HUGO BOSS TRADEMARK AND OTHERS v. THE BRITAIN BOSS INTERNATIONAL CO LTD AND ANOTHER

HCA 2231/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2231 OF 2013

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D E C I S I O N

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Index

Introduction

1. On 19 February 2014, I made an order entering judgment against the 1^st and 2^nd defendants upon their failure to serve and file a defence.[1] This decision deals with the defendants’ application to set aside the default judgment.  It will address whether proper service was effected on the 2^nd defendant by postal or letter box service at the address that she listed in the annual returns of the 1^st defendant as her residential address which was the registered office of the 1^st defendant.  It will also address the distinction between setting aside a regular and irregular default judgment.  It will finally address the merits of the defence advanced by the defendants in submission against an evaluation of the plaintiffs’ claim of infringement of trademarks and passing off. 

Background

2. Despite the long history of disputation between the parties, this litigation first commenced when the solicitors for the plaintiffs forwarded by hand a cease and desist letter dated 25 September 2013 to the 1^st defendant at its registered office, requesting the 1^st defendant to cease to use the “BOSSSUNWEN”, “博斯绅威” and/or “BOSSCO” names or marks or any other names or marks similar to the 1^st plaintiff’s “HUGO BOSS”, “BOSS”, and “雨果博斯” trademarks.  There was no reply.[2] I note that in the company records of the 1^st defendant there is listed together with the address of the registered office an email address, but it would appear that no communication with the 1^st defendant was made through this medium.[3]

3. In November 2013, the plaintiffs instituted civil proceedings against the defendants with default judgment being entered against them in January 2014 as a result of their failure to defend the action. 

4. The writ of summons issued on 18 November 2013[4] and the summons for default judgment issued on 8 January 2014[5] were served on the 1^st defendant under cover of letter dated 19 November 2013 and 9 January 2014 respectively[6] by leaving the same at the 1^st defendant’s registered address, Flat B‑1, 6^th Floor Wider Industrial Building, 58 Tsun Yip Street, Kwun Tong, Kowloon, Hong Kong. 

5. The writ of summons was served on the 2^nd defendant under cover of letter dated 19 November 2013 by registered post and by inserting through the letter box on 19 November 2013[7] at the usual and last known address of the 2^nd defendant which was the same address as that of the 1^st defendant, and the summons for default judgment was served by ordinary post and by inserting through the letter box on 9 January 2014 at the same address.[8]  The process server affirmed that in his opinion, the 2^nd defendant would have come to have known of the writ and the summons for default judgment within seven days of inserting them in the letter box and that the letter dated 19 November 2013 together with the writ, and the letter dated 9 January 2014 together with the summons for default judgment, had not been returned to the offices of the plaintiffs’ solicitors by the Hong Kong Post Office through the dead letter post.[9] 

6. There followed the statement of costs for summary assessment dated 6 February 2014 which arose from the default judgment.  It was served on the 1^st defendant by leaving a letter dated 6 February 2014[10] at the registered office of the 1^st defendant and on the 2^nd defendant by ordinary post and by leaving a letter dated 6 February 2014[11] at the usual and last known address of the 2^nd defendant which was the same address as that of the 1^st defendant.[12] 

7. By summons dated 8 January 2014, the plaintiffs made application on 19 February 2014 for final judgment against the 1^st and 2^nd defendants for failure to serve a defence.[13] By this stage, no acknowledgment of service or an intention to defend had been filed by the defendants.  The order for final judgment was granted.[14] 

8. The 1^st and 2^nd defendants were each served with a sealed copy of the order and judgment of 19 February 2014 under cover of letters dated 26 February 2014, which were left at the registered office of the 1^st defendant.[15]

9. As is apparent from the above, all the relevant documents in relation to both the 1^st and 2^nd defendants were served at the one address being the registered office of the 1^st defendant.  The documents were sent or served at this address over a period from 25 September 2013 to 26 February 2014. 

10. It was not until 8 April 2014 that the solicitors for the 1^st and 2^nd defendants filed a notice to act for them in the proceedings.[16]

11. On 10 June 2014, the 1^st and 2^nd defendants issued a summons to set aside the judgment entered on 19 February 2014 in the case of the 1^st defendant on the ground that it has a good defence to this action with a real prospect of success, and in the case of the 2^nd defendant on the grounds (i) that the judgment was an irregular judgment because the writ had not been duly served on her as she was not within the jurisdiction at the relevant time; and (ii) that she has a good defence to this action with a real prospect of success.[17]

The final judgment

12. In this action the plaintiffs’ claim against the defendants is for trademark infringement and passing off.  The plaintiffs seek relief in the form of an injunction restraining the defendants from infringing the registered trademarks of the 1^st plaintiff or passing off, an order that the 1^st defendant change its company name and transfer the changed name to the 1^st plaintiff, an order that the 2^nd defendant transfer domain names of specified websites to the 1^st plaintiff, and an order that all articles and items used in breach of the injunction be forfeited and delivered to the 1^st plaintiff.

13. As a result of the failure of the defendants to file a defence, final judgment was entered and an order was made in the following terms:

“1. The 1^st defendant, whether acting by itself, its directors, officers, servants, employees, agents, representatives or associated companies or subsidiary companies or any of them or otherwise howsoever, and the 2^nd defendant whether acting by herself, her servants, employees or agents or any of them or otherwise howsoever, both be permanently restrained from doing the following acts or any of them (including by means of the Internet) in Hong Kong:

(a) Passing off or attempting to pass off any business, goods or services as those of or in any way connected with the plaintiffs or any of them, whether by advertising, carrying on any business or trade under, using in connection with any business or trade, or registering as a company name, business name, trademark, trade name, domain name or otherwise howsoever the names “BOSS, “博斯”, “BOSSsunwen”, “BOSS SUNWEN”, “BOSSCO”, “博斯紳威” or any other name or device identical or confusingly similar to any of them;

(b) infringing the Hong Kong registered trademarks of the 1^st plaintiff; or

(c) causing, enabling or assisting others to do any of the aforesaid acts.

2. The 1^st and 2^nd defendant do take all necessary steps within 14 days from the date of service of this Order to change the name of the 1^st defendant to a name that does not include the word “BOSS” and “博斯” or any name confusingly similar to the names “BOSS” and “博斯”, whether registered at the Business Registration Office of the Inland Revenue Department or as a company name or as a trademark or as an application for a trademark, domain name or other property, and including any entry of such name in any directory or other public record.

3. The 1^st and 2^nd defendants do take all necessary steps within 14 days from the date of service of this Order to transfer the <bosssunwen.com>, <bosssunwen‑shop.com> and <bosssunwen.cn> domain names to the 1^st plaintiff.

4. The 1^st and 2^nd defendants do within 14 days from the date of service of this Order deliver up to the plaintiffs’ solicitors and confirm upon oath or affirmation of all articles and all signboards, advertisements, circulars, notepapers, business cards, letter heads, stationary labels or other printed matter now or subsequently in the possession, custody, power or control of the defendants, the continued use or possession of which would be in breach of any of the aforesaid injunctions.

5. The 1^st and 2^nd defendants do forfeit to the plaintiffs of all goods and materials so delivered up.

6. There be an inquiry as to damages or, at the plaintiffs’ option, an account of the profits made by the 1^st and 2^nd defendants by reason of the 1^st and 2^nd defendants’ acts of trademark infringement and/or passing off.

7. There be payment by the 1^st and 2^nd defendants to the plaintiffs of all sums found due upon such inquiry as to damages or account of profits.

8. The plaintiffs’ costs of this action be summarily assessed at HK$59,250.00, to be paid by the 1^st and 2^nd defendants to the plaintiffs.”[18]

The parties

14. The 1^st plaintiff holds the intellectual property rights of the Hugo Boss group of companies.[19] The 2^nd plaintiff is the holding company of over 50 subsidiaries worldwide which collectively form the Hugo Boss Group.  The 1^st and 2^nd plaintiffs are companies incorporated in Germany.  The 3^rd plaintiff is a company incorporated in Hong Kong and is a wholly‑owned subsidiary and trading arm of the Hugo Boss Group which manages the business of the Hugo Boss Group in Hong Kong and China.

15. The Hugo Boss Group is a well‑known international brand producing luxury clothing, footwear and accessories.  It operates throughout the region and first established a retail outlet in Hong Kong in 1982 and in Mainland China in 1994.  The “BOSS” and “HUGO BOSS” trademarks have been registered in Hong Kong since 23 May 1985, in Class 25, in respect of a wide range of clothing.

16. The 3^rd plaintiff has been trading in the trademarks, (i) BOSS; (ii) BOSS HUGO BOSS; (iii) 雨果博斯; (iv) 博斯, in Hong Kong and China continuously since at least 1994.[20]  The 1^st plaintiff is also the registered proprietor of the Hong Kong trademark registrations which are set out in Appendix 1 to the statement of claim.[21]  In the course of the hearing to set aside the default judgment, it was acknowledged that one of the trademarks should not be included as registration is still pending.[22] 

17. The 1^st defendant, BRITAIN BOSS INTERNATIONAL COMPANY LTD, is a company incorporated in Hong Kong on 20 August 2001.  Since 2006, the 2^nd defendant, Sun Xiaowen, has been the sole director and shareholder of the 1^st defendant, taking over from her husband, Wu Xunan, who was a co-director and shareholder.  She lists as her residential address the registered office of the 1^st defendant, even though she is not a resident of Hong Kong and ordinarily resides in Mainland China.  The secretary of the 1^st defendant is Madam Lai Yuet Mei, who is a resident of Hong Kong.  The registered office of the 1^st defendant is the office of an unrelated company owned by Madam Lai.  Since the date of the 1^st defendant’s incorporation it has remained dormant and has not carried on any business in Hong Kong.[23]

18. The 2^nd defendant claims to hold valid trademark registrations in Mainland China for the brand name “BOSSSUNWEN” and operate a vast number of franchised stores in Mainland China selling fashion items under this brand name.  

19. It is the case that over the last 10 years the parties have been engaged in trademark litigation and disputes against each other elsewhere, in particular in Mainland China. 

The plaintiffs’ claim

20. In the statement of claim, the plaintiffs delineate the goodwill and reputation of the Hugo Boss Group and its name and trademarks, and claim that it had acquired substantial reputation and goodwill in Hong Kong and China in respect to the trademarks, which are solely and exclusively owned by the plaintiffs.  They claim that the defendants had infringed their trademarks both through use of identical and similar signs.  They also claim that the 1^st defendant is the alter ego of the 2^nd defendant, that the 2^nd defendant has at all material times personally controlled, directed and procured the activities of the 1^st defendant, and that the 2^nd defendant has authorised and has been personally involved in the 1^st defendant’s acts of trademark infringement and passing off.

21. The plaintiffs complain that the 1^st defendant’s English and Chinese language corporate name and the various signs used on the defendants’ websites, amount to use of signs which are identical or similar to the registered trademarks in Hong Kong.  It is complained that the defendants’ websites feature predominantly and offer for sale a wide range of clothing and accessories bearing signs clearly identical or confusingly similar to the plaintiffs’ registered trademarks.  They also complain that the defendants are using various infringing signs on the websites as well as using the 1^st defendant’s infringing corporate name for various business related activities.  They refer to the several trademark licence agreements granted by the defendants which in some instances include Hong Kong.  The plaintiffs submit that the evidence before the Court shows that the defendants have used the sign contrary to section 18(5) of the Trade Marks Ordinance, Cap 559.

