PAN CHUNG PAT WO TONG (HONG KONG) LTD v. LAW YAN WAI t/a SINGAPORE MEDICINE CO

HCA 1719/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1719 OF 2010

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J U D G M E N T

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BACKGROUND

1.  In this Action, the Plaintiff seeks injunctive and a number of other reliefs against the Defendant for passing off and infringement of its trade marks.

2.  The Plaintiff’s case is that since sometime in the 1960s, its predecessor had been marketing a Chinese medicated oil in Hong Kong by reference to the following marks: -

(a) the Chinese mark “八和堂 ”;

(b) the Chinese mark “班中八和堂 ”;

(c) the Chinese mark “神效華陀油 ” or “救急華陀油 ”; and

(d) the device mark known as “關陀像 ”, a copy of which is attached hereto as Appendix 1.

3.  Since about 1993, the Plaintiff took over the business of its predecessor and has continued to market the medicated oil 華陀油 (“Wah Tor Yeow (Oil)”) by reference to the abovementioned marks.  I will refer to the marks as “the Plaintiff’s Marks”.

4.  In addition, the Plaintiff is the proprietor of a number of other registered trade marks for medicinal products in class 5 in Hong Kong:

(a) the mark “劉耀明監製 & device” (registered in 1962 under no. 19640451, and assigned to the Plaintiff in 2002);

(b) the mark “關陀像”[1] (registered in 1995 under no. 199708190, and assigned to the Plaintiff in 2002);

(c) the mark “班中八和堂” (registered in 2001 under no. 200215500);

(d) the mark “班中八和堂華陀” (registered in 2001 under no. 200500384);

(e) the mark “關陀像” (registered in 2002 under no. 200304185);

(f) the mark “八和堂 & device” (registered in 2004 under no. 300294840);

(g) the mark “關陀像”^[2] (registered in 2008 under no. 301173131); and

(h) the mark “八和堂” (registered in 2009 under no. 301287540).

5.  The packaging of the Plaintiff’s medicated oil 華陀油 (Wah Tor Yeow (Oil)) has always been of a distinctive design and colour scheme which incorporates the Plaintiff’s Marks.  It also contains wordings and other drawings of a distinctive character.  I will refer to the medicated oil produced by the Plaintiff (and its predecessor) as “the Plaintiff’s Product”.

6.  Sometime towards the end of 2004, the Plaintiff became aware that a medicated oil calling itself also “神效華陀油” but apparently produced by one “星洲百和堂” was being sold in the market.  This other product was not produced by the Plaintiff but was later discovered to be a product of the Defendant.

7.  The packaging of the Defendant’s product, its design and colour scheme was strikingly similar to the Plaintiff’s.  Not only had it adopted the name “神效華陀油” with an image that closely resembled the Plaintiff’s關陀像, the Defendant’s label “百和堂” also sounded very similar to the Plaintiff’s “八和堂”.  Also, the label “百和堂” was positioned, like the Plaintiff’s, prominently across the top of the front panel of the packaging box.  It further transpired that the Defendant had caused the mark “百和堂” to be registered in class 5 in April 2004 (registration no. 300191961).

8.  In early 2006, the Plaintiff received more complaints from its customers who had purchased counterfeits of the Plaintiff’s Product.  The Plaintiff therefore decided to revise the design on the packaging of the Wah Tor Yeow (Oil) in mid-2006.  The new design still incorporates the Plaintiff’s Marks and retains essentially the same distinctive features.  (I will refer to the packaging used before 2006 and that after 2006 collectively as “the Plaintiff’s Get-Ups”).

9.  On the other hand, the Defendant, carrying on business under the trade name of Singapore Medicine Co (星洲藥業), had been selling his products in at least three different packagings, that is:

(a) two versions of “神效華陀油” under the label “百和堂”, the label “百和堂” being flanked by the words “星” and “洲” on each side respectively;

(b) another version called “星洲華陀油” under the label “百和堂”, which was flanked by the words “神” and “效” on each side.

