XCHRX MAK KAI SHUN v. XU QING HAI AND ANOTHER

HCA 312/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 312 OF 2000

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J U D G M E N T

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1. This is an application for summary judgment under O.14, r1 of the Rules of the High Court. The Plaintiffs' claims are in respect of infringement by the Defendants of a design registered in the United Kingdom. This was for the design of a toy drawing board which was eventually produced by the 2nd Plaintiff. The registered design number is 1008889 and the date of registration is 27 September 1982 ("the registered design").

2. The 2nd Plaintiff was registered as the proprietor of the registered design. The 2nd Plaintiff assigned all the rights in the registered design to the 1st Plaintiff in 1990. Thereafter, the 2nd Plaintiff became the exclusive licensee of the 1st Plaintiff in respect of all the rights and privileges conferred by the registered design.

3. On the evidence that has been filed and served on the Defendants, the registered design is valid and subsisting. The 2nd Plaintiff has for many years been producing and selling toy drawing boards incorporating the features of the registered design under and by reference to the name "The Magic Drawing Board" and the items numbers 828 and 828A.

4. On the evidence, the investigator employed by the Plaintiffs met the 2nd Defendant on 23 December 1999 who gave him a business card. The 2nd Defendant informed the investigator that he was a shareholder of Kalee Trading Co., that he was in charge of the business of Kalee Trading Co. in Hong Kong and that he had been engaged in the toy business for 7 to 8 years. He also said that the majority shareholder of Kalee Trading Co. was Xu Qing Hai, the 1st Defendant. According to the business registration particulars of Kalee Trading Co., Xu Qing Hai is, in fact, recorded as the sole proprietor. He is the 1st Defendant.

5. On the same occasion as when the investigator met the 2nd Defendant at the 1st Defendant's premises, the 2nd Defendant also revealed to the investigator that Kalee Trading Co. had a factory in the Mainland which produced the drawing boards sold by Kalee Trading Co. Samples of the products were obtained from the 2nd Defendant. One of them was a Magic Drawing Board produced as Exh. "RL-5" to the affirmation of Ringo Leung Wai Man. On 24 December 1999, the investigator received by fax from the 2nd Defendant a quotation for the products offered for sale by Kalee Trading Co. One of the items that was offered for sale and which was set out in the quotation was the Magic Drawing Board with the reference number KL 828A, a sample of which had already been provided to the investigator.

6. I am satisfied on the evidence that the 1st Defendant's "Magic Drawing Board" is an infringement of the registered design. The infringing toy drawing board and the box in which the product is packaged are virtually identical reproductions of the 2nd Plaintiff's products. Even the model number 828A and the instruction leaflet have been copied. This is strong evidence of direct copying. On the 2nd Defendant's admission to the investigator, Kalee Trading Co. was involved in the manufacture of the toys in their factory in Jinjiang in the Mainland. This is a factory operated by Kalee Toys Cream Co. Ltd. in Jinjiang.

7. Defences have been filed by the Defendants in various documents filed in court. The document dated 11 April 2000 although headed 'Defence' is not, in fact, a defence as all it states is that the company is alleged to have made forged drawing boards.

8. The document dated either 2 or 7 April 2000 filed by the 1st Defendant states that Kalee Trading Co. is a trading company and that the drawing boards sold by it were purchased from the Mainland and then on sold to third parties. This was purely trading in nature.

9. The document dated 4 April 2000 filed by the 2nd Defendant contains an admission that he is an employee of the 1st Defendant. It alleges that the 1st Defendant started its business on 10 September 1999 and that the 2nd Defendant has been in the toy business for just a very short time. The 2nd Defendant also states that he has no idea about liabilities for infringing copyright and forging.

10. No affidavit or affirmation evidence has been filed by the Defendants in opposition to the Plaintiffs' application. It is clear on the evidence filed on behalf of the Plaintiffs that the 2nd Defendant admitted to the investigator engaged by the Plaintiffs that he was in charge of the business of Kalee Trading Co. in Hong Kong. The 2nd Defendant was also the person who actually offered the infringing items for sale and there is also an admission by the 2nd Defendant that the items were manufactured by the 1st Defendant's factory in the Mainland. The bald assertion by 2nd Defendant in the document dated 4 April 2000 that he has no idea about liability for infringing copyright and forging does not afford a defence to him. As Mr Ling, Counsel for the Plaintiffs, has correctly pointed out, ignorance about liability for infringing a registered design affords no defence to a claim for injunctive relief in respect of infringement of registered design. S. 31 of the Registered Design Ordinance (Cap. 522) clearly spells out the rights conferred by registration.

11. On the question of damages or an account of profits in respect of infringement of a registered design, S. 51(1) of the Ordinance affords a defence to a defendant who proves that at the date of the infringement he was not aware, and had no reasonable grounds for believing, that the design was registered. It is necessary for a defendant relying on this to prove that at the date of the infringement :

(1) that he was not aware that the design was registered; and also

(2) that he has no reasonable grounds for believing that the design was registered.

It is for the Defendant to allege and prove this. This has not been alleged by the Defendant. There is also no evidence filed by the Defendants in support of the statutory defence to a claim for damages on an account of profits.

12. On an O.14 application the onus is on the Defendant to satisfy the court that there is an issue or question in dispute which ought to be tried or that there ought for some other reason to be a trial. The Defendants have failed to satisfy me that there is an issue or question which ought to be tried or that there ought for some other reason to be a trial of any part of the Plaintiffs' claims. I give judgment to the Plaintiffs.