NU PHARM LTD v. CHAMP GROUP LTD AND OTHERS

HCIP 5/2020

[2021] HKCFI 751

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 5 OF 2020

(TRANSFERRED FROM HIGH COURT ACTION NO. 2995 OF 2016)

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D E C I S I O N

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1.  There are 3 paper applications before me:

(i)  the Defendants’ application by way of summons dated 1 April 2019 (“the FBP Application”) for further and better particulars (“FBP”) of the Amended Statement of Claim (“the ASOC”);

(ii)  the Defendant’s application by way of summons dated 24 May 2019 for specific discovery (“the Defendants’ Discovery Application”); and

(iii)  the Plaintiff’s application by way of summons dated 16 July 2019 for specific discovery (“the Plaintiff’s Discovery Application”).

Background

2.  The Plaintiff was incorporated in 1998.  The Plaintiff is engaged in the business of selling a variety of food supplements and nutritional products.  One of the Plaintiff’s products relates to the wellness of the liver and is called “肝美健” in Chinese and “Liver Clear” in English made in Sweden (“the Plaintiff’s Product”).  At different stages in time, the Plaintiff managed to obtain certain registered trade marks in respect of “medicinal food supplements for nutritional purpose; all included in Class 5” (“the Plaintiff’s TMs”):

Registration No.	Trade Mark	Date of Filing/Registration
300406593 (“the Plaintiff’s 1st TM)		21 April 2005
302507922 (“the Plaintiff’s 2nd TM”)		28 January 2013
302743506 (“the Plaintiff’s 3rd TM”)		23 September 2013

3.  The 4 Defendants are associated companies. Since 1998, the 3^rd Defendant established a network of selling Japanese medicinal and health products under the brand name “日本命力Meiriki” (“Meiriki Products”).  In 2009, the 1^st Defendant was established to import a liver health product manufactured in Sweden (“the Defendants’ Product”).  The 1^st Defendant entrusted distribution of the Defendant’s Product to the 4^th Defendant which also distributed other Swedish manufactured products.  The 3^rd Defendant handled the marketing of the Defendants’ Product, frequently in conjunction with other Meiriki Products.

4.  In August 2012, the 1^st Defendant obtained a distribution right to sell the Defendants’ Product in Hong Kong.  It is the Defendants’ case that, prior to that, various preparatory works were undertaken including the naming of that product.  By June 2012, the Chinese and English names of the Defendants’ Product were devised as “保肝美” and “Liver Clean” respectively.

5.  Before the Plaintiff applied to register the Plaintiff’s 2^nd and 3^rd TMs, the 3^rd Defendant submitted a request for preliminary advice on registrability to the Trade Marks Registry (“the Registry”) in respect of the following mark:

6.  The Registry did not consider the above mark sufficiently distinctive.  The 1^st and 3^rd Defendants then submitted successive revised versions of the proposed mark for the Registry’s consideration and advice some of which included the word “LeverRen”. Eventually, the Registry advised on 11 October 2012 that the following mark was sufficiently distinctive:

7.  Subsequently, the 1^st Defendant had on various dates filed with the Registry the following applications for registration of trade marks in respect of “dietetic substances adapted for medical use; all included in class 5”:

Application No.	Trade Mark	Date of Filing
302406546 (“the Defendant’s 1st  TM”)		16 October 2012
302593314 (“the Defendants’ 2nd TM”)		29 April 2013
302593323 (“the Defendants’ 3rd TM”)		29 April 2013
302752650 (“the Defendants’ 4th TM”)		30 September 2013

8.  In December 2012, the Defendants’ Product was launched in Hong Kong under its first generation packaging bearing the Defendants’ 1^st TM.

9.  Following the complaint made by the Plaintiff for trade mark infringement, the Defendants decided to remove the words “Liver Clean” and replaced them with the word “LeverRen”.  The Defendants also applied for registration of the Defendants’ 2^nd, 3^rd and 4^th TMs.

10.  It is the Defendants’ case that:

(i)  in June 2013, sale of the Defendants’ Product was conducted using the 2^nd generation packaging bearing the Defendants’ 2^nd TM; and

(ii)  from mid to late 2013, production of the Defendants’ Product was conducted using the 3^rd generation packaging bearing the Defendants’ 3^rd TM.

11.  In July 2013, the Plaintiff opposed the 1^st Defendant’s application for registration of the Defendants’ 1^st TM but did not give any notice of opposition to the registrations of the Defendants’ 2^nd, 3^rd and 4^th TMs.  It is the Plaintiff’s case that it is free to elect between opposition proceedings and invalidation proceedings under the Trade Marks Ordinance, Cap. 559 (“TMO”) with no obligation to oppose the registrations of the Defendants’ 2^nd, 3^rd and 4^th TMs.

12.  The Plaintiff applied to register the Plaintiff’s 3^rd TM in September 2013 and the 1^st Defendant filed the application to register the Defendants’ 4^th TM later in the same month.

13.  In June 2014, the Plaintiff filed evidence in the opposition proceedings in the Registry (“the Opposition Proceedings”) alleging that, inter alia, the Defendants’ 1^st TM was registered in ‘bad faith’.

