of mostly “common features”

27.  The defendants’ pleaded case is that the Plaintiff’s Get-up consists mostly of common features in the trade that are easily distinguishable and would not cause confusion.  The plaintiff submits there is no merit in this plea because it is the plaintiff’s case that the Plaintiff’s Get-up is distinguished by the combination of the features identified in the Statement of Claim in which the overall visual effect is to be appreciated as a whole.  The comparison Tables A-G put forward by the defendants totally ignores the rules of comparison and dwell on matters of no trade mark significance.

28.  Mrs Law’s testimony on this topic is contained in her 2 witness statements.

29.  Insofar as the book Hong Kong Apothecary is concerned, Mrs Law was unable to point to any matter therein in support of her allegation that the distinctive features of the Plaintiff’s Get-up are very common in the Chinese medicine trade. 

30.  Mrs Law has also confirmed that what connection the characters 黃道 may have had with Taoism had nothing to do with why the Laws chose 黃道人 as a product name.  All those internet materials in this regard are thus irrelevant.   

31.  In their Defence, the defendants rely on some products on the market which allegedly have been around since 1 March 1999 to say they incorporate similar features to the Plaintiff’s Get-up.  In her witness statements, Mrs Law did not even deal with this aspect of the defendants’ case other than making a very general statement of no evidential value whatsoever: “I also visit shops in the market from time to time and found that there are packaging of many Chinese medicinal oil products incorporating similar features to the Plaintiff’s products”.

32.  There is not a shred of independent and objective evidence from the defendants who bear the evidential burden to support the allegation that any of these products have been on the market since 1 March 1999.  Neither invoices nor witnesses from the trade have been put forward in support. 

33.  All that the defendants could muster is that one product, “Wong Fu Chi” (黃夫子) has a HKP number on it and so it was put to the plaintiff’s witness Wong Wei Kin Cathy (“Cathy Wong”) that this product was on the market before 1999.  However, this premise is false and unreliable.  Firstly, it is not known whether the HKP number is genuine and in respect of what product was it registered.  Secondly, it has an expiry date of 2019 and thus could not have been on the market before 1999.

34.  The evidence-in-chief and the cross-examination of Cathy Wong has dealt with this aspect of the defendants’ evidence and they have been summarized by the plaintiff as follows:

(1)  Features of the Plaintiff’s Get-up are not common features in the trade.  The wide range of medicated oils on the market each have features distinguishing its own product.

(2)  The defendants themselves sell a wide range of medicated oils in packagings that are distinctly different from the Plaintiff’s Get-up.

(3)  Many of the samples adduced in evidence by the defendants as closely similar have been successfully sued by the plaintiff.

(4)  And the plaintiff will issue proceedings against infringing medicated oils if they can obtain samples on the market.

C2.    Estoppel/acquiescence/delay

35.  It is pleaded by the defendants that (a) the 1^st defendant and the 4^th defendant have openly and publicly offered the Infringing Products to the public since the mid-1990s, ie there was use of the Infringing Products since the mid-1990s; and (b) applications were made in 2004 to register the Infringing Products with the Chinese Medicine Council (“CMC”) under 3 application numbers: HKP01403 and HKP01405 in the name of the 1^st defendant and HKP04101 in the name of the 4^th defendant.

36.  The defendants allege they had been led by the lengthy period of inaction by the plaintiff into assuming the plaintiff did not object to the defendants’ use of the mark/name 黃道人and the defendants’ packaging.  Therefore, the defendants had continued to invest time, effort and money towards establishing their business by reference to 黃道人.  The defendants thus rely on some sort of estoppel arising from the alleged acquiescence and delay which have caused the defendants to assume to their detriment the plaintiff would not take any action.

37.  When particulars were requested, the answers supplied were vague or the response was that the particulars sought were matters of evidence.  After many rounds of discovery, there is neither a shred of credible evidence to demonstrate that the Infringing Products have been sold since the 1990s (ie no evidence of use since 1990s) nor have they been registered with the CMC since 2004 as alleged.

38.  This is the main plank of the defendants’ case.  It is alleged that the 1^st defendant and the 4^th defendant were selling the Infringing Products prior to March 1999.  In support of this, they rely on applications submitted to the Department of Health (“DOH”) in 2004 under the auspices of a grand-fathering regulatory policy, which required a mere assertion to be made that a medicinal oil product has been sold in the Hong Kong market by the applicant for more than 5 years, with some prima facie proof of the same in the form of invoices and the packaging in use.

39.  Common sense and logic would dictate that any trader in Chinese medicinal products making a bona fide application would submit the packaging of what they had actually been selling on the market in the 1990s together with their application in 2004 given the importance of this cut-off date.  One must bear in mind that these forms were devised with Chinese medicine traders in mind and not scientists and pharmaceutical companies.  Mr Law seemed to have no difficulty filling in the forms - in fact he filed over a hundred applications for the 1^st defendant and the 4^th defendant.  As the plaintiff’s witness Chan Siu Fung Jackel (“Jackel Chan”) had pointed out in his evidence, the 1^st defendant and the 4^th defendant claimed to have frequently sent representative to attend talks given by DOH.  There would have been no reason for the defendants not to have submitted packagings of the Infringing Products with the applications in 2004 if indeed they were on the market even in 2004 or been sold since before 1999, as claimed in the application submitted.

40.  How the defendants have put forward this aspect of the case and how the documents in Bundles C3 to C5 have been disclosed is also highly suspect.  First of all, Mrs Law has given no credible explanation as to why the Consolidated Defence was different from the original defence.  Her answer was that she told her lawyers but she did not know why they did not plead it.  This answer is simply incredible.  Secondly, as submitted by the plaintiff, the documents in Bundles C3 to C5 were disclosed in dribs and drabs.

41.  The documents at Bundle C1/54 (Annex E to H) and C1/63 (Annex B to C) were disclosed on 6 December 2016.  The application documents of the Infringing Products at Annex D were not disclosed until much later.  As a result of the disclosure, Jackel Chan analyzed them and filed his witness statement on 29 March 2017 where he came to the conclusion that the documents did not support the defence case.  It is important to note that Mrs Law in her first witness statement of 29 March 2017 only made the briefest of all references to these documents that form the core of the defence.

