THE QUEEN v. NEWTIMES LTD

IN THE SUPREME COURT OF HONG KONG

(Appellate Jurisdiction)

MAGISTRACY CRIMINAL APPEAL NO. 1009 OF 1989

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BETWEEN

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J U D G M E N T

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1. At the conclusion of the hearing of this application I said that the appeal would be allowed, the conviction quashed and I would give written reasons later. This I now do.

2. This was an appeal against conviction on a charge that between the 10th March, 1987 and mid-August, 1987 the Appellant caused to be falsely applied to 1,000 dozen pairs of men's trousers a trade mark, namely "PLAYBOY and a rabbit head device". The evidence relied on by the prosecution was not in dispute and took the form of an agreed statement of facts and various documentary exhibits.

3. The agreed statement of facts set out that on the 28th May, 1988 officers of the Customs and Excise Department seizeed some 4,404 pairs of men's trousers from various shops in Hong Kong. These trousers bore the trade mark "PLAYBOY" together with the well known rabbit-head logo. It was agreed that these goods were part of an order placed by the Appellant with a Mr. Mak Moon Tong, trading as Vista's Garment, pursuant to a contract dated 11th March, 1987. This contract set out that the Appellant was purchasing a total of 1,000 duzen paris of trousers for export to a firm in the Republic of Panama known as Chiko's International, S.A. This company told the Appellant that they had authority from the lawful proprietor of the trade mark and logo in Panama and a document was produced, signed by a Mr. Alberto Sasson, president of Playboy International Corp in Panama, stating that they authorised Chiko's International, S.A. to manufacture men's jeans, to be delivered only in the Republic of Panama. This authority was supported by a certificate produced at the trial from the Ministry of Trade and Industry of the Republic of Panama. There was no dispute that, provided the trousers were delivered to and sold within the Republic of Panama, there was no unauthorised use of the trade mark.

4. The trousers however were not sent to Panama in accordance with the contract. In August, 1987, the managing director of the Appellant went to the factory in China. where they had been manufactured. After inspecting them he rejected them as being not of proper quality, there being numerous defects. The Appellant never took delivery of the trousers and had nothing further to do with them.

5. According to the agreed statement of facts which is however of course in no way binding on Vista's Garment, 1,000 dozen pairs of trousers were brought back to Hong Kong in January, 1988 by that firm and were subsequently disposed of locally. It is also agreed that the trademark "PLAYBOY" and the rabbit-head logo is registered in Hong Kong in the name of Playboy Enterprises Inc. of Chicago, United States of America. Neither the Defendant nor Vista's Garment had the authority of Playboy Enterprises Inc. to sell the jeans in Hong Kong bearing the "PLAYBOY" mark and logo.

6. The record of proceedings is not easy to follow but the magistrate, in convicting the Appellant, found that it was authorised by Playboy International Corp. to manufacture and deliver to Panama garments bearing the "PLAYBOY" trade mark. It seems therefore clear that if the goods had been up to the required quality and had been sent to Panama in accordance with the contract there could be no question of the Defendant's having committed any offence. The goods would have been in transit through Hong Kong but that clearly would have been perfectly in order as the goods would not have been sold here. The magistrate however went on to say that the Appellant "being experienced in the import and export of goods of this sort should have at least attempted to search the trade mark registry in Hong Kong before it proceeded to enter into a contract for the manufacture of the jeans. It is clear that by entering into the said contract the Appellant should have anticipated that had the said jeans been manufactured badly and become unacceptable to the Appellant then appropriate means should and indeed must be made to ensure that such jeans would not be sent or find their way to Hong Kong where the trade mark "PLAYBOY" for jeans and other garments are being sold". He went on to say that the Appellant "by virtue of it entering into the contract with Vista on the 11th March, 1987 for the manufacture of the said 1,000 dozen pairs of jeans (which had come into Hong Kong from the manufacturer Vista in China) had procured, counselled, aided, abetted or was an accessory to the commission of the manufacturing of the said jeans which had come into Hong Kong where such jeans bore the trade mark of "PLAYBOY" without the authority of the owner of the trade mark in Hong Kong in breach of the provisions of the said Ordinance Cap. 362".

7. The information which the Appellant faced was that between the 10th March, 1987 and mid-August, 1987 they did cause to be falsely applied the trousers with "PLAYBOY" device. It is quite clear from the evidence that when the device was applied to the trousers in China it was done for the purpose of export to Panama and that there was authority from the holder of the trade mark in Panama for that to be done. There can therefore, in my view, be no question that when the trade mark was applied to the goods in China at the behest of the Appellant in Hong Kong no offence was committed. Indeed it would seem that the Appellant had made sure that the ultimate purchaser, Chiko's International, S.A., had permission from the owner of the trade mark in the place where the goods were to be sold, Panama. The offence was committed when the goods were sent to and sold in Hong Kong but the magistrate has found, and indeed there is no dispute, that was not done by the Appellant. The Appellant had rejected the goods in China and from them on had no control whatever over them. They had never paid for the goods and obtained property in them. The magistrate has found that the Appellant should have anticipated that the jeans might be badly manufactured and be unacceptable and therefore might find their way into Hong Kong where there was no authority for the use of the "PLAYBOY" logo. That cannot be right. The information does not allege any such default and indeed clearly the Appellant had no control whatever over was done with the jeans after they had been rejected. Any offence was committed by whoever brought the jeans into Hong Kong and exposed them for sale here and clearly, on the agreed facts, that was not the Appellant.

8. I am quite satisfied that the magistrate's findings of fact are not supported by the agreed evidence and that the basis on which he has convicted the Appellant - that it should have taken steps to ensure the trousers did not come into Hong Kong for sale - cannot be supported. The Appellant has not committed the offence as charged. The conviction is quashed and the fine, if paid, must be remitted.

9. An application was made for the Appellant to have the costs of the hearing before the magistrate and in this Court. I was satisfied that on the evidence as presented the Appellant should not have been charged with this offence. I ordered that the Appellant is to receive its costs of the hearing before the magistrate and of this appeal, to be taxed if not agreed.