14.  According to the Defendants, they had by September 2014 ceased all sales of the Defendants’ Product under the 1^st generation packaging bearing the Defendants’ 1^st TM, i.e. no more packaging bearing the words “Liver Clean”.  From then onwards, the Defendants’ Product in the market only bore the Defendants’ 2^nd or 3^rd TM.  The 1^st Defendant considered that there was no commercial reason to persist in upholding the registration of the Defendants’ 1^st TM.  On 24 December 2014, the 1^st Defendant informed the Plaintiff that it would not file evidence in the Opposition Proceedings.

15.  On 5 January 2016, the 1^st Defendant assigned the Defendants’ 2^nd, 3^rd and 4^th TMs to the 2^nd Defendant.

16.  The Opposition Proceedings took place in the absence of the 1^st Defendant on 17 February 2016.  On 30 June 2016, the Registrar of Trade Marks dismissed the application for registration of the Defendants’ 1^st TM, having drawn an inference of “bad faith” on the state of the evidence.

17.  On 17 November 2016, the Plaintiff commenced the present proceedings against the Defendants to claim for various relief for trade mark infringement and passing off.  The Plaintiff also seeks for a declaration of invalidity of the registrations of the Defendants’ 2^nd, 3^rd and 4^th TMs in accordance with ss 53(5)(a), 53(5)(b) and 53(3) of the TMO.

18.  It is the Defendants’ case that, since December 2016, the Defendants’ Product was sold under the 4^th generation packaging depicting the Defendants’ 4^th TM.

The FBP Application

19.  I first deal with the FBP Application.  For such application, the Defendants complain that the FBP supplied by the Plaintiff pursuant to their following requests are inadequate: (i) Requests 3 to 6; (ii) Request 8; (iii) Requests 15 to 17; (iv) Requests 22 to 27; and (v) Requests 29 to 40.

20.  As part of the defence, the Defendants claim that the Plaintiff has all along marketed the Plaintiff’s Product by reference to the Plaintiff’s names “卡士蘭” and “Nu Pharm” and the unique “C in Cross logo”, and so there is no basis for the Plaintiff to say that it has goodwill attached to “Liver Clear  肝美健” or “肝美健” alone.

21.  Requests 3 and 4 relate to the trade mark registration status in respect of the names “卡士蘭” and “Nu Pharm”.  The Defendants no longer pursue the requests after the supply of the trade mark registration documents by the Plaintiff.  In any event, the requests should be put in the form of discovery and interrogatories as the matters relate to evidence and not pleading.

22.  Request 5 is directed at whether the “Liver Clear 肝美健” mark and the “卡士蘭 Nu Pharm” mark have been used in conjunction, and if so, how.  In reply, the Plaintiff states that the pleading is sufficient.

23.  I agree with Ms Tam, SC, counsel for the Plaintiff, that the pleading is sufficient and the request concerns matters of evidence and is unnecessary.  In fact, the way in which Request 5 was put suggests that the Defendants knew full well the Plaintiff’s case on whether the “Liver Clear 肝美健” mark and the “卡士蘭 Nu Pharm” mark are used together, which is sufficiently set out in §2(2)-(4) of the Re-Amended Reply.  I agree that the Plaintiff’s case is clear from the pleading.  The Defendants also complain of possible surprises at the trial.  However, through the discovery process (as further elaborated in the latter part of this Decision), the Defendants would be able to obtain the promotional and marketing materials of the Plaintiff’s Product throughout the years.  Hence the Defendants’ concern has no basis at all.

24.  Request 6 is no longer pursued after the disclosure of evidence by the Plaintiff.  Though how the Plaintiff has marketed or promoted the Plaintiff’s Product may be relevant, such kind of request relates to evidence and not pleading.  Further, in the case that the Plaintiff has supplied all the documents relating to the promotion and marketing of the Plaintiff’s Product including those included in the Defendants’ Discovery Application, there is simply no need for the Plaintiff to provide further particulars in this regard.

25.  Request 8 relates to the Plaintiff’s allegation that the Plaintiff’s Product has been the “leading” natural product targeted at liver health in Hong Kong.  The Defendants ask when.

26.  Again I agree that the request concerns matters of evidence and is unnecessary.  Mr Pow, SC, counsel for the Defendants, submits that the answer is relevant to the issue of goodwill, but the court would look at facts such as sales figures, promotional materials and market shares to determine such issue.  The allegation of “leading” product on the wellness of liver is not of much assistance, and I doubt whether one can provide a precise answer to such request.

27.  Request 15 is similar to Request 6.  It is not pursued for the same reasons.

28.  Request 16 relates to the Plaintiff’s allegation that Chinese speakers have come to rely on the mark “肝美健” in distinguishing the Plaintiff’s Product from others.  The Defendants submit that they are entitled to know the factual basis for such conclusion put forward by the Plaintiff.

29.  I agree with Ms Tam that the request concerns matters of evidence to which the Defendants are not entitled.  As to whether “卡士蘭 Nu Pharm” mark or the “肝美健” mark would have a more significant impact on the Chinese speaking public, this would be all a matter of evidence.  In any event, it would be extremely difficult for a party to provide full particulars on such matter which depends, to a great extent, on the perception of the marks by a particular sector of the public.  Furthermore, the Defendants are not entitled to make such request in the nature of interrogatory, which is apparent from the way in which Request 16 is put.

