XCHRX NEW BRIGHT INDUSTRIAL CO. LTD. v. GOLDEN BRIGHT MANUFACTURER LTD.

HCA 15804/98

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 15804 OF 1998

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REASONS FOR JUDGMENT

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This matter first came before me on 31st March 1999 for directions for trial which had been scheduled to take place for 5 days commencing 19th April 1999. It was agreed that five days would not be sufficient to deal with all issues between the parties. Essentially, the Plaintiff's claims are targeted at two of the Defendant's products - a toy tower crane ("the crane") and a toy excavator ("the excavator"). Concerning the crane, the Plaintiff alleges infringement of copyright. In relation to the excavator, there is complaint of infringement of registered design and copyright. For technical reasons, the Plaintiff would like to have trial re-fixed so that all claims may be heard in one go. For technical and commercial reasons, the Defendant would like to have as many issues resolved as soon as possible. It was said that the Defendant would have great difficulties in selling toys for the coming Christmas season unless the allegations of infringement are cleared up before the end of this May.

2. After hearing arguments, I decided that, in order to make the best use of time already allocated, that trial over alleged infringement of copyright in relation to the crane should proceed as scheduled and trial of remaining issues be adjourned to a later date to be fixed. Usual directions were then given including order for exchange of witness statements. On 12th April 1999, the Defendant served on the Plaintiff the written statements of two key witnesses - Mr. YUEN Shuen Ming ("YUEN") and Mr. BAO Wei Gang ("BAO"). These statements triggered off in turn, two applications by the Plaintiff. The Plaintiff firstly applied for adjournment of the trial for the crane that was due to start on 19th April 1999. Secondly, the Plaintiff took out an urgent summons ("the second summons") to strike out certain parts of the witness statements. It will be seen that the second summons raised important preliminary issues.

3. Arguments on the second summons spanned three days starting from 19th April 1999 at the end of which I ruled against the Plaintiff. I said at the time that I would give full reasons for my decision. The reasons are as follows.

HISTORY OF LITIGATION

4. The Plaintiff took action against the Defendant in HCA 13636 of 1997 ("the earlier action") concerning an earlier version toy tower crane ("the first crane") put on the market by the Defendant. It was claimed that the first crane infringed the copyright of a large number of design drawings of a toy tower crane ("the Plaintiff's crane") marketed by the Plaintiff. That earlier action was concluded by a consent judgment dated 26th March 1998 against the Defendant ("the consent judgment") under which the Defendant was restrained by injunction not to infringe the copyright belonging to the Plaintiff, was required to surrender infringing copies, etc. etc.

5. After the earlier action was concluded, the Defendant put on the market the crane which is admittedly a revised version of the first crane. The Plaintiff then commenced the action herein for, inter alia, infringement of copyright in 8 design drawings relating to the Plaintiff's crane. These eight drawings are among the many relied upon by the Plaintiff in the earlier action. In other words, it is claimed that the crane, albeit a modified design, also infringed the Plaintiff's copyright pertaining to the Plaintiff's crane that was the subject of the earlier action. On 26th December 1998, Barnett J. in this action made an order by consent ("the Consent Order"). The crucial part of that order for present purposes is in the first paragraph therein:-

"1. the Defendant be precluded from taking issue at the trial of this action with the subsistence of copyright in the design drawings of the Plaintiff's crane set forth in paragraph 3(a) of the Amended Statement of Claim or with the Plaintiff's ownership of such copyright and that the non-admission in paragraph 3 of the Defence has no application to such matters, which were determined by the consent judgment in HCA No. 13636 of 1997 between the parties hereto."

THE WITNESS STATEMENTS

6. The second summons refers to specific parts in the statements of YUEN and BAO. It would be idle to recite verbatim those parts. I hope both sides would accept a brief summary of the effects of those parts.

7. In essence, those challenged parts of the statements reveal the design brief to BAO, the designer of the first crane and the crane. They go on to the design process of the first crane, disclosing what models of toy cranes and real-life construction cranes were referred to and salient features of the first crane. In the course of discussing the design process, the statements mentioned two points: first, parts of the first crane bear features common to different brands of toy cranes already on the market and real-life construction cranes; secondly, parts of the first crane were the result of independent creation by BAO and other members of the Defendant's design team. In an annex to BAO's statement are particulars of modifications made to the first crane resulting in the crane that is the subject of this action.

