HKSAR v. HUI CHI KWAN

CACC 138/2012

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CRIMINAL APPEAL NO. 138 OF 2012

(On Appeal From District Court Criminal Case No. 492 of 2011)

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REASONS FOR JUDGMENT

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Hon Cheung JA (giving reasons for judgment of the Court) :

The charges

1. The applicant was convicted after trial by H H Judge A Pang of the following 28 charges under sections 9(2) and 18(1) of the Trade Descriptions Ordinance (‘TDO’) (Cap 362) :

(1)  15 charges of ‘Possession for sale or for any purpose of trade or manufacture goods to which a forged trade mark was applied’ (Charges 1, 3, 5, 7, 8, 10, 11, 13, 15, 17, 19, 21, 23, 25 and 27) (‘Group A offences’).

(2)  13 charges of ‘Possession for sale or for any purpose of trade or manufacture goods to which a trade mark or mark so nearly resembling a trade mark as to be calculated to deceive was falsely applied (Charges 2, 4, 6, 9, 12, 14, 16, 18, 20, 22, 24, 26 and 28) (‘Group B offences’).

2. The applicant was sentenced to eight months’ imprisonment in respect of each of 28 charges and the sentences were ordered to run concurrently making a total of eight months’ imprisonment.

The application

3. The trial was conducted in Chinese but on appeal in English.  The Reasons for Verdict which was written in Chinese was translated to English. 

4. The applicant applied for leave to appeal against conviction out of time.  He also applied for leave to appeal against sentence.

5. As the delay was extremely short and was caused by a misunderstanding on the wording of the appeal provision, we proceeded to hear the application for leave to appeal against conviction on the merits.

6. At the conclusion of the hearing, we granted leave to appeal against the conviction out of time, treated it as the appeal proper but dismissed the appeal.  We refused to grant leave to appeal against sentence.  We now give our reasons.

The prosecution case

7. The prosecution case, which was based almost entirely on agreed facts, was relatively short.  We will adopt the summary of facts by the Judge and supplement it where necessary :

(1)  Pak Hung International Ltd (‘Pak Hung’) was incorporated in Hong Kong on 9 July 2009, the applicant is the sole shareholder and director of Pak Hung;

(2)  On 15 July 2009, the applicant, as the director of Pak Hung, opened four bank accounts for Pak Hung with the Bank of China.  He is the sole signatory of these four bank accounts;

(3)  Pak Hung operated 14 retail shops under the name Polo Santa Roberta (‘PSR’) from which the business revenue were all being deposited into Pak Hung’s four bank accounts with Bank of China;

(4)  Burberry Limited is the owner of the registered trade mark ‘Burberry Check’.  The trade mark was registered in Hong Kong.  The registration is valid from 23 February 2000, and the expiry date is 23 February 2017;

(5)  The applicant, Pak Hung or their employees had never obtained authorization from Burberry Limited for the sale of goods applied with the Burberry trade mark or possession of such goods for commercial or manufacturing purposes;

(6)  On 31 August 2010, Customs Officers successfully procured handbags with suspected forged Burberry trade marks from the 14 retail shops of the applicant.  Customs Officers also seized a number of handbags and leather goods being applied with suspected forged Burberry trade marks from the office of Pak Hung;

(7)  The 14 retail stores and office were rented from their respective landlords either under the applicant’s personal name or the name of Pak Hung or Polo Santa Roberta, and all the leases were being signed by the applicant as lessee;

(8)  The retail business of shops were being conducted, controlled and managed by Pak Hung.  The goods in the shops also belonged to Pak Hung and Pak Hung was responsible for the purchase, pricing and delivery of the goods to store at various retail shops for sale.

The Burberry Trade Marks

8. According to Mr Chim Sze Wing (‘Mr Chim’), the president of the intellectual properties department of the Asia Pacific region of Burberry Limited, it owns the following trade marks :

(1)  Burberry Check

9. Burberry had been using the Burberry Check trade mark since 1920.  All Burberry products have the Burberry Check trade mark.  The Burberry Check trade mark was registered in over 150 countries, and is well known to the public as the trade mark of Burberry.