30.  Request 17 relates to a question as to whether it is the Plaintiff’s case that the English speaking public have come to rely on the mark “肝美健” distinguishing the Plaintiff’s Product from other similar products in the market, and if so, state the facts in support of such assertion.  I reject Request 17 for the same reasons.

31.  Request 22 relates to §8 of the ASOC which pleads that substantial expenses had, between 2005 and 2015, been incurred in promoting the Plaintiff’s Product.  The request seeks to ascertain whether in undertaking such promotional activities, the Plaintiff was also promoting the Plaintiff’s general reputation under the “卡士蘭 Nu Pharm” mark and logo, its company name, as well as the Plaintiff’s connection with France.  Mr Pow submits that the answer is relevant to the nature of the Plaintiff’s goodwill and the question of likelihood of confusion.  He says that the Defendants are entitled to know whether such promotional activities (not just the packaging) invariably involve promoting not just the name “Liver Clear 肝美健” but also more importantly

32.  Requests 23 to 26 are all directed at the issue of “likelihood of confusion” which, says the Defendants, is inexorably linked to the very nature and extent of the goodwill or reputation said to have been generated.  Mr Pow submits that it is necessary for the Defendants to know and understand the Plaintiff’s case on the goodwill and reputation generated by the use of the mark  

33.  I agree with Ms Tam that these requests relate to matters of evidence and not pleading.  As mentioned above, it would be matter of evidence as to how the public would perceive a particular mark associated with a product and it is not something which can be easily particularised. Further, the matters requested are also beyond the scope of the averments made in §9 of the ASOC, and the Defendants are not entitled to particulars of matters unilaterally raised by them instead of pleaded by the Plaintiff.

34.  Request 27 relates to a question as to when the Plaintiff knew about the Defendants’ applications for the registration of the Defendants’ TMs.  Mr Pow submits that the answer is relevant to the defences of estoppel, acquiescence and laches raised by the Defendants.

35.  I agree with Ms Tam that the request concerns matters of evidence and is unnecessary.  Further, the request is framed in the form of an interrogatory in the guise of request for FBP.  In any event, §21 of the ASOC does not even plead knowledge of those trade marks, and it is not open to the Defendants to cross-examine the Plaintiff under the pretext of request for FBP.  Though Mr Pow has emphasised that the answer is relevant to the issues of the case and the Defendants should not be taken by surprise as to the possible answer given by the Plaintiff at the trial.  Nevertheless, it does not alter the fact that these are matters of evidence.  If the Plaintiff has not covered such matters in their witness statements or disclosed documents, the Defendants should, subject to the requirement as to necessity either for disposing fairly of the cause or matters or for saving costs, apply for the Plaintiff to provide the evidence by way of answer to interrogatory.

36.  It seems that the Defendants do not pursue Request 28.  In any event, the request should be denied for the same reasons.

37.  Request 29 relates to a question as to when the Plaintiff decided not to file any notice of opposition to any or all of the Defendants’ application for the Defendants’ TMs.  Request 30 relates to a question as to how the Plaintiff perceives as to the differences between the Plaintiff’s and the Defendants’ TMs.  I reject these requests for the same reasons as those under Request 27.

38.  Requests 31 and 32 require the Plaintiff to identify the similarities in respect of the marks and packaging designs between the Plaintiff’s and the Defendants’ Products.  The Plaintiff is requested to set out those similarities that are said to be “designed to imitate”. Mr Pow submits that if the Plaintiff points to a particular feature and says that this feature of similarity is reflective of a deliberate attempt to imitate, the Defendants should be forewarned so as to provide evidential explanation.

39.  In my judgment, the requests are totally unnecessary.  The similarities are apparent from visual comparison. Furthermore, as seen from the Re-Amended Defence and the witness statement of Ms Joann Cheung (“Ms Cheung”), it is clear that the Defendants understood the Plaintiff’s case perfectly well and was able to prepare evidence properly in response.

40.  In my judgment, such kind of requests only complicate rather than facilitate the resolution of the disputes in trade mark infringement and passing off cases.  Pleadings are for the purpose of crystalizing the issues in the dispute and to avoid surprises at the trial.  For such kind of cases, there is no secret about the relevant marks and packaging designs to be compared for similarities.  It would be an exaggeration for someone to complain about surprises, as the parties should be able to address and the similarities and the differences in their evidence and submissions.  Requiring the parties to go so much in-depth as to particularise the similarities and the differences would only complicate the whole process.

41.  Further, it is clear that the allegation of “designed to intimate” is based on the similarities of the marks and the packaging designs.  I do not think that the inclusion of such allegation is able to add any more weight to the necessity of the requests.

42.  The Defendants do not pursue Request 33.

43.  Request 34 relates to the Plaintiff’s allegation that there is real risk of the public being misled into believing that the Defendants’ Product is a new line or extension of the Plaintiff’s Product.  Request 34 is a question as to whether it is the Plaintiff’s case that such real risk exists.  Requests 35 and 36 then follow up to seek elucidation of the Plaintiff’s case as to whether such real risk was appreciated at the time and why the Plaintiff decided not to file oppositions to the applications for registration of the Defendants’ 2^nd, 3^rd and 4^th TMs. Request 37 requires the Plaintiff to particularise the specific distinctive elements of each of the Plaintiff’s TMs which the Plaintiff says will suffer detriment in the form of loss of distinctiveness.