42.  The second batch of discovery was given by the defendants on 29 March 2017, the same day the witness statements were exchanged.  These are the documents at Bundle C2/270 (Annex E to H), C2/261 (Annex B to C) and C2/239 (Annex D). Jackel Chan analyzed this batch of documents and filed his supplemental witness statement on 12 July 2017 with the conclusion that the disclosed documents do not support the pleaded case at all.  It was only on 30 November 2017 that the defendants disclosed what are now Bundles C3 to C5.

43.  Mrs Law filed her supplemental witness statement on 30 November 2017 but it was dated 13 October 2017 referring to some of the documents at Bundles C3 to C5.  This demonstrates the defendants were hanging onto Bundles C3 to C5 since at least October 2017.  The supplemental witness statement of Mrs Law did not even attempt to deal with the criticisms of Jackel Chan but dealt with these very important matters to the defence case in a token manner and broad-brush approach.  It is incumbent on the defendants to (1) make good their defence by explaining these documents and the process of application and (2) to answer the criticisms of Jackel Chan which they had failed to do for the simple reason that the documents do not support their pleaded case.

44.  Jackel Chan was cross-examined extensively on his witness statements and Bundles C3 to C5.  I agree his evidence was convincing and firm and the key takeaways of his evidence are:

(1)  2 weeks before trial he had gone through Bundles C3 to C5 and found the applications a bit weird.  He reviewed the papers over the weekend mid-trial and saw no need to change his testimony contained in his witness statements.

(2)  One cannot change the name of the product under the same certificate.

(3)  If the Infringing Products were actually sold by the defendants on the market in 1999, the defendants should have and would have supplied their packaging actually in use together with the application form.

45.  The testimony of Jackel Chan and the cross-examination of Mrs Law show that the applications were made not in respect of the Infringing Products but the applications were amended many times and metamorphosed over the course of 5 to 7 years into products which were vastly different from that in the original applications. 

46.  Some points from the testimony of Jackel Chan and Mrs Law should be highlighted.

C2(a).    Bundle C3 - HKP-01403 - Annex B & C

47.  Mrs Law’s evidence was that the packaging at [C1/66-67] was the product packaging referred to in the invoices at [C1/61].  This certainly cannot be the case because the packaging was printed with year 2000 and “Manufactured by Singapore Medicine” “o/b Good Prestige Ltd” thereon.  Good Prestige Ltd was only incorporated in the year 2000 and the directors and shareholders were not the Laws.  Mrs Law tried to explain this inconsistency by saying that the drug store asked the defendants to produce this product in their name.  When questioned on how that would make any sense, Mrs Law changed her testimony again to that the packaging was new from 1999 or 2000 because the packaging says 2000.  These documents and the evidence of Mrs Law are totally unreliable and do not support the defendants’ case.  There is therefore no evidence that this was the defendants’ product (as they represented to DOH it was) or that it was indeed sold by them in Hong Kong since 1999 or any subsequent time.

48.  Jackel Chan made this pertinent observation: if the packaging was submitted with the application, the defendants have not explained why they did not amend the packaging by cutting and pasting as they have done with all the other packaging amendments, but submitted an entirely different packaging on 18 November 2009 [C3/496], curiously reverting from a relatively modern packaging to a much older style packaging resembling the plaintiff’s packaging.

49.  Insofar as the Infringing Product at Annex B is concerned, Mrs Law said in cross-examination that it was first put on the market after 2004 and not in the 1990s.  This statement cannot be true because the packaging identical to Annex B was only submitted to DOH on 9 July 2013 [C3/531].

50.  Mrs Law’s initial testimony was that the packaging at Annex C was put on the market in 1999.  On the next day, the evidence was then changed to “it was the packaging of 1997” and later “1997 or 1998”.  This bare allegation and the constant shift in testimony is uncorroborated by any objective and independent evidence. 

51.  The defendants have not disclosed any sales invoices to retailers or orders for printing these packaging from their two long time printers and no representatives from local dispensaries were called.  The defendants did not even contact their two long-serving salespersons, Yau and Chan who had been working for the 1^st defendant and the 4^th defendant since the 1980s and 1990s respectively.  Finally, no evidence was adduced to show Annex C was even submitted to DOH for approval.  An adverse inference should be drawn to the effect that if these persons had been called, their evidence would not have assisted the defendants – Li Sau Keung v Maxcredit Engineering Ltd [2004] 1 HKC 434 at §§28-29.

C2(b).    Bundle C4 - HKP-04101 - Annex E, F, G & H

52.  The key takeaways from the evidence of Jackel Chan are:

(1)  Although the product name on the application form was 南洋活絡油 but by reason of the packaging submitted [C4/556-557] there is no evidence to suggest that the packaging is consistent with the application.

(2)  The ingredients list included in the application form gives away the defendants’ case: if one takes into account of excipients in the ingredients listed, the total value would exceed 100%.  As submitted by the plaintiff, if the product packaging was actually on the market, this mistake would not have been made.

(3)  The packaging and inserts submitted are different from the application which are all different from Annexes E to H.

(4)  From the packaging submitted with the application, the defendants were unable to show any packaging bearing 黃道老人 or 正宗老人 were in actual used by the defendants on the market at the date of application.  The inference is the opposite, ie no such products were in use by the defendants.

(5)  If the products were actually on the market, they would readily have been supplied together with the application.

53.  During the cross-examination of Mrs Law, she initially stated that Annex E, F and G were put on the market in 2006.  However, after a long and difficult cross-examination on this topic because Mrs Law refused to give straight answers to simple questions, she finally admitted that Annex E and F were put on the market in 2011 and after 2011 respectively.

54.  Insofar as Annex H is concerned, the product name was not even 正宗老人 but 南洋活絡油 at the time of application.  正宗老人 only first appeared in 2012 in a submission for amendment despite Mrs Law’s knowledge of the requirement to submit packaging before the cut-off date in 1999.

