AVENT LTD AND ANOTHER v. PROMINENT WING LTD AND OTHERS

HCA 480/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 480 OF 2008

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BETWEEN

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REASONS FOR JUDGMENT

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1.  On 29 December 2009 I gave summary judgment to the plaintiffs against the 1^st, 3^rd and 4^th defendants and ordered as follows:

(1)  that a permanent injunction be granted to restrain the 1^st, 3^rd and 4^th defendants and each of them , in the case of the 1^st and 3^rd defendants whether acting by themselves, their directors, officers, agents or servants or any of them or otherwise howsoever and in the case of the 4^th defendant whether acting by himself, his servants or agents or any of them or otherwise howsoever from doing any of the following acts:-

(i)  infringing the plaintiffs’ copyright in the original artistic and literary works relating to each of the plaintiff’s products set out in Schedule 2 of the amended statement of claim, the parts and components thereof; together with the instruction manuals and packaging therefor (“the copyright works”); and

(ii)  attempting, causing, procuring assisting, counselling, enabling, acting in concert or pursuant to a common design or otherwise howsoever to do any of the acts referred to herein.

(2)  The 1^st, 3^rd and 4^th defendants and each of them deliver up within 14 days from the making of this order all articles and materials in their possession, power, custody or control including bottles and/or parts thereof, dies, plates, templates, labels, leaflets and catalogues the use or sale of dealing therewith by the 1^st, 3^rd and 4^th defendants or each of them would offend against the foregoing injunctions.

(3)  The 1^st, 3^rd and 4^th defendants do within 14 days from the making of this order, and in the case of the 1^st and 3^rd defendants by a director make and file an affidavit/affirmation and serve a copy thereof on the plaintiffs’ solicitors setting forth so far as are known to the 1^st, 3^rd and 4^th defendants the names and addresses of all persons, firms or companies:-

(a)  to whom the 1^st, 3^rd and 4^th defendants have sold and/or supplied and/or offered to sell and/or supply;

(b)  from whom the 1^st, 3^rd and 4^th defendants have ordered, bought and/or obtained;

(c)  who has offered to sell and/or supply to the 1^st, 3^rd and 4^th defendants; and

(d)  who has ordered from the 1^st, 3^rd and 4^th defendants;

items of the types referred to in paragraph (2) herein with full details of the respective dates, prices and quantities of each supply or order thereof and further do exhibit to such affidavit/affirmation copies of all documents relating to the aforesaid dealings, including, but not limited to all relevant contracts, invoices, delivery notes, orders and other documents or copies thereof in the possession, power, custody or control of the 1^st, 3^rd and 4^th defendants.

(4)  The 1^st, 3^rd and 4^th defendants do within 14 days from the making of this order, in the case of the 1^st and 3^rd defendants by a director make and file an affidavit or affirmation and serve a copy thereof on the plaintiffs’ solicitors setting forth the following information:-

(a)  the number of bottles and parts thereof which are infringing copies of the copyright works sold by the 1^st, 3^rd and 4^th defendants;

(b)  the number of bottles and parts thereof which are infringing copies of the copyright works that remain unsold by the 1^st, 3^rd and 4^th defendants;

(c)  the sums received or receivable by the 1^st, 3^rd and 4^th defendants in respect of the bottles and parts thereof which are infringing copies of the copyright works sold by the 1^st, 3^rd and 4^th defendants; and

(d)  the costs incurred by the 1^st, 3^rd and 4^th defendants in respect of the manufacture, distribution and sale of the bottles and parts thereof which are infringing copies of the copyright works;

and exhibit to such affidavit/affirmation copies of all documents relating to the aforesaid information, including, but not limited to all relevant contracts, invoices, orders, payment receipts and other documents or copies thereof.

(5)  There be an inquiry as to damages including additional damages in accordance with Section 108(2) of the Copyright Ordinance or alternatively, at the plaintiffs’ option an account of profits, in respect of the 1^st, 3^rd and 4^th defendants’ acts of infringement of copyright.

(6)  The 1^st, 3^rd and 4^th defendants do jointly and/or severally pay to the plaintiffs all sums found due upon taking such inquiry and/or account together with interest thereon at such rate and for such period as this Honourable Court deems fit.

(7)  That the 1^st, 3^rd and 4^th defendants do pay the costs of this action including the costs of this application to be taxed if not agreed.