44.  I agree with Ms Tam that the pleading is adequate and the requests are totally unnecessary.  By those requests, the Defendants are effectively seeking to explore matters which are beyond the scope of the averments made in §36 of the ASOC.  It is simply not open to the Defendants to cross-examine the Plaintiff under the guise of requests for FBP.  Furthermore, comparison of the relevant trade names and marks is relatively a straightforward exercise.  There is no point in asking the Plaintiff to provide further particulars under Request 37.

45.  §37 of the ASOC alleges that there was extensive use, promotion and advertising of the name and marks “Liver Clear 肝美健” or “肝美健” alone.  Request 38 asks for particulars of ‘when, where [and] how extensive use, promotion and advertising of the name and mark “肝美健” alone was conducted also with reference to the “卡士蘭 Nu Pharm” mark or the words of “卡士蘭” or “Nu Pharm”.

46.  Having considered the express wording of the request, I agree with Ms Tam that the request relates to matters beyond the scope of the averments made in §37 of the ASOC.  In any event, it would be a matter of evidence as to how the Plaintiff had marketed the Plaintiff’s Products, whether it was marketed and promoted by reference to the name and mark “肝美健” alone, or whether it was marketed or promoted also by reference to the mark or the words of “卡士蘭” and “Nu Pharm”.  As mentioned above, through the discovery process, the Defendants would be able to obtain the promotional and marketing materials of the Plaintiff’s Product throughout the years.  The Defendants should have no difficulty in preparing their defence by reference to these materials.  It also reinstates the fact that these are matters of evidence and not pleading.

47.  Requests 39 and 40 require the Plaintiff to confirm whether it is its case that there is likelihood of confusion by the public as to the use of the name and mark “Liver Clear 肝美健” or “肝美健” alone without reference to the mark or the words of “卡士蘭” or “Nu Pharm”, and if yes, to supply the facts in support such allegation.

48.  Again I have to agree with Ms Tam that the pleading is adequate and the requests are totally unnecessary.  The matters raised in these requests are also beyond the scope of the averments made in §38 of the ASOC, and the Defendants are not entitled to particulars of matters unilaterally raised by them instead of pleaded by the Plaintiff.  Further, the Defendants should have no difficulty in preparing the defence by reference to the Plaintiff’s evidence on the promotion and marketing of the Plaintiff’s Product.

49.  For these reasons, I refuse the FBP Application. I make a costs order nisi that the costs of the FPB Application be to the Plaintiff.

The Defendants’ Discovery Application

50.  On 13 March 2019, the Defendants’ solicitors, Iu, Lai & Li (“ILL”), wrote to the Plaintiff’s solicitors, Lau, Wong & Chan (“LWC”), by letter (“the ILL’s Letter”) seeking discovery of documents.  All the requests for disclosure by the Defendants arose out of the contents of a statutory declaration of Mr Wong Charles Sik Wing dated 23 June 2014 (“Mr Wong’s SD”) filed in opposition to the 1^st Defendant’s application for registration of the Defendants’ 1^st TM in the Registry and disclosed as item 7 in the Plaintiff’s List of Documents dated 29 August 2018 in this action.  The requests were itemized under sub-paragraphs of §8 of the ILL’s Letter.

51.  On 17 April 2019, LWC replied saying that:

(i)  The Plaintiff is willing to provide discovery of Requests (1)(b); (1)(c); (2)(a) and (3)(a).

(ii)  In respect of Request (12)(a), save and except the television commercials exhibited as “WCSW-15” in Mr Wong’s SD, the Plaintiff has lost record of the same.

(iii)  In respect of Requests (10); (11)(b); (11)(d); (11)(f), (11)(g); (16)(b) and (16)(d), such documents in fact do not exist or the Plaintiff has lost record of the same.

(iv)  In respect of all remaining requests, the Plaintiff does not admit existence, possession, custody and power but contends “relevance” and “necessity”.

52.  The Defendants took out the Defendants’ Discovery Application on 24 May 2019.  Schedule 1 made use of the ILL’s Letter as a template.  The Defendants seek specific discovery of documents under all requests except Requests (1)(b), (1)(c), (2)(a) and (3)(a).

53.  The documents requested mainly relate to the promotional and marketing materials of the Plaintiff’s Product.

54.  In the 1^st affirmation of Mr Chu Kuo Fai Gordon (“Mr Chu”) in support of the Defendants’ Discovery application, Mr. Chu categorized the outstanding requests into the following 8 categories: (i) Packaging Category; (ii) Sales Booth Category; (iii) MTR Advertisements Category; (iv) Website Category; (v) Mailing Advertisements Category; (vi) Newspaper & Magazine Category; (vii) Artwork Category; and (viii) Video Advertisements Category.  For easy reference, I adopt the same categorization in this Decision.

55.  In the 1^st affirmation of Mr Wong Charles Sik Wing (“Mr Wong”) filed in opposition to the Defendants’ Discovery Application, Mr. Wong provided 3 answers:

(i)  Answer 1: He reiterated that for Request (12)(a) under the Video Advertisements Category, the Plaintiff has lost record of the same.

