XCHRX HAYCO MANUFACTURING LTD. v. WAI MING PRECISION MOULDING LTD.

1996 No. A2001

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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J U D G M E N T

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INTRODUCTION

1. The Plaintiff, Hayco Manufacturing Ltd. ("Hayco"), manufactures and sells various household products. Those products include a range of brushes. Over the last few years, a number of brushes in Hayco's range have been manufactured for Hayco by the 1st Defendant, Wai Ming Precision Moulding Ltd. ("Wai Ming"). However, a little over a year ago, the business relationship between Hayco and Wai Ming came to an end.

2. Following the breakdown of this relationship, Wai Ming has begun to manufacture its own range of household products. They are being marketed and sold by the 2nd Defendant, Fairy Star Industrial Ltd. ("Fairy Star"), which is an associated company of Wai Ming. Wai Ming's products also include a range of brushes. Hayco claims that some of these brushes are direct copies of its brushes, and that in manufacturing, marketing and selling them, Wai Ming and Fairy Star have infringed Hayco's copyright in their design.

3. The summonses before me are applications by Hayco for various interlocutory injunctions to restrain Wai Ming and Fairy Star from continuing to manufacture, market and sell infringing copies of Hayco's brushes and for ancillary relief. The summonses are opposed by Wai Ming and Fairy Star on the grounds that (i) Hayco has no real prospect of succeeding in its claim for permanent injunctions at trial, (ii) the balance of convenience does not favour the granting of interlocutory injunctions, and (iii) Hayco was guilty of inordinate delay in lodging these applications, and the Court in its discretion should deny it relief on that ground.

COPYRIGHT

4. Hayco's allegations relate to four particular brushes in its range: a utility scrub brush, a radial-head toilet brush, a radial-head toilet brush with lip brush, and a swivel scrub brush. Hayco claims that these brushes were all based on drawings by one of its employees, Camy Ng. Copies of her drawings for each of the four brushes have been exhibited. Hayco's case is that it is the owner of the copyright which subsists in those drawings.

5. Wai Ming and Fairy Star claim that, if copyright subsists in those drawings, Hayco is not the owner of the copyright in them. This claim is based on the affidavit sworn by Stephen Ng, a director of Wai Ming and its designer. Different considerations apply to each of the drawings, and it is therefore necessary for me to deal with each of them separately.

6. The drawing for the utility scrub brush. Mr. Ng claims that some years ago Donald Hay, Hayco's Chief Executive Officer, showed him a deck brush which had been made and sold by Merrywear of New Zealand. Mr. Hay asked him to copy it. The drawing which Hayco claims was made by Camy Ng was in fact made by Mr. Ng, and was used for his own reference purposes when he copied the Merrywear brush. That is said to be borne out by the purchase order issued by Hayco to Wai Ming for moulds for scrub brushes "similar to" various Merrywear brushes. For his part, Mr. Hay accepts that he showed the Merrywear brush to Mr. Ng, though he denies that he ever asked Mr. Ng to copy it. He simply showed it to Mr. Ng to give him ideas for the kind of utility scrub brush which Hayco wanted. Mr. Hay claims that the reference to Merrywear brushes in the purchase order for moulds was merely a reference to the dimensions of the Merrywear brushes, and not a reference to their style. Indeed, when I compare what is alleged to be Camy Ng's drawing (exhibit "DH-2") with the Merrywear brush which Mr. Ng claims he got from Mr. Hay (exhibit "SN-4"), I see differences in the shape of the front end and in the width of the back end.

7. The drawings for the toilet brushes. Mr. Ng claims that he and Mr. Hay studied various brushes made by other manufacturers. They then incorporated various features of them in their own designs. He claims that one of the four drawings alleged to have been made by Camy Ng for toilet brushes was in fact a drawing which he made, though he does not state which drawing that was. He does not spell out his case on the other three drawings, but what I take him to be saying is that, if they were made by Camy Ng, no copyright subsists in them because they were copies of toilet brushes already on the market. In order to show that the drawings relied upon by Hayco were no more than copies of toilet brushes already on the market, Mr. Ng exhibited (a) the 1990 brochure of an Italian company which manufactured and sold "Melody" brushes (exhibit "SN-7"), and (b) various brushes purchased by Mr. Ng or on his instructions in Europe, China and Hong Kong (exhibit "SN-8"). I have compared these exhibits with the drawings relied upon by Hayco (exhibit "DH-5"). There are two features in the drawings which are not present in the exhibits. First, the toilet brush in the drawings has a shoulder which holds it in its holder, whereas the toilet brushes in the exhibit have a ring which Mr. Hay claims to be aesthetically less pleasing. Secondly, the handle of the toilet brush in the drawings has an indentation for the thumb and ridges to fit the contours of the hand, whereas none of the toilet brushes in the exhibits have either (apart from those with a twisted wire head).