22. In relation to the trademark infringement by the use of identical signs, the plaintiffs complain that through various websites and online purchases the defendants have been selling products in Hong Kong which infringed the trademarks of the 1^st plaintiff.  The use of identical signs was in relation to signs “BOSS” and “博斯” as set out in the statement of claim.  The particulars of infringement alleged by the plaintiffs are set out in paragraph 14 of the statement of claim and read:

 “(a)  Prior to this Writ (from a date which is not presently known to the Plaintiffs), the 1^st defendant has supplied, offered to supply, promoted, marketed, advertised, distributed and/or sold, imported, exported, offered for sale, put goods on the market, including on the Internet fashion, shows, leatherwear and fashion accessories products (“Defendant’s Products”) by reference to or under the signs “BOSS” and/or “博斯” and has used the signs on websites, goods, packaging, business papers, advertisement and/or advertising materials, and, have put goods on the market, offer or supply service, import or export goods and/or stock goods under the signs.

(b)  The Defendants or any of them have registered or caused to be registered the domain names <bosssunwen.cn>, <bosssunwen.com> and <bossunwen-shop.com> have set up the equivalent websites which are used to promote and market the Defendant’s Products to the consumers in Hong Kong and mainland China (“Defendants’ Websites”);

(c)  The Defendants’ Websites are aimed and directed at the consumers in Hong Kong;

(d)  The Defendants have distributed the Defendants’ Products or caused them to be sold and/or advertised to consumers in Hong Kong either through the Defendants’ Websites and/or business-to-consumer websites and/or retail shops, which are accessible to the public in Hong Kong; and/or

(e)  The Defendants have or caused to have the Chinese Name and English Name attached or printed onto the Defendants Products, packing materials, stationery, and/or letterheads.”

23. The use of similar signs was in relation to the defendants’ use of the signs “BOSS”, “博斯”, “BOSSSUNWEN”, “博斯绅威” and/or “BOSSCO”.[24] The particulars of infringement alleged by the plaintiffs are set in paragraph 16 of the statement of claim and read:

“(a) Prior to this Writ (from a date which is not presently known to the Plaintiffs), the 1^st Defendant has supplied, offered to supply, promoted, markets, advertised, distributed and/or sold, imported, exported, offered for sale, put goods on the market, including on the Internet the Defendant’s Products by reference to or under the signs “BOSS”, “博斯”, “BOSSSUNWEN”, “博斯绅威” and/or “BOSSCO”, a full list of which is annexed in Appendix 2 herein (collectively “Defendants’ Signs”) and have used the Defendants’ Signs on websites, goods, packaging, business papers, advertisement and/or advertising materials, and, have put goods on the market, offer or supply service, import or export goods and/or stock goods under the Defendants’ Signs;

(b) The Defendants on about October 2006 have attempted to file a trade mark application with Hong Kong Trade Marks Registry to register and use the “BOSSSUNWEN” sign in Classes 18, 25 & 43, which was eventually rejected by the Hong Kong Trade Marks Registry; and/or

(c)  Paragraphs 14(a) to (e) are repeated.”

24. The plaintiffs allege that the words “BOSS” and “博斯” have distinctive elements and have been used by the defendants in the same or similar business to the plaintiffs in respect of fashion and accessories, and that the use of the 1^st defendant’s names and the defendants’ signs are likely to leave members of the public to assume that the products and the services of the defendants are coming from the same trade source as, or are with economic connections to, the plaintiffs.

25. In the passing off claim, the plaintiffs complain that the 1^st defendant by adopting the trade name “BOSS” and “博斯” in English and in Chinese, since its incorporation, which are identical to the plaintiffs’ trade names and trademarks, was calculated and intended to mislead and deceive.  The plaintiffs claim that they have a protectable reputation and goodwill in both the trade names and trademarks acquired through trading, that the defendants have traded in products similar to the plaintiffs using their trade names and trademarks thereby misrepresenting to the public that they are connected with products which are identical or similar to that of the plaintiffs, and that the plaintiffs in consequence have suffered damage or would do so to their business and goodwill.

26. The particulars of passing off alleged by the plaintiffs are set out in paragraphs 18 to 21 of the statement of claim and read:

“18. The Plaintiffs will rely, pending discovery and/or interrogatories, upon the following facts and matters in support of its claim of passing off:

(a) The Plaintiffs have a protectable reputation and goodwill in both the names and Trade Marks acquired through trading. Paragraph 4, 7-10 are repeated;

(b) The Plaintiffs repeat the matters pleaded in Paragraph 14 and 16 above;

(c) The Defendants have or caused to have the name of the 1^st Defendant attached to the Defendant’s Products, hangtags, packing materials and/or websites controlled by the Defendants;

(d) Both the English and Chinese Names are identical or similar to the 1^st Plaintiff’s ‘BOSS’, ‘HUGO BOSS’, ‘博斯”, “雨果博斯” Trade Marks and the trade names of the Plaintiffs; and/or

(e) The Defendants’ misrepresentation or continuation to misrepresent to the public after receiving the Cease-and-desist Letter from the Plaintiffs on 25 September 2013 was likely to mislead the public to believe that services offered by the Defendants are the same as, originated from or connected to the Plaintiffs.

19. By reason of the foregoing, the Defendants have, since a date prior to the issue of the Writ herein, passed off and/or continued or threatened to pass off and/or have procured, authorised or assisted the passing off by others of their business and/or goodwill as and for the Plaintiffs’ business and goodwill.

20. The Defendants should have at least since about 2004 been aware of the oppositions raised by the 1^st Plaintiff against the registration of BOSSSUNWEN marks in various classes in China. The 2^nd Defendant should have at least since about 2011 been aware of the 1^st Plaintiff’s opposition against the registration of the “BOSSSUNWEN” mark in the United Kingdom. Further, the Defendants were notified by the Plaintiffs’ solicitors by way of a cease-and-desist letter which contains the complaint of the use of the Defendants’ Signs on 25 September 2013.

21. As of the date of this Statement of Claim, the 1^st Defendant has not changed its name to one that does not include the word “BOSS” in its English Name and the Chinese characters ‘博斯” in its Chinese Name and has not ceased the use of its name in respect of the advertising, promotion and sale of the 1^st Defendant’s Products, including on hangtags, packing materials and/or websites.”

Application to set aside

27. Pursuant to Order 19, rule 9, a court in the exercise of its discretion may set aside or vary a default judgment on “such terms as it thinks just”.[25] The court’s discretion is therefore wide.  The body of jurisprudence that has developed in relation to this order has differentiated between judgments regularly obtained and judgments irregularly obtained.

28. In examining the relevant case law, it is necessary to appreciate that the purpose of the power is to avoid any injustice that may be caused by the entering of judgment in default.  Two underlying principles that come into play in the exercise of this power are, on the one hand, that a party should observe procedural rules with judgment entered against him in default and, on the other, that a party should not be deprived of an adjudication of the case on its merits.

29. There is no dispute that the default judgment obtained against the 1^st defendant is a regular judgment.  The 2^nd defendant contends that she was not in Hong Kong at the time of service of the writ and therefore the defaultjudgment against her is irregular.  The plaintiffs submit that notwithstanding her absence from the jurisdiction the default judgment against her is a regular judgment. 

30. The issues that I need to resolve in this application are whether proper service was effected on the 2^nd defendant and whether there is a meritorious defence to the action.  The latter issue may not be relevant to the 2^nd defendant if I decide that the judgment entered against her was irregular because the judgment should be set aside as of right without consideration of the merits of the defence.

(a) Irregular judgment

31. As a general proposition, irregular judgments should be set aside as of right, but the court retains a residual discretion to have regard to the conduct of the parties in determining whether to exercise such a right or not, or to impose terms upon the setting aside of the judgment.  This was explained by the Court of Appeal in Po Kwong Marble Factory v Wah Yee Decoration Co Ltd[26] where Sears J, who gave the leading judgment, said:

“... whilst it can be rightly said that a judgment which has been obtained irregularly ought to be set aside as of right, in other words that the merits of a particular defence to the claim do not have to be entered into by the court, nevertheless, there is always a residual discretion in the court to have regard to the conduct of the parties. For example, if a judgment has been obtained irregularly and the writ comes to the notice of the defendant, he may delay for a certain period of time before taking any action on the writ. In my judgment, the court still has a discretion – having regard to what the defendant himself has done – to deprive him, if necessary, of the judgment or alternatively, to impose terms upon the setting aside of the judgment which accord with justice having regard to the facts of the particular case.”[27]

32. Bokhary JA (as he then was) in a separate and concurring judgment, added that “as of right” meant without going into the actual merits of the defence and did not mean shutting one’s eyes to the circumstances surrounding the issues of the case and why things went wrong.[28]  In that case, the Court of Appeal concluded that because service of the writ was ineffective, the default judgment had been irregularly obtained and therefore should be set aside.

33. Another case where the Court of Appeal considered the issue of setting aside a default judgment for want of proper service was Deng Minghui v Chau Shuk Ling[29]. There the court held that a defendant was entitled to set aside an irregular default judgment as of right but subject always to the residual discretion of the court.[30]  In the circumstances of that case, the court held that the judgment was irregular for two reasons.  First, there was material non‑disclosure in the affirmation of service of the writ; and secondly, the defendant was not within the jurisdiction at the time the writ was served in accordance with Order 10, rule 1(2).  The court also held that where a writ was not properly served in the first place but subsequently came to the defendant’s notice; such notice did not make the service proper.  This case is of particular relevance to the present case because the issue here is whether service was properly effected at a time when the 2^nd defendant claimed she was not within the jurisdiction. 

(i) Evidence relating to the issue of service

34. The evidence filed with the court in relation to this application falls into two categories.  The first concerns evidence in relation to the issue of service of the proceedings on the 2^nd defendant and the second concerns the evidence in relation to the merits of the defence.  I will accordingly analyse the evidence under these two separate headings, although there will be by necessity some overlap.

35. I find the evidence submitted by the defendants to be unsatisfactory, and at times questionable, for a number of reasons.  The evidence came in the form of two affirmations from the 2^nd defendant. No affirmation was filed by Madam Lai, the company secretary, who according to the 2^nd defendant received the relevant court papers but only passed them on to her in late March 2014.  The 2^nd defendant in her affirmations did not address certain matters in relation to the application before the court, and what she did address, requires careful analysis.

36. The 2^nd defendant stated that the parties have been engaged in trademark litigation in Mainland China since June 2004 and the plaintiffs must have been aware of the existence of the 1^st defendant since then.  She stated that in that time, the plaintiffs had never complained about the use of the company name of the 1^st defendant or the alleged use of the defendants’ signs in Hong Kong.  That is not entirely true. It is quite apparent that the use of the “BOSS” name or mark through the various derivatives employed by the defendants has been a matter of constant consternation to the plaintiffs as seen by the litigation in Mainland China and the United Kingdom.  The defendants have mainly limited their operations to Mainland China but that seems to have changed in recent times as they have attempted to expand their operations elsewhere, including Hong Kong.