(ii)  Answer 2: As for Requests (10); (11)(b); (11)(d); (11)(f), (11)(g); (16)(b) and (16)(d) under the Artwork Category, such documents in fact do not exist or the Plaintiff has lost record of the same.

(iii)  Answer 3: For the other requests, he said:

(a)  these requests cover documents of a very long timeframe dating back to 1998 and are highly oppressive;

(b)  they are not relevant;

(c)  they are not necessary;

(d)  most of the requested documents either do not exist or the Plaintiff has lost record;

(e)  it is impracticable for the Plaintiff to identify whether each of the requested documents exists or is still in possession, custody or power of the Plaintiff;

(f)  it would be extremely costly and time consuming for the Plaintiff to conduct such identification exercise; and

(g)  the Plaintiff is thus unable to confirm whether each of the requested documents exists or is still in possession, custody or power of the Plaintiff.

56.  After the filing of Mr Wong’s supplemental witness statement exhibiting all packaging designs of the Plaintiff’s Product since 2004, the Defendants accept that the Plaintiff has partially complied with the requests under the Packaging Category.  According to them, the outstanding issue relates to the disclosure of the packaging designs between 1998 and 2003.

57.  In the 2^nd affirmation of Mr. Chu, the Defendants made the following replies:

(i)  Answer 1 is untrue and unacceptable because by simply browsing the Plaintiff’s own website, one can already retrieve 25 videos of television commercials, 10 of which relate to the Plaintiff’s Product.  A simple search on YouTube reveals more.

(ii)  Answer 2 is also unacceptable.  The answers “in fact do not exist” or “the Plaintiff has lost record of the same” are mutually exclusive reasons and thus inconsistent with each other.  Mr. Wong did not depose to what efforts he had caused the Plaintiff to make or circumstances of them being “lost”.

(iii)  Answer 3 is unacceptable and prevaricating.  Mr. Wong put up a variety of rolled-up excuses. Some are mutually exclusive and inconsistent as explained above. Furthermore, Mr. Wong simply considered the exercise too cumbersome and it is obvious that he had not taken the trouble of conducting any search amongst the Plaintiff’s files or records to ascertain whether any of those documents in fact exists or is in the Plaintiff’s possession.

58.  The Plaintiff then obtained leave and filed Mr. Wong’s 2^nd affirmation dated 9 March 2020 which includes the following:

(i)  For the Video Advertisements Category, Mr. Wong produced an optical disc containing all footages obtained from the Plaintiff’s contractor.  He confirmed there are no other video commercials for the Plaintiff’s Product.

(ii)  As for the Packaging Category, Mr. Wong argued that the 1998 to 2003 packaging designs are not relevant or necessary.

59.  Following such flow of events, the Defendants’ stance is as follows:

(i)  In respect of the Video Advertisement Category, as the Plaintiff eventually complied with the request, the Defendants need not pursue further.

(ii)  In respect of the Packaging Category, the Defendants will pursue discovery of the 1998 to 2003 packaging designs.

(iii)  In respect of the MTR Advertisement Category, the Website Category, the Mailing Advertisement Category, the Newspaper and Magazine Category and the Artwork Category, so long as the documents are properly disclosed, the Defendants need not pursue these requests separately.

(iv)  In respect of the Sales Booth Category, the Defendants will continue to pursue this request as the documents distinctly relate to references of the association of the Plaintiff’s Product with France.

60.  Apparently, the court only needs to determine the outstanding requests under the Packaging Category and the Sales Booth Category.

61.  For the requests under the Packaging Category, Ms Tam submits that since the Defendants’ Product was only launched in the market in 2012, it would not be relevant to look at the packaging designs of the Plaintiff’s Product in the period between 1998 to 2003.  I disagree.

62.  In my judgment, the manners in which the Plaintiff has marketed and promoted the Plaintiff’s Product “from the start”, whether in terms of the use of any trade names, trade marks, get-up or packaging designs, are relevant on the issues of goodwill and likelihood of confusion for the purpose of the passing off claim.  The features of the get-up of a product may have an important impact on the perception of the product and its origin ingrained into the minds of the public.  Such perception would not be a static one.  If the product has been in the market for a period of time, the get-up of the product in the early phase may still have an impact, in particular when the customers have certain loyalty to the brand concerned.  Since the Plaintiff pleads that the Plaintiff’s Product has been sold since 1998, the Defendants should be allowed to obtain documents relating to the packaging designs of the Plaintiff’s Product from 1998 to 2003.  The earlier packaging designs of the Plaintiff’s Product are also relevant as to whether there is likelihood of confusion between the Plaintiff’s and the Defendants’ Products, in particular when the Defendants are relying on the contention that the Plaintiff has all along marketed the Plaintiff’s Product by reference also to the Plaintiff’s own name and the connection of the Plaintiff’s Product with France with a view to establish that there is no likelihood of confusion between the two products.

63.  Ms Tam submits that the class of documents under the Packaging Category is defined or described extremely widely as “all drawing(s) (two-dimensional and three-dimensional), mock-up(s) and materials used in and for the [successive generations of] packaging (including blister foil)” of the Plaintiff’s Product.  Ms Tam argues that the requests for specific discovery of such a widely defined class of documents dating back to 1998-2003 (i.e. around 17 to 22 years ago) are highly oppressive.  Further, there is no evidence that these documents in fact exist or are in the possession, custody or power of the Plaintiff.  Even if they do exist, it would be extremely costly and time consuming for the Plaintiff to retrieve them.