10.  The overall design and packaging on all three versions of the Defendant’s product is clearly very similar to that of the Plaintiff’s Get-ups.

11.  The Plaintiff commenced the present Action in November 2010, alleging passing off and infringement of its trade marks.  The Plaintiff also applies to invalidate the Defendant’s registered mark. 

CONCESSIONS BY THE DEFENDANT

12.  Shortly after the Plaintiff’s counsel (Mr Philips Wong) began his opening of the Plaintiff’s case, counsel for the Defendant (Mr Bruce Lau) indicated that his client would not be contesting a number of issues.  The Defendant’s concessions were later formulated on the second day of the trial.  They are as follows:

The Defendant agrees not to dispute the following:

In relation to passing off:

(a) that the Plaintiff has enjoyed goodwill in respect of the Chinese marks “班中八和堂”, “神效華陀油”, “救急華陀油”, and the device mark known as “關陀像” when they were applied to the Plaintiff’s get-up as shown in Annex B of the Statement of Claim;

(b) that the Defendant’s product as shown in Annex D of the Statement of Claim (“the Infringing Product”) was confusingly similar to the Plaintiff’s Product, and was likely to lead members of the public to believe that the Infringing Product were the goods of the Plaintiff, or goods associated with the Plaintiff;

(c) that the Plaintiff had thereby suffered or is likely to suffer damage as a result.

In relation to trade mark infringement

(d) that the “關陀像” adopted by the Defendant in the Infringing Product was similar to the Plaintiff’s Registered Trade Mark No. 199708190, and the Defendant’s use of which on the Infringing Product was likely to cause confusion on the part of the public.  

13.  The concessions had certainly narrowed down the issues to be determined.  Counsel for the Defendant identified the remaining live issues as follows: (i) whether the Defendant acted in bad faith when he applied for registration of the mark “百和堂” and consequently whether such a mark could be invalidated or revoked by virtue of section 11(5)(b) of the Trade Marks Ordinance; and (ii) whether the Defendant should be prevented from using the mark “百和堂” by virtue of the law of passing off as provided in section 12(5)(a) of the Ordinance. 

14.  The trial proceeded with Mr Hung, a director of the Plaintiff, giving oral evidence on the Plaintiff’s behalf. 

15.  The Defendant, on the other hand, elected not to give evidence and did not call any witness.

FURTHER CONCESSIONS 

16.  Before the final address, counsel for the Defendant informed the Court that he would not be filing closing submissions and the Defendant would surrender to judgment. 

17.  When the hearing resumed, counsel for the Plaintiff submitted a draft order to be made.  The Defendant, however, only accepted some of the terms as drafted.  The following undisputed parts were accordingly  embodied in a Consent Order: 

“(1) A permanent injunction be granted to restrain the Defendant, whether acting by himself, his servants, partners, employees, agents or any of them or otherwise howsoever, from passing off, threatening to pass off, and/or causing, enabling and/or assisting others to pass off in Hong Kong products, not being products of the Plaintiff, as and for the products of the Plaintiff and/or as products licensed and/or endorsed by the Plaintiff and/or associated with the Plaintiff:-

(a) by the use of any of the marks “八和堂”, “班中八和堂”, “神效華陀油”, “救急華陀油” and the Plaintiff’s device mark “關陀像” [i.e. Appendix 1 hereto], or any marks confusingly similar thereto;

(b) by the use of any of the Plaintiff’s get-ups as shown in [Appendix 2 hereto][3], or any get-up confusingly similar thereto; and/or

(c) by any other means.

(3) A permanent injunction be granted to restrain the Defendant, whether acting by himself, his servants, partners, employees, agents or any of them or otherwise howsoever, from infringing the Plaintiff’s Registered Trade Mark No.199708190.

(4)     The Defendant’s Trade Mark Registration No.300191961 be declared invalid.”