C2(c).     Bundle C5 - HKP-01405 - Annex D

55.  There was really no cross-examination of Jackel Chan on this topic.  Jackel Chan in re-examination testified that even after the product name had been changed by subsequent amendments, 黃道老人 was never a part of the product name of the application.  Mrs Law admitted in cross-examination that the Infringing Product in Annex D was put on the market in 2012 and not according to her pleaded case, ie since the mid-1990s. 

56.  In summary, the following points can be noted from Bundles C3 to C5 and the oral testimony:

(1)  Bundles C3 to C5 do not support the proposition that the products of packaging shown in Annex B to H were on the market since the mid-1990s or even as at the date of the 2004 applications.

(2)  The testimony elicited from Mrs Law during cross-examination, who refused to give straight answers to simple questions, supports (1) above.

(3)  The evidence of the defendants is inherently unreliable and suspect.

(4)  The evidence demonstrates that in order to beat the cut-off date, the 1^st defendant and the 4^th defendant applied to register many products as a “place holder”.  That is why they were unable to provide inserts/labels/packaging at the time of application but until much later.  These inserts/labels/packaging were modified upon seeing the popularity of the Plaintiff’s Product.

(5)  Additional examples in support of the conclusion in (4) are an application was made to register 麼利文正宗三蛇膽油, the name and packaging of which was only changed to 黃道老人 in July 2011.  黃道老人 was never part of the product name on the application.  Applications were filled out so as to effectively make the original product a “place holder” for the later imposition of the 黃道老人 mark to create a different product but relying on the HKP number to be given under the application.

(6)  The evidence supports the plaintiff’s pleaded case that the Infringing Products appeared on the market since 2012.  There is no other objective and reliable evidence to suggest they were on the market before 2012.  If that had been the case, the defendants could have simply produced invoices from 2011, 2010 or even 2009. Applications to change packaging by cutting and pasting on previous packaging is not evidence of use as incorrectly maintained in the defendants’ Written Closing. The cumulative effect of the evidence is that the material date for consideration of passing-off and trade mark infringement is 2012.

(7)  The defendants have thus put forward a false case of use of the Infringing Products since the 1990s, and is hereby rejected.

D.     PASSING-OFF

57.  The basic principles of passing-off require proof of a goodwill in a business in the supply of goods (or services) distinguished by a name or mark or get-up that has been or likely will be damaged by the conduct of another and such conduct ismisleading or deceptive of the public.  This principle is restated by the Court ofFinal Appeal in Re Ping An Securities Ltd (2009) 12 HKCFAR 808 at §17.  There, the court followed Reckitt & Colman Products Ltd v Borden Inc [1990] RPC 341 at 406.  In particular, Gault NPJ giving the Judgment of the Court of Final Appeal cited with approval the speech of Lord Oliver in Reckitt & Colman where his Lordship stated the trinity of passing-off as:

(1)  First, the plaintiff must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get-up” (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff’s goods or services.

(2)  Secondly, the plaintiff must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff.  Whether the public is aware of the plaintiff’s identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff.

(3)  Thirdly, the plaintiff must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.

58.  In The Commissioners of Inland Revenue v Muller & Co’s Margarine Ltd [1901] AC 217 at 223-224, Lord MacNaghten defined goodwill as:

“It is the benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old-established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source. However widely extended or diffused its influence may be, goodwill is worth nothing unless it has power of attraction sufficient to bring customers home to the source from which it emanates.”

59.  The term “get-up” has been defined by the Supreme Court of Canada in Ciba-Geigy Canada Ltd v Apotex Inc [1992] 3 SCR 120 at 138:

“The term “get-up” is normally used in passing off to mean the whole visible external appearance of goods in the form in which they are likely to be seen by the public before purchase.  If the goods are sold in packages, then their get-up means the appearance of the pack taken as a whole.  If they are sold or displayed unpackaged, then the get-up relied on can only be that inherent in the goods themselves.  The look, the appearance, the get-up of a product play a crucial role in the purchase process since they are the chief means at the manufacturer’s disposal to attract customers.  The importance of visual impact is well known: what appeals to the eye is crucial.  The product’s appearance or its packaging – shape size or colour may be characteristic of a particular manufacturer and have the effect of marking out the product or making it recognizable as his own.”

60.  The relevant time to determine whether a plaintiff has established the necessary goodwill or reputation is the date of the commencement of the defendant’s conduct complained of – Cadbury-Schweppes Pty Ltd v The Pub Squash Co Ltd [1981] RPC 429 at 494.  Insofar as the plaintiff is aware, the defendants started their alleged infringing activities in 2012.

61.  United Biscuits (UK) Ltd v Asda Stores Ltd [1997] RPC 513, was a case involving get-up where the plaintiff sued the defendant for passing-off its Puffin biscuits as the plaintiff’s Penguin biscuits.  Robert Parker J set out the following general principles which are highly relevant to the present action:

(1)  That long use of a particularly distinctive get-up places on a new competitor who is minded to use a similar get-up a special obligation to avoid confusion [524].

(2)  The question why a defendant chose to adopt a particular name or get-up is always highly relevant and is a question which falls to be asked and answered [531].

(3)  The plaintiff need not prove that every member of the general public is likely to be deceived.  It is sufficient for the plaintiff to show that a substantial part of the general public will be led to suppose or assume that the plaintiff was in some way responsible for the defendant’s goods [532 & 538].

62.  The imitation of a number of things, each of which is in itself not distinctive of a plaintiff’s goods, may make a strong case of passing-off on the account of the cumulative effect of the detailed resemblances.  The taking by a defendant of a word or words, which though not distinctive, form a prominent part of the plaintiff’s label, may strongly contribute to the passing-off - Kerly’s Law of Trade Marks and Trade Names, 16^th ed, §20-175.

63.  In considering the question of likelihood of confusion or deception, the court is entitled to give effect to its own opinion and is not confined to evidence of witnesses called at trial – Neutrogena Corp & Anor v Golden Ltd & Anor [1996] RPC 473 at 495-496. 