8. It is also in the statements that the Plaintiff's crane share characteristics of a toy crane of another brand ("the Joustra crane"). The inference to be drawn from this is that there is limited originality in the design of the Plaintiff crane so that on the question of infringement the court need only concentrate on parts in the design of the Plaintiff's crane that is really original and protected. The statements also allege that the Defendant could not with due diligence uncover facts which could have enabled the Defendant to challenge the scope, but not the subsistence, of copyright in the design of the Plaintiff's crane.

9. Lastly, the statements aver that the settlement by consent judgment in the earlier action was agreed by the Defendant for commercial reasons, meaning it was not due to recognition of weaknesses in the defence. The Plaintiff's challenge to the statements are based on estoppel and pleading practice.

THE PLAINTIFF'S ARGUMENTS

10. Mr. Garland, SC for the Plaintiff, put forward very forceful arguments. This is what he said in effect as I understand it. The Consent Order gives rise to cause of action estoppel and issue estoppel. An absolute bar operates due to cause of action estoppel, save one exception to cause of action estoppel where a point was not decided in the earlier action because it was not raised due to special circumstances. There has been a final order in the earlier action between the same parties to the effect that the first crane infringed the Plaintiff's copyright in the drawings relied on. The matter is res judicata and cannot now be relitigated by the Defendant in this or any other action. The fact that the order was made by consent is irrelevant. See The Doctrine of Res Judicata by Spencer Bower, paragraphs 38 and 39; Kinch v Walcott [1929] A.C. 482 at 493; Thomson v Moore 6 RPC 426 at 430, 431, 436, 441, 456; Moore v Thomson 7 RPC 325 at 334-335 and Re South American and Mexican Co [1895] 1 Ch. 37 at 44, 45, 50.

11. Issue estoppel operates in respect of issues fundamental to the earlier determinative decision. See Hoystead v Commissioner of Taxation [1926] AC 155 at 170. According to Mr. Garland, the issues fundamental to the Consent Order are:

1) that the Plaintiff has copyright in the relevant drawings in that they were not copied from earlier material, and

2) that the Defendant infringed that copyright, in that the parts complained of were sufficiently objectively similar to the Plaintiff's drawings and that the Defendant had copied.

Those issues have therefore been conclusively determined by the Consent Order and are res judicata. There is also an exception to issue estoppel where the point was not raised although there must still be special circumstances. See The Doctrine of Res Judicata by Spencer Bower, paragraph 189 and Arnold v National Westminster Bank [1991] 2 A.C. 93 at 104-109.

12. The effect of estoppel is that the Defendant cannot challenge the subsistence and ownership of copyright and cannot allege that the parts of the first crane subject of the Consent Order were either not sufficiently objectively similar to the Plaintiff's crane or were not copies thereof. In particular, the Defendant cannot say that those parts of the first crane were independently designed by reference to real life or other toy cranes or in any other way. Nor, by parity of reasoning, can it seek to narrow down the scope of the Plaintiff's copyright by alleging that the Plaintiff copied the Joustra crane or took features common to tower cranes.

13. Even if it were permissible to look at the extent of copyright infringement, the Defendant clearly attempted in the earlier action to raise a case that the first crane lacked sufficient objective similarity to the Plaintiff's crane and that the first crane was of independent creation. The Defendant then consented to judgment. Further, at the time of the earlier action, the Defendant quite clearly knew about the Joustra crane and other models which it is now seeking to use in support of its case, but was not prepared to take the trouble to find them. Some of the cranes now sought to be relied on by the Defendant were actually in its possession at the time of the earlier action.. A thorough search apparently has now revealed them but it is too late to use any of them for defence.

14. There are no special circumstances justifying non-application of estoppel. The Defendant is simply trying to re-open matters which it could and should have known.

