JAYJUN COSMETIC CO., LTD v. JAY JUN (KOREA COSMETIC LTD)

HCMP 161/2018

[2018] HKCFI 2619

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO 161 OF 2018

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REASONS FOR JUDGMENT

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1.  This is the plaintiff’s application by originating summons for a declaration that the Hong Kong trademark registered on 23 June 2016 by the defendant be invalidated under sections 53(3) and 11(5)(b) of the Trade Marks Ordinance (Cap 559).

2.  The essence of the plaintiff’s submission was that the defendant’s application for registration had been made in bad faith.

3.  I had no difficulty accepting this submission based on the history of the plaintiff’s business and its established reputation in the cosmetics field in the wider region including in China and here in Hong Kong.  I also took cognizance of the defendant’s conduct in the proceedings to date.

4.  The defendant’s solicitors came off the record on 23 October, just days before the defendant’s own application for security for costs was due to be heard which application in the plaintiff’s submission was unmeritorious and not supported by evidence.  In the event on 26 October, the defendant did not appear on his own application and it was dismissed with costs to the plaintiff.

5.  Notwithstanding all relevant documents including the originating summons, the supporting affirmations, and the notice of hearinghaving been duly served before the defendant’s solicitors went off the record and notwithstanding the plaintiff’s skeleton and list of authorities having been served at the defendant’s registered office, the defendant did not appear at the hearing before me.

6.  In the circumstances I heard the plaintiff’s application and made an order in terms having concluded the defendant’s application to register the offending trademark was made in bad faith.  I accepted the plaintiff’s submission that this was established by:

(1) The plaintiff having filed ample evidence to show that it had used its trademark extensively in Hong Kong and had already gained a substantial reputation and goodwill associated with it before the registration of the defendant’s mark.

(2) The features of the plaintiff’s mark, which had been registered in Korea on 26 May 2016 and thereafter in the People’s Republic of China, Japan and Taiwan are confusingly similar when compared with the Defendant's mark.

(3) At the time when Mr Lam on behalf of the defendant made the application for registration of the defendant’s mark, the plaintiff had already registered its trademark in China and the defendant’s mark basically replicates all the features of the plaintiff’s trademark in terms of structure, size, choice of letters and fonts.  This shows not only that the defendant was well aware of the existence of the plaintiff’s business but its registration too of its trademark and accordingly it was clearly a premeditated attempt to usurp the plaintiff’s reputation, goodwill and to gain an unjustifiable advantage in the retail market.

(4) The defendant’s inclusions of the word Korea and Cosmetic in its company name demonstrates that it was already aware that the plaintiff runs a cosmetic business and the business originated it in Korea.

(5) The defendants failed to put up any cogent evidence to defend itself in this matter.  The purported explanation it gave that the names were the nicknames of Mr Lam’s son and daughter does not have any credibility in all the circumstances.

(6) The fact that Mr Lam on behalf of the defendant approached the plaintiff’s distributors in Hong Kong for the purchase of the plaintiff’s product in June 2016 and has continued to purchase products casts a serious doubt that the registration of their mark was a mere coincidence. 

7.  In the absence of any credible testimony or arguments to the contrary it seemed to me clear that the plaintiff had made out its case.

8.  In the light of my decision the plaintiff asked for costs to be summarily assessed on an indemnity basis and in support of this application handed me correspondence between the parties which was on a without prejudice basis and which demonstrated in my view that the defendant’s motivation for registration of the mark was purely financial and designed to extract a lucrative settlement from the plaintiff.

9.  This, taken with the defendant’s complete lack of regard for the present court proceedings justified to my mind the plaintiff’s applicationand I therefore summarily assessed the costs to be paid by the defendant on an indemnity basis.

10.  In ordering indemnity costs I took note of the defendant’s approach to his security for costs application, his disregard for the Court in not even appearing on this application and the without prejudice correspondence put before the court after I had made the order I have, which demonstrates to my mind a clear attempt on the defendant’s part to extract a punitive sum from the plaintiff by way of compensation for his withdrawing his trademark which is the subject of the action; this seems to me to be evidence of a base ulterior motive.

11.  If a party is sued and states an intention to defend it is disrespectful to the court simply to abandon any attempt to participate in the proceedings such that the plaintiff is put to unnecessary costs and both court and judicial time is wasted.