64.  Proof of actual confusion or deception, if the mark or get-up in question is in the opinion of the court likely to confuse or deceive, is unnecessary.  It is seldom the case that all instances of confusion or deception will come to light.  The more perfect the deception, the less likely that will be so.  Nevertheless, if there is evidence of actual confusion or deception, this will afford very strong evidence that the resemblance between the marks in question is so close as to be likely to confuse or deceive.  Thus, evidence of actual confusion is always relevant and may be decisive, whilst absence of such evidence may often be readily explained and is rarely decisive - Neutrogena Corp, ibid, at 482; Harrods Ltd v Harrodian School Ltd [1996] RPC 697 at 716.

65.  In assessing a case of passing-off by imitation of get-up, one postulates that the average purchaser is neither the very careful nor the very careless buyer but an average purchaser, who has a general idea in his mind’s eye of what he means to get but not an exact and accurate representation of it.  Nor will he necessarily have the advantage of seeing the two products side by side.  Nor will he be alerted to single out the fine points of distinction or definition.  Although the law of passing-off is not designed to grant monopolies in successful get-ups, the moment a party copies he is in danger and he escapes liability only if he makes it “perfectly clear” to the public that the articles which he is selling are not the other manufacturer’s, but his own articles, so that there is no probability of any ordinary purchaser being deceived – Blue Lion Manufacturing (Pty) Ltd v National Brands Ltd [2001] (3) SA 885 (SCA) at §§3 & 4.

66.  Under the principle of imperfect recollection,

“the question is not whether if a person looking at the two trade marks side by side there would be a possibility of confusion; the question is whether the person who sees the proposed trade mark in the absence of the other trade mark, and in view only of his general recollection of what the nature of the other trade mark was, would be liable to be deceived and to think that the trade mark before him is the same as the other, of which he has a general recollection.” - Kerly’s Law of Trade Marks and Trade Names, 16^th ed, §20-207.

67.  Indeed, the questions to be asked in every case when assessing the likelihood of confusion are the background of the type of market in which the goods are sold, the manner in which they are sold and the habits and characteristics of purchasers in that market - Reckitt & Colman, supra, at 415-416.

68.  Unless the circumstances of a case suggest otherwise, the court is entitled to find, if passing-off is established, that the plaintiff has suffered some damage – Henderson v Radio Corporation Pty Ltd [1969] RPC 218 at 241-242.  In the present action, once misrepresentation has been proved, there cannot be any doubt that damage has been suffered by the plaintiff, in particular in the diversion of sales to the defendants and also in the dilution of the exclusivity of the Plaintiff’s Marks and the Plaintiff’s Get-up.

69.  It is passing-off for a defendant to put into circulation goods which are inherently likely to deceive consumers even though the immediate purchasers maybe middlemen who are not themselves deceived and even though the middlemen may ultimately dispose of the goods in a manner which does not deceive anyone at all.  The tort is complete when the defendant parts with possession of the deceptive goods – Lever v Goodwin 4 RPC 492 at 507; Draper v Trist 56 RPC 429 at 435.  (See: The Law of Passing Off by Professor Christopher Wadlow, 5^th ed, at §5-137.)

70.  The concept of instruments of deception also applies to intangibles such as company names, internet domain name registrations and trade mark registrations.  A name which is, by reason of its similarity to another name, inherently likely to lead to passing-off is an instrument of deception – British Telecommunications v One In A Million Ltd [1999] FSR 1 at 18 & 23-24.

71.  Deception is the central element of the tort of passing-off.  It is not necessary for a plaintiff to establish that the defendant consciously intended to deceive the public as a probable result of his conduct.  Nevertheless, the question why the defendant chose to adopt a particular name or get up is always highly relevant.  If it is shown that the defendant deliberately sought to take benefit of the plaintiff’s goodwill for himself, the court will not “be astute to say that he cannot succeed in doing what he is straining every nerve to do” – Slazenger & Sons v Feltham & Co (1889) 6 RPC 531 at 538; Harrods Ltd, supra, at 706.

72.  Where a trader, having knowledge of a particular market, borrows aspects of a competitor’s get-up, it is a reasonable inference that he believes there will be a market benefit in so doing.  The obvious benefit will be the attraction of custom which would have otherwise gone to the competitor.  It is an available inference that the trader considered that such borrowing was fitted for the purpose and therefore likely to deceive or confuse.  Such copying may well be of only part of the competitor’s get-up. – Sydneywide Distributors Pty Ltd v Red Bull Australia Pty Ltd [2002] FCAFC 157 at §§117 & 121.

D1.    Goodwill

73.  The defendant has conceded in its Opening that the plaintiff has goodwill in the word mark and Get-up.  In addition, Mrs Law had admitted in cross-examination that there is substantial goodwill in the “黄道益” trade mark and the Plaintiff’s Get-up.  That should have been sufficient to put the issue to rest.  However, during cross-examination of Cathy Wong and being opportunistic, the defendants’ counsel tried to raise some opaque and unpleaded point relating to the plaintiff’s goodwill.

74.  It is trite that goodwill is territorial.  The plaintiff is not suing on the goodwill in USA, Singapore or mainland China but on the goodwill in Hong Kong.  The acts of infringement were all committed in Hong Kong.  When Mainlanders visit Hong Kong to buy their desired product, they are looking for the Hong Kong products in the Hong Kong packaging, not some Mainland packaging that they knew were available on the Mainland.  The “attractive force” relied on by the plaintiff is the Hong Kong goodwill, ie indicia of origin by way of the Hong Kong packaging, which the Mainland shopper believes is superior to the Mainland equivalent products.  To suggest that they would be looking in Hong Kong for some “packaging sold on the Mainland” (referred to as “Tinly’s packaging”) is a failure to understand the evidence.  

75.  Mainlanders and the public in Hong Kong are familiar with the Plaintiff’s Get-up and there is no evidence to suggest otherwise.  An article of 28 May 2012 in Nanfeng (Southern) City Post describes how mainlanders love to buy over the counter medicines in Hong Kong because they are relatively cheap and of good quality and the Plaintiff’s Product was discussed.  On the top of the list is an image of the Plaintiff’s Product. 