15. Without prejudice to the estoppel argument, the matters raised in the statements should be pleaded by the Defendant. See Rules of the High Court, Order 18, r.8(1)b. They are material facts which would have to be pleaded and particularised and in respect of which discovery would have to be given.

16. Finally, YUEN's witness statement contains allegations about the reasons for settling in the earlier action, which are quite irrelevant. That statement also quite improperly exhibits without prejudice correspondence between the parties. They too should be struck out.

THE DEFENDANT'S ARGUMENTS

17. Mr. Liao, SC for the Defendant, said this. One must distinguish ownership of copyright from scope of copyright. A party may own copyright but the scope of the copyright may be limited or confined to a certain aspect or attribute of the work that enjoys copyright. The Defendant concedes that the Plaintiff has copyright and that that copyright was infringed by the first crane. But the earlier action did not define the scope of the Plaintiff's copyright and so in this subsequent action it is still open to the Defendant to ask the court to determine the scope of the Plaintiff's copyright. Mr. Liao referred to a number of authorities in which although intellectual or industrial property right was conceded the court would identify the elements or attributes of the article or device in which the right subsists in order to determine the question of infringement. I shall revert to these authorities in due course. On the basis of these authorities, Mr. Liao contended that it is open to YUEN and BAO to particularize in their statements the design process and details in the design of the Plaintiff's crane, the first crane in the earlier action, the crane in this action and the Joustra crane and other models. The details are given, not to dispute subsisting copyright in the Plaintiff's crane, but to enable the court to determine the scope of that copyright and whether the design of the crane in this action encroached upon that scope.

18. Even if either cause of action estoppel or issue estoppel operates so that in the normal course of events the Defendant may not raise the matters discussed in the statements of YUEN and BAO, Mr. Liao submitted that there are special circumstances. At the material time, the Defendant moved its factory and those responsible mistakenly believed that the Joustra crane and other reference models and materials had been discarded. So during the earlier action, the Defendant thought that it had lost crucial evidence for defence. Also, the Defendant could not ascertain the date the Joustra crane came into the market until recently. If the Joustra crane pre-dated the Plaintiff's crane, obviously the Defendant could contend in the earlier action that the Plaintiff copied from the Joustra crane. It was only after the earlier action had been concluded that the Defendant obtained confirmation from a witness in France about the date the Joustra crane came into the market. In view of these special circumstances, the Defendant ought to be allowed to re-open issues concerning design or originality.

19. In answer to the pleading practice point, Mr. Liao said that the matters discussed in the statements are matters of evidence. In Copinger and Skone James on Copyright, 14th edition, it is stated that:-

"Whether copying has occurred or not is a matter of fact. Direct evidence of copying is rarely available and reliance frequently has to be placed on inference drawn from circumstantial evidence. ...... It is good practice for the plaintiff to particularise at an early stage in an action the alleged points of similarity between his work and the defendant's work. The existence of a striking general similarity coupled with evidence of the opportunity to copy will establish a prima facie case of copying which the defendant then has to answer. The evidential burden shifts to the defendant who then may seek to adduce evidence of some alternative explanation of the similarities between the two works, for example, evidence of independent creation or common source. The Court has declined to order interrogatories seeking evidence of the detailed history of the defendant's development of their copyright work on the grounds that they were "fishing" for information which would be the subject of evidence at the trial. The task of the judge is then to consider the evidence as a whole and decide whether there has been copying or not. An appellate court will not normally interfere with the judge's finding of fact." (Paragraph 22-117 at pp 1078-9)

20. In Rockwell International Corporation and another v. Serck Industries Limited [1988] F.S.R. 187, the plaintiff sought to administer interrogatories on the detailed history of the defendants' design and development of their valve alleged by the plaintiff to be an infringement of copyright, Falconer J disallowed the interrogatories for a plaintiff in a copyright action is not entitled to ask the defendant to disclose what the defendant did in the design process. Mr. Liao went through the challenged parts in the statements of YUEN and BAO. In a nutshell, he said these parts go to evidence that can be raised at trial without pleading.