64.  I agree that the requests cover a wide range of materials. However, the most important thing is that the Defendants should be allowed to look at the packaging designs of the Plaintiff’s Product since it was first launched in the market, whether they are in the form of drawings, photographs or the actual packaging themselves.  Since the Plaintiff was able to produce the relevant materials for the packaging since 2004, I do not see why it does not also possess the pre-2004 materials, unless they are lost in which case the Defendants have to confirm the same on affirmation.  Being able to supply the post-2004 materials, there is no reason to believe that locating the pre-2004 materials would be unduly laborious, and there is no basis to say that further disclosure of the packaging designs in the period from 1998 to 2003 will somehow become oppressive.  I therefore allow the discovery of such materials.

65.  I then turn to the requests for the documents under the Sales Booth Category.

66.  As explained in the supporting affirmations, requests for discovery of this category arose out of the Defendants’ observations from the television commercials featuring Mr Simon Yam (任達華) who repeatedly emphasized “法國卡士蘭” (French Nu Pharm).  The Defendants also discovered from the photos exhibited in Mr Wong’s SD that the Plaintiff had set up designated sales booths at Watsons bearing the prominent slogan of “保證法國空運到港” (guarantee that the products will be delivered from France to Hong Kong by air) under which the Plaintiff’s Product was marketed and sold.  Further, the Defendants found out from the exhibits of the advertisements in Mr Wong’s SD that the Plaintiff’s Product was promoted together with other products of the Plaintiff under the same slogan of “保證法國空運到港” without clear-cut distinction of which product originated from France.  In Mr Wong’s supplemental witness statement, he admitted that in hindsight, Mr Simon Yam should not have referred himself as “法國卡士蘭代言人” (spokesman of French Nu Pharm) or make a general reference to “法國” (France) in association with “卡士蘭” (Nu Pharm).

67.  Mr Pow submits that, under such circumstances, the Defendants are entitled to know how extensive had sales booths, distribution outlets and promotional activities been involved in giving the public an impression, deliberate or otherwise, of a connection of the Plaintiff’s Product with France.  According to him, these matters are relevant to the issues of “the Plaintiff’s buildup of reputation in its get-up” and “likelihood of confusion”, especially when the Defendants’ get-up and promotions were all emphasizing on the “Swedish Connection”.  This would be relevant in determining the question of likelihood of confusion.

68.  I agree.  In dealing with the discovery under the Packaging Category, I have already explained why the manners in which the Plaintiff marketed and promoted the Plaintiff’s Product are relevant to the issues of goodwill and likelihood of confusion.  The sales booth was just one of the channels in which the Plaintiff’s Product was promoted and marketed, and that is why the discovery is relevant.

69.  It is likely that there would be documents about the designs of the sales booths.  Some of such design drawings had been exhibited in Mr Wong’s SD. Unless the Plaintiff confirms that no such documents existed or the same are lost, the Plaintiff should disclose these documents to the Defendants.  There is also no evidence to suggest that the discovery exercise is oppressive or the effort involved in locating the documents is too laborious.

70.  For these reasons, I grant the order sought in the Defendants’ Discovery Summons in respect of:

(i)  requests under the Packaging Category, i.e. Requests (1)(a); (2)(b); (3)(b); (4)(a); (4)(c); (4)(f); (4)(g); (5)(a); (6)(a); (7)(a); (8)(a); (11)(a); (11)(c); (11)(e); (13(a); (16)(a) and (16)(c) of §8 of the ILL’s Letter attached as Schedule 1 to the Defendants’ Discovery Application;  and

(ii)  requests under the Sales Booth Categories, i.e. Requests (4)(b); (4)(d); (4)(e); (5)(b); 6(b); (7)(b); (8)(b); (9)(a) and (9)(b) of §8 of the ILL’s Letter.

71.  For the Defendants’ Discovery Application, I make a costs order nisi that the costs of the summons be to the Defendants.

The Plaintiff’s Discovery Application

72.  For the Plaintiff’s Discovery Application, the Plaintiff seeks specific discovery of:

(i)  documents relating to the group brainstorming session referred to in §§16 and 17 of Ms Cheung’s witness statement;

(ii)  documents relating to the meetings held in the period between 6 February and 25 April 2012 as well as “internal meetings” referred to in §18 of Ms Cheung’s witness statement;

(iii)  correspondence exchanged between the representative(s) of the supplier of the Defendants’ Product, Allergon Aktiebolag (including Rickard Magnusson), and the representative(s) of the 1^st Defendant (including Ms Cheung) in the period between 14 March and 17 April 2013 in relation to or as a result of the letter from Advokatbyrån Gulliksson AB (a Swedish law firm) to Allergon Aktiebolag dated 14 March 2013;

(iv)  unredacted copies of the minutes of meetings produced in Annex 6 to Ms Cheung’s witness statement (“the Annex 6 Documents”); and

(v)  unredacted copy of the distribution agreement between Allergon Aktiebolag and the 1^st Defendant produced in Annex 9 to Ms Cheung’s witness statement (“the Distribution Agreement”).