37. The litigation in Mainland China was over the 1^st defendant’s application for the mark “BOSSSUNWEN”. On 13 December 2013, the Supreme People’s Court of the People’s Republic of China dismissed an application by the 1^st plaintiff for a retrial of its application to the Trademark Review and Adjudication Board for the cancellation of the 1^st defendant’s trademark.  The court in its reasons found that the application did not satisfy the requirements of relevant statutory provisions and commented that both parties had established their own reputation in the field of clothing goods and that the public could distinguish between them and their trademarks and that they would not be confused about the origins or manufacturer of the goods and would not misidentify the goods to the relevant trademarks of the parties.  

38. The 2^nd defendant claimed that she first received notice of this action in or about late March 2014 when she received by post from the company secretary some court documents and a letter from the plaintiffs’ solicitors dated 5 March 2014 demanding payment of costs.  She then instructed her solicitors to make inquiry as to what had happened.  She claimed that she had not received any notice of the proceedings.  She stated that she was not in the jurisdiction between 17 November 2013 and 20 February 2014 except for 13 and 14 January 2014 when she came and left Hong Kong on those two successive days. 

39. The 2^nd defendant explained that the registered office of the company is the office of an unrelated company owned by the company secretary and that it has never carried on any business at that address.  She stated that as the parties had been engaged in litigation for the past 10 years they were well known to each other, and that the plaintiffs knew that the 1^st defendant did not carry on any business at the registered office or engage in any business activities in Hong Kong.  She stated that the company secretary agreed to take on the position when she became the sole director and shareholder of the company in August 2006 and it was arranged that she would forward all correspondence and documents sent to the company at the registered office to her in Mainland China.  

40. The difficulty I have with this explanation is that there has been a flow of correspondence and documents sent to or served at the 1^st defendant’s address since September 2013 and there has been no indication that the correspondence or documents have not been received.  Significantly, there has been no instance when the covering letters have been returned to the sender. There is no satisfactory explanation as to why the relevant documents that were sent or served from September 2013 onwards were not passed on to her as arranged with Madam Lai and why it took so long to take out the present application, that is, over 2 months from when the 2^nd defendant claimed she first became aware of the matter, except for the claim that the defendants needed time to prepare the application. 

(ii) Service on the 2^nd defendant

41. There is no challenge that proper service of the proceedings took place on the 1^st defendant.  The company even though dormant and inactive since the date of its incorporation uses as its registered office the business premises of the secretary of the company who is a resident of Hong Kong.  

42. As I have already noted, the 2^nd defendant is the sole director and shareholder of the company and in public records of the company lists as her residential address the registered office of the 1^st defendant, even though she ordinarily resides in Mainland China.  She now complains that service of the proceedings was not properly effected on her.

43. Under the rules of court it is a fundamental principle that a writ of summons or its originating equivalent must be served on a defendant.[31]  The writ of summons sets out the nature of the claim which is being made by a plaintiff against a defendant and notifies the defendant that proceedings have been issued against him as claimed.  It is therefore of critical importance that the rules of service are fully and properly complied with in order to bring the proceedings to the notice of a defendant.

44. The rules have developed so that it is a key requirement that a writ must be served personally on a defendant.  They, however, provide an alternative method of service on a defendant within the jurisdiction.  Order 10 rule 1(2) allows personal service to be effected by sending a copy of the writ by registered post, or by post or by insertion through the letterbox at the defendant’s “usual or last known address”.  A key requirement for this mode of service is that the defendant is within the jurisdiction.  The authorities in Hong Kong are clear and state categorically that unless the defendant is within the jurisdiction at the time of service, the service will be otherwise invalid.[32] The relevant rules and requirements are expected to be strictly adhered to because service of the proceedings on the party that the claim is being made against is fundamental.

45. The plaintiffs in this action obtained judgment in default against the 2^nd defendant for her failure to file a defence.  It is argued on behalf of the 2^nd defendant that she was not given notice of the proceedings and the court should set aside the judgment because it was irregularly obtained.  As previously noted, according to Po Kwong Marble Factory v Wah Yee Decoration Co Ltd[33] a judgment which had been obtained irregularly should be set aside as of right without the need for the court to consider the merits of the particular defence to the claim but the court retains a residual discretion to have regard to the conduct of the parties and make an appropriate order to meet the justice of the situation.

46. Mr Philips B F Wong, on behalf of the defendants, relies on the case of Deng Minghui, and argues that the default judgment entered against the 2^nd defendant was irregular for two reasons.  First, there was material non‑disclosure by the plaintiffs in not informing the Court that the 2^nd defendant was a PRC citizen and not resident in Hong Kong, that the 2^nd defendant’s address enclosed in company records was known to the plaintiffs not to be her residential address, and that the defendants did not operate any business in Hong Kong.  I have examined the company records and it is clear that the 2^nd defendant provides as her residential address the registered office of the 1^st defendant. The address she has provided is understandably treated as notice to the world at large that this is her contact address in Hong Kong and in relation to her capacities as a director and shareholder of the company.  Secondly, the 2^nd defendant was not within the jurisdiction at the time when the writ was served.  This in my view is the key issue. 

47. I will now address the two reasons in turn.

(iii) Material non-disclosure

48. Mr Wong lists three matters that the plaintiffs failed to disclose which he argues were crucial and material facts. 

49. The first matter was that the 2^nd defendant was a PRC citizen who ordinarily resides in Mainland China.  He submits that the plaintiffs had been engaged in trademark litigation with the 2^nd defendant and her companies in Mainland China for the past ten years and were therefore well known to each other, and that it was particularly known to the plaintiffs that the 2^nd defendant resided in Mainland China.  He also submits that the 1^st plaintiff had opposed a trademark application by the 2^nd defendant in the United Kingdom in early 2011 where the 2^nd defendant had stated her address as No 24, Xinpuzhong Road, Qiaton Town, Yongjia County, Zhejiang Province, China.

50. The second matter was that the 1^st defendant’s address could not possibly be a residential address.  Mr Wong argues that the plaintiffs rely heavily on the fact that the 1^st defendant’s address was stated to be the residential address of the 2^nd defendant in the Annual Return filed by the 1^st defendant.  Throughout the company records, the 2^nd defendant as a shareholder and director stated her residential address to be the 1^st defendant’s registered office.  It is argued that the plaintiffs deliberately chose to rely on information which they knew to be incorrect.  If it was incorrect, then in my view, it was entirely of the 2^nd defendant’s making.  She stated in the public records of the company that this address was her residential address in Hong Kong.  It lies ill in the mouth of the 2^nd defendant to complain that the plaintiffs relied on an address that she herself provided and put on the public record.  The fact that the 1^st defendant’s address is located in an industrial building is neither here nor there.  The 2^nd defendant stated that this was her address in a public record; well knowing it may be treated and regarded as a means to contact or communicate with her. 

51. The third matter is that the plaintiffs had conducted an investigation into the defendants and their business activities in Hong Kong in 2013, and therefore the plaintiffs must have known that the 1^st defendant’s address was occupied by another company and that the 2^nd defendant could not have possibly resided in a unit of an industrial building. 

52. It is also argued that the plaintiffs were well aware that the 2^nd defendant held a Chinese passport as this was shown in company records and they were on notice that the address was not her residential address.  The fact is that the 2^nd defendant chose to list as her address the 1^st defendant’s registered office which she described as her residential address in the public record of the company.  In my view, the 2^nd defendant has no cause for complaint if the plaintiffs treated it as her address to contact or serve documents on her in Hong Kong.  When a person from outside Hong Kong is required to list, and does list, an address in Hong Kong in a public record, then he or she should expect that it is an important piece of information, and because of the nature of it, will be relied upon by others for the purpose of contacting or communicating with him or her.  The obligation is on her and no one else, to ensure that she is appropriately aware or notified of any contact made by another at that address.  That was clearly understood and appreciated by the 2^nd defendant.  She stated in her affirmation that she had an arrangement with Madam Lai for her to pass on any correspondence or documents that were sent to her at that address.

53. On the basis of the above, it is argued that there was clear evidence of material non‑disclosure in the affirmation of the service of the writ.  I have no hesitation in rejecting this argument. 

54. A person who is not ordinarily resident in Hong Kong, and wishes to use and enjoy the corporate services here must comply with the relevant legal and administrative requirements, otherwise any failure to do so can have serious consequences.  The 2^nd defendant listed an address as her residential address for the public record of the 1^st defendant in her separate capacities as a director and shareholder.  This is an important requirement which should be treated seriously.  The obligation is on the person with the responsibility to make sure it is done and done for the purpose required.  The listing of an address by an officer of a company is done not only for the purpose of identification but also in order to effect any contact or communication with such person in relation to the company’s affairs or business.  Listing a false or inappropriate address by such person is the fault of the person and no one else.  There may be circumstances where an address is incorrect through no fault of the person, such as a change of address has taken place without a prompt change of the record or the person is indisposed for good reason, but in the present case there appears to be no such circumstances.[34]

55. As I have already pointed out, the 2^nd defendant appreciated the significance of listing the address she did in the company records of the 1^st defendant and put in place an arrangement with Madam Lai to pass on to her any documents sent to her at the address.  For no apparent reason this was not done timeously and no explanation from the 2^nd defendant has been given as to why this did not happen on this occasion.

56. I do not find that any of these matters amount to material non-disclosure. 

(iv) Absence from the jurisdiction

57. The 2^nd defendant stated in her affirmation she was not in the jurisdiction when the writ of summons was served at the address that she listed as her residential address and further this was not her usual and/or last known address.  At the times of service of the relevant documents, the 2^nd defendant was not in Hong Kong except for 2 days on 13 and 14 January 2014. 

58. The plaintiffs submit that they rely on the most recent annual return of the 1^st defendant which stated that the residential address of the 2^nd defendant was the Hong Kong address there listed.  They also submit that there is an obligation on officers of a company to ensure that material particulars in an annual return are correct.[35]  The 2^nd defendant in response claims that she ordinarily resides in Mainland China and points to the dispute with the plaintiffs in the United Kingdom where she listed an address in Zhejiang province.  In reply to this, the plaintiffs make the valid points that the address was given some three years before the filing of the annual return and was an address not in Guangzhou where the 2^nd defendant’s group of companies is based; and that the 2^nd defendant’s evidence is that Madam Lai was under instructions to forward all correspondence and documents to her and that she would travel to Hong Kong from time to time. 

59. The plaintiffs complain that the 2^nd defendant’s evidence as to why the default occurred does not stand up to scrutiny.  They point out that various documents in relation to these proceedings have been forwarded to the office of the 1^st defendant since the 25 September 2013, and yet it was not until sometime in late March 2014 that the 2^nd defendant claimed that she received some court documents in relation to the case.  It was noted that there was an arrangement in place whereby Madam Lai would forward to her correspondence or documents sent to the office but no explanation has been provided as to why this had not been done, and nor has any evidence been given by Madam Lai on the matter.  It was also noted that the 2^nd defendant was in Hong Kong on 13 and 14 January 2014 and yet no explanation has been provided as to why any of the relevant documents were not brought to her attention on that occasion.  I agree with the plaintiffs’ submissions that the explanation provided is far from satisfactory and I seriously doubt whether it is true. 