21. To forestall complaint of surprise, Mr. Liao referred to an affirmation by Mr. YUEN Shun Yin (a brother of YUEN) dated 16th October 1998 for the Defendant in response to an application for interlocutory injunction by the Plaintiff in this action. In that affirmation, the Defendant has already denied copying, asserted independent creation and shown photographs of the Joustra crane and other models studied by the Defendant's designers. The affirmation and photographs were available for discovery. The Plaintiff could have asked for inspection of actual toys or models but it did not.

22. As a subsidiary argument, counsel also cited from various parts in pleadings, affidavits and statements filed on behalf of the Plaintiff to the effect that the Plaintiff had mentioned reference to the design of other toys and cranes. This being the case, the Defendant is entitled to refer to the other toys and cranes as well.

23. On the without prejudice correspondence, Mr. Liao asked the court to note that both sides have in fact placed before the court without prejudice correspondence between the parties.

ESTOPPEL

24. The problem boils down to a doctrinal conflict. On the one side of the scale, there is the doctrine of estoppel. As Mr. Garland quite rightly pointed out, there must be finality in the determinations of disputes. Once a case has been determined, whether after trial or by consent judgment, it is final and parties should not be allowed to re-litigate on the same issues. That is what res judicata is all about. But on the other side of the scale, there is the very concept that copyright is a right founded on originality. The extent of originality defines the scope of copyright. It would turn the law of copyright on its head if copyright becomes one that is defined, not by the extent of originality, but by concession of one party in one action. Like Mr. Garland said, the scope of copyright never changes. Even if the Defendant made any concession about the scope of the Plaintiff's copyright, it is difficult to see how that scope can be at variance with that a court may find in another case between the Plaintiff and a third party.

25. I can readily see that the problem I am faced with has important implications to practical commerce and industry. I can also understand that different judges may well stand by one side or the other of a doctrinal conflict. Still, it is my duty to decide one way or the other. As I see it, an intellectual or industrial property right is a legal right. The doctrine of estoppel is an equitable doctrine. Equity follows the law. Give the choice to throw my weight on either the side of the law or that of equity, I would stand by the side of the law. This should be sufficient to dispose of cause of action estoppel.

26. Last it may be said that the cause of action estoppel ought not be disposed of in a cursory manner, I considered the basis that gives rise to estoppel. I thought it was no accident that Mr. Garland repeatedly referred to the Consent Order as he canvassed the case of estoppel. Strictly speaking the cause of action estoppel arose from the result of the earlier action - the consent judgment. The Consent Order by Barnett J in this action does not add or create anything. The Consent Order is declaratory of the estoppel effect of the consent judgment in HCA 13636 of 1997. The Plaintiff sought to cast the estoppel, as it were, in engraved stone. The Defendant obliged by giving consent. So the Consent Order prescribes the extent of the estoppel. What does the Consent Order say? Well, it says that copyright subsists in the design drawings of the Plaintiff. There is no mention of the scope of the copyright.

27. In Walker & Co. v. A.G. Scott and Co. Ltd. [1892] 9 RPC 482, Walker had a registered design pertaining to a kind of tin can. The defendant in that case at first make cans which Walker alleged infringed his registered design. After some correspondence, the defendant wrote a letter expressing regret that he should have infringed the design in any way and undertook therein not to manufacture, sell, or offer for sale, any cans similar to Walker's. Subsequently, Walker commenced proceedings against the defendant for infringement. The cans complained of in the proceedings had sharp edges whereas Walker's had rounded edges. Chitty J, as he then was, said at pages 485-486:-

"The question is whether the Defendants have infringed the design. The tin can manufactured by the Defendants is, in all respects, similar to the Plaintiff's can, except that in the Defendant's can the edges at the top and bottom are sharp instead of being rounded. They are as sharp as can be made of bent tin. The Defendants' case is that the Plaintiff's design was new or original in one respect only, namely, in the rounded edges. Now, what is protected by the Act is the design as a whole. The design may be valid within the Act although all the parts are old except some particular part only which is new or original. The novelty or originality of the particular part may be sufficient to impart the character of novelty or originality to the whole. As the Defendants admit the validity of the Plaintiff's design, I am not concerned to enter upon any question as to its novelty or originality as whole; but, on the question of infringement, it becomes necessary to ascertain what is old and what is new. This is obvious. Supposing a design was registered for a bottle of the ordinary shape in all respects, except the neck, which was twisted, it is plain the proprietor of the design could not prevent other persons from making ordinary bottles without twisted necks. The Defendants, who have exhibited a great number of old and well known cans, have proved that there is no novelty or originality in the Plaintiff's design, except in the rounded edges. [It follows that there is no infringement]

