SMART TRIKE MNF. PTE. LTD AND ANOTHER v. FUNG KWOK HOI AND ANOTHER

HCA 1989/2014

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1989 OF 2014

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DECISIONS

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1.  In the judgment handed down on 22 June 2016 (“the Judgment”), I granted summary judgment in favour of the 1^st Plaintiff against the Defendants. I left open the question as to whether the 2^nd Plaintiff is also entitled to judgment against the Defendants. After the exchange of further written submissions, I understand that the only remaining issues between the parties are: (i) whether the 2^nd Plaintiff is entitled to judgment against the Defendants; and (ii) the question of costs vis-à-vis the 2^nd Plaintiff and the Defendants.

2.  I have already set out the background of this case and the reasons for granting judgment in favour of the 1^st Plaintiff in the Judgment itself.  I do not want to repeat the same here.  For easy reference, I use the same abbreviations that I adopted in the Judgment.

3.  In the first written submissions, the Plaintiffs only asked for the Defendants to pay the costs of the 2^nd Plaintiff.  It was only in the written submissions in reply that the Plaintiffs raised for the first time that the 2^nd Plaintiff is also entitled to judgment against the Defendants.

4.  The reason given by the Plaintiffs is that the confirmatory assignment as referred to in §8(h) of the Statement of Claim (“the Confirmatory Assignment”) was only executed by the 2^nd Plaintiff in favour of the 1^st Plaintiff on 13 December 2013 which was after the issue of the writ on 15 May 2013.  In such circumstances, it is arguable that the 2^nd Plaintiff still had the locus to sue at the time of the writ and so judgment should also be granted in his favour.

5.  I decline such request.  As stated in the 1^st affirmation made by the 2^nd Plaintiff in support of the summary judgment filed on 28 May 2015, it has all along the Plaintiffs’ case that the 1^st Plaintiff is and was at all material times the owner of the copyright subsisted in the Copyright Works[1], and the 1^st Plaintiff is the owner of the Registered Trade Mark[2] and the Registered Design[3].  These were accepted by the Defendants in the summary judgment application.

6.  In view of such stance adopted by the Plaintiffs, it would now be too late for them to say that, at the time of the writ, the 2^nd Plaintiff also had interest in the Copyright Works, or indeed other intellectual property rights, relating to the drawings and hand sample concerning the design of ST157.  Furthermore, the description “confirmatory assignment” referred to in §8(h) of the Statement of Claim suggests that the ownership of the Copyright Works had in fact been assigned to the 1^st Plaintiff at an earlier date, and that was why the parties executed the Confirmatory Assignment to confirm the assignment presumably made earlier.  As it is the Plaintiffs’ case that the 1^st Plaintiff is and was at all material times the owner of the Copyright Works, the 2^nd Plaintiff is not entitled to any judgment against the Defendants.

7.  As the 2^nd Plaintiff is not entitled to judgment, he should normally be asked to pay for the costs of the Defendants.  However, the Plaintiffs argue that it was reasonable to join in the 2^nd Plaintiff for the following reasons.  First, the 2^nd Plaintiff was joined in for the purpose of preventing the Defendants from taking the technical point that the 1^st Plaintiff is only the equitable owner of the Copyright Works but the legal title remains with the 2^nd Plaintiff.  Second, the joinder of the 2^nd Plaintiff also protects the Defendants from the risk of “double jeopardy”, that is, the risk of the Defendants for being sued for the same infringement twice by both the 1^st and 2^nd Plaintiffs.  These were the submissions made by the Plaintiffs in the first written submissions.

8.  Though I do not grant judgment in favour of the 2^nd Plaintiff, I take the view that there is some justification for the joinder of the 2^nd Plaintiff.  To me, the extra costs of having the 2^nd Plaintiff in the proceedings are quite minimal, but the inclusion of him as a party in the proceedings can save the trouble of dealing with any unnecessary technical challenges relating to the ownership of the Copyright Works.  The question of ownership of a particular piece of copyright work may not be a straightforward matter.  If the Defendants were to take issue with the ownership of the Copyright Works, the Plaintiffs would then have to explain as to why the ownership of copyright relating to a drawing prepared by a particular employee would finally vest in the 1^st Plaintiff.  To avoid any unnecessary challenges, there is some justification for the joinder of the 2^nd Plaintiff.  In particular, the costs associated with the joinder should be minimal.

9.   For the above reasons, I am of the view that the fair order for costs vis-à-vis the 2^nd Plaintiff and the Defendants is one of no order as to costs of the action including the costs of the summary judgment application.  I therefore so order.

10.   For the avoidance of doubt, this application only relates to the costs of the claim by the 2^nd Plaintiff.  Hence, the costs order nisi relating to the claim vis-à-vis the 1^st Plaintiff and the Defendants has already made absolute 14 days after the date of the handing down of the Judgment.