60. Notwithstanding the force of the plaintiffs’ submissions, the fact remains that the 2^nd defendant was not within the jurisdiction at the time service of the relevant papers in these proceedings which were sought to be served pursuant to Order 10, rule 1(2) as an alternative to personal service on her.[36] On this basis, as service was irregular, so was the default judgment that was entered.  Even though there was delay in making application to set aside the default judgment and the evidence of the 2^nd defendant is doubtful as to when she became aware of these proceedings, it is not enough for me to exercise my residual discretion to refuse to set aside the irregular judgment.  I leave open however the issue of imposing conditions, if any, on the order to set aside the default judgment. 

(b) Regular judgment

61. Where the judgment is regular it is necessary for the defendant to explain why judgment was allowed to go by default and to show on evidence that there is a meritorious defence to the action.  This will necessarily require assessing the case on a sensible appraisal of the relevant circumstances and evidence before the court.  Upon such an appraisal, if judgment against the defendant is inevitable, then notwithstanding the defence that has been shown, the default judgment would stand.

62. In Hong Kong Civil Procedure, 2015, at paragraph 13/9/13, useful guidance is given on relevant considerations when exercising the discretionary power to set aside a default judgment.  It is stated that the major consideration is whether the defendant has shown a defence on the merits to which the court should pay heed as a matter of common sense, since there is no point in setting aside a judgment if the defendant has no defence; and if the defendant can show merits, the court would not let a judgment pass on which there has been no proper adjudication.  In exercising this discretion, a court has to weigh all the relevant factors against the dominant factor of the merits, in order to determine the justice of the case.  Although in most cases, the merits of a defence would be determinative in the exercise of the discretion under this power, a court can in exceptional circumstances refuse to set aside a judgment even where a defence of sufficient merit had been demonstrated.  As explained by Mr Recorder Ma SC (as he then was) in Young Bing Ching (deceased) v Chow Yung Fong & Anor,[37] a defendant must at least show that he has a defence with a real prospect of success and this presupposes the existence of other factors to which the court should have regard.  Moreover, this will require the court to have regard to all relevant circumstances, this being fact or case specific, and will involve weighing any other relevant factors against the dominant factor of the merits of the defence in order to determine the justice of the situation. 

63. The plaintiffs submit that there is no real prospect of success in any defence to the plaintiffs’ trademark infringement and passing off causes of action.  This in my view is a key issue in this case and I will need to address in detail the plaintiffs’ claim and the defence.  The plaintiffs also submit that no likely prejudice would be caused to the defendants or to any third party should the default judgment be set aside and that none has been shown.  Whereas the plaintiffs are likely to continue to suffer prejudice should the judgment be set aside as this would delay enforcement action in Hong Kong and elsewhere against other infringing parties. 

The evidence relating to the claim and the defence

64. In demonstrating that the defendants have a good defence which has reasonable prospect of success, it is necessary to consider the defence as presented by the defendants in the context of the plaintiffs’ pleaded case.  Whilst this is only relevant in relation to the 1^st defendant, it will require an examination of the defence as presented jointly by the 1^st and 2^nd defendants and the making of findings for the purposes of addressing this application.  As pointed out by the defendants, what is required in setting aside default judgment is that they show a meritorious defence in relation to the pleaded case.  See China Construction Realty Ltd v Sino Business Services Proprietary Ltd & Ors[38] and Ng Wai Chiu v Skin Club (Shock Treatment) Ltd & Anor.[39]  

65. I should make it clear that the matters arising from this application which I am required to consider rely on the evidence put before me by the parties in sworn statements together with exhibits that have been produced.  It is on the basis of this material that I will address the matters that I have to decide and will accordingly for the purposes of this application assess the evidence and make appropriate findings.  I note however that there has been a lack or paucity of evidence from the defendants in support of the contentions that they have advanced. 

66. By way of general explanation, trademarks and names have rights from trade use and through registration.  The primary objective in protecting trademarks, trade names, get‑up and the like is to ensure that they are not imitated by others so as to lead to confusion of customers.  The common law has developed actions against passing off and injurious falsehood to protect the use in trade of such marks or names.  As additional protection, trademark registration grants rights to a registrant of a trademark as provided under the Trade Marks Ordinance, Cap 559.

67. Trademarks are limited in their scope by the requirement that they be registered for specific goods or services which are grouped according to a system of classification.  Infringement of the right is then judged against this listing.A trademark is broadly defined to cover any sign capable of being represented graphically which is capable of distinguishing goods or services of one undertaking from those of other undertakings.  This includes words, including personal names, designs, letters, numerals, the colour or the shape of goods or their packaging.[40] 

68. According to the 2^nd defendant, even though the 1^st defendant has never carried out any business in Hong Kong, it is active in Mainland China and registered there the following trademarks between 2002 and 2004, “BOSSSUNWEN”,[41] “BOSSsunwen”,[42] “BOSSCO”,[43] “博斯紳威”[44] and “博斯紳威”.[45]  

69. The company has granted licences to use the trademarks “BOSSSUNWEN” and “BOSSsunwen” to two PRC companies.  The 2^nd defendant claimed that the licences did not cover the use of the marks in Hong Kong or Macau.  That appears not to be the case, as I have been taken to several trademark licence contracts between the 1^st defendant and PRC companies where the licence is for use in China, including Hong Kong and Macau.[46]  The 2^nd defendant stated that the marks complained of by the plaintiffs were not similar to the plaintiffs’ marks and that there was no likelihood of confusion.  She relied on the decision of the Supreme People’s Court dated 13 December 2013.

70. The General Counsel of the 2^nd plaintiff, Ms Judith Eckl, has filed an affidavit in opposition to the application by the defendants.  She gave a detailed account of the history and background of the Hugo Boss Group and how it has established itself as a global leader in premium and luxury clothing, footwear and accessories.  

71. Ms Eckl explained that the Group has generated annual sales of over several billion Euros in the last few years and is among the world’s most profitable listed apparel manufacturer.  The Group markets and manages multiple lines including the BOSS core brand, the lines BOSS Orange, BOSS Green, HUGO HUGO BOSS and many other cross‑overs or extensions of the brand.  She explained that the different sub‑brands target different and clearly defined consumer groups, and cover an extensive product range consisting of classic modern business wear, elegant evening wear and sportswear, shoes and leather accessories, licensed fragrances, eyewear, watches, children’s fashion, motorcycle helmets, mobile phones, mobile accessories and home textiles.  She stated that Hugo Boss products can be found in 127 countries at more than 7100 points of sale with 1010 directly operated stores.

72. Ms Eckl provided a detailed history of the Group which dates back to the early 1920s when the founder, Mr Hugo Ferdinand Boss, operated a clothing factory in Germany.  Through decades of growth and development the business gradually shaped into the international fashion group that it is today.  It was during 1970s, that the BOSS brand was launched and registered.  It has since then been one of the most important and distinguished core brands of the Hugo Boss Group.  It was later in the 1980s, that the Group expanded its range of products and markets, venturing into fashion accessories. It also changed its corporate structure by the public offering of stocks through the 2^nd plaintiff which is listed in XETRA and NASDAQ.  As part of the Group’s development and profile as an international fashion house, it has launched marketing campaigns through a series of sponsorships for international sports events and activities.  At the same time, it has added to its collection of trade names and brands which is growing as it continues to further develop existing products and extend to new products.

73. As part of the Group’s future development, Ms Eckl stressed its commitment to online shopping.  Its products can be purchased on the Internet through the provision of online stores which have been made available in various European countries and in the United States of America.  The Group also maintains channels on video portals and social networking sites.  It holds and runs a variety of internet domains, such as www.hugoboss.com, www.hugotracks.com, www.hugoboss.asia, www.hugoboss.cn, www.hugoboss.hk and domain names containing the BOSS core mark such as www.boss.com, www.boss.hk, www.boss.cn and www.boss.co.uk.

74. Ms Eckl emphasized that a key feature in the Group’s business is the importance of public recognition of its reputation and brands.  It has embarked on diverse and extensive promotions and marketing campaigns of its products and services over the decades which include substantial and extensive sponsorships.  As a result of the Group’s diverse and strategic marketing campaigns, the BOSS brand is recognised as a leading and well‑known brand in fashion.  On the evidence before me, there is no question that the BOSS brand has worldwide recognition and reputation.  Its brand name is readily recognized globally for high quality apparel and related accessories. 

75. The core brand of the Group and the mark, “BOSS” was registered as early as in 1987.  The 1^st plaintiff was and is the registered proprietor and successor‑in‑title of various trademark registrations in Hong Kong.  The 3^rd plaintiff has been trading under, among others, the following trademarks in Hong Kong and China continuously since at least 1994: (i) BOSS; (ii) BOSS HUGO BOSS; (iii) 雨果博斯; (iv) 博斯.[47]

76. The date of first use of the trademarks in relation to the distribution of fashion and fashion accessories products in Hong Kong was as early as the 1980s.  In 1982, the Hugo Boss Group opened its first shop in Hong Kong which has now grown to 14 shops.  The plaintiffs have been continuously promoting the BOSS brand in Hong Kong through publicity and advertising on various mediums, including websites such as www.hugoboss.com, and have incurred significant turnover and also expenditure for advertising. 

77. The Group has also been actively promoting and building the reputation for the Hugo Boss brands in China.  The 1^st plaintiff first registered its core mark “BOSS” in China in August 1985, and then subsequently registered trademarks such as “雨果博斯” and “BOSS HUGO BOSS”.  In 2000, the “BOSS” mark was included in the “National Major Trademark Protection List”, and in 2004 it was recognized by the Chinese Trademark Office as a well‑known trademark.  The Group opened its first store in Beijing as early as 1994 and now has 169 stores in China.  Sales in China have grown significantly and represent a large proportion of the group sales in the Asia Pacific region.  It has also launched its official Chinese online store, www.hugoboss.cn, on 19 March 2014.  The Group has also expended substantial sums in marketing and advertising in the promotion of its brands and products.  It has also engaged in a number of promotion campaigns in China. 

78. The 2^nd defendant takes issue with the claim made by Ms Eckl concerning the marks “雨果博斯” and “博斯”.  She claimed that in relation to these marks, the plaintiffs do not enjoy the reputation and goodwill in Hong Kong at the relevant time.  She commented that from the evidence adduced by the plaintiffs, there were few instances evidencing the use of these marks in Hong Kong and that she did not believe that a substantial number of the general public in Hong Kong were aware of the marks as most of the time the plaintiffs’ products were referred to by their English names. 

79. The 2^nd defendant referred to the list of trademarks set out in Appendix 1 of the statement of claim and complained that by the default judgment, the defendant had been adjudged to have infringed the “S device” mark and “S BOSS SELECTION HUGO BOSS” mark, which she stated were not confusingly similar to the marks complained of being used by the defendants.  This issue has to be assessed against the allegations of the wholesale exploitation of the brand name BOSS in its various forms and derivatives by the defendants.

80. There is no doubt that as a result of the widespread and long standing use of the trade names and marks that the plaintiffs’ trademarks as well as its business products and services advertised, promoted and sold under the trademarks, are well‑known to relevant customers and that the plaintiffs have acquired substantial reputation and goodwill in Hong Kong and China and the rest of the world with respect to them. 