10. The ‘Burberry Check’ trade mark is composed of three horizontal and three vertical lines plus the additional line in the middle.  The use of colour of the Burberry Check registered trade mark is not restricted.  However, the most commonly used colour by Burberry is ‘camel’ colour, which is similar to the colour of beige.

(2)  Equestrian Knight Device

11. In addition to the Burberry Check registered trade mark, Burberry Limited has another registered trade mark, named the ‘B Prorsum’ with a knight riding on horseback, which is being referred internally by Burberry Limited as the ‘Equestrian Knight Device’.  This is another independent trade mark which was registered both in Hong Kong and in other countries around the world.  Its registration date in Hong Kong was 8 February 1993, and the registration shall expire on 8 February 2014.

12. Burberry Limited also has a swing ticket in its products.  It contained the images of the registered trade marks ‘Burberry Check’ and ‘Equestrian Knight Device’, with a trade mark notice.  From August 2009 to August 2010, the trade mark notice on the swing ticket contained the following words :

‘ Burberry, Burberrys, the Equestrian Knight Device and the Burberry Check are trade marks belonging to Burberry Limited and are registered or protected by unfair competition laws in all major markets.’

The use of Burberry trade marks

13. At the request of the prosecution, Mr Chim examined the goods obtained from the applicant’s shops.  He accepted the prosecution’s advice to classify those goods with the traditional camel colour and the Burberry Check as Category A goods, while other goods of other colours or contained only part of the Burberry Check trade mark as Category B.  These two categories of goods are the same two categories of goods under the Group A and Group B offences.

14. In addition, among the PSR handbags, some of them had the impression of a polo player embedded in the Burberry Check.

15. The swing ticket of the PSR products is similar to the Burberry swing ticket.  The Burberry swing ticket had in the upper left corner the registered trade mark of the ‘Equestrian Knight Device’ and at the upper right corner the Burberry Check registered trade mark.  It had the trade mark notice.  On the PSR swing ticket, there was also the registered trade mark of the polo player of PSR while the upper right corner showed a grid pattern very similar to that of the Burberry Check.  Also on the swing ticket there was a trade mark notice similar to that of Burberry swing ticket but with the following words :

‘ POLO the Equestrian Knight Devise and the POLO Check are trade mark belonging to POLO Santa Roberta Limited and are registered or protected by unfair competition laws in all major world markets.’

The PSR trade mark

16. A company called Polo Santa Roberta Limited (‘PSR Ltd’) is the registered owner of a trade mark Polo Santa Roberta together with the image of a polo player on a horseback.

The PSR registered designs

17. PSR Ltd owned three registered designs in respect of fabrics granted by the Hong Kong Designs Registry.  The three designs are Designs Nos. 0800123.8, 0602147.9 and 0601018.5 (Designs A, B and C).  The three designs were registered on 18 January 2008, 14 January 2006 and 21 April 2006 respectively.

18. A visual inspection of the Burberry Check and the three PSR designs suggested they are practically identical.

19. Burberry succeeded in revoking the three registered designs by PSR Ltd in July 2010 (HCMP 2696/2009).

The applicant’s case

20. The applicant gave evidence in his defence.  The Judge summarised his case as follows :

‘ 43. The [applicant], aged 34, received education up to year 2 of secondary school in Mainland China. After coming to Hong Kong in 1996, he had served as an apprentice for air-conditioning work and then worked as salesman of electronic watches for a trading company. In 2004, [he] set up a company with his own funds for the sale of low-priced household goods, and that company is still in operation. [He] confirmed that Pak Hung was incorporated in July 2009 with himself being the sole director and shareholder, and the establishment of Pak Hung was to operate the Polo Santa Roberta business.

(a) The relationship between [the applicant] and Polo Santa Roberta

44.  The [applicant] first came into contact with Polo Santa Roberta products at early 2007.  At that time, his friend Mr Kwok Ka Chun (“hereinafter referred to as Kwok”) invited him to visit his Polo Santa Roberta shop at Soy Street.

45.  In mid 2008, Kwok contacted the [applicant] asking whether he was interested in participating in the business of Polo Santa Roberta. However, at that time as the [applicant] was in discussion with another friend for business, he declined Kwok’s invitation to the business of Polo Santa Roberta.