76.  The defendants’ Written Closing says that the plaintiff no longer has goodwill in the blue and white packaging.  There is no positively pleaded defence of abandonment and extinction of such goodwill, just a last-minute tactical maneuver to take advantage of the litigation within the family by relying on the Judgment of Lam J (as Lam VP then was) disclosed only shortly before the trial^[1] to formulate a speculative theory of the vanishment of goodwill in the blue and white packaging.  Further, the assertion is again factually incorrect because Mrs Law admitted to the plaintiff’s goodwill.

D2.    Copying and misrepresentation

77.  The issues of copying and misrepresentation are intertwined. 

78.  The gist of the evidence of Mrs law is as follows:

(1)  Mrs Law and Law often make references to other products in the market in making their own similar products.

(2)  They were aware of the Plaintiff’s Product since 1975.

(3)  They were aware of the plaintiff’s 1986 packaging.

(4)  They introduced a 活絡油 in mid-1980s and made reference to the Plaintiff’s Product which was the most famous brand of 活絡油.  However, she later tried to resile from this damaging admission by saying she had no impression of or paid attention to the plaintiff’s packaging.

(5)  The 1^st defendant’s first 活絡油 was 黃國民 which was copied from the Plaintiff’s Product since Mrs Law could not point to other products on the market with similar features as the Plaintiff’s Product back in 1986.

(6)  The surname 黃 was copied from the plaintiff when they had a whole list of other surnames to pick from.

(7)  In coming up with Annex B, they made reference to the Plaintiff’s Product.

(8)  Mrs Law and her husband came up with Annex D by making references to other products in the market in 2012 and copied the yellow wash from the plaintiff.  Note that the packaging did not change into yellow colour as the defendants would like to describe it to make their copying look less embarrassing.  The design is clearly for the old blue-and-white overall design to remain readily recognizable as the packaging design, only with a glowing effect over it.

(9)  Mrs Law said it was the demands of the market which drove them to make so many different brands/packaging although the ingredients are more or less the same.  However, that does not explain why they are given very similar though “different” brand names, with very similar packaging designs.

(10)  Annex B to G all carry the same bar code.  When confronted with this curious phenomena Mrs Law tried to explain that it was a mistake caused by the printing company.  However, other 活絡油 carried by the defendants that do not have 黃 or 老人 on a packaging similar to that of the Plaintiff’s Product all have different bar codes.  I have no hesitation in rejecting Mrs Law’s explanation in this regard.  The more likely explanation is that Annex B to G are treated by the defendants internally as the same product with slightly different trade dresses, all to imitate the Plaintiff’s Product and take advantage of the plaintiff’s goodwill.

79.  The evidence above has to be seen and contrasted with the defendants’ flagship brands 金大班, 虎頭標 and 星洲. Their names and packaging do not resemble the Plaintiff’s Product at all and they stand out prominently in their own right. 

80.  In the premises, I agree that the evidence irresistibly points to one single conclusion: the purpose of copying the surname 黃 and the Plaintiff’s Get-up is to deceive consumers into believing the Infringing Products are somehow related to the plaintiff and providing retailers with a spectrum of deceptive packaging is to allow retailers to sell the Infringing Products without having to compete with each other on the price.

81.  The conclusion at paragraph 80 above is further supported by the following facts and matters:

(1)  Law’s refusal to give evidence and his resignation from the partnership of the 1^st defendant 6 weeks after the Writ herein was issued in 2014.  Adverse inferences should be drawn that he copied the Plaintiff’s Get-up to ride on the goodwill and reputation of the plaintiff. 

(2)  Since the Writ was issued, the defendants have changed the packaging but still retained 黃 or 黃道 and Mrs Law could not give any reason for doing so at all. 

(3)  Most of the 1^st defendant’s products have the 1^st defendant’s registered trade marks on them with the exception of 黃道人 because the defendants wanted to use 黃道人 as a trade mark and ride on the goodwill of the plaintiff.

(4)  Mrs Law admitted that the purpose of their trade mark applications was to shield the defendants from attack and to prejudice the plaintiff.

(5)  Mrs Law admitted she knew that the trade mark application 黃道老人 would conflict with 黃道益.

(6)  Mrs Law could not explain why she chose to hang onto the characters 黃 and 道 when she allegedly did not expect any advantage to be gained in picking the surname 黃 which was copied from the plaintiff. One must bear in mind that of all the various kinds of medicinal oils carried by the defendants in their ranges of products, such as Ngor Sut Oil 莪朮油, Man Kam Oil 萬甘油, Pak Fa Oil 白花油, Kui Fung Oil 驅風油 and Hung Fa Oil 紅花油, none except 活絡油 uses the characters 黃 and/or 道 as part of their trade marks.  This fact I accept amply demonstrates the defendants’ intention to deceive.

82.  On the issue of deceptive similarity/misrepresentation, the defendants have denied having had an intention to deceive.  However, if one reads paragraph 13 of the Consolidated Defence carefully, the defendants have not positively denied copying nor pleaded a case of independent creation.  There remains no explanation how the Infringing Marks and the packaging of the Infringing Products were devised.

83.  This is to be considered against the objectively striking resemblance between the Infringing Marks, the get-up of the Infringing Products with the Plaintiff’s Marks, the Registered Trade Marks and the Plaintiff’s Get-up and they include the particulars of Deceptive Similarity pleaded and the matters hereinbelow:

(1)  The shape, size and proportion of the paper boxes.

(2)  The colouring of the paper boxes.

(3)  The design and housing of the glass bottle with a front label made visible through a window in the carton box, the shape of the window having been cut substantially in accordance with the shape of the bottle or the front label on the bottle.

(4)  The position on the front label of the bottle of a photographed portrait in oval shape of a male adult.

(5)  The back panel of the paper carton box shows the same portrait as that appearing on the label of the bottle in a central position. 

(6)  The Infringing Marks which are deceptively similar to “黃道益”, appear immediately adjacent to the fringe of the portrait both on the label of the bottle and the box packaging.

(7)  Dark blue horizontal banners appearing across the top of the front of the box packaging with bold Chinese characters appearing across the top.

(8)  Four bold Chinese characters in a vertical line printed in a conspicuous and contrasting colour against the white background on either side of the window on the box packaging bearing laudatory epithets on the nature and efficacies of the product, namely, for relieving pains and stiffness in bones, tendons and muscles.