81. The concern of the plaintiffs is that the reputation and goodwill that it has acquired in its trademarks should solely and exclusively belong and inure to the benefit of the plaintiffs.  There is no doubt in my view that the “BOSS HUGO BOSS” brand is and was commonly known in Hong Kong and China by customers and others as “BOSS”.  The group has adopted the Chinese mark “雨果博斯” in the 1990s when it expanded its market in China.  The Chinese “雨果博斯” is the phonetic transliteration of “Hugo Boss” but it was not until 1995 and 2005 that it was registered as trademarks in China and Hong Kong respectively.  The first part “雨果” is a common translation for “Hugo”, and “博斯” mark is the equivalent of the phonetic transliteration of “BOSS”. The characters “博斯” do not carry any meaning.  It has aural significance in that the characters pronounced bo si in Putonghua.  This is as close in Chinese to pronouncing “boss” in English.  

82. Ms Eckl set out the results of inquiries into the defendants.  She stated that according to the official websites either operated or licensed by the defendants www.bosssunwen.com, www.bosssunwen-shop.com and www.bosssunwen.cn, there are more than 400 franchised stores in China among which at least 10 direct point‑of‑sales are located in Guangdong Province, 13 in Beijing and 9 in Shanghai.  The websites are accessible by Hong Kong consumers who she said are being targeted for online purchasing.  Inquires have revealed that the defendants are affiliated with the Guangdong BOSSsunwen Group Co Ltd (广东博斯绅威集团有限公司), which is the holding company of other companies including the Guangdong BOSS Garment Industrial Co Ltd (广东博斯服饰实业有限公司), Guangzhou Sunwen Shoes Industrial Co Ltd (广州绅威鞋业实业有限公司), Guangzhou Luyi Xuelai Trade Development Co Ltd, and Guangzhou Polo Village Group Limited (广州市保罗威特皮具有限公司).  All these companies are current licensees of the 1^st defendant to produce products which, as claimed by Ms Eckl, infringed the rights of the plaintiffs.  The core members involved in operating the business of the defendants’ licensees include the 2^nd defendant, her husband, Mr Wu Xunan, her brother, Mr Sun Wenxiang and her sister‑in‑law, Ms Dong Leilei and another possible relative Mr Sun Miao.

83. The 2^nd defendant stated that the three domains mentioned by the plaintiffs have never been registered in the names of her or the 1^st defendant.  The plaintiffs point out that notwithstanding the defendants’ claims that the acts complained about have nothing to do with them; it was in the face of these proceedings that all of the infringing websites were apparently shut down.  The plaintiffs ask the rhetorical question if the defendants had nothing to do with these websites as is claimed, why in the face of this litigation they were recently shut down.  I think that is a fair question to ask. 

84. The 2^nd defendant produced the domain name registration records which appear to be held by affiliated or associated companies of the defendants.  She stated that their activities in Mainland China are outside the jurisdiction of Hong Kong and that the 1^st defendant holds the valid trademark “BOSSSUNWEN” in Mainland China.  That may be so but I am concerned with their activities that take place or have an impact in the jurisdiction.

85. The 1^st defendant’s English name “THE BRITAIN BOSS INTERNATIONAL COMPANY LIMITED” comprises a geographical reference to “BRITAIN” and the distinctive trade-name “BOSS” which is identical to the plaintiffs’ well‑known core brand BOSS, which has been registered in Hong Kong since 1988.  Similarly, the Chinese name “英國博斯國際有限公司” comprises the Chinese translation of “英國” and “博斯”, which is pronounced bo si in Putonghua.  It also comprises Chinese characters “博斯” which are identical to the plaintiffs’ Chinese language BOSS trademark, “博斯”.  The literal meaning of “boss” in Chinese is not adopted by the 1^st defendant as its trade name or sign, but instead the aural feature of the name has been copied. 

86. In respect of the 1^st defendant’s name, Ms Eckl made the point that the 1^st defendant has no connection to “Britain” or to the “BOSS” brand.  The company has no subsidiaries outside of Hong Kong.  In other words, it is a company incorporated in Hong Kong with no business or commercial activities here but with extensive commercial and business activities in Mainland China. 

87. It is clear in my view that the 1^st defendant simply copied the plaintiffs’ trade name and trademarks by the incorporation name of the company.  The adding of the geographical reference “Britain” is just an act to mislead or deceive the public into thinking that the 1^st defendant is part of the Hugo Boss Group featuring and developing a British style or British related products. 

88. Ms Eckl complained, with justification in my view, that the 1^st defendant is simply a letter box company which was registered for the purpose of misusing the possibility to include “Britain” marks and the company name which is not possible under Chinese law.  She stated it was common practice for Mainland Chinese to register companies in Hong Kong with the names identical or substantially similar, usually with the addition of a geographical reference, to an existing famous brand as a vehicle in an attempt to legitimise its unauthorised infringing activities in Mainland China.  She stated, and I accept, that the defendants’ licensees have been producing, trading and marketing under, among others, the following relevant signs or on apparel, leather wear and related fashion accessories: (i) BOSSSUNWEN; (ii) BOSSCO; (iii) BOSS; (iv) 博斯; and/or (v) 博斯绅威.  As pointed out by her, the 1^st defendant’s signs and the distinctive parts of its sign “BOSSSUNWEN” consists of Hugo Boss’s core trademark “BOSS” in enlarged letters followed by “sunwen” in smaller letters.  The enlarged font style of “BOSS” in “BOSSsunwen” is either identical or substantially similar to that of the core “BOSS” mark of the plaintiffs. Similarly, “BOSSCO” consists of the plaintiffs’ “BOSS” trademark followed by “CO” which is the common abbreviation for the word “company”.  I accept the evidence of Ms Eckl that this clearly shows that the defendants’ intention is to mislead the public into thinking that “BOSSsunwen” and/or “BOSSCO” are related or associated brands originated from or otherwise associated with the plaintiffs. 

89. From Ms Eckl’s inquiries, she stated that other than Mainland China, the 1^st defendant has no registered trademark in Hong Kong or elsewhere.  She noted that the 1^st defendant had made an unsuccessful attempt to apply for the registration of the “BOSSsunwen” in 2006 in Hong Kong which was refused.  She also noted that the 2^nd defendant’s brother had also attempted to register the “BOSSsunwen” mark in the United Kingdom, which was also refused.  She complained that the 1^st defendant and its licensees have used the plaintiffs’ core mark “BOSS” for marketing and advertising without consent from the plaintiffs.  She gave illustrations of promotions and marketing campaigns where “BOSS” was used.  She complained that the 1^st defendant’s products carrying the 1^st defendant’s signs can be found on many shopping sites, some of which are popular online shopping channels for consumers in Hong Kong.  The 1^st defendant in the promotion of its products on these online shopping sites displays signs “BOSS” prominently printed on product pictures and the rest of the pictures are gave instances of that products of BOSSCO and BOSSsunwen being ordered through the internet and delivered in Hong Kong. 

90. The 2^nd defendant answers the allegations made by Ms Eckl by pointing out that the defendants were not responsible for the alleged acts and that the activities complained of by the plaintiffs all took place in Mainland China.  She complained that the plaintiffs could have and should have commenced proceedings in Mainland China against the appropriate parties, and that they are mixing up matters for the sole purpose of prejudicing the defendants.  She stated that, the 2^nd defendant claimed that the Chinese name “博斯” of the 1^st defendant was not copied from the plaintiffs.  She claimed that the plaintiffs alleged marks “雨果博斯” and “博斯” were hardly known in Hong Kong or even in Mainland China.  She said that the plaintiffs always preferred to use their English names instead of the Chinese names.  She said therefore there was no reason why the defendants would want to copy the names of the plaintiffs, and that the defendants chose the Chinese characters “博斯” instead of “波士” because the Putonghua pronunciation of the former is a closer transliteration to the word “Boss”. She said that for the brand “BOSSSUNWEN”, the Chinese transliteration of “博斯绅威” was used.  This is an unsatisfactory explanation.  The Chinese characters “博斯” when pronounced in Putonghua, have the aural similarity of “BOSS” in English.  The 2^nd defendant claimed that they did not copy the name “BOSS” from the plaintiffs and that the word “boss” is very commonly used in Hong Kong and in Mainland China.  In those circumstances, the use of the word “boss” is an entirely different matter and normally related to a work situation when referring to a superior.  It is not a common word used in relation to clothing and accessories as is used by the defendants.  There is no substance to this point and verges on the ridiculous. It is claimed by the 2^nd defendant that the plaintiffs were the ones who actually copied the defendants’ mark “BOSSSUNWEN”.  This is a reference to the plaintiffs’ application to register the mark “BOSSSUNWEN” in Mainland China in 2010.  It would appear this was a strategy in an effort to try and stop the defendants and their associated entities from infringing the trade name of “BOSS”. 

91. I have no hesitation in concluding that the plaintiffs enjoy a strong reputation in Hong Kong, China and the rest of the world in relation to their trademarks, trade names and products and services.  It is also clear to me that the 1^st defendant by its name and by the names and marks endorsed on its products was misleading and misrepresenting that its products were related or associated with the plaintiffs.  There is clearly a spillover from the defendants’ activities in Mainland China to Hong Kong, and to the region and the rest of the world which has had, and in all likelihood will have, serious consequences to the reputation and goodwill of the plaintiffs.  There is also a concerted effort by the defendants to sell their products outside of Mainland China, in particular Hong Kong, through online or direct sales.  

92. It is also complained by Ms Eckl that the 1^st defendant has misrepresented its company information to the public.  As evidenced by the material submitted to the court, the promotion or information about the 1^st defendant states falsely that the company history originates from England and depicts the founder by using the picture of a famous English actor.  She identified various aspects to the 1^st defendant’s company history and particulars which are obviously false or a total exaggeration. 

93. Ms Eckl stated that as a result of the defendant’s misrepresentation, the plaintiffs have suffered reputational and economic losses.  She claimed that the products of the 1^st defendant are inferior and reflect negatively on the plaintiffs’ image as a brand that produces high quality products.  This she stated has caused irreparable reputational damage to the plaintiffs.  She also claimed that the defendants’ infringing activities have brought the plaintiffs’ substantial economic loss.  This is to some extent quantified by the nature and the extent of the operation of the defendants and its associates, in particular its claim that it has 400 stores throughout Mainland China.  Although I bear in mind that the defendants have the registered trademark “BOSSSUNWEN” in Mainland China and the issue I am concerned with is what trademark infringement and passing off has taken place in the jurisdiction.

94. The plaintiffs claimed that they have suffered direct loss and loss of the distinctiveness of the “HUGO BOSS” or “BOSS” brand because of the defendants’ activities.  There is naturally concern by the plaintiffs that the defendants will continue to infringe and engage in unlawful acts of passing off, which if allowed to go unabated, would cause the plaintiffs greater and significant loss and damage. 

95. It is submitted that the 2^nd defendant as the sole director and shareholder of the 1^st defendant since 2006 has played a principal role in the infringement of trademarks and passing off.  She has personally signed a number of license agreements and is a director in Guangdong BOSSsunwen Group Co Ltd (广东博斯绅威集团有限公司) and a member of the board of supervisor in Guangdong BOSS Garment Industrial Co Ltd (广东博斯服饰实业有限公司).  This is also evident by the statements of the 2^nd defendant in her affirmations filed before the court where she describes her involvement in the business operations of the 1^st defendant. 

