HONG MAN CHING v. HONGDOU GROUP CORPORATION

HCMP2148/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 2148 OF 2005

	IN THE MATTER OF the Trade Marks Ordinance, Cap.43 of the Laws of Hong Kong
	AND
	IN THE MATTER OF Hong Kong Trade Mark Application No. 04838 of 2002 by HON MAN CHING to register the trade mark Part A of the Register in Class 25, and the opposition thereto by HONGDOU GROUP CORPORATION
	AND
	IN THE MATTER OF an appeal from the decision of the Registrar of Trade Marks dated 8 July 2005
	AND
	IN THE MATTER OF Order 55 of the Rules of High Court, Cap.4A

D E C I S I O N

1.  This is a trade mark appeal.  The appellant wanted to register   as a trade mark under Class 25 for clothing, footwear and headgear.  The respondent opposed it.  Miss Lavinia Chang, on behalf of the Registrar of Trade Marks, held a hearing on 31 May 2005 and dismissed the appellant’s application afterwards.  She did so by drawing an irresistible inference that the appellant, in designing his mark, had copied the respondent’s mark.

2.  From the affidavits and statutory declarations filed by the respondent, it can be seen that the respondent had first used its mark of   on garments, shorts, underwear, caps, hats and shoes in 1991.  The English part of the trade mark was spelt out in small block letters.  It was registered as a trade mark in the Mainland in 1992 and was ranked one of the top 10 brand names in the Mainland in 1994.  On 9 April 1997 it was awarded the status of a well known trade mark by the Trade Mark Office of the Mainland.  It has been registered in 20 countries.  The respondent’s turnover in the year 2000 was RMB¥2.238 billion and in 2001 was RMB¥2.87 billion.  Its advertising expenditure for the years 2000, 2001 and 2002 were RMB¥40,677,400, RMB¥21,731,900 and RMB¥42,224,000 respectively.  

3.  The trade mark had been advertised by, among other methods, commercial advertisements in various television channels in the Mainland and the erection of huge advertising signs in various cities in the Mainland.  The respondent is one of the key enterprise groups in Jiangsu Province.  However, the respondent has several trade marks and I accept the submissions of Miss Tsang, counsel for the appellant, that it is not known how much was spent on the promotion of this particular trade mark. 

4.  On 16 November 2000, the respondent acquired an English variant of the English part of the trade mark, which is in block capital letters.  This mark has been made known to the public in the Mainland since 21 December 2000 when the respondent issued its prospectus for listing in the Shanghai Stock Exchange.  This mark appeared in the prospectus.

5.  I now come to the appellant’s case.  The appellant studied English and English literature at the Guangxi University between 1973 to 1978.  After graduation he worked as an officer of the Guangxi Government Foreign Affairs Office from 1978 to 1985.  He came to Hong Kong in September 1985.  He then worked in a few international trading companies dealing with tung oil, plywood, steel products, fishmeal, rice, sugar, vegetable oil, etc., but not clothing or garments.  In 1993 he set up his own tung oil business with some friends. 

6.  In the last 10 years there was a downturn of his tung oil business.  In around 2001 he started to consider other business opportunities, such as production and sale of clothing, because garment business in Hong Kong has always been strong and the general public in Hong Kong is willing to spend on clothing. 

7.  He did not explain why did he dare to try the business of clothing when he was not educated in it and had no experience in it at all.  Before he had made up his mind on where to set up his factory and before he had any plan for production, he firstly applied to register a trade mark.  He chose the mark   because of its special meaning of true love, as demonstrated in a famous poem Hongdou Ci “紅豆詞” by the famous Tang poet, Wang Wei “王維”.  In fact, famous poets and writers like Cao Xueqin “曹雪芹” and Wang Guowei “王國維” have in the past also composed poems in the name of Hongdou Ci “紅豆詞”. 

8.  The appellant had in 1984 written a little travel book introducing the city of Yong “邕”, which is another name for Nanning City “南寧” in Guangxi.  He also referred to the poem Hongdou Ci “紅豆詞” by Wang Wei “王維” in this book.  But 紅豆 or “red bean” itself is a kind of bean which is frequently used for making delicious desserts.  It is better known as an ingredient for food than as a symbol of love or affection.  In any case, red bean is not something that is usually associated with clothing.