8. The drawings for the swivel scrub brush. Mr. Ng claims that Mr. Hay showed him a swivel scrub brush which came from the United States. Mr. Hay asked him to copy it, while at the same time altering its design because the U.S. design had been registered. Again, Mr. Ng does not spell out his case on the two drawings alleged to have been made by Camy Ng (exhibits "DH-28" and "DH-29"), but what I take him to be saying is that, if they were made by Camy Ng, no copyright subsists in them for two reasons. First, they were copies of the swivel scrub brush already on the market with sufficient modifications to conceal the fact that they were copies. Mr. Ng does not identify the manufacturer of the swivel scrub brush which came from the United States, but he does exhibit an advertisement on the internet for a swivel scrub brush manufactured by Wilen Companies Inc. Alternatively, the drawings relied on by Hayco were copies of a drawing which Mr. Ng made for the swivel scrub brush when Mr. Hay asked him to modify the original design for it.

9. For his part, Mr. Hay claims, as I read his affidavits, that Camy Ng's drawings were based on his design ideas. He accepts that he discussed with Mr. Ng the dimensions of the two rectangular openings on either side of the central opening. He claims that he did so for technical reasons only, namely to ensure that there would be sufficient room during the making of the moulds to make the two holes in the central opening to secure the attachment.

10. There is no doubting the similarity between the second of Camy Ng's drawings (exhibit "DH-29") and Mr. Ng's drawing (exhibit "SN-13"), but there is no way of telling whether the latter is a copy of the former, or the former a copy of the latter. In the course of the hearing, Mr. Colin Shipp for the Defendants pointed to the fact that Hayco's telephone number on the chop stamped on exhibit "DH-29" suggests that the drawing came into existence after telephone numbers in Hong Kong acquired the prefix "2", but that point was neutralised by the fact that Hayco's case is that the chop was stamped on exhibit "DH-29" subsequently when Hayco received advice that its design drawings should bear a chop asserting copyright ownership. However, I have compared exhibit "DH-29" with the advertisement for Wilen's brush (exhibit "SN-16"). The designs for the attachment to the brushes are completely different.

Conclusion

11. Having analysed the competing contentions with care, I am satisfied that there are serious questions to be tried as to whether copyright subsists in the drawings relied upon by Hayco. Although some of the contentions can be tested by a comparison of the drawings with the various exhibits, the issue turns for the most part on the differences in the evidence of Mr. Hay and Mr. Ng. Those differences can only be resolved at the trial of the action.

12. INFRINGEMENT

In considering whether Wai Ming and Fairy Star have infringed Hayco's copyright in the designs for the four brushes, I have borne two things in mind:

(i) The comparison is to be made between the Defendants' products and Hayco's drawings, not Hayco's products: see, for example, Centallic Technology Development Ltd. v. Worldwide Industrial Ltd. (HCA10156/95).

(ii) Where commercial designs are concerned, it is necessary to compare the designs closely with the allegedly infringing products. Moreover, the more rudimentary the drawings, the greater the need for the reproduction of the drawings to be exact: see Copinger & Skone James, Copyright, 13th. ed., para. 8-55.

13. The utility scrub brush. There are a large number of differences between Hayco's drawing (exhibit "DH-2") and the utility scrub brush manufactured by Wai Ming (exhibit "DH-16"). Wai Ming's brush has much rounder edges, the shape and size of its cavity is different, and the shape, size and number of the ridges on its side are different. Miss Monica Chow for Hayco beguilingly claims that these differences are insignificant when compared with the ergonomic features which are common both to the drawings and Wai Ming's brush, but the ergonomic features of Hayco's drawings which are said to be so important and unique are all reproduced in the Merrywear brush. To test that, I put Hayco's brush (exhibit "DH-27"), Wai Ming's brush (exhibit "DH-16") and the Merrywear brush (exhibit "SN-4") next to one another. The similarity between Hayco's brush and Merrywear's brush became apparent, and the differences between Wai Ming's brush and the others were highlighted. The drawing relied upon by Hayco is, I think, on the rudimentary side in view of the absence of measurements in it. In those circumstances, I require a measure of exactitude between the drawing and Wai Ming's brush before I am prepared to say that there is such a substantial degree of objective similarity between them so as to raise a prima facie case of copying. I do not discern that measure of exactitude here. If the differences between the drawing and Merrywear's brush suggest that the drawing was not a copy of the Merrywear brush, the differences between the drawing and Wai Ming's brush suggest even more that Wai Ming's brush was not a copy of the drawing.