The other question, turning on the undertaking signed by the Defendants, may be disposed of in a few words. This undertaking was asked for and obtained after the Defendants had infringed the Plaintiff's design, and I think it was not intended to be, and ought not to be construed, as being anything more than an undertaking that the Defendants would not infringe the Plaintiff's design in future. I am unable to accept the argument that it meant to deprive the Defendants of the rights they then had to make or sell cans which were not infringements of the Plaintiff's design. I therefore refuse the motion." (Emphasis added)

Although this is a case on registered design, Mr. Liao said that the same principle applies to ordinary copyright cases.

28. In Moore. v. Thomson 7 RPC 325, Thomson had had a patent invention in the form of a mariner's compass for about ten years when the defendant Moore introduced a compass card with allegedly new arrangement. Thomson commenced action against Moore for violation of his patent right. That action developed somewhat similar to the present one. What transpired, I quote from Poster, MR in Ireland sitting as trial judge in the High Court, was:-

"The action was commenced by a writ upon the 16th June 1884, followed by a statement of claim on the 16th of July in the same year, by the Plaintiff, Sir William Thomson, to restrain the Defendant from an alleged violation of his rights as a Patentee of improvements in the mariner's compass. The statement of defence was filed on the 9th of August 1884, and that statement of defence raised every question that could be raised in such a case - namely, it raised in a strict way the Plaintiff's title under his letters patent for originality, and raised also the question of violation of his rights. The case went on, and a large number of affidavits were filed in March 1885; and when the case was almost ready for hearing, and a very considerable amount of expense had been incurred, a consent was entered into on the 12th of June in that year, which was in these words:

"That a perpetual injunction be awarded to restrain the Defendant from infringing the Plaintiff's letters patent for certain improvements in the mariner's compass, and in the means for ascertaining and correcting its errors, dated the 29th March 1876, and the 18th October 1876, respectively; and that the Defendant do pay to the Plaintiff the sum of ￡3 for damages; that the Defendant do pay to the Plaintiff his costs of this action, when taxed, including the costs of the affidavits filed on behalf to the Plaintiff, and the costs of this consent and making the same a rule of Court; and that all further proceedings in this action be stayed."

The consent was accordingly made a rule of Court by an order of the 18th of June 1885, whereby an injunction was awarded in the terms I have mentioned; and there the matter ended, as far as concerned the infringement complained of at that time. There was in the case a very long correspondence between the parties, to a portion of which I may have to refer afterwards. That correspondence showed very considerable vacillation upon the part of the Defendant as to the course which he was to take. At one time he strenuously opposed the Plaintiff's claim in all its branches; at another time he stated that he had been advised that what he had done was a violation of the Plaintiff's rights, and an infringement of his patent. He afterwards in a letter withdrew that admission; but ultimately he consented to the injunction which is the basis of the present proceedings." (6 RPC 426 at 430)

Subsequently, Moore put out another compass card. Thomson charged that new card as a fresh infringement of his patent and a breach of the injunction and moved for an attachment. The motion was heard by the Master of the Rolls who held that the new card did not constitute an infringement . Thomson went to the Court of Appeal who reversed the Master of the Rolls on the ground that the learned judge applied the wrong test as to what was protected under the patent. Moore then took the matter to the House of Lords who affirmed the decision of the Court of Appeal on the same ground.