46.  In early 2009, Kwok contacted the [applicant] again, saying that he had health problems and experienced a great deal of pressure.  He then asked whether the [applicant] was interested in taking over the operation of the relevant shop.  The [applicant] expressed that he would have to discuss with his wife, and that he did not have any previous experience in conducting this kind of business.  Kwok then said to the [applicant] that he could act as a consultant for the [applicant] at the early stage after the [applicant] had taken over the business.

47.  In April 2009, Kwok brought the [applicant] to the Polo Santa Roberta’s supplier located at G/F, 114 Fuk Wa Street, Sham Shui Po.  The [applicant] described that the shop, which comprised of two floors, had a lot of Polo Santa Roberta merchandises on display, and it did not only conduct retail business but also wholesale business.  At that time, the [applicant] met with Mr Cheung Ho Ming (“hereinafter referred to Cheung”) who was the supplier and manufacturer of Polo Santa Roberta merchandises.  Cheung told the [applicant] that Polo Santa Roberta was his family business which had started operation in the 1980s in Taiwan, and in 1993, 1994 they commenced business in Hong Kong. Cheung further told the [applicant] that the brand Polo Santa Roberta had been registered in the European Union, the Mainland China, and Hong Kong, and that they had factories in Mainland China and in Malaysia, which the [applicant] was welcomed to visit.

48.  About 2 to 3 weeks after visiting Cheung’s shop in Sham Shui Po, the [applicant] visited Cheung’s factory in Guangzhou.  According to the [applicant] that the factory occupied extensive grounds with over one thousand workers, and the building also had a showroom and office.  After the visit, Cheung held up a bronze plaque similar to that of the defence exhibits D5 and told the [applicant] that the trade mark and designs of Polo Santa Roberta were registered in Hong Kong, the European Union and Mainland China through Benny Kong & Yeung, Solicitors.  Cheung also told the [applicant] that, if he so required, Cheung could instruct Benny Kong (hereinafter referred to as ‘Kong’) to show the relevant documents to the [applicant] for inspection.  Cheung further expressed to the [applicant] that Cheung would give to dealers of Polo Santa Roberta merchandises a bronze plaque similar to that of defence exhibits D5 to prove that they are authorized to sell Polo Santa Roberta merchandise. In addition, Cheung also expressed to the [applicant] that, after the [applicant] had taken over the business from Kwok, Cheung would apply for a ‘No Fakes’ logo label issued by the Hong Kong Intellectual Property Department for each and every store of the [applicant].

49.  During their conversation Cheung also told the applicant that, as they have previously found counterfeit Polo Santa Roberta merchandises in Hong Kong, his company and Benny Kong & Yeung, Solicitors had previously reported these to the Customs, and the Customs had assisted them to ‘combat the counterfeit’.  Cheung pointed out to the [applicant] that once the [applicant] had taken over the business from Kwok, the [applicant] would be required to assist them by paying attention to the situation of counterfeit Polo Santa Roberta merchandises in the market.  Cheung emphasised to the [applicant] that, if the [applicant] had taken over the business from Kwok, he must strictly follow the set guidelines for decoration and other relevant codes of practice.

50.  After the [applicant] returned to Hong Kong, in or about the end of June 2009 he made an appointment to see Kong and met with Kong in his law firm.  According to the [applicant] Kong at the meeting had given him a set of 12 registration documents of Polo Santa Roberta (i.e., defence exhibit D24).  Kong told the [applicant] that these documents were trade mark and design registration documents of Polo Santa Roberta Limited that he registered in the EU, the Mainland and Hong Kong.  As to why there are two types of registration certificate concerning of design registration and trade mark registration, the [applicant] did not make any inquiries to Kong.

51.  In addition, the [applicant] said that at that time he did not peruse the design registration documents, and so he did not notice that the ‘items’ field was filled with the word ‘fabric’, and Kwok did not specifically offer any explanation to that.  The [applicant] added that when he read these documents he only focused on checking the certificate of registration, while he did not have the relevant knowledge to distinguish whether the registration is suitable for the particular kind of items.

52.    During the meeting of Kong with the [applicant], Kong also said that they had previously assisted Polo Santa Roberta Limited to lodge complaints to the Customs about someone selling counterfeit Polo Santa Roberta merchandises, so after the [applicant] had taken over the business from Kwok, if he discovered that someone was selling counterfeit Polo Santa Roberta goods, he could inform Kong so that Kong would assist Cheung to deal with the matter.