96. Ms Eckl sets out other instances where the 2^nd defendant and family members have engaged in rampant and serial trademark infringement on a large and extensive scale.  Other famous brands are identified and listed where the 2^nd defendant’s family members are involved in infringing well‑known trademarks and passing off.[48] The 2^nd defendant has not responded to the examples that have been given on the basis that she has been advised that they are irrelevant to the dispute between the parties and therefore she makes no comment.  I do not agree.  They show a knowledge and pattern on the part of the 2^nd defendant and her family in trademark abuse and passing off.  The fact that the defendants and their associates are involved in the use or the attempted use of other well‑known brands and marks is relevant to any claim by them that this case is a one-off occurrence or coincidence.

Infringement of trademarks

97. Upon registration of a trademark, the proprietor has an exclusive or superior claim against any other person who may wish to use an identical or similar mark.  Infringement will occur if the marks of the goods or services are both identical and if only similar then it must be shown that the relevant public is likely to be confused.  Infringement may occur if a mark with a reputation where a similar sign is used in ways that is likely to cause dilution.

98. In the statement of claim, the plaintiffs’ claim against the defendants is for infringing six registered trademarks.[49] The defendants argue that the plaintiffs did not plead infringement in respect of nine trademarks identified in the Appendix 1 attached to the statement of claim.  Therefore, it is submitted by the defendants that part of paragraph 1(b) of the default judgment which covers these registered trademarks must be set aside as the plaintiffs have not pleaded any case of infringement in respect of these marks in the statement of claim. 

99. The plaintiffs complain that the 1^st defendant’s English and Chinese language corporate name and the various signs used on the defendants’ websites, amount to use of signs which are identical or similar to the registered trademarks in Hong Kong.  It is complained that the defendants’ websites feature predominantly and offer for sale a wide range of clothing and accessories bearing signs clearly identical or confusingly similar to the plaintiffs’ registered trademarks.  They also complain that the defendants are using various infringing signs on the websites as well as using the 1^st defendant’s infringing corporate name for various business related activities.  In support of their claim, they refer to the several trademark licence agreements granted by the defendants for the sale of their infringing products which extend to Hong Kong.  The plaintiffs submit that the evidence before the court shows that the defendants have used the sign contrary to section 18(5) of the Trade Marks Ordinance, Cap 559 (“the Ordinance”).

(a) The legislative provisions

100. Section 18(3) of the Ordinance provides:

“A person infringes a registered trademark if:

(a) he uses in the course of trade or business a sign which is similar to the trademark in relation to goods or services which are identical or similar to those for which it is registered; and

(b)  the use of the sign in relation to those goods or services is likely to cause confusion on the part of the public.”

101. Section 18(5) of the Ordinance provides:

“For the purposes of this section a person uses a sign if, in particular, he:

(a) applies it to goods or their packaging;

(b) offers or exposes goods for sale under the sign;

(c) puts goods on the market under the sign;

(d) stock goods under the sign for the purpose of offering or exposing them for sale or of putting them on the market;

(e) offers or supplies services under the sign;

(f) imports or exports goods under the sign; or

(g)  uses the sign on business papers or in advertising.”

102. The Ordinance sets out exceptions to infringement under section 19. The defendants rely on section 19(4) which provides:

“(4) A registered trademark is not infringed by the use by any person in the course of trade or business in Hong Kong of an unregistered trademark or other sign in relation to goods or services if the unregistered trademark or other sign has been so used in Hong Kong by that person or a predecessor in title continuously from a date preceding the earlier of –

(a) the date of first use in Hong Kong of the trademark which is registered; and

(b)  the date of registration in Hong Kong of that trademark.”

103. The defendants argue that the statement of claim is misleading because it is alleged that the defendants have infringed their registered trademark “博斯”.  It is argued that the plaintiffs had not registered the trademark and had only applied to have it registered in an application dated 18 October 2013 and that the application is still pending.  On this point, the defendants are correct that no infringement proceedings can be commenced before the date that the trademark is in fact entered into the register.[50] Accordingly, this part of the default judgment should be set aside. 

104. The defendants also argue that none of the infringing acts as set out in the statement of claim have been proved by the evidence adduced by the plaintiffs.[51] The defendants argue that their case is that they have never carried on business activities in Hong Kong, which is accepted by the plaintiffs, and that the plaintiffs have not adduced any evidence showing that the defendants have committed the alleged infringing acts complained of as pleaded in the statement of claim.  In particular, they argue, that there is no evidence showing that the defendants have used any of the defendants’ signs in relation to any products in Hong Kong.  That is not correct as Ms Eckl has provided instances where infringing products of the 1^st defendant have been purchased online and delivered in Hong Kong.  There is also the issue that the incorporation of the 1^st defendant was with a name similar to the registered trademark of “Boss” and ultimately as time has shown for the purpose to exploit the BOSS brand name in Mainland China. 

105. The defendants argue that trademark rights are strictly territorial in nature and as is well established any alleged infringing act must take place in the jurisdiction to find an infringement as claimed.  See Brands Inc Ltd v Kabushiki Kaisha Regal Corp.[52]  

106. The defendants also argue that there is no evidence showing that the defendants’ websites as listed in the statement of claim were aimed and directed at consumers in Hong Kong.  It is submitted that none of the domains have been registered in the names of the 1^st or 2^nd defendants, and there is no evidence that any of them were operated by either of them.  The defendants argue that the evidence shows that the domains bosssunwen.cn and bosssunwen‑shop.com are no longer working and are inoperative.  They submit that even on the printouts that had been adduced by the plaintiffs there is nothing to show that the websites were operated by the defendants.  They further submit that the evidence also shows that the domain bosssunwen.com does not provide sale of products online and an examination of the websites reveals that they cannot aim or target the general public in Hong Kong.

107. This part of the defendants’ argument is a reference to the commentary in Kerly’s Law of Trademarks and Trade Names,[53] where it was noted that when considering whether a website infringes a trademark a key question is whether the use is ‘aimed and directed” at a consumer in the jurisdiction.  Whilst the websites may have a broad and extensive reach, the significance is that they can reach consumers in Hong Kong with whom they can transact.  I accept the evidence of Ms Eckl in relation to the purchases of goods from websites that the solicitors for the plaintiffs were able to make and direct delivery of the products was made to them.  I am satisfied on the evidence that the relevant websites were aimed and directed at consumers in Hong Kong.  

108. It is also argued by the defendants that the signs used in these websites were mainly “BOSSSUNWEN” and “博斯新威” which the operators of the website may legitimately use in Mainland China as the defendants have valid trademark registrations in respect of these marks in Mainland China.  The issue, however, is whether the relevant websites are aimed and directed at consumers in Hong Kong and I have found that they are.  It may be that they are also aimed and directed at consumers elsewhere but the fact remains the websites target Hong Kong consumers.

109. The defendants argue that the plaintiffs relied on a number of purchases made by the plaintiffs’ solicitors through websites that had not been pleaded in the statement of claim or were not shown to be operated by or related to the defendants.  Even if the defendants are correct, the products clearly originated from the 1^st defendant and were capable of being purchased online and traded in Hong Kong.  The defendants argue that plaintiffs cannot rely on any alleged infringing acts committed by others in support of its infringement claims against the defendants.  The point is that the defendants are able to trade their products in Hong Kong through online services which products infringe the trademark of the plaintiffs.  I also agree with the plaintiffs’ submission that notwithstanding the defendants’ denial that they operate either directly or indirectly the websites the fact that the websites were shut down upon the institution of these proceedings would indicate that the defendants control and operate the websites.

110. It is also argued by the defendants that the plaintiffs have never pleaded the case against defendants’ licensees or third parties or that any allegation has been made that the defendants procured or conspired with others to infringe the trademarks of the plaintiffs such that the defendants should be liable as joint tortfeasors.  In essence, they rely on the authority of SNE Engineering Co Ltd v Hsin Chong Construction Co Ltd[54] that in making a case of joint tortfeasorship, it must be specifically pleaded in the action.  It is submitted that this has not been done and therefore the plaintiffs cannot rely on what others have done as set out in the plaintiffs’ evidence.  The simple answer to this argument is that there is ample evidence to show that the defendants have abused the plaintiffs name or marks either directly or indirectly as alleged in the statement of claim.

111. The defendants argue that there is also no evidence showing that the defendants had caused the 1^st defendant’s company name to be printed on any products in Hong Kong as alleged in the statement of claim.[55] It seems to me that it matters not where the infringing product has been printed or packaged as long as it is used or traded in the jurisdiction where what is printed or packaged infringes the trademark of the plaintiffs, and especially where there is evidence that infringing products could be and were sold to consumers in Hong Kong.  

112. It is claimed by the defendants that at all material times, the defendants had only granted its licensees to use the “BOSSSUNWEN” trademark which the 1^st defendant holds valid trademark registration in Mainland China.  That does not extend to other jurisdictions and in any event on the evidence there were numerous examples of products been marketed by the defendants that were infringing the BOSS mark. 

113. The defendants take issue with the contents of the affidavit of Ms Eckl, in relation to matters that she alleged against the defendants’ licensees and other third parties in respect of the rights in Mainland China.  They argued that these allegations are not relevant for two reasons.  First, because the trademark rights are territorial and what happened in Mainland China is subject to adjudication according to the laws there.  Secondly, the acts complained of even if they occur in Hong Kong would not be relevant because they allege infringing acts committed by others in support of the infringement claim against the defendants.  The point is that infringing products can be traded in Hong Kong through these licence agreements as already noted.  On the evidence before me, it would appear that the defendants use the licence agreements and other arrangements as a means to avoid liability for trademark infringement. The plaintiffs have provided evidence displaying the interrelationship between the various persons and entities involved with the 1^st defendant and I am satisfied that this is all part of an elaborate arrangement under the control of the 2^nd defendant and her family members.

114. The defendants take issue with the claim of the plaintiffs that the use of “BOSS” and “博斯” in the 1^st defendant’s company name constitutes trademark infringement.  They argue that this has not been pleaded in the statement of claim and only appeared as a cause of action of passing off.[56] It is further argued by the defendants that even assuming that there was a use of the defendants’ signs in Hong Kong and that the plaintiffs have pleaded the case of trademark infringement in respect of the defendants’ company names, there was still a question as to whether it would constitute trademark infringement.  The defendants denied that they have used or infringed the trademark in question. 

115. Under section 18(3) of the Ordinance, it is stipulated that a person infringes a registered trademark if he uses in the cause of trade or business a sign which is similar to the trademark in relation to the goods or services which are identical or similar to those for which it is registered, and the use of the sign in relation to those goods or services is likely to cause confusion on the part of public.  The defendants argue that a comparison of the plaintiffs’ registered mark with the signs the defendants have allegedly used would not support the plaintiffs’ claim.  It is submitted that in the context of the 1^st defendant’s company name, the signs used are not “BOSS” and “博斯” but rather “The Britain Boss International Company Limited” and “Britain Boss International” and “英國博斯國際有限公司”.  The defendants rely on the case of Reed Executive Plc v Reed Business Information Ltd.[57] In my view, what the defendants are seeking to do is to look at the registered marks in isolation and not in their context in order to address whether there is a likelihood of causing confusion on the part of the public.  I am satisfied that there is trademark infringement and passing off by the use of the name BOSS in the corporate name of the 1^st defendant.