73.  After the taking out of the Plaintiff’s Discovery Application, the Defendants confirmed that, in respect of items (i) to (iii), they had disclosed or were prepared to disclose all available documents in their possession to the Plaintiff.  Hence, the discovery of those documents is no longer a live issue apart from costs.  The remaining question I have to decide is whether I should order unredacted copies of the documents listed in items (iv) and (v) to be disclosed.  The Defendants also disclosed a redacted copy of the minutes of the nutritionists’ meeting held on 6 February 2012 (“the 6 February Minutes”) pursuant to the request under item (ii).  Again I have to decide whether I should order discovery of the unredacted copy of such document.  For easy reference, I refer all these documents as “the Redacted Documents”.

74.  Ms Tam relies on my judgment in K & L Gates v Navin Kumar Aggarwal & Ors[1] to argue that redaction should only be allowed if it does not destroy the sense of the document or makes it misleading.  The Defendants would have the duty to explain the broad nature of the redacted materials so as to give the court a sense of the materials excluded and why they are not relevant to the issues of the case, and the court should not simply accept the Defendants’ bald assertion of irrelevance when there is nothing available to the court to assess the credibility of the assertion.

75.  According to Ms Tam, the redactions made by the Defendants to the Redacted Documents are too extensive and would preclude the reader from gaining a proper understanding of the nature and effect of these documents, obscure the sense of them or make them unintelligible, if not misleading.  Ms Cheung only made a bald assertion (which was not made in her witness statement or any previous correspondence) that “the ‘redacted’ parts/portions of those copy documents are irrelevant to any matters/issues to be decided in this action and contain confidential and commercially sensitive information which should not be made available to the Plaintiff being a business competitor of the Defendants”.  The court should not just simply accept such bald assertion at face value.  Further, regarding the Defendants’ purported concern over the confidentiality and sensitivity of the Redacted Documents, Ms Tam submits that any such concern can be addressed by the implied undertaking not to use the documents for any collateral or ulterior purpose.[2]

76.  I first deal with the Distribution Agreement. In my judgment, the redaction of such document is very different from the ones I had to deal with in K & L Gates[3].

77.  First, the nature of the Distribution Agreement is obvious from the unredacted title page and the first page of the agreement.

78.  Second, all redactions at bottom right of each succeeding pages are clearly made to cover up one signor’s initial.  The other initial next to it is not redacted.

79.  Third, many of the terms pertaining to the roles and activities of the 1^st Defendant as distributor have not been redacted.

80.  Fourth, though the contents of Clauses 7 to 15 and 18 have been redacted, the titles of these clauses can still be seen.  The titles (i.e. the Distributor’s Sales Efforts, Orders and Delivery, Price and Terms of Payment, Inspection of Products, Claims, Warranty, Regulatory Compliance, Stock, Trademarks and Other Intellectual Property Rights, Limitation of Liability, Term and Termination) give the reader a broad description of the contents of the relevant clauses.  From the descriptions in the titles, there is nothing to suggest that the contents of these clauses are relevant to any of the issues of the case.  Further, there is reason for me to believe that the agreements made by the parties on these areas involve sensitive commercial information which the Defendants would not like their competitors (of which the Plaintiff is one) to see.  The Plaintiff should not be allowed to fish for materials with a view strength its case.

81.  Fifth, the notice-serving addresses and the personal data and signatures of the signing persons are redacted.  They are not relevant to the issues of the case.

82.  Sixth, the product’s specifications, ingredient list, test results, safety certificates, price list, and sales targets have been partially redacted to remove figures, commercially sensitive information, trade secrets and knowhow, etc.  As such information is not relevant to the issues in the case, I agree with Mr Pow that the Defendants are entitled to redact such commercially sensitive information in the Distribution Agreement.

83.  Ms Tam submits that there is no evidence to show that the redacted materials contain such kind of sensitive information as alleged by Mr Pow, and the Defendants should not be allowed to adduce such evidence by way of counsel’s submissions.  I disagree.  Although Ms Cheung just claimed in her affirmation that the redacted materials contain “confidential and commercially sensitive information”, there is basis, from the titles of the clauses and the contexts of the various tables and specifications, to believe that the redacted materials do contain the commercially sensitive information as submitted by Mr Pow.  As I see it, there is sufficient information from the unredacted parts of the Distribution Agreement for the court to reach such conclusion.

84.  I then turn to the Annex 6 Documents.  In §§17 to 18 of her witness statement, Ms. Cheung was explaining how the Defendants came to adopt the Chinese and English names of the Defendants’ Product.  She was trying to explain the responsible process of research, suggestion, discussion and determination, and the Annex 6 Documents were adduced to support such assertion.

85.  The only way I can identify the individual Annex 6 Documents is by reference to the page number in the hearing bundle.  They can be found in Bundle B5.  The number refers to the page number in the hearing bundle.

86.  Mr Pow has also supplied me with the unredacted copies of the Annex 6 Documents in a sealed envelope and invites me to look at the documents themselves.  I decide not to do so.  Though the court may in appropriate cases peruse the documents themselves with a view to determine whether the redacted parts are relevant, the court should be reluctant to do so unless it is absolutely necessary.  After all, it would be against natural justice if the other side, or at least their legal representatives, do not have the opportunity of looking at the documents themselves.