(9)  The characters Infringing Marks appear on the label on the bottle seen through the window of the box packaging as well as on the back of the box packaging.

(10)  The Infringing Marks appear prominently on the box packaging.

84.  The defendants have denied that the Infringing Products are confusingly and deceptively similar and have put forward various arguments as to why they so contend.  The defendants have put forward 41 pages of detailed and minute comparison in table form which, as submitted by the plaintiff, is pointless and completely ignores the rules of comparison.  Such arguments put forward by the defendants are wholly unconvincing and without merit.

85.  The fact that Mrs Law had initially applied to register the mark “黃道” in Class 5 in 2014 after the Writs were issued and not “黃道人” or “黃道老人” negates the argument that any distinctiveness of the Infringing Marks comes from the combination of all 3 or 4 characters of the Infringing Marks.  The subsequent applications to register the Infringing Marks “黃道人” or “黃道老人” in 2016 is merely an afterthought.

86.  Further, by reason of the similarities between the Infringing Products at Annex E, F and G and the plaintiff’s “1993” packaging including but not limited to the incorporation of the seal of identical shape and Chinese characters therein (93 new packaging), such similarities cannot be explained and has not been explained except by a deliberate attempt on the part of the defendants to appropriate the goodwill of the Plaintiff’s Marks and the Plaintiff’s Get-up especially when the 4^th defendant, the manufacturer named on the packaging only commenced business on 27 June 1996.

87.  Applying the global appreciation test, I agree with the plaintiff’s submission that the Infringing Marks and the Infringing Products are visually, aurally and conceptually similar to the Registered Trade Marks.  By reason of the highly distinctive character of the Registered Trade Marks through use, the likelihood of confusion will be enhanced.  It is also the plaintiff’s case that the defendants have copied the Registered Trade Marks/the Plaintiff’s Get-up/the Plaintiff’s Marks.

88.  The defendants identified 4 key features of the Infringing Products which are allegedly clear differences apparent to anyone.  These alleged 4 key features do not serve to distinguish in law and in fact.  Insofar as the name, 星洲藥業 SINGAPORE MEDICINE CO appearing on the Infringing Products is concerned, the law is that whether the public is aware of the plaintiff’s identity as the manufacturer of the goods is immaterial, as long as they are identified with a particular source.  It matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name.  The confusion as to origin in passing-off is confusion as to origin of the indicia in which goodwill subsists, not confusion as to who is the manufacturer or proprietor of the indicia because consumers may not know and may not care who the manufacturer or proprietor is. 

89.  Insofar as the appearance of Chinese medicine registration numbers appearing on the Infringing Products are concerned, there is no evidence that consumers rely on Chinese medicine registration numbers to distinguish medicinal oils from one another rather than the brand name and get-up.  Indeed, common sense would say otherwise.  Insofar as the strip opener with Singapore Medicine marked on it is concerned, the Plaintiff’s Product has the same strip opener feature.

90.  To argue that the image of the old man looks entirely different from Mr Wong To Yick and therefore distinguishes the Infringing Products is really scraping the bottom of the barrel.  This argument does not take into account of the rules of comparison which includes imperfect recollection.  Further, such an argument does not exclude the possibility that the public would assume an association in the form of a common manufacturer or the Infringing Products are manufactured under licence from the source of the Plaintiff’s Product.

91.  The defendants have been relying on cases where there was evidence of confusion.  The absence or presence of evidence of confusion is not conclusive.  Ultimately, the question of likelihood of confusion is a matter for the tribunal of fact taking into account all the circumstances, and not for any witness.

D3.    Instruments of deception

92.  Insofar as category 1 of instruments of deception are concerned, ie goods which are inherently deceptive in that they carry indicia so close to what is distinctive of the plaintiff that they are bound to deceive unless specific remedial measures are taken, the plaintiff relies on the matters set out in paragraphs 77 to 91 above.  I agree with the plaintiff’s submission that the Infringing Products are inherently deceptive. 

93.  Insofar as category 2 is concerned, ie goods which do not deceive unless the retailer was responsible for a further misrepresentation of his own, but which are still close enough to those of the plaintiff in their distinctive features for this to be facilitated.  It may be assumed that if the defendants supply goods which just fall short of being inherently deceptive intending that they will be passed off by the retailers then they will be liable.

94.  There is testimony from Mrs Law to the effect that the products the defendants make are driven by the demands of the market ie what retailers want.  Retailers would want products that would sell and Mrs Law knew what was happening in the market place and how retailers were committing switch-selling of famous medicinal brands.  And despite having such knowledge she continued to supply the Infringing Products to retailers.

95.  The blogposts demonstrate that the Infringing Products are instruments of deception and that is what has been pleaded in the Reply.

E.     TRADE MARK INFRINGEMENT

E1.    Section 18(3) of the TMO

96.  Under section 18(3) of the TMO:

“A person infringes a registered trade mark if

(a) he uses in the course of trade or business a sign which is similar to the trade mark in relation to goods or services which are identical or similar to those for which it is registered; and

(b) the use of the sign in relation to those goods and services is likely to cause confusion on the part of the public.”

97.  “Use” is defined in TMO section 18(5):

“For the purposes of this section a person uses a sign if, in particular, he—

(a) applies it to goods or their packaging;

(b) offers or exposes goods for sale under the sign;

(c) puts goods on the market under the sign;

(d) stocks goods under the sign for the purpose of offering or exposing them for sale or of putting them on the market;

(e) offers or supplies services under the sign;

(f) imports or exports goods under the sign; or

(g) uses the sign on business papers or in advertising.”

98.  The principles to be applied in assessing the likelihood of confusion under section 18(3) TMO have been laid down and developed in a number of decisions of the European Court of Justice and of the UK courts, in particular, Sabel v Puma [1998] RPC 199; Canon Kabushiki Kaisha v Metro-Goldwyn-Mayer Inc. [1999] RPC 117; Lloyd Schuhfabrik Meyer & Co GmbH v Klijsen Handel B.V. [2000] FSR 77 and Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] FSR 19, at §§51-52, 87.  These principles have been applied and followed in the Hong Kong Court of Appeal - Tsit Wing (Hong Kong) Co Ltd v TWG Tea Co Pte Ltd [2015] 1 HKLRD 414 at §§33-38.