9.  The appellant said he wanted to design and produce a series of clothing and other products under this trade mark, which represented true love, for the young people of Hong Kong and thus to arouse their awareness to true love and loyal marriage.  However, apart from the coincidence of his choosing the Chinese name and the Putonghua transliteration of “red bean” as a trade mark for clothing, there are other coincidences in this case.  The English part of his trade mark is, as is also the case for the respondent’s trade mark, designed with the Galaxy BT font type with the two “O’s” inclined for about 45 degrees.  His mark can in fact be superimposed on the respondent’s English variant made in November 2000, save the second letter “O”.  The second letter “O” in the appellant’s mark is slightly smaller than the respondent’s.  These coincidences and his unexplained daring venture into the clothing production business, of which he knew nothing, made his story incredible. 

10.  The respondent said that the appellant had simply copied the respondent’s mark made in November 2000.  The appellant denied that vehemently.  He was adamant that he had designed this trade mark without referring to the respondent’s mark.  He maintained that he was not aware of the existence of the respondent when he designed his mark.  Miss Tsang reminded me that there was no evidence showing that the respondent’s mark had been shown to the appellant.  There is no dispute that the respondent’s mark had not acquired any reputation in Hong Kong.

11.  I am further reminded that there was no cross-examination of the appellant at the hearing before the Registrar.  In Re Borsalini Trade Mark [1993] 1 HKC 587 at 592D to E, Godfrey J said:

“Although this is unusual, in my judgment, a party opponent who intends to dispute the honesty of the applicant in proceedings of this sort would be well advised to do so.  Except when the case is too plain for words,it cannot be right for any tribunal to decide questions of honesty or dishonesty on affidavit evidence, untested by cross-examination.  If cross-examination is not sought, inferences of deponent’s dishonesty ought not to be drawn, unless irresistible.” 

12.  I am also referred to Re Polek Trade Mark Application No. 1998 of 1990 by Deputy Director Waters on 21 November 1990, where at page 39 he referred to the Piries case (49 RPC 1952 and 50 RPC 147) and said:

“(1) It was decided in the House of Lords (50 RPC 1932) that the applicants had invented their mark honestly even though they knew of the Opponent’s mark when it was adopted.  This was acknowledged earlier in the Court of Appeal (49 RPC 1932) by Lawrence L. J. at p. 216 in the following manner:

“The mark was adopted by the Appellants honestly without any ulterior motive and without any thought of the Respondent’s Mark.  There is nothing to suggest that Messrs Pirie & Sons in adopting this Mark, wanted to obtain the benefit of any advantage which the Respondent Company had gained in this country by the sale of their paper in the United Kingdom.””

13.  Relying on this case, Miss Tsang further submitted that there was no advantage for the appellant to copy the respondent’s mark as such mark had no reputation in Hong Kong. 

14.  However, I find that the inference that the appellant had copied the respondent’s mark is an irresistible one on the grounds I have discussed above.  It is possible that he had taken over the respondent’s English part of the mark and reduced the size of the second letter “O” so that it looked more like a bean than a melon.  That explains why one mark can be superimposed on the other save the second letter “O”.  From this irresistible inference, I would logically find that the appellant’s case on how he had designed this mark a dishonest one. 

15.  I also do not agree that the appellant can obtain no advantage or benefit in copying the respondent’s mark.  The respondent’s CEO has already said in a statutory declaration that the respondent intended to apply for registration of his mark in Hong Kong after these proceedings are over.  If the appellant should be prepared to take all the trouble to copy the respondent’s mark and to get it registered in Hong Kong as his own trade mark, he must have a purpose in mind.  Obviously, if he should succeed, he can obstruct the respondent’s intended registration.  That nuisance value may be translated into a commercial value.  I think this is apparent to any reasonable  businessman.  I therefore conclude that the Registrar was right in refusing registration.  I therefore dismiss the appeal with costs.