53.  Thereafter, Kwok agreed with the [applicant] for the [applicant] to take over his Polo Santa Roberta business, including inventory, at the consideration of HK$1.7 million.  They further agreed that the [applicant] would pay $100,000 to Kwok monthly as consultant fees.  At the same time, Kwok can also get 10 percent of the net profit of these businesses.  Kwok at that time had seven shops selling Polo Santa Roberta products.  The [applicant] said he considered Kwok as a legitimate businessman, and had not suspected that Kwok was engaged in the sale of copyright-infringing or any other illegal goods. Kwok remained as a consultant even after the incident.

54.  [The applicant described how the HK$1.7 million was paid to Kwok.]

55.  The [applicant] said that, after taking over the business on 1 August, 2009, he only contacted Cheung not more than four or five times, or even only two to three times.  The contacts between Kwok and Polo Santa Roberta and Cheung were relatively more frequent, and that was the reason why the [applicant] retained Kwok as consultant.

56.  As for the pricing of the Polo Santa Roberta merchandises, the [applicant] said that it was prescribed by the supplier Polo Santa Roberta Limited, so as the discount for sales of merchandise.  He claimed that as the supplier wanted to promote the brand Polo Santa Roberta and achieve higher publicity, the supplier’s sales strategy would be to offer discounts.

57.  According to the [applicant], after taking over Kwok’s business, he was committed to enhance the image and mode of operation of the shops.  Cheung also stipulated for a standardized interior and exterior decoration and design of the shops, and the invoice being used by the shop was also designed by Cheung.  As to the anti-dust and paper packaging bags, they were also provided by Cheung.’

The Judge’s finding

21. The Judge found, amongst other things, that the Burberry Check trade mark was applied to both the Category A and Category B goods.  She further held that the applicant had failed to discharge the reverse burden imposed on him by section 26(4) of TDO. 

Conviction

22. We will now address the grounds of appeal on conviction.

Ground 1

23. Ground 1 is that the Judge erred in law in finding that the statutory defence contained in section 26(4) of TDO had not on the facts of this case been made out, particularly having regard to the decision of the Court of Final Appeal in Lee To Nei v. HKSAR and Lau Hok Tung and Others v. HKSAR (2012) 15 HKCFAR 162.

24. Section 9(2) of the TDO provides that :

‘ (2) Subject to the provisions of this Ordinance, any person who sells or exposes or has in his possession for sale or for any purpose of trade or manufacture, any goods to which any forged trade mark is applied, or to which any trade mark or mark so nearly resembling a trade mark as to be calculated to deceive is falsely applied, commits an offence.’

25. Section 26(4) provides that :

‘ (4) In any proceedings for an offence under section 9(2) it shall be a defence for the person charged to prove that he did not know, had no reason to suspect and could not with reasonable diligence have ascertained, that a forged trade mark had been applied to the goods or that a trade mark or mark so nearly resembling a trade mark as to be calculated to deceive had falsely been applied to the goods.’

26. That the PSR products had applied the forged Burberry Check trade mark is not an issue in this appeal.  In considering Ground 1, it is important to bear in mind that the applicant’s case that he was invited to take over and later took over the distributorship operation of Kwok who sold the PSR products was not accepted by the Judge.  The Judge further did not regard the relationship between the applicant and PSR Ltd was merely a distributor and supplier relationship.  The Judge considered the following matters :

1)   After the transfer, Kwok remained as an adviser and received a salary of $100,000 per month together with dividends sharing.  Kwok was also mainly responsible as contact between the applicant’s new operation and the supplier and manufacturer of PSR products which was controlled by Cheung.  This is despite the fact that Kwok’s avowed purpose of transferring the operation to the applicant was due to his health and that he was finding it too much of a pressure to carry on the operation.

2)   When the applicant was considering the proposal to take over the operation, he met the lawyer who carried out the registration of the PSR products.  He was specifically told by the lawyer of two types of registrations, namely, trade mark registration and design registration.  Yet the applicant made no inquiries with the lawyer as to why there were two types of registrations. 