14. The toilet brushes

The differences between Hayco's drawings (exhibit "DH-5") and the toilet brushes manufactured by Wai Ming (exhibits "DH-14" and "DH-15") are very small. The hook on the handle has disappeared, and has been replaced by a hole; the shape of the cavity in the handle is squarer than the drawing, and goes all the way to the shoulder; Wai Ming's brush does not have a thumb indentation on the handle; and the measurements of the ridges on the handle are slightly larger in the drawing. But I regard all these differences as modest and insignificant when compared with the ergonomic features which are common to both the drawings and Wai Ming's brushes. They are set out in para. 3 of Mr. Hay's 1st affidavit. To test that, I put Hayco's brushes (exhibits "DH-25" and "DH-26") and Wai Ming's brushes (exhibits "DH-14" and "DH-15") next to each other. The resemblance was particularly striking. The toilet brushes in exhibit "SN-8" show that there is a limit to the number of different ways in which toilet brushes can be designed, and they serve to highlight the similarities between Hayco's drawings and Wai Ming's brushes rather than their differences. In my view, there is such a substantial degree of objective similarity between Hayco's drawings and Wai Ming's brushes as to raise a prima facie case of copying.

15. The swivel scrub brush. The claim relating to the swivel scrub brush was not included in the Statement of Claim indorsed on the writ. It was only included in the Amended Statement of Claim. No leave to amend the Statement of Claim was sought because Hayco's solicitors purported to amend the Statement of Claim pursuant to Ord. 20 r. 3, i.e. they thought that leave was unnecessary. In that respect, they were wrong. Every act of infringement of copyright constitutes a new cause of action, and an amendment to plead a new cause of action cannot be made without leave. Mr. Shipp contends that I cannot grant interlocutory relief relating to the swivel scrub brush until such leave has been obtained.

16. Not surprisingly, Miss Chow applied for leave to amend the Statement of Claim. It is plain that the Defendants would not suffer any relevant prejudice if I granted leave. Their solicitors had assumed that the Statement of Claim had been properly amended, and they pleaded to it by serving and filing in court an Amended Defence and Counterclaim. They were not alerted to the point until Mr. Shipp was instructed last week. In these circumstances, I grant Hayco leave to amend the Statement of Claim in the form of what purports to be the Amended Statement of Claim filed on 15th May. I direct that the filing and service of the Amended Statement of Claim be dispensed with, and I direct that the Reply to the Amended Defence and the Defence to Counterclaim filed on 12th June may stand as the Reply to the Amended Defence and the Defence to Counterclaim. I therefore proceed to consider on its merits Hayco's contention that its copyright in the drawings of the swivel scrub brush has been infringed.

17. The differences between the second of Hayco's drawings (exhibit "DH-29") and the swivel scrub brush manufactured by Wai Ming (exhibit "DH-32") are very small. The side view of the brush on the drawing suggests that the underneath is convex, whereas the side view of Wai Ming's brush shows it to be flat; Wai Ming's brush has ridges over the two attachment points, whereas the drawing does not; and the drawing shows two indentations in the central opening which Wai Ming's brush does not have. But I regard these differences as infinitesimal when compared with the similarities: the shape and size of the brush, the number of openings and their shape, and the position of the two attachment points. Again, to test that, I put Hayco's brush (exhibit "DH-30") and Wai Ming's brush (exhibit "DH-32") next to each other. The resemblance was again very striking. In my view, there is such a substantial degree of objective similarity between the second of Hayco's drawings and Wai Ming's brush as to raise a prima facie case of copying.

Conclusion

18. For these reasons, I have come to the conclusion that Hayco has established an arguable case that Wai Ming has copied the toilet brushes and the swivel scrub brush, and that Hayco has a real prospect of succeeding in its claim for permanent injunctions at trial in relation to those brushes.

BALANCE OF CONVENIENCE

19. Miss Chow argues that, with infringing copies on the market, the sales of Hayco's toilet and swivel scrub brushes will be affected. Instead of ordering Hayco's toilet and swivel brushes, retailers may buy Fairy Star's infringing copies, thereby diminishing Hayco's profits. Mr. Shipp responds to that argument in two ways:

(i) These brushes are ordinary household products. There are many similar brushes on the market already, and the differences between them are small. Mr. Shipp argues that the presence of Fairy Star's brushes in the market, even if they infringed Hayco's copyright, would hardly affect Hayco's business. I do not think that I can give any weight to this argument. It proceeds on a factual premise which I am not prepared to accept without evidence: I do not know whether there are many similar brushes on the market already. I have no idea whether in Hong Kong there is a wide selection of toilet and scrub brushes for potential customers to choose from, or whether the choice is relatively limited. Without any evidence, I cannot make the leap of faith which Mr. Shipp asks me to.