87.  The 962 Document (found in page 962 of Bundle 5) shows the date and nature of the meeting.  Numbered §§ 1-4 are redacted.  It is the Defendants’ case that only §5 is relevant to these proceedings because it shows that the discussions on “Product name of Liver product”.  According to Mr Pow, redacted §§1-4 refer to marketing activities of other products.

88.  I wonder why the Defendants have not told the court about this in the opposing affirmations.  The Defendants seek to rely on the unredacted documents in the sealed envelope to make good the point, but this kind of practice should not be encouraged.  As mentioned above, it should only be in exceptional circumstances that the court should look at the documents without giving the counter-party the opportunity to so.

89.  This redaction is different from those in the Distribution Agreement.  For the latter, the court can look at the unredacted parts (including the titles of the clauses and the contexts for the tables) and get a rough idea about the contents of the redacted materials.  But without the explanation given by Mr Pow in his submissions, the court would not be able to know what the redacted parts in the 962 Document are about.

90.  As the court should not accept Mr Pow’s submissions as evidence, I do not find that there is sufficient justification for the redactions in the 962 Document.  In particular, the circumstances as to how the Defendants came up with the names “保肝美” and “Liver Clean” is one of the crucial issues in this case.  However, the court is also concerned about the possible misuses of the commercially sensitive information by the Plaintiff who is one of their main competitors, in particular if the redactions concern unrelated products.  At this stage, I would order the discovery of the unredacted 962 Document to the Plaintiff’s legal representatives subject to the condition that they are not to release the same to their client, i.e. the Plaintiff (“the Limited Discovery Order”).  But if the redacted materials are not what Mr Pow told me, or the redactions somewhat contain relevant materials, the Plaintiff’s legal representatives would be at liberty to apply to court for leave to release the unredacted document to the Plaintiff.

91.  The 963 Document shows the date and time of the meeting.  One sees a number of Chinese words, names and phrases under the heading “Liver product”.  This document recorded the various proposed words or names for the Defendants’ Product.  The bottom part is redacted. According to Mr Pow, the redacted part involves the names of the celebrities.

92.  Again the Defendants have failed to provide a broad nature of the contents of the redacted materials in the affirmation.  For the same reasons, I make the Limited Discovery Order as that for the 962 Document.

93.  The 964 Document has been extensively redacted.  One can see it as a record of a nutritionist meeting held on 21 March 2012.  There is substantial redacted part under §5 for “Ideas for Liver product”. According to Mr Pow, the redacted part is simply a list of attendees and the redaction is to protect their identities.

94.  Again the Defendants have failed to provide a broad nature of the contents of the redacted materials in the affirmation.  Further, confidentiality and commercial sensitivity are listed as the reasons for the redactions and not the protection of the identity of the relevant persons attending the meeting.  In any event, the Plaintiff is entitled to look at the list of the attendees as they are potential witnesses in the case.  I therefore reject the redactions.

95.  According to Mr Pow, the 965 Document recorded a number of proposed Chinese names for the Defendants’ Product on 22 March 2012. The English name that appeared was “Liver Clean”.  In her witness statement, Ms Cheung had explained how the Defendants chose the names for the Defendants’ Product.  According to Mr Pow, the redacted parts are the names of persons and the redactions are to protect their identities and privacy.

96.  I reject the redactions for the same reasons as those for the 964 Document.

97.  According to Mr Pow, the 966 and 967 Documents are similar to the 964 Document.  The relevant information apparent from the documents was that voting exercises were conducted at the 29 March and 3 April 2012 nutritionist meetings in relation to “the name of the Liver product”.  Mr Pow submits that the actual votes or who casted them would not be relevant, and the court can see from the unredacted copies that the redacted portions relate to sales and marketing activities of other products and a list of attendees.

98.  For the same reasons, I do not allow the redactions of the voting exercise and the list of attendees.  For the parts relating to the sales and marketing activities of the other products, I allow a limited discovery in terms of the Limited Discovery Order.

99.  The 969 Document is extensively redacted.  It relates to a nutritionist meeting on 25 April 2012.  The part not covered shows various proposed Chinese names of the Defendants’ Product and 3 proposed colours.  According to Mr Pow, these are the only relevant information for this case.  The redactions relate to services, sales and marketing activities of other products, and specifications and formulae of other products.

100.  For the same reasons, I make the same discovery order as that for the 966 and 967 Documents.

101.  Finally, I come to the 6 February Minutes which can be found in Hearing Bundle B3.  Again, there is extensive redaction.  One can see it relates to the nutritionist meeting held on 6 February 2012.  The headings “Sales”, “Marketing” and “Finalise the name of the liver product” appear in the document.  Mr Pow submits that the materials under “Sales” and “Marketing” are not relevant to the Defendants’ Product which did not exist at the time.  For those under the heading of “Finalise the name of the liver product”, Mr Pow submits that they relate to the sales and marketing activities of other products and a list of attendees.

102.  For the same reasons, I take the view that all the information about the Defendants’ Product including the list of attendees need to be disclosed.  For those relating to the sales and marketing activities of the other products, I make a Limited Discovery Order.

103.  For the Plaintiff’s Discovery Application, I make a costs order nisi that the costs of the summons be costs in the cause.

104.  All the costs orders nisi mentioned above shall be made absolute 14 days after the date of the handing down of this Decision.