99.  The principles are:

(1)  The likelihood of confusion must be appreciated globally, taking account of all relevant factors.

(2)  The matter must be judged through the eyes of the average consumer of the goods or services in question, who is deemed to be reasonably well informed and reasonably observant and circumspect – but who rarely has the chance to make a direct comparison between different marks and must place his trust in the imperfect picture of them he has kept in his mind, and whose attention varies according to the category of goods or services in question.

(3)  The average consumer normally perceives a mark as a whole and does not proceed to analyse its various details.

(4)  The visual, aural and conceptual similarities of the marks must normally be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components, but it is only when all other components of a complex mark are negligible that it is permissible to make the comparison solely on the basis of the dominant elements.

(5)  Nevertheless, the overall impression conveyed to the public by a composite trade mark may, in certain circumstances, been dominated by one or more of its components.

(6)  Beyond the usual case, where the overall impression created by a mark depends heavily on the dominant features of the mark, it is quite possible that in a particular case, an element corresponding to an earlier trade mark may retain and independent distinctive role in a composite mark, without necessarily constituting a dominant element of that mark.

(7)  A lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods or services, and vice versa.

(8)  There is a greater likelihood of confusion where the earlier trade mark has a highly distinctive character either per se or because of the use that has been made of it.

(9)  Mere association, in the strict sense that the later mark brings of the earlier mark to mind, is not sufficient.

(10)  The reputation of a mark does not give grounds for presuming a likelihood of confusion simply because of a likelihood of association in the strict sense.

(11)  If the association between the marks causes the public to wrongly believe that the respective goods or services come from the same or economically linked undertakings, there is a likelihood of confusion within the meaning of the section.

100.  The concept of what constitutes a likelihood of confusion on the part of the public was discussed by the Court of Final Appeal in Tsit Wing (Hong Kong) Co Ltd v TWG Tea Co Pte Ltd (No 2) (2016) 19 HKCFAR 20.  Gummow NPJ held at §44 that “while a mere possibility of confusion is not enough, it is sufficient if the result of use by the defendant of the sign in question will be that a number of ordinary persons will entertain a reasonable doubt and be caused to wonder whether it might not be the case that the goods or services in respect of which the defendant’s sign is used have the same provenance as those in respect of which the trade mark is used.”  Thus, it can be seen that the threshold of demonstrating a likelihood of confusion is not high. 

101.  An additional factor in the global appreciation test is the intention of the defendant, who as a person who knows the market in which he is offering his good or services.  Thus whether the defendant copied the Plaintiff’s Mark or deliberately sailed close to the wind are factors that should be taken into account - Specsavers International Healthcare Ltd, supra, §115-116.

102.  In Portakabin Ltd v Powerblast Ltd [1990] RPC 471 at 480, Mummery J in comparing the marks Portoblast and Porta, had regard to the idea of the mark and said that “the addition of the next five letters, “blast”, in the defendant’s mark, does not diminish the resemblance of “portoblast” to the registered mark “porta” in its essential features of idea.”

103.  For the purposes of section 18(3), the court has to assume even if it were not so in fact that the mark owner has a reputation and goodwill in his mark.  In other words, the court has to assume that the mark has been in use and developed a reputation and goodwill for the entire specification of goods or services.  This is what distinguishes registered trade mark rights from the common law right of passing-off.  The former confers protection ahead of use.  Infringement will occur irrespective of any use – the mark may not have been used at all.  The kind of use contemplated when a mark is unused or minimally used has to be that of notional and fair use.  When the mark sued upon has actually been used on a substantial scale, one can take that actual use into account in assessing its distinctiveness but it does not limit the circumstances under which confusion may occur – Reed Executive Plc v Reed Business Information Ltd [2004] RPC 40 at §§79-81.

104.  Proof of actual deception is unnecessary.  If one or more cases of actual deception are made out to the satisfaction of the court, this will be very strong evidence that the resemblance between the marks in question is so close as to be likely to deceive –Kerly’s Law of Trade Marks and Trade Names, 16^th ed, §23-019.

105.  The Registered Trade Marks are set out at paragraph 12 above.  The Packaging Trade Mark is registered in respect of monochrome as well, hence it is treated as registered in respect of all colours. 

106.  The plaintiff submits that Annex B to H are infringements of the 黃道益 mark by reason of the testimony of Cathy Wong at paragraph 90 of her witness statement.  Her testimony has not been challenged.

107.  Insofar as the distinctive features of the Packaging Mark are concerned, I agree they are similar to the distinctive features of the Plaintiff’s Get-up. While such features and their overall visual effect are to be appreciated visually, they are described hereinbelow for the purpose of identification:

(1)  A rectangular-shaped paper carton box of an overall white background, alternatively, of an overall white background with a yellow colour fading off into white or simply monochrome.

(2)  The paper carton box has a window.

(3)  The back panel of the paper carton box shows portraits of the maker. 

(4)  The name of “黃道益” appears immediately adjacent to the fringe of the portrait on the box packaging.

(5)  Dark blue horizontal banners appearing across the top and bottom of the front of the box packaging with bold Chinese characters “黄道益活絡油” appearing across the top and English words “WONG TO YICK” appearing across the bottom.

(6)  Four bold Chinese characters in a vertical line printed in a conspicuous and contrasting colour against the white background on either side of the window on the box packaging.

(7)  Chinese characters appearing in the aforesaid horizontal banners and the vertical lines bearing laudatory epithets on the nature and efficacies of the product, namely, for relieving pain and stiffness in bones, tendons and muscles.

(8)  The characters “活絡油” appear prominently with the name and mark “黃道益” on the bottom panel of the box packaging.

108.  The distinctive and dominant component of the Packaging Mark is 黃道益 because words speak louder than devices and this is how the Packaging Trade Mark would be referred to by consumers.

109.  In coming to the view that there is a high likelihood of confusion, this court accepts the following points which have been highlighted by the plaintiff:

(1)  There are visual, aural and conceptual similarities between the Registered Trade Marks and the Infringing Products by reason of the defendants’ use of the characters 黃 and 道.