3)   The applicant was only one of the dealers of PSR products.  Yet the newspaper advertisements published by PSR only referred to the shops operated by the applicant.  It made no sense to have such a selective advertisement.  The applicant then claimed that he was responsible for the advertisements of PSR products on television, magazines and travel publications.  This again made no sense because it means one dealer had to fund advertisement of PSR products which may benefit other dealers.

4)   Despite the assertion that PSR Ltd and Cheung exercised strict control over the operation of the applicant’s shops in terms of decoration, price and discount of the products, the applicant was allowed to place advertisements on television and magazines and to finance and appear in sponsored events as the representative of PSR. This shows that their relationship went beyond a mere distributor and supplier relationship.

27. We are of the view these are conclusions that the Judge was clearly entitled to reach. It is in this context that the Judge considered the applicant’s knowledge in respect of the Burberry trade mark, the revocation of the PSR registered designs and the statutory defence.  Without challenging the judge’s finding in the amended perfected grounds of appeal, Mr Reading SC and Mr Jason Chan, counsel for the applicant, handed up a ‘Speaking Note’ at the hearing of the appeal and with it attempted to challenge the finding by the Judge.  We refused to allow counsel to proceed in this way because the prosecution would not be in a position at this late stage to respond properly to this challenge on factual findings.

28. In considering the issue of knowledge, the Judge found that the applicant had visited a Burberry shop and purchased an item there.  Although he said that he only purchased a shirt, that shirt was not produced at the trial.  By this visit the applicant must have been aware of the Burberry Check pattern on the Burberry products which bore such a striking resemblance to the check pattern on the PSR products.

29. At the end of 2009, Burberry commenced proceedings against PSR Ltd (HCMP 2696/2009) to seek revocation of the PSR registered designs.  Reyes J granted the relief in July 2010 and the decision was affirmed on appeal in December 2010.

30. The applicant claimed that he had no knowledge of the revocation and only learnt of it when his premises were raided on 31 August 2010.  He was charged on 1 September 2010.  The Judge did not believe him.  The Judge referred to the following matters :

1)   On 27 February 2010, an advertisement appeared in a local newspaper in respect of PSR products.  This advertisement identified the applicant’s shops. A line of words ‘NOT AFFILIATED WITH BURBERRY CORP’ appeared on the advertisement.  The Judge was of the view that the applicant ought to be aware of this advertisement and must have known of the Burberry proceedings.

2)   In January or February 2010, the applicant also received from the lawyer at the direction of Cheung, two copies of the design registration documents of PSR products showing the registration date was 21 January 2010.  The applicant produced these documents at the trial.  The Judge commented that the applicant’s evidence was that he had not asked for the documents and had not made inquiries with Cheung about them. Yet Cheung directed the lawyer to send him the documents.  The Judge considered that the relationship between Cheung and the applicant must have been closer than what the applicant chose to disclose and the applicant was aware of the revocation of the registered designs. 

31. We are of the view that the Judge was entitled to reach her view on the knowledge of the applicant.  His state of knowledge of the revocation proceedings was clearly relevant to the issue of the ‘statutory defence’.

32. It is argued that when his premises were raided on 31 August 2010, the Court of Appeal had not yet heard the appeal from Reyes J.  We do not see the relevance of this as it was not the applicant’s case that his state of knowledge was dependant on the Court of Appeal’s judgment.  His case, which was disbelieved, was simply that he was not aware of the revocation proceedings until the day of the raid.

33. It is clear from the judgment of the Court of Final Appeal in Lee To Neiand Lau Hok Tung that a defendant only carries the evidential burden in respect of the provisions under section 26(4) of the TDO.  At the time of the trial, the Court of Final Appeal had not yet delivered its judgment and the parties proceeded on the basis that the applicant carried the persuasive burden and had to discharge it on a balance of probability. 

34. The Court of Final Appeal,per Ribeiro PJ,at paragraph 16 first considered that section 26(4) reverses the burden of proof imposed on the prosecution in a criminal trial and derogates from the presumption of innocence.  He then held :

‘ 51. In Hong Kong, as in the United Kingdom, combating counterfeiting is strongly in the public interest. However, in our jurisdiction there is plainly a reasonable alternative to abrogating the presumption of innocence in the context of s.9(2) and 26(4). It is to place the persuasive burden on the prosecution to prove either that the accused knows, or has reason to suspect or could with reasonable diligence ascertain that the goods bear forged trade marks. That would be achieved by reading down s.26(4) as imposing merely an evidential burden on the accused to raise as an issue the proposition that none of the three conditions apply, with the prosecution retaining the persuasive burden as to each element of liability throughout.’