116. The parties referred to the case of Guccio Gucci SPA v Gucci[58] where the general principles in assessing the likelihood of confusion as set out by Kitchen J in Julius Samann Ltd v Tetrosyl Ltd[59] were summarised as follows:

(a)  The likelihood of confusion must be appreciated globally, taking account of all the relevant factors.

(b)  The matter must be judged through the eyes of the average consumer of the goods in issue, who is deemed to be reasonably well informed and reasonably observant and circumspect.

(c)  In order to assess the degree of similarity between the marks concerned the court must determine the degree of visual, aural or conceptual similarity between them and, where appropriate, evaluate the importance to be attached to those different elements taking into account the nature of the goods in question and the circumstances in which they are marketed.

(d)  The visual, aural and conceptual similarities of the marks must therefore be assessed by reference to the overall impressions created by the marks bearing in mind their distinctive and dominant components.  The perception of the marks in the mind of the average consumer plays a decisive role in the overall appreciation of the likelihood of confusion.

(e)  The average consumer normally perceives a mark as a whole and does not proceed to analyze its various details.

(f)  There is a greater likelihood of confusion where the earlier trademark has a highly distinctive character, either per se or because of the use that has been made of it.

(g)  The average consumer rarely has the chance to make direct comparisons between marks and must instead rely upon the imperfect picture of them he has kept in his mind further the average consumer’s level of attention is likely to vary according to the category of goods in question.

(h)  Appreciation of the likelihood of confusion depends upon the degree of similarity between the goods.  A lesser degree of similarity between the marks may be offset by a greater degree of similarity between the goods, and vice versa.

(i)  Mere association, in the sense that the later mark brings the earlier mark to mind, is no sufficient for the purpose of the assessment.

(j)  But the risk that the public might believe that the goods come from the same or economically linked undertakings does constitute a likelihood of confusion within the meaning of the section.[60]

117. I have borne these principles in mind when addressing the issue of the likelihood of confusion in the circumstances of the present case. 

(i) Similarity

118. The defendants argue that the marks in question are not sufficiently similar to cause any likelihood of confusion.  They give as an example “BOSS” as compared with “BOSSSUNWEN” and “雨果博斯” as compared with “博斯紳威”. The defendants rely on the recent decision of the English Trademarks Registry in relation to the BOSSERT trademark.[61] The name and circumstances relating to that trademark is completely different to the present case and I find no assistance by relying on what it is contained in the decision of Trademarks Registry in England and Wales in relation to that case.  The defendants also rely on the fact that the word “boss” is seen legitimately in company names registered in Hong Kong.  The names referred to are made up entirely differently and provide no useful comparison or any substance to the argument that the word “boss” as compared to the “BOSS” mark, is found in other registered names, and therefore is not likely to cause the confusion as claimed.  The defendants rely on the fact that the 1^st defendant has been incorporated for ten years, and there is no evidence that has been any confusion caused in the general public in Hong Kong because of the name.  I find the argument specious given the fact it is acknowledged that the 1^st defendant is a dormant company which has not operated in Hong Kong.  It has nevertheless been quite active in Mainland China and as the evidence as indicated that is now having an impact in this jurisdiction. 

119. Where the plaintiffs’ claim is based on the trademark registration “雨果博斯” and the use of the 1^st defendant’s company name, the defendants rely on the defence under Section 19(4) of the Ordinance.  The defendants argue that the 1^st defendant was incorporated some ten years ago, well before the trademark was registered so therefore they had previously used the mark in the 1^st defendant’s name.  I cannot see how the defendants can rely on this defence when according to their own case they have not used the trademark in Hong Kong as the company has been dormant here. 

120. It is well‑established that in assessing composite marks one looks at dominant and distinctive components in order to determine whether there has been any infringement of a trademark.  In Tsit Wing (Hong Kong) Company Ltd v TWG Tea Company Pte Ltd[62], the following principles were summarised from relevant authority:

“… to determine how a registered mark should be compared with an allegedly infringing sign…:

(i) In assessing the distinctive and dominant components in a composite mark, generally speaking words ‘speak louder’ than devices: Oasic Stores Ltd’s Trademark Application [1998] RPC 631, at 644.

(ii) Further, if the device in a composite mark is too simple to evoke any particular concept for the average consumer, it cannot be regarded as the dominant element in the composite mark: Kavaklidere‑Europe v OHIM & Anor [2012] ETMR 843, at paras 35-46.

(iii)  The likelihood of confusion or deception is not disapproved by placing the two marks side by side and demonstrating how small is the chance of error in any consumer who places his order for goods with both the marks clearly before him, for orders are not placed, and are not often placed, under such conditions.  It is more useful to observe that in most persons the eye is not an accurate recorder of visual detail, and that marks are remembered rather by general impressions or by some significant detail than by any photographic recollection of the whole: De Cordova v Vick Chemical Co (1951) 86 RPC 103, at 106; 32Red Plc v WHG (International) Ltd [2011] RPC 721, at para 95.”

121. As regards the visual, aural and conceptual similarities between the marks, the signs used by the defendants, in respect of the exact same goods or services in respect of which the plaintiffs’ marks have been registered, are aurally and conceptually identical – they contain the wording component of the 1^st plaintiff’s marks in their entirety.  The logo components of each mark are generic and indistinctive and, it is submitted, to be disregarded in determining the question of similarity.  The addition of words such as “CO”, which have no trademark significance, does not serve to distinguish the infringing signs used by the defendants from the 1^st plaintiff’s marks in any way, nor does the use of the generic words “Boss” and “International” in the previous corporate name of the 1^st defendant.  On the issue of confusion of customers in respect of the use of well‑known and high distinctive marks, Deputy Judge Horace Wong SC had this to say in Guccio Gucci SPA[63]:

“That use of a well‑known and highly distinctive mark may lead customers to assume that a new product or a new design originates from the same owner or proprietor of the mark, does not cease to apply merely because another word or name also appears in the new product or the new design. The significance of the other word or name depends on the circumstances. Where the other word or name is otherwise unknown as a mark of origin, customers will naturally associate the same with the mark that is well known to them, and will be led to believe that the other name or word is used merely to indicate that the product belongs to a secondary or extension line of the same brand…”

(ii) Likelihood of confusion

122. The case law on likelihood of confusion makes it clear that it is not necessary to show actual confusion or deception and it will suffice if the sign is in the opinion of the court likely to confuse or deceive. 

123. As held by the Court of Appeal in Tsit Wing (Hong Kong) Co Ltd & Ors v TWG Tea (HK) Co Ltd & Anor [2015] 1 HKC 403, in assessing the likelihood of confusion arising from the use of a sign, the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that were likely to operate in that average consumer’s mind in considering the sign and the impression it was likely to make on him.  The Court emphasized that the sign was to be considered in its context. 

124. The signs used by the defendants, and in particular the 1^st defendant’s corporate name, copy the wording component of the plaintiffs’ relevant marks identically, and they both operate in exactly the same industry.  There is likelihood of confusion as regards the defendants’ websites and the facts that they were shut down in the face of these proceedings provides proof to that effect.  The predominant use of the word “BOSS”, sometimes alone or in composite, would no doubt confuse the average consumer.  I agree with the plaintiffs’ submissions that the average consumer is likely to think that the plaintiffs are behind the marks and signs used the defendants, and that the defendants’ business is connected with or otherwise endorsed by the plaintiffs.  I have been asked to consider the confusion amongst consumers in China but it is enough for me to view this from the perspective of consumers in Hong Kong.  I am convinced that the average consumer in Hong Kong would be confused or deceived by the use of the marks or signs by the defendants. 

Passing off

125. The elements of passing off were described by Lord Oliver in the leading authority of Reckitt & Colman Products Ltd v Borden where he said: [64]  

“First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying “get‑up” (whether it consists simply of a brand name or trade description, or the individual features of labeling or packaging) under which his particular goods or services are offered to the public, such that the get‑up is recognized by the public as distinctive specifically of the plaintiff’s goods or services. 

Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that the goods or services offered by him other goods or services of the plaintiff. 

Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief intended by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.”

126. The following three elements can be distilled in order to establish liability for passing off:

(1)  the plaintiff must have a reputation with the public, established through evidence of actual trade or advertising;

(2)  the defendant must make misrepresentation to the public which is related to this reputation of the plaintiff; and

(3)  the plaintiff must in consequence suffered damage or be about to do so.  

(a) Reputation

127. The plaintiffs’ reputation may be founded on a trademark or trade name where the public has come to associate the mark or name with its goods or services.  It is the reputation which gives rise to business goodwill in the jurisdiction that is at stake.  

128. The plaintiffs have clearly established that they have a protectable reputation and goodwill in both names and trademarks acquired through trading. 

(b) Misrepresentation

129. The plaintiffs must show that the defendants are causing at least the likelihood of confusion among a significant portion of the relevant public.  This may be done by imitating a mark or name etc or by supplying goods or services to an order which uses the mark or name etc.  It must be shown that the defendants are responsible for at least some ultimate confusion in the mark or name of a product earmarked for sale or distribution.  When the goods or services offered by both the plaintiffs and the defendants are the same or are very similar, the plaintiffs will almost always suffered damage from the passing off.  

130. The evidence before me shows that the 1^st defendant has passed off its products and business as that of or connected to the plaintiffs’ business and goodwill by using its trade names and marks and that the 2^nd defendant has controlled and directed the 1^st defendant in its passing off activities or has acted in concert in doing so.  The use of the 1^st defendant’s names and the defendants’ signs are likely to leave members of the public to assume their products are coming from the same trade source as or connected to the plaintiffs.

(c) Damage

131. It is necessary therefore that there is an assessment made of the goodwill in the marks relied on, and this is done by assessing the goodwill at the time when the infringing activities commenced which is the subject of the action.  It is necessary to show that the goodwill is substantial and not trivial.  If the goodwill is trivial, then correspondingly there will be little, if any damage resulting from any passing off.[65]

132. On the question of goodwill, the defendants argued there is hardly any evidence showing that the plaintiffs enjoyed goodwill in the Chinese marks “博斯” and “雨果博斯” in Hong Kong as of 20 August 2001, which was the date when the 1^st defendant was incorporated and commenced using the company name which the plaintiffs are claiming for its passing off.  They argued that despite the evidence that had been adduced by the plaintiffs, there is hardly any showing the use of these marks in Hong Kong before 20 August 2001, or even in Mainland China, and even if there was some use of the marks, they argued that it would be too trivial for the purpose of showing passing off.  They argued that in the absence of any goodwill of the Chinese marks in Hong Kong as of the 20 August 2001, the plaintiffs’ passing off claim is bound to fail.  In respect of the English marks, the defendants’ defence is that that they had not committed any wrongful act as pleaded.  It is acknowledged that the English company name of the 1^st defendant can be subject to a direction from the court for a change of company name based on the doctrine of instruments of deception. 