29. Practically every judge in all three tiers involved in the Thomson case held that the defendant Moore was estopped by the injunction from questioning either the validity of the patent or the fact that his previous card was an infringement. It was in this respect that Mr. Garland cited this case in support of the Plaintiff. Mr. Liao, however, asked me to look at the judgments more closely. For instance, Porter MR said,

"The effect of the consent and order is absolutely to preclude the Defendant from disputing the validity of the Plaintiff's patent; and the only defence he can now raise is that what he has done since is not an infringement. By stopping the action under the consent, the Defendant precluded the Plaintiff from obtaining a decree upon the question of the validity of the patent; and even if any other member of the public might successfully dispute the Plaintiff's title for want of novelty or the like, the Defendant cannot be permitted to do so. ...... This is an application simply for an attachment against the Defendant for a violation of the Plaintiff's patent; and it is therefore first necessary to decide ascertain exactly what the Plaintiff's patent is; and secondly, what is the precise act of infringement relied upon." (6 RPC 426 at 431) (Emphasis added)

Lord Ashbourne LC sitting in the Court of Appeal remarked:-

"The Defendant is estopped by the consent order of the 18th June 1885, from denying the validity of the Plaintiff's letters patent, and also from denying that the "Bengore Head" card was an infringement. Other suitors might question these matters, but the Defendant cannot. He is limited to the contention that he has not disobeyed the injunction by any subsequent infringement. This makes it necessary to scan closely the Defendant's later card, which is now alleged to be an infringement. We have had produced before us the various compasses and compass cards referred to in the affidavits, and that has facilitated our being able the more readily to follow the arguments addressed to us. No one before the Plaintiff had combined a light card with steadiness." (6 RPC 426 at 441)

Palles, the Lord Chief Baron, also sitting as a member of the Court of Appeal observed,

"These words of the Master of the Rolls show that the view he took of the question of law is identical with that at which we have arrived, and that we all agree that we are to ascertain, as best we can, the essential principle of the patented invention, and to decide not whether there is a difference in detail, but whether there is a difference such as to make the two machines essentially and characteristically different.

To determine, then, whether the Defendant's compass card is the same, in substance and effect, as that of the Plaintiff, we must, as it seems to me, analyse the invention described in the Specification, and ascertain whether there is in it an essence or substance which underlies and is distinct from its form; and if there be, distinguish between each. This is a question of construction of the Specification; and like that of any order written instrument, must be arrived at from a consideration of every part of it, in connection with the material circumstances existing at the time it was penned, including the then state of the public knowledge on the subject." (6 RPC 426 at 449)

Similar dicta can be found in all the speeches in the House of Lords except that by Lord Bramwell.

30. As the Lord Chancellor noted in the Thomson case when it finally went before him seated on the woolsack, it would be pointless to go through the very long and elaborate deliberations in all three courts. What is most instructive, I think, is that all the judges went into great lengths to analyse the intricacies of the Thomson invention and the features in the Moore new card. Even Lord Bramwell, who held that once Moore had conceded Thomson's subsisting patent right one scarcely need look at the Thomson invention, found it necessary in his minority opinion to consider details in the Moore new card compared with the previous card and he protested that he could not go into greater detail. So, despite the fact that the defendant Moore was estopped on account of the injunction from challenging the Thomson patent, it is necessary for the court dealing with a complaint of infringement to identify the protected elements under the patent and to ascertain whether the alleged infringing copy pirated those elements.

31. I do not think Mr. Garland sought to argue that in copyright cases the court should not adopt the same approach as for Walker and Thomson. But, for completeness, I should refer to Warwick Film Productions Ltd. v. Eisinger and others [1969] 1 Ch. 508. There, question arose as to whether a film script infringed the copyright of two books, all on the Oscar Wilde trials. The defendant in that case admitted that he copied from the second of the two books. It is important to note the logic sequence of the decision by Plowman, J. The learned judge first considered whether copyright subsisted in the two books. He found that both books enjoyed copyright protection. Then, he considered who owned the copyright. He came to the conclusion that the Plaintiff did not own the copyright in the first book but copyright in the second book did belong to the plaintiff. Now, bearing in mind that the defendant had admitted copying from the second book, on the finding that copyright in the second book belonged to the plaintiff, one would have thought that judgment should on the analysis so far be for the plaintiff. But no, the learned judge went on to consider the copied parts. He found that those parts were in fact records of the trial proceedings in which the author of the second book could not claim original creation. In other words, even though the question of ownership of copyright has been decided, on a complaint of infringement the court still has to examine the scope of the copyright and if the copying does not extend to the scope protected, there is no infringement.