(2)  There is a greater likelihood of confusion because the Registered Trade Marks have a highly distinctive character per se and because of the use that has been made of it.

E2.    Section 18(4) of the TMO

110.  Section 18(4) of the TMO prohibits a type of infringement which can be established without any actual confusion being demonstrated:

“(4) A person infringes a registered trade mark if –

(a) he uses in the course of trade or business a sign which is identical or similar to the trade mark in relation to goods or services which are not identical or similar to those for which the trade mark is registered;

(b) the trade mark is entitled to protection under the Paris Convention as a well-known trade mark; and

(c) the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character or repute of the trade mark.”

111.  Although the wording suggests that the application of the sub-section is confined to the use of the similar mark on goods or services “not identical or similar” to those for which the well-known mark is registered, it has been authoritatively decided that it ought to be read to apply to the use by the defendant on goods and services “whether or not similar or identical”: Adidas-Salomon AG v Fitness World Trading Ltd [2004] FSR 21 §13-22,which has been followed in Hong Kong in Christie Manson & Woods Ltd v Chritrs (Group) Ltd [2012] 5 HKLRD 829 §51.

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

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

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

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

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

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

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

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

113.  The plaintiff clearly satisfies section 4(1)(c) having carried on business in Hong Kong for many years.

114.  As to whether the Registered Trade Marks are well known, Schedule 2 of the TMO sets out the factors for consideration:

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

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

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

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

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

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

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

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

115.  The plaintiff relies on the following in support of the contention, which is accepted by this court, that the Registered Trade Marks are well-known marks within the meaning of Schedule 2 of the TMO:

(1)  黃道益 has been used as a trade mark in Hong Kong since 1968.

(2)  黃道益 has been registered as a trade mark since 7 December 1991.

(3)  Extensive use has been made of 黃道益 as a trade mark before and after registration, not only in Hong Kong but in other countries around the world.

(4)  As far back as 1997, there were counterfeits of the Plaintiff’s Product in Singapore.

(5)  黃道益 has been registered as a trade mark in many countries around the world prior to 2012.

(6)  The earliest variant of the Packaging Trade Mark was used since 1990.

(7)  The Packaging Trade Mark was registered on 14 September 2006.

(8)  There have been substantial sales of medicinal oils made under the Registered Trade Marks.  In the year 2012, the sales turnover of the Plaintiff’s Product was $335,620,000.

(9)  The Registered Trade Marks have been extensively promoted.

(10)  As far back as 1997, the plaintiff and the Customs & Excise Department have taken action against counterfeits in Hong Kong.  The plaintiff has also initiated civil actions against many infringers.

(11)  Mrs Law has admitted that there is substantial goodwill in the Registered Trade Marks and the Plaintiff’s Get-Up.

E2(a).     Whether there is a link between the Registered Trade Marks and the Infringing Marks and Infringing Products

116.  What needs to be proved is that due to the degree of visual, aural or conceptual similarity between the Registered Trade Marks and the Infringing Marks and Infringing Products, the public makes a connection or establishes a link between the two even though it does not confuse them.  When the average consumer upon seeing the Infringing Marks and Infringing Products calls the Registered Trade Marks to mind, it is tantamount to the existence of such a link.  In a case where confusion is established, there must a fortiori be such a link.

117.  The plaintiff relies on the following facts and matters in support of the contention, which is accepted by this court, that the requisite link has been established:

(1)  The high degree of visual, aural and conceptual similarity between the marks in issue which have been addressed above.

(2)  The goods in question are identically aimed at the identical section of the consuming public.

(3)  The Registered Trade Marks have a very strong reputation.

(4)  The Registered Marks are highly distinctive per se and through user.

(5)  There exists a likelihood of confusion as demonstrated herein.

E2(b).     Unfair advantage

118.  The matters and evidence referred to in 77 to 95 above clearly demonstrate the defendants intended to take unfair advantage by riding on the coat-tails of the Registered Trade Marks.

E2(c).     Without Due Cause & section 4(3) defence in Schedule 5 of TMO

119.  The defendants have not adduced any evidence of “due cause” and there is no credible evidence of the use of 黃道人 and the Infringing Packaging prior to 4 March 2003.

F.     JOINT TORTFEASANCE

120.  I agree there is a mountain of evidence to show the defendants are joint tortfeasors acting under a common design.  Besides Mrs Law having admitted that Law and her had copied the Plaintiff’s Get-up and 黃道益name, the following are additional evidence demonstrating joint tortfeasance under a common design:

(1)  The non-individual defendants are a family business operated and directed by Mr and Mrs Law.

(2)  Mr and Mrs Law designed the packaging themselves.

(3)  They were the ones who decided whether to add any new products.

(4)  The 1^st defendant and the 4^th defendant cross-sold products of one another.

(5)  After 2012, all of the 4^th defendant’s products were distributed by Ms Law.

121.  The submission that the 2^nd defendant and the 3^rd defendant are simply holding companies is plainly wrong.  The 1^st defendant is not a legal person.  The 2^nd defendant and the 3^rd defendant carry on business in the name and style of the 1^st defendant, and Mrs Law in her witness statement has admitted the 2^nd defendant and the 3^rd defendant are not mere holding companies.

G.     CONCLUSION

122.  By reason of the matters stated above, judgment should be entered in favour of the plaintiff against the defendants for passing-off and trade mark infringement under section 18(3) and (4) of the TMO, for injunctive relief with ancillary orders including delivery up, discovery and an enquiry as to damages or an account of profits.

123.  The precise terms of the judgment are to be agreed by the parties within 28 days from the date hereof, failing which, there be leave to the parties to lodge and exchange within 28 days thereafter written submissions on the terms of the judgment, and the matter is to be determined on the papers.

124.  The costs of these proceedings (including all costs reserved, if any) be paid by the defendants to the plaintiff, such costs are to be taxed if not agreed with a certificate for 2 counsel.

125.  The above order as to costs is nisi and shall become absolute in the absence of any application within 28 days to vary the same.

126.  Lastly, I express my gratitude to counsel on both sides for their helpful assistance in this matter.