2.  I indicated at the time that written reasons would be given later. This I now do.

3.  The 1^st plaintiff is and was at all material times a company incorporated in the United Kingdom. The 1^st plaintiff is a well-known designer and manufacturer of a variety of high quality English made baby and mother care products and accessories.

4.  In 2007 the 1^st plaintiff’s business was acquired and taken over by the 2^nd plaintiff which is a member of the corporate group of Koninklijke Philips Electronics N.V. a well-known group of companies for the manufacture and the design of, inter alia, high quality consumer electronics, domestic appliances and personal care products under and by reference to the mark PHILIPS.

5.  By a business sale agreement dated 18 December 2007 made between the 1^st plaintiff and the 2^nd plaintiff, the 2^nd plaintiff purchased as a going concern with effect from 31 December 2007 all the business, undertaking and assets of the business of the 1^st plaintiff including the goodwill and all intellectual property rights.

6.  In 1984 the 1^st plaintiff launched a new and unique line of baby and mother care products and accessories (“the plaintiff’s products”) under and by reference to the trade mark AVENT and/or other AVENT formative device mark as set out at paragraph 7 of the amended statement of claim (“the AVENT marks”).

7.  The AVENT marks applied to the plaintiffs’ products are represented in different colours of shading or detailing for each of the alphabets namely, yellow for A, green for V, blue for E, pink for N and orange for T.

8.  The plaintiffs’ products have been successfully sold worldwide including Hong Kong and have been available for sale in Hong Kong since 1985.

9.  Since about 2000 the 1^st plaintiff launched and marketed worldwide including Hong Kong a new line of non-spill cups with a unique design under and by reference to the mark MAGIC and other MAGIC formative marks including MAGIC CUP and MAGIC SPORTSER (“the MAGIC marks”) in addition to the AVENT marks. The descriptive terms “non-spill” and “easy-sip” also appear on the hangar cards attached to the feeding bottles and spouts as is shown in the evidence before me.

10.  Substantial effort and expenses have been expended by the plaintiffs and their agents and distributors worldwide including Hong Kong in advertising, promoting and marketing the AVENT marks and the MAGIC Marks and the plaintiffs’ products.

11.  The plaintiffs’ case is that prior to 1 January 2008 the 1^st plaintiff was and after 31 December 2007 the 2^nd plaintiff has been the owner of the copyright subsisting in all literary and artistic works in respect of the original designs of the plaintiffs’ products, the parts and components thereof, together with the instruction manuals and packaging for the same. Particulars of the plaintiffs’ products including their respective parts and components in which copyright is said to subsist are set out at paragraph 12 of the amended statement of claim. Schedule 2 annexed to the amended statement of claim gives particulars of the copyright works.

12.  The 1^st plaintiff is also the registered proprietor of the Hong Kong Standard Patent 1033804 (“the patent”) which has been valid and subsisting at all material times.

13.  By its summons dated 10 June 2009 the plaintiffs applied for summary judgment against the 1^st, 3^rd and 4^th defendants for copyright and patent infringement and sought judgment for permanent injunctions to restrain them from:

(1)  infringing the plaintiffs’ copyright in the copyright works;

(2)  infringing the patent;

(3)  attempting, causing, procuring, assisting, counselling, enabling, acting in concert or pursuant to a common design or otherwise howsoever to do any of the acts referred to.

14.  Delivery up and discovery orders were also sought as set out in the plaintiffs’ summons together with an inquiry as to damages including additional damages in accordance with section 108(2) of the Copyright Ordinance or alternatively at the plaintiffs’ option an account of profits in respect of the 1^st, 3^rd and 4^th defendants’ acts of infringement of copyright. An order was also sought that the 1^st, 3^rd and 4^th defendants do jointly and/or severally pay to the plaintiffs all sums found due upon taking such inquiry and/or account together with interest thereon. An order that the 1^st, 3^rd and 4^th defendants do pay the costs of the action including the costs of the application to be taxed if not agreed was also sought.

15.  Although there is a claim for passing off in the amended statement of claim, Mr Shipp, for the plaintiffs, informed me at the hearing that if the Court were to give summary judgment to the plaintiffs as sought in the plaintiffs’ summons the plaintiffs would no longer pursue their claim in passing off. That being so, there would be no need for any part of the action to proceed to trial and the plaintiffs would seek an order for the costs of the action including the costs of the application to be paid by the 1^st, 3^rd and 4^th defendants.

16.  The 1^st, 3^rd and 4^th defendants are represented by the same firm of solicitors and have filed a defence (“the defence”). As they are represented by the same firm of solicitors one can assume that there is no conflict of interest between these defendants.