32. The Plaintiff in the present case has been advised all along by a formidable team of lawyers who know full well the distinction between ownership of copyright and scope of copyright. If indeed the Defendant should be estopped from questioning the scope of the copyright in the Plaintiff's crane, I should have thought the Consent Order would be framed to cover this aspect too. The truth of the matter is that in the earlier action there was no trial and hence no determination on the scope of copyright. The consent judgment in the earlier action is not even as elaborate on particulars of ingenuity or originality as the injunction in the Thomson case. I cannot see how the Defendant is estopped or the court prevented from going into the scope of the Plaintiff's copyright in a subsequent complaint of infringement.

33. On issue estoppel, it is true that the Defendant in this action rehearsed some of matters raised in the earlier action, e.g. independent creation. So did Moore in the Thomson case. Before he consented to the injunction, Moore in his defence raised every question that could be raised. In the nature of this kind of cases, where the scope of the intellectual or industrial property right was left indeterminate on a prior occasion, the court still has to look at all the evidence and circumstances to determine what actually is protected and what the defendant has done that is said to be a fresh infringement. In the Thomson case, it was held that the defendant Moore could not allege that the Thomson invention was anticipated by other designs. But that, I think, is because Moore was in so doing challenging the patent right of Thomson which he had already conceded. This is a difference, perhaps a fine one, between introducing evidence and arguments that would effectively overturn the acknowledged right and producing evidence and arguments that delimits the undefined scope of an acknowledge right without purging the right altogether. As to how far the attack would adversely affect an acknowledged right must be a matter of degree depending on the particular circumstances of each case. In the present case, the court has not even begun to look at the scope of the Plaintiff's copyright or the attack on its scope. At this stage, I cannot say the evidence the Defendant seeks to introduce would totally repudiate the Plaintiff's copyright.

34. Even if I am wrong on the broad questions of cause of action estoppel and issue estoppel, Mr. Garland accepted that the Defendant may bring back to life particular issues if there are special circumstances. In this respect, I took on board everything said by Mr. Liao about the special circumstances in the Defendant's case. By way of exception, on the peculiar facts of this case, I would hold that the Defendant may re-open the issue of the scope of the Plaintiff's copyright.

PLEADINGS

35. Bearing in mind that this is a copyright case, I must especially guard against myself falling into the error of unjustified repetition of counsel's submission. With respect, the arguments on the pleadings point advanced on behalf of the Plaintiff fell short of the mark indicated by the authorities. I simply say here that I was convinced by Mr. Liao.

REASONS FOR SETTLEMENT

36. On the fact of it, reasons for settlement are irrelevant. However, as Mr. Liao pointed out, the Plaintiff is seeking additional damages for fragrant repeat infringement. I think it is only fair that the Defendant should be allowed to ventilate its state of mind which may be relevant for the purpose of mitigation on the question of additional damages.

WITHOUT PREJUDICE CORRESPONDENCE

37. Again, it seems prima facie improper for the Defendant to bring out without prejudice correspondence. But the Plaintiff has done that too. I think the Plaintiff must be deemed to have waived its privilege.

THE DECISION

38. For the reasons given, the second summons to strike out parts of the Defendant's witness statements should fail. Accordingly, I dismissed it.

39. Mr. Garland gallantly took a rear guard stand on costs. He said that the issues raised by the second summons are pertinent to trial and so costs should be costs in the cause. With respect, I took a different view. Those issues stood on their own although they would have an important impact on the course of trial. On the application of Mr. Liao, I ordered costs against the Plaintiff to be taxed if not agreed, with certificate for two counsel.

40. I was forewarned that should I decide against the Plaintiff on the summons the problem would be taken higher. It was agreed by all parties concerned that in the circumstances trial must be re-fixed pending the outcome of the appeal which will no doubt be of guidance to the trial judge. Hence it was ordered that trial of the whole case be adjourned with liberty to apply.

41. In closing, I wish to thank both counsel for their thorough and erudite submissions. Also, the courtesy and assistance they extended to the court mark the noblest tradition of the Bar.