(ii) Mr. Shipp claims that Hayco's loss of profits sounds in damages, so that damages would be an adequate remedy for Hayco. I accept that, on Hayco's claim for an account of profits, Fairy Star would have to produce its sales records, and that the sales of its products can be ascertained in that way. I do not think that that is sufficient. Even if Fairy Star's sales records were to distinguish between sales of infringing copies of Hayco's toilet and scrub brushes and Fairy Star's other sales, it would be entirely a matter of guesswork as to how many sales of the toilet and scrub brushes Hayco would have made in the absence of Fairy Star's infringing copies on the market. I accept that any diminution in Hayco's sales of the toilet and scrub brushes could be ascertained by comparing current against previous sales, but it would be difficult, if not impossible, for Hayco to prove that the diminution in sales was attributable to Fairy Star's infringing copies being on the market.

20. For these reasons, I do not think that damages would be an adequate remedy for Hayco, even if the Defendants were in a position to pay them. By the same token, however, I do not regard the damages which Hayco would have to pay the Defendants on its cross-understanding as to damages as an adequate remedy if it turns out at trial that interlocutory relief should not have been granted. It would be difficult, if not impossible, for Fairy Star to prove what profits it would have made if it had been allowed to continue to sell the infringing copies until the trial takes place.

21. Because the respective remedies in damages available to both Hayco and the Defendants are inadequate, I turn to the balance of convenience. The toilet and scrub brushes represent only a small proportion of Hayco's and the Defendants' product range, and I am not persuaded that an adverse decision on this summons would be so disastrous to the losing party that it runs the risk of going out of business. However, the Defendants have, I think, brought these summonses upon themselves. Having begun to market toilet and scrub brushes which bore such obvious similarities to those of Hayco, they ought to have appreciated that when Hayco got wind of what they were doing, Hayco would accuse them of copying their brushes. If they had appreciated that, then they took a calculated risk in going into what they did with their eyes wide open. Hayco had done nothing before the Defendants began to market the brushes to lead the Defendants to think that their conduct would be tolerated.

22. For this reason, the preservation of the status quo in this case is best achieved, in my view, by preserving the state of affairs which existed before the Defendants began to market the infringing brushes. That point has particular force in this case where Fairy Star claims that, as a result of Hayco's claim for interlocutory injunctions, it has not been accepting the orders which it has received. For these reasons, I have reached the conclusion that a greater injustice would be caused to Hayco if interlocutory relief was refused but permanent injunctions granted at trial than the injustice which would be caused to the Defendants if interlocutory relief was granted but permanent injunctions refused at trial. Accordingly, I find that the balance of convenience favours the granting of interlocutory relief.

DELAY

23. The Defendants' claim that Hayco was guilty of inordinate delay in making this application is based on a statement in Mr. Hay's first affidavit that he first saw a leaflet which advertised Fairy Star's products on 13th October 1995. Despite that, Hayco did not file its first summons relating to the utility scrub brush and the toilet brushes until 25th March 1996, and it did not file its second summons relating to the swivel scrub brush until 10th May 1996.

24. However, the photographs of Fairy Star's product range in the leaflet were very small, and it would have been extremely difficult, given that there is a limit to the number of different ways in which ordinary household brushes can be designed, for Hayco to tell from the leaflet alone whether its copyright in any of its designs was being infringed. Hayco can be excused, I think, for not applying for interlocutory relief against the Defendants until it had actually obtained samples of the Defendants' products. As to that, Mr. Hay claims that Hayco only obtained samples of the utility scrub brush and the toilet brushes early in March, and that it was only after the issue of the first summons that Hayco obtained a sample of the swivel scrub brush. In these circumstances, I do not think that it would be right to deny Hayco such relief as it would otherwise be entitled to on the ground that it delayed in proceeding with this application.

CONCLUSION

25. For these reasons, Hayco is entitled to suitably-worded interlocutory injunctions restraining the Defendants from continuing to manufacture, market and sell toilet brushes and swivel scrub brushes of the types exhibited and to suitable ancillary relief. I shall hear the parties on the precise form of the order I should make.