17.  The 2^nd defendant has not sought to defend these proceedings.

18.  At the call over hearing of the plaintiffs’ summons before me on 2 July 2009 the 1^st defendant conceded that it had infringed the patent and judgment was entered for the plaintiffs against the 1^st defendant in respect of the claim for patent infringement as set out in my order of 2 July 2009.

19.  As the 1^st, 3^rd and 4^th defendants wished to file and serve evidence to oppose the rest of the relief sought by the plaintiffs in its summons, directions were also given by my order of 2 July 2009 for the filing and serving of evidence by the 1^st, 3^rd and 4^th defendants in opposition to the plaintiffs’ summons. However, despite these directions no evidence has been filed on behalf of the 1^st, 3^rd and 4^th defendants.

20.  On an O.14 application for summary judgment the threshold onus is on a defendant to show that there is a triable issue. The defence consists largely of non-admissions and denials. No positive case is put forward on behalf of the 1^st, 3^rd and 4^th defendants. No evidence has been filed on behalf of these defendants.

21.  There is an obligation on a defendant to make out a positive case (He-Ro Chemicals Ltd v Jeuro Container Transport (HK) Ltd & another [1993] 2 HKC 368 at 372 H to I). These defendants have failed to do so.

22.  The plaintiffs’ case is that prior to the issue of the writ the 1^st, 2^nd, 3^rd and 4^th defendants have been acting in concert or pursuant to a common design in the course of trade or business to infringe the plaintiffs’ intellectual property rights.

23.  The 1^st defendant is the distributor of a range of baby and mother care products and accessories under and by reference to the mark “bimi” and its formative device as set out at paragraph 14(d) of the amended statement of claim (“the bimi products”). The plaintiffs’ case is that the bimi products as particularized at paragraph 14(d) of the amended statement of claim are infringing copies of the plaintiffs’ corresponding copyright works in respect of the plaintiffs’ products.

24.  Bimi products have been available for sale in Hong Kong in retail outlets since at least about April 2007 as is shown in the affidavit evidence of Jan Cornelis De Visser (“De Visser”). The evidence filed on behalf of the plaintiffs has not been challenged by these defendants.

25.  It was discovered that the 1^st defendant was the distributor of the bimi products. On the unchallenged evidence of Jofa Wong Man Yu (“Jofa”) when Jofa spoke to a person from the 1^st defendant on 18 April 2007 over the telephone, she was informed that the plaintiffs’ AVENT milk bottles were made in the same factory as the bimi milk bottles in Germany. This was a lie and a misrepresentation that the plaintiffs’ products were made in Germany when they were in fact made in England and that the bimi products were in some way associated with the plaintiffs.

26.  By letter dated 5 July 2007 from the plaintiffs’ solicitors Messrs Wilkinson & Grist to the 1^st defendant the plaintiffs demanded that the 1^st defendant cease its infringing activities. The 1^st defendant was clearly informed that the plaintiffs were the owner of intellectual property rights in their products including the packaging for the same which were the subject of, inter alia, copyright protection in Hong Kong and other countries.

27.  By letter dated 23 August 2007 from its then solicitors Messrs David Hui & Co. the 1^st defendant maintained that it was only a local distributor of the bimi products. In the said letter it also relied on certain designs of bimi products having been registered as registered designs.

28.  The plaintiffs did not know that there were registered designs in respect of any of the bimi products and this revelation by the 1^st defendant led the plaintiffs to conduct searches in the Register of Designs. It was discovered that there were 5 registered designs in the name of the 2^nd defendant in respect of some of the bimi products as set out at paragraph 32 of the affidavit of De Visser. By reason of the lack of novelty of the designs in the light of the prior art of the plaintiffs’ products, these registered designs were revoked by an order of the Court of First Instance dated 16 January 2008 in HCMP 2011 of 2007. The 2^nd defendant did not contest those proceedings.

29.  The packaging for the bimi products states that the products are made in Germany and that bimi is a trademark of the 3^rd defendant.

30.  The 3^rd defendant is also:

(1)  the registered owner of the Hong Kong registered trade mark bimi in respect of a variety of products in classes 3, 10, 11, 16 and 25 covering baby and mother care products and accessories.

(2)  the registrant of the domain name “babybimi.com”.

31.  The 3^rd defendant is a limited company incorporated in the United Kingdom. The 4^th defendant is its sole director.