133. With the advent of online trade through the Internet, the establishment of the domain name as a form of commercial symbol has developed.  An unacceptable practice occurs when a person obtains a domain name consisting principally of the name of a well‑known company or brand, for the purpose of transferring the domain name for a price.  The practice has been deemed fraudulent and because it would lead to passing off it could be enjoined.  It is worthwhile noting the comments in British Telecom v One in a Million where it was held.[66]

“ … Whether any name is an instrument of fraud will depend upon all the circumstances. A name which will, by reason of its similarity to the name of another, inherently lead to passing off is such an instrument. If it would not inherently lead to passing off, it does not follow that it is not an instrument of fraud. The court should consider the similarity of the names, the intention of the defendant, the type of trade and all the surrounding circumstances. If it be the intention of the defendant to appropriate the goodwill of another or enable others to do so, I can see no reason why the court should not infer that it will happen, even if there is a possibility that such an appropriation would not take place. If, taking all the circumstances into account the court should conclude that the name was produced to enable passing off, is adapted to be used for passing off and, if used, is likely to be fraudulently used, an injunction will be appropriate.”

134. It is submitted by the defendants that the English name of the 1^st defendant would not inherently lead to passing off.  They claim this is so given that there are a large number of companies in Hong Kong which have legitimately adopted the word “BOSS” marks as part of their names.  It is claimed by the defendants that all that the 1^st defendant did was to grant out to use the “BOSSSUNWEN” mark which holds valid trademark registration in Mainland China. I find this a specious argument for three reasons.  First, the evidence before me shows that the defendants have blatantly and deceptively exploited the “BOSS” mark.  Secondly, the 1^st defendant was incorporated in Hong Kong in 2001 and that the Hong Kong company was then used to establish itself in Mainland China for the purpose of exploiting the “BOSS” mark.  It was in Mainland China that the 1^st defendant with Hong Kong corporate standing was registered and thereafter promoted its name in the same trading industry as the plaintiffs.  This was a typical case of a shadow company as is frequently seen in Hong Kong.  In this case, the 1^st defendant has established a market through its passing off in another jurisdiction.  Thirdly, infringing products have been traded in Hong Kong through online sales and are openly marketed. 

135. The defendants also argued that it would be unconscionable for the plaintiffs to enforce their rights against the defendants over the use of the 1^st defendant’s company name because that name of 1^st defendant existed for at least ten years with no action having ever been taken.  There has been action taken on a number of fronts outside the jurisdiction of Hong Kong and the company has remain as admitted by the defendants dormant, and it was not a case, as being claimed, that the plaintiffs have acquiesced to the 1^st defendant’s use of the name but have challenged them in various jurisdictions where they have sought to actively infringe their trademarks and pass off.

136. There is also a long line of authority establishing that the mere fact of setting up a company using a name identical or similar to the name of another trader would appropriate the goodwill of the latter.  This was explained in Kabushiki Kaisha Yakult Honsha & Ors v Yakudo Group Holdings Ltd & Anor (No 4)[67] where Lam J (as he then was) held:

“In the context of passing off, there has been a long line of cases establishing that the court would grant injunctive relief against a defendant who set up a company by an identical name or one similar to the name of another trader that would appropriate the goodwill of the latter. Even if the defendant did not start trading under that name, the court will require the name to be changed: see La SA des Anciens Etablissements Panhard et Levassor v Panhard Levassar Motor Co Ltd [1901] 2 Ch 513; Suhner & Co AG v Suhner Ltd [1967] RPC 336; Fletcher Challenge Ltd v Fletcher Challenger Pty Ltd [1982] FSR 1; Glaxo Plc v Glaxowellcome Ltd [1996] FSR 388; Direct Line Group Ltd v Direct Line Estate Agency Ltd [1997] FSR 374. In British Telecommunications Plc v One in a Million Ltd [1999] FSR 1, Aldous LJ reviewed these cases and considered that the rationale behind was that the incorporation of the company under such a name constituted an instrument of deception in the circumstances. At p 18, His lordship said:

‘In my view there can be discerned from the cases a jurisdiction to grant injunctive relief where a defendant is equipped with or is intending to equip another with an instrument of fraud.  Whether any name is an instrument of fraud will depend upon all the circumstances.  A name which will, by reason of its similarity to the name of another, inherently lead to passing off is such an instrument.  If it would not inherently lead to passing off, it does not follow that it is not an instrument of fraud.  The court should consider the similarity of the names, the intention of the defendant, the type of trade and all the surrounding circumstances.  If it be the intention of the defendant to appropriate the goodwill of another or enable others to do so, I can see no reason why the court should not infer that it will happen, even if there is a possibility that such an appropriation would not take place.  If, taking all the circumstances into account the court should conclude that the name was produced to enable passing off, is adapted to be used for passing off and, if used, is likely to be fraudulently used, an injunction will be appropriate.”

137. The mere fact of incorporation under a name incorporating “BOSS” and “博斯” amounts to unlawful use of an instrument of deception. [68] This was succinctly explained in the learned text The Law of Passing-Off:[69]

“The preferred analysis is that if the defendant company is indeed making a representation that it is the claimant, or associated with the claimant in one of the ways capable of amounting to passing‑off, and if that misrepresentation is really likely to cause damage to subsisting goodwill of the claimant, then there ought to be liability for passing‑off even though the defendant is not actually or prospectively engaged in any trade. The question is not whether the defendant company is a trader in fact, but whether it is making a representation of the kind which real traders make in the course of trade, whether to their customers, or to members of the other classes (such as suppliers) who may be relevant for these purposes. On this analysis, it cannot be said a priori that no passing off action can lie (unless on a quia timet basis) against a dormant or shell company – but its non‑trading status may be highly relevant to whether the tort of passing‑off is already considered to be complete as soon as incorporation occurs or is officially published.”

Findings on the merits of the defence

138. On the evidence presented in this application I find that the defence is devoid of merit.  There are certain matters that have been raised by the defendants that can be dealt with by way of amendment to the original order in relation to the 1^st defendant. 

139. I am satisfied on the evidence before me that the 2^nd defendant and her the husband, together with other family members, have embarked on an enterprise of trademark infringement and passing off of the BOSS brand name through the incorporation of the 1^st defendant that facilitated their operations in Mainland China and that are now having an impact in Hong Kong.  The 1^st defendant is a classic shadow company which has been incorporated with a name confusingly similar with the well-known brand name of BOSS.  The company provides the means to engage in its activities to use the BOSS brand name in Mainland China, while it remains dormant in Hong Kong.  This case illustrates how a shadow company operates and how it can develop and expand in another jurisdiction to a level where it can have serious reputational and economic consequences to the brand-name holder.

140. The Hugo Boss Group as represented by the plaintiffs in this action is a well-known global manufacturer and retailer in luxury clothing and accessories.  It operates primarily through its brand names and marks, Hugo Boss and Boss and various derivatives or related names or marks.  The Group is without question an entity in its field of business with an established global reputation and goodwill.

141. The 2^nd defendant and her husband incorporated the 1^st defendant on 20 August 2001 and through this corporate vehicle have established a business in Mainland China centred on the trademark that they have registered there of BOSSSUNWEN.  On the evidence before me, it is quite apparent that they have used various techniques and devices to display prominently the name BOSS in the manufacture and sale of clothing and accessories.  Through this trademark name they have sought to expand their operations in other jurisdictions which have been successfully resisted by the Hugo Boss Group.  It is also quite apparent that they have traded their infringing products in other jurisdictions, including Hong Kong, through associates or intermediaries and/or online sales.

142. I am satisfied that the defendants have failed to satisfy me that they have a case with real prospects of success.  It is not without significance that the defendants have not filed a draft defence or filed evidence of any substance to support their claims.  The evidence that has been filed is silent as to the defendants’ infringing use of the signs BOSSCO and BOSS CO, as to the 1^st defendant’s status as the alter ego of the 2^nd defendant and as to how the defendants came up with their various BOSS signs. 

143. I agree with the plaintiffs’ submissions that the relevant question as to trademark infringement is whether the 1^st defendant was using signs confusingly similar to plaintiffs’ marks in Hong Kong in respect of the same or similar goods or services and as to passing off whether the 1^st defendant’s conduct amounts to a misrepresentation causing damage, or likely to cause damage to the plaintiffs’ international and domestic goodwill and reputation. The issue is not so much whether the defendants have established business operations in Hong Kong, but whether they have by the incorporation of the 1^st defendant and their operations elsewhere use a name comprising or confusingly similar to the plaintiffs’ signs in the sale of infringing goods in Hong Kong.  There is ample evidence that the defendants are seeking to expand their operations by targeting consumers in Hong Kong.  This is evidenced by online sales to consumers in Hong Kong.  There is also ample evidence that whilst they have used the registered trademark “BOSSSUNWEN” they have used the BOSS sign by depicting it predominantly in their mark or in composite, or on its own. 

144. As rightly pointed out by the plaintiffs, prior to these proceedings being instituted, the defendants showed a clear intention to conduct business in Hong Kong through websites intended to target Hong Kong consumers.[70]

Amendment of pleadings

145. The defendants have criticised the particulars of the causes of action in the statement of claim.  The plaintiffs respond by noting that the pleaded causes of action of trademark infringement and passing off are abundantly clear.  They note that some of the criticisms are essentially cosmetic and can easily be corrected.  I agree that that is the case. 

146. The defendants complain that trademark No 302771794 is not a registered trademark as it is pending registration.  The plaintiffs acknowledge that it was included in Appendix 1 by error.  It should be noted that the trademark in question was registered in Mainland China in June 1995 and is relevant to the passing off cause of action.  The plaintiffs submit that if there is any doubt about the matter it can be rectified by amending the order to delete a reference to this trademark.  

147. The defendants also complain that the plaintiffs did not plead infringement in respect of trademarks Nos 1988B2025AA, 1991B0042, 1991B0043, 199608481, 200002421, 200201822AA, 301789110, 301789147AA, 302405024 listed in Appendix 1 and therefore paragraph 1(b) of the default judgment which covers these trademarks must be set aside.  The plaintiffs submit that the order simply enjoins the defendants from “infringing the Hong Kong registered trademarks of the 1^st plaintiff” and if need be the matter can be rectified by amendment.

148. In relation to any amendment to the order to correct the reference to the relevant trademarks, this can be done pursuant to the Order 2, rule 1 and Order 20, rule 5.  I agree that these matters can be corrected by an appropriate amendment. 

149. The trademark No 301789110 is for the stylized trademark which comprises the first and last letters of the BOSS trade name (“B” and “S”) and is depicted as a stylized logo.  The plaintiffs submit that this mark is derived from, and is visually, aurally and conceptually similar to their BOSS trademark.  They disagree with the defendants’ suggestion that their infringing signs are not confusingly similar to this mark and to trademark No 301789147AA.[71] They submit that the defendants have infringed both of these registered trademarks in advertising and offering for sale belts with belt buckles bearing the infringing stylized logo.  Evidence has been presented before me to support the plaintiffs’ claim and the criticism by the defendants of the inclusion of these trademarks is without foundation.

Conclusion

150. For the foregoing reasons, I order that the final judgment order against the 1^st defendant stand but the terms of which need to be appropriately amended, and I will hear the parties upon them failing to agree on the terms of any amendments, and that final judgment against the 2^nd defendant be set aside for want of proper service.  It remains that the plaintiffs may seek the imposition of conditions on the order to set aside and/or an order for interim relief against the 2^nd defendant, and if so, I will hear the parties on those matters. 

151. I will also hear the parties on the question of costs.

Appendix 1

Appendix 2