B&Q PLC v. P&Q DECORATION & BUILDING MATERIALS (H.K.) CO LTD

HCA70/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 70 OF 2007

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D E C I S I O N

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1. This is the plaintiff’s application for interim injunctions against the defendant.

(1)     The 1^st application seeks to restrain the defendant from infringing certain of the plaintiff’s registered trademarks in Hong Kong.

(2)     The 2^nd application seeks to restrain the defendant from passing off or attempting to pass off its business as being that of or being connected with the plaintiff.

2. The plaintiff also seeks ancillary relief and consequential orders, which are set out in the summons.

3. I have read the extensive affidavits filed in support of this application by the plaintiff.  I have examined the exhibits to those affidavits.  I have considered the skeleton submissions filed and supplemented, as they were this morning orally.

4. The principles to be applied when considering the grant or refusal of an application for an interlocutory injunction were enunciated by the House of Lords in American Cyanamid Co. v. Ethicon Ltd [1975] AC 396.  They do not need to be rehearsed in this decision beyond stating that :

(1)     the plaintiff must show that there is a serious question to be tried and, if it succeeds,

(2)     the court must consider whether the balance of convenience lies in favour of granting or refusing interlocutory relief.

5. When considering whether the balance of convenience favours the granting or refusal of interlocutory relief, the court should consider whether if the plaintiff succeeds he would be adequately compensated by damages for the loss sustained between the application and the trial.

6. If damages would not provide an adequate remedy, the court should then go on to consider whether if the plaintiff fails, the defendant would be adequately compensated under the plaintiff’s undertaking in damages.

7. I now turn to the facts.

8. The plaintiff company is part of a United Kingdom-based group retailing home improvement products.  In affidavits filed in support of its applications, the plaintiff asserts that it is the largest international decoration and building material retail group in Europe and the third largest in the world.  It operates over 700 stores in Europe and Asia.  One of its main retail brands is “B&Q” and under this brand, the plaintiff sells a wide variety of goods, including do it yourself products, building materials, home improvement and gardening supplies.  It is apparent from the plaintiff’s affidavit that the brand “B&Q” is integral to its worldwide operations.  This is clearly reflected in its advertising programs.

9. The plaintiff has, in recent years, expanded its operations into China.  By the end of December 2006, they had 58 stores in 25 cities.  By any account, the plaintiff’s business in China is extensive.

10. The plaintiff is the owner in Hong Kong of a number of registered trademarks in the style of “B&Q” both in English and in Chinese characters and in various combinations.

11. In November 2006, the plaintiff became aware that the defendant was trading in Hong Kong, under the style “P&Q” and was using as part of its name, the same Chinese characters as are contained in the plaintiff’s registered trademarks.  Further investigation revealed that the defendant was in the business of selling products and services for home improvement, including kitchens, bathrooms, flooring, tiles and decorating materials.  That is to say essentially the same type of products that the plaintiff sold worldwide and in China and intended to sell in Hong Kong [the plaintiff deposes to the fact that they intend to open its first store in Hong Kong in July 2007].  The plaintiff further alleges that the defendant has deliberately adopted as part of its advertising the distinctive colour and layout used by the plaintiff, which it says, has come to be associated with the plaintiff’s reputation.

12. Essentially, the plaintiff’s case is and will be that the defendant has deliberately set out to trade on the goodwill of the plaintiff, and in the course of so doing has infringed the plaintiff’s registered trademarks.  That part of the plaintiff’s cause of action is based on section 18 of the Trade Marks Ordinance, Cap. 559, which prohibits the use of identical and confusingly similar marks, in respect of identical or similar goods.  On the face of it, the defendant appears to have set out replicate the distinctive features of the plaintiff’s registered trademarks albeit that it used “P” instead of “Q” in its own name.  The similarity between the two cannot properly be described as co-incidental.  I am satisfied, on the material before me, that there are serious issues to be tried under this limb of the plaintiff’s claim.

13. The plaintiff’s second complaint is that the defendant is passing itself off as having a connection to the plaintiff when it has not, and by implication that the goods sold by the defendant are attributable to the plaintiff.

14. The essential ingredients of the common law tort of passing off are set out in Reckitt and Coleman Products Ltd v. Borden Inc and Others [1990] 1 WLR 491.  They can be summarised as :

(1)     that the plaintiff has acquired a reputation or goodwill in his product or service;

(2)     that the defendant misrepresents whether intentionally or not that the product or service offered by him were the plaintiff’s; and

(3)     that causes damage to the plaintiff.

15. I am satisfied that under this limb of the plaintiff’s claim there are serious issues to be tried.

16. I must next address the question whether the plaintiff could be compensated by damages rather than by an injunction.

17. I accept, as the plaintiff’s counsel submits, that damages would not, in the circumstances of the instant case, be an adequate remedy.

18. The plaintiff asserts, and I accept, that the good name and reputation of the plaintiff cannot be properly protected by an award of damages after a trial and that the balance of convenience requires that it be granted injunctions to be put in place immediately.

19. In addition to the usual injunctions, the plaintiff asks for the following :

“3.   The Defendant do forthwith take all such steps as lie within its power to remove of the registration of the company names ‘P&Q Decoration & Building Materials (H.K.) Company Limited’ and/or ‘百安居裝飾建材(香港)有限公司’from the registers maintained by the Companies Registry, the Business Registration Office of the Inland Revenue Department and all other government departments and agencies and/or to change the said names to some other name or names which do not include ‘P&Q’, ‘B&Q’, ‘百安居’ or anything confusingly similar thereto.”

20. I decline to make such an order and I believe that those I will make should at this stage be sufficient.  The plaintiff may in due course obtain such an order from the trial judge.

21. The orders I make are :

1. The defendant be restrained until trial or further order, whether acting by itself, its directors, officers, servants, agents, nominees, representatives, subsidiaries or other related companies or any of them or otherwise howsoever, from doing the following acts or any of them, that is to say :

(a)  infringing the plaintiff’s Hong Kong registered trademarks;

(b) carrying on any business under the name “P&Q Decoration & Building Materials (H.K.) Company Limited”, “百安居裝飾建材(香港)有限公司”, or any name or mark confusingly similar thereto, or any name or mark containing the words “P&Q”, “B&Q” or “百安居”, and/or any other words confusingly similar thereto;

(c)  otherwise howsoever from passing off, attempting to pass off, causing, enabling or assisting others to pass off the defendant and/or its business as and for that of or in any way connected with the plaintiff, its subsidiaries or its affiliated or associated companies.

2. The defendant do within 14 days from the date hereof remove and deliver to the plaintiff’s solicitors for safe custody all signs, facia boards, banners and all printed matter including but not limited to stationery, business cards and flyers bearing the name or names “P&Q”, “P”n“Q”, “百安居”, “P&Q Decoration & Building Materials (H.K.) Company Limited” and/or “百安居裝飾建材(香港)有限公司” within its possession, custody or control.

3. The defendant do within 28 days of these orders by making, filing and serving on the plaintiff’s solicitors an affidavit confirm that paragraph 2 above have been duly complied with.

4. Either party be at liberty to apply.

5. The plaintiff’s costs in the cause.