THE DISPUTED ORDER      

18.  What remains in dispute concerns mainly paragraph 2 of the draft in the following terms:

“(2) Without prejudice to the generality of Paragraph (1) hereof, a permanent injunction to restrain the Defendant, whether acting by himself, his servants, partners, employees, agents or any of them or otherwise howsoever, from producing, marketing, selling, offering and/or exposing for sale, promoting, exporting and/or dealing in or with any products under or by reference to:-

(a) any of the marks “百和堂”, “神效華陀油” and “救急華陀油” or any marks confusingly similar thereto, including any marks which incorporate the mark “百和堂”;

(b) the Defendant’s device mark “關陀像” [i.e. Appendix 3 hereto] or any device confusingly similar thereto; and/or

(c) any of the Defendant’s get-ups as identified as Exhibits P3, P4 and P5, or any get-up confusingly similar thereto”.

19.  There is no dispute as to sub-paragraphs 2(b) and (c), nor the first part of sub-paragraph (a).  The dispute lies in the phrase “including etc. …” highlighted in the latter part of (a).

20.  The essence of the Defendant’s objection is that the inclusion of the disputed phrase would have the effect of unjustifiably enlarging the scope of the reliefs sought in the Statement of Claim.  There was no allegation in the Statement of Claim, says the Defendant, that the mark “星洲百和堂” is confusingly or deceptively similar to the Plaintiff’s marks “八和堂” or “班中八和堂”.

21.  Further, it was argued that the Plaintiff’s evidence concerned only the confusion caused by the mark “百和堂”, and not by “星洲百和堂”.  The Defendant also pointed to the fact that it had successfully registered its mark “星百和堂洲” (registration no. 301338381AB) and 2 other versions of “星洲百和堂” in 2009 (registration no. 301338381AA), and that such registrations were not sought to be invalidated in these proceedings.  Hence, were the injunction to include the disputed phrase, the Defendant would be unjustifiably restrained from dealing in products bearing its legitimate marks.  As a fallback position, the Defendant contended for an express proviso that the mark “星洲百和堂” should be excepted from the operation of the injunction if the Court were to allow the disputed phrase to be incorporated in the Order.

THE PLEADINGS

22.  I would first deal with the objection on the basis of the pleadings.  In relation to passing off, one of the Plaintiff’s complaints related specifically to the Defendant’s production or marketing of the Infringing Product “under or by reference to the Plaintiff’s Marks or marks deceptively similar thereto”[4].  For the purpose of illustrating the various aspects of the infringement, a photograph bearing the mark “百和堂” with the words “星” and “洲” flanking either side was attached to the Statement of Claim[5]. 

23.  On a fair reading of the Statement of Claim as illustrated with the aid of the photograph, there should not be any doubt that among the infringements complained of, the Plaintiff’s objection included not only the Defendant’s use of the mark “百和堂” but also “星洲百和堂” on the Infringing Product.  I do not agree that just because §(b) of the Particulars of Passing Off[6] was directed solely against the Defendant’s mark “百和堂” (and not specifically “星洲百和堂”), the scope of §(a) of those Particulars should be similarly restricted.  Nor do I accept that just because there are other references to “Infringing Trade Mark” in the Statement of Claim (which relates only to “百和堂” by definition), the breadth of the allegations under §(a) in the Particulars of Passing Off should be qualified and curtailed.

24.  That, when read in conjunction with paragraph 12 of the Statement of Claim, should not leave one in any doubt that the Plaintiff’s case is that the Defendant’s use of the mark “百和堂” and “星洲百和堂” had caused confusion to members of the trade and the public in Hong Kong.

25.  Contrary to a further argument of the Defendant, I am also not persuaded that the Infringing Product complained of (as defined and pictured in the Statement of Claim), relates only to the overall impression of the get-up of the product but not any of its individual marks.  I see no good reason to read down the allegations in §(a) of the Particulars of Passing Off in this manner. 

26.  Turning then to the scope of the reliefs, paragraph (2) in the Prayer must be understood to be complementary to the injunction sought in paragraph (1).  Whilst the purpose of paragraph (1) is to restrain the Defendant from passing off products by use of the Plaintiff’s Marks and the Plaintiff’s Get-Ups, paragraph (2) specifically seeks to prevent the Defendant from producing or dealing in “the Infringing Product” (as defined in paragraph 11 of the Statement of Claim).  Again, with reference to the Particulars and the aid of the photograph, the Infringing Product sought to be proscribed was one containing, among other things, the mark “星洲百和堂”. 