32.  Although it would appear that the 3^rd defendant is the manufacturer of the bimi products, no explanation has been provided as to why it was the 2^nd defendant and not the 3^rd defendant who registered the 5 registered designs which have since been revoked.

33.  The domain name www.babybimi.com appears on the packaging and hanger cards of the bimi products. An example of this can be found in exhibit JCDV 31 to the affidavit of De Visser. The evidence shows that on the website hosted at the said domain bimi is touted as a British brand manufactured by the 3^rd defendant in accordance with European standards.

34.  A domain name search was conducted and it was discovered that the administrative, billing and technical contacts are persons and entities in the Mainland with Mainland telephone and fax numbers. The domain name is registered through a Mainland registrar.

35.  As shown in the evidence of De Visser, the plaintiffs have discovered that in fact the 3^rd defendant has been a dormant company since at least 2006. According to annual returns filed in the United Kingdom the 4^th defendant is the sole director of the 3^rd defendant and she resides in Guangzhou. In one of the filings the contact details of a Hong Kong address is given and this has been discovered to be the offices of a firm of accountants who also provide company secretarial services.

36.  It would seem on the unchallenged evidence that the only thing British about the 3^rd defendant and the bimi products is that the 3^rd defendant was incorporated as a limited company in the United Kingdom.

37.  The unchallenged evidence all points to the conclusion that the 3^rd defendant has strong ties with the Mainland, that it is a dormant company and is only a front.

38.  The plaintiffs as the owner of the copyright in the copyright works has the exclusive right to, inter alia, issue copies of the work to the public in Hong Kong (section 22(1)(b) Copyright Ordinance Cap. 528).

39.  Issuing copies of the work to the public is an act restricted by the copyright in the copyright works (section 24(1) Copyright Ordinance). As the local distributor of the bimi products in Hong Kong the 1^st defendant has issued copies of the work to the public and it has infringed the plaintiffs’ copyright. This is a primary infringement and not a secondary infringement of copyright.

40.  There is secondary infringement of copyright where a person, without the licence of the copyright owner, imports an infringing copy of the work, into Hong Kong or distributes a copy of the work which he knows or has reason to believe to be, an infringing copy of the work (sections 30 and 31(1) Copyright Ordinance). By the cease and desist letter of 5 July 2007 the 1^st defendant was clearly notified that the plaintiffs were the copyright owners of the works referred to and, as shown in the evidence, by distributing the bimi products thereafter in Hong Kong the 1^st defendant knew or had reason to believe that the copies distributed were infringing copies of the work. Apart from being liable for primary infringement of copyright, the 1^st defendant would also be liable for secondary infringement of copyright.

41.  As stated at paragraph 7-17 Copinger and Skone James on Copyright 15^th Edn.

“Where substantial similarity is established this is prima facie evidence of copying and also of access.  Once a prima facie case is established in this way, a shift in the evidential burden takes place which the party charged may refute by evidence of independent creation or by giving some alternative explanation for the similarities”.

42.  The 3^rd defendant has failed to provide any explanation as to why the colour shading chosen for the bimi mark is similar to the plaintiffs AVENT mark. Exhibit JCDV 31 to the affidavit of De Visser is the bimi Magic Sports Cup. The descriptive terms “spill proof” and “easy to sip” are used in the hanger card. The 3^rd defendant has also failed to provide an explanation why it chose the word MAGIC and the descriptive terms “spill proof “ and “easy to sip”.

43.  At paragraph 18 of the defence it is averred that the shading of the bimi mark was designed by a professional designer. No particulars are given at all. This is a bald assertion without condescending to any particulars. Furthermore, no evidence at all has been adduced in support of this.

44.  Mr Yeung, for the 1^st, 3^rd and 4^th defendants, accepted that there was a substantial similarity between the bimi products and the plaintiffs’ products.

45.  The 3^rd defendant has failed to provide any evidence of independent creation or give any alternative explanation for the similarities. In my view, the irresistible inference is that there has in fact been copying.

46.  Although in its solicitors reply of 23 August 2007 the 1^st defendant claimed only to be a distributor, it is represented by the same firm of solicitors that act also for the 3^rd and 4^th defendants. As I have said, one can assume that there is no conflict of interest between these defendants.

47.  It seems to me on the unchallenged evidence the defendants have all acted in concert or under a common design to infringe the intellectual property rights of the plaintiffs.

48.  In my judgment the 1^st, 3^rd and 4^th defendants have failed to show any triable issue.

49.  For these reasons I gave summary judgment to the plaintiffs and made the orders as set out at paragraph 1 above.