27.  I therefore do not accept the Defendant’s contention that the Statement of Claim did not include an objection to the Defendant’s use of the mark “星洲百和堂”, or that the scope of the reliefs as pleaded was not sufficiently broad to prevent the use of such mark.

SHOULD THE DISPUTED PHRASE BE INCORPORATED?

28.  The Consent Order provided that the Defendant’s mark “百和堂” is to be declared invalid.  I am satisfied, also, that the Defendant should be restrained from using the mark “百和堂” or any marks confusingly similar to “八和堂” or “百和堂”. Indeed, there is no dispute as to the first part of sub-paragraph 2(a) of the draft order.

29.  Counsel for the Plaintiff contended that the words “星洲” (as for example, “香港” or “馬拉”) was merely geographically descriptive and the addition of such words to the mark “百和堂” did not and will not make the mark any less confusing or misleading to the public when passed off as the Plaintiff’s Marks.  Counsel referred to the case Brestian v Try [1957] RPC 443, a decision of Danckwerts J which was upheld on appeal, [1958] RPC 161.  That case concerned businesses carried on by both parties as ladies hairdressers.  The plaintiff traded under the name “Charles of London” with branches in London, Wembley and Brighton, while the Defendant used the same name for his business in Tunbridge Wells with the addition of the word “Coiffeur” in a not very prominent manner.  The court granted an injunction to restrain the Defendant “from carrying on any business under any name containing ‘Charles of London’ or any words likely to be confused therewith …..”  (emphasis added)

30.  Counsel further contended that the insertion of the disputed phrase in the present case is necessary to give full effect to the injunction.  Otherwise, the Plaintiff may be forced to commence separate action to restrain the Defendant from using other variations of “百和堂” whenever they appear in the market. 

31.  I see much force in the Plaintiff’s argument.  Indeed, as it was remarked by the author of The Law of Passing-Off by Wadlow, 4^th edition, at §10-036:

“The form of injunction granted in a passing-off action depends on the circumstances of the case, and is necessarily to some extent a compromise between protecting the rights of the claimant and allowing the defendant to trade legitimately. On a strict analysis, the injunction granted sometimes covers acts which might not be passing-off at all, but this may be inevitable if the claimant is to be given adequate protection. It may be impossible to produce a form of words which is simple and workable but still precisely tailored to what the claimant is entitled to restrain.”

32.  Considering the circumstances of the present case, I am satisfied that mere addition of words of a geographical description on the misleading mark “百和堂” is not likely to render the use of the mark less confusing or deceptive.  Nor, indeed, would it have the effect of lessening the confusion by adding words such as “神效” as in Exhibit P5, which are themselves words closely associated with the Plaintiff’s Marks. 

33.  It is impossible to set out exhaustively all the conceivable permutations in the injunction.  The prohibition against the use of “the mark “百和堂” and any marks confusingly similar thereto” should obviously remain the operative part of the injunction.  But in light of the discussion above, I think it is right that the order should provide expressly that the injunction prohibits also variations of the mark by mere addition of words of a geographical description only.

34.  I am mindful that it is not possible to pre-judge whether any other permutations would render the use of the mark confusingly similar to that of “八和堂” or “百和堂”.  They may have to be dealt with as and when the occasion calls for a determination. But bearing in mind that while the injunction should afford adequate protection to the Plaintiff it should not be extravagant or excessive.  I think the right balance will be achieved by modifying the disputed phrase so that paragraph 2(a) will be read:

“(a)    any of the marks “百和堂”, “神效華陀油” and “救急華陀油” or any marks confusingly similar thereto, including for the avoidance of doubt the mark “星洲百和堂” or variations of the mark “百和堂” by means only of the addition of words of a geographical description;”

35.  I take note that my ruling will have the effect of preventing the Defendant from using the several versions of the marks registered with the words “星洲百和堂”.  However, as counsel for the Plaintiff has pointed out, such registrations should not affect the power of the Court to grant redress against passing off: Section 10(3) of the Trade Marks Ordinance. 

CONCLUSION

36.  For the foregoing reasons, in addition to the Consent Order already granted, I will make the following orders[7]:

“(2) A permanent injunction to restrain the Defendant, whether acting by himself, his servants, partners, employees, agents or any of them or otherwise howsoever, from producing, marketing, selling, offering and/or exposing for sale, promoting, exporting and/or dealing in or with any products under or by reference to:-

(a) any of the marks “百和堂”, “神效華陀油” and “救急華陀油” or any marks confusingly similar thereto, including for the avoidance of doubt the mark “星洲百和堂” or variations of the mark “百和堂” by means only of the addition of words of a geographical description;

(b) the Defendant’s device mark “關陀像” [i.e. Appendix 3 hereto] or any device confusingly similar thereto; and/or

(c) any of the Defendant’s get-ups as identified as Exhibit P3, P4 and P5, or any get-up confusingly similar thereto.

(collectively “the Infringing Products”)

(5) The Defendant shall, within 14 days from the personal service of this Order upon him, deliver up to the Plaintiff’s solicitors for free disposal all the documents, goods and articles, including the Infringing Products, in the possession, custody, power or control of the Defendant the continued retention, distribution, use and/or dealing in or with which by the Defendant would offend against any of the foregoing injunctions and injunction set out in the Consent Order granted on 10 May 2013.

(6) The Defendant shall, within 17 days from the personal service of this Order upon him, make and file an affidavit/affirmation and serve a copy thereof on the Plaintiff’s solicitors verifying that the Defendant has complied with Paragraph (5) hereof and that he no longer has in his possession, power, custody or control any of the items required to be delivered up under Paragraph (5) hereof.

(7) The Defendant shall, within 21 days from the personal service of this Order upon him, make and file an affidavit/affirmation and serve a copy thereof on the Plaintiff’s solicitors setting forth the names and addresses of all persons, firms or companies:-

(a) to whom the Defendant has sold and/or supplied and/or offered or exposed for sale and/or supply;

(b) from whom the Defendant has ordered, purchased and/or obtained supplies of;

(c) who has offered to sell and/or supply to the Defendant; and

(d) from whom the Defendant has received orders for or enquiries relating to;

the Infringing Products, together with full details of such sale, offer and/or supply including the dates, quantities and consideration involved, and further disclose in the said affidavit or affirmation the exact whereabouts of any person, firm or company known or believed by the Defendant to be in possession of the Infringing Products, and further do exhibit to such affidavit or affirmation copies of all documents relevant to the aforesaid, including but not limited to quotations, purchase orders, contracts, correspondence, shipping documents, invoices, receipts and delivery notes.

(8) The Plaintiff be at liberty to elect between an enquiry as to damages and an account of profits within 28 days after the Defendant has fully complied with Paragraph (7) hereof, and upon such election, there be an enquiry as to what damages the Plaintiff has suffered by reason of the Defendant’s acts of passing off and trade mark infringement, or an account of profits made by the Defendant through such acts.

(9) An order for the payment by the Defendant to the Plaintiff of all sums (including interests) found due to the Plaintiff upon the taking of the enquiry or account provided for in Paragraph (8) hereof.

(10) The Plaintiff be at liberty to use any of the affidavits/affirmations, documents, articles, materials or information obtained in accordance with or as a result of this Order in any manner that should be required for the protection or better protection of the rights of the Plaintiff the subject matter of this action and/or similar rights enjoyed by the Plaintiff in Hong Kong or elsewhere.”

37.  I shall give liberty to apply in case any refining of the wordings of the Order is necessary.

38.  I will make an order nisi that the Defendant shall pay the Plaintiff’s costs of and incidental to this Action, including all costs reserved, such costs to be taxed if not agreed.

Appendix