35. The burden imposed on the prosecution in this case in respect of section 26(4) is therefore,

1)   either the applicant knows,

2)   or has reason to suspect,

3)   or could with reasonable diligence ascertain that the PSR products in his shops bear the forged Burberry trade mark.

36. In this case bearing in mind the context in which the Judge found the applicant came to operate his shops which sold the PSR products and his relationship with PSR Ltd, this means the applicant must have knowledge of the Burberry challenge to the validity of the PSR registered designs.  She concluded that there were sufficient grounds for the applicant to suspect, among other things, that the PSR products had applied the forged Burberry Check trade mark. 

37. This is what the Judge said :

‘ 203 Overall, I am certain that the [applicant] is aware of the Burberry litigation. I am also sure that on the day the Customs took action (ie 31 August, 2010), the [applicant] is aware that Burberry had successfully revoked the 3 registered designs of Polo Santa Roberta Limited. I am certain that these fore-mentioned factors are sufficient to constitute grounds for the [applicant] to suspect that the relevant merchandise had applied the forged Burberry Check trademark or had applied “mark that could deceive others”.

204   Based on the above analysis and the ruling of fact, even if the [applicant] did not know for sure that the merchandise he possessed at shops A-N and the premise O had been applied with forged Burberry Check trademark, or mark that was very similar to that trademark, I have ruled that he failed to prove on balance of probabilities that he had no reason to suspect that the relevant merchandises were being applied with forged Burberry Check trademark, or had been applied with marks that were very similar to that trademark and were likely to deceive others. In other words, after the [applicant] knew of the Burberry litigation and the revocation of the 3 registered designs of Polo Santa Roberta Limited by the Court, he no longer had any reason to rely solely on those so-called “No Fakes” logos and the Polo Santa Roberta authorisation bronze plaque and believed there was no problem to the merchandise.’

38. In our view, while an error had been made by the Judge in respect of the law on section 26(4) (and of which leave to appeal should be granted), if the Judge had properly directed herself on the law, she would have reached the same conclusion that the prosecution had proved that the applicant had reason to suspect that the PSR products bore the forged Burberry trade mark.  Accordingly, the statutory defence under section 26(4) was not available to the applicant.

Other grounds

39. Counsel for the applicant merely relied on the other grounds of appeal contained in their written submission without further elaboration at the hearing.

Ground 2

40. Ground 2 is that on the whole of the evidence the Judge erred in finding that the alleged false trade marks were ‘calculated to deceive’ when the goods bearing the alleged false trade marks, were on the face of it, clearly not Burberry products and were never sold as such.

41. It is said that anyone entering into the applicant’s 14 shops on 31 August 2010 would be confronted by large and prominent signage informing the customer that the shop sold the products of PSR.  Every item in the store carried a label and some carried brass or metal tags, containing the brand name PSR.  Receipts, credit card slips and even the shopping bags carried the name of PSR.

42. Counsel for the applicant submitted that although they are not in a position to refute the evidence of Mr Chim, what they can say is that even for those items that bore the Burberry Cross logo, not a single customer could have gained the impression that these items were Burberry.  In other words, it could not be said, on the facts of this case, that the false trade marks were calculated to deceive any customer or prospective customer who entered or passed by the applicant’s shops into believing that what was for sale was a genuine Burberry product.

43. The Judge accepted the evidence of Mr Chim that although he classified the seized products into two categories, it was simply on the basis that those goods which used the camel colour and the Burberry Check as Category A while those goods that only applied the Burberry Check but not the camel colour was referred to as Category B. In fact, according to Mr Chim’s opinion (which the Judge accepted) there was no difference between the two categories as all these goods applied the Burberry Check, and the Burberry Check was a registered trade mark in Hong Kong which have no restrictions on the colour applied.

44. In other words, in respect of the charges, all products had a false trade mark applied to them, and it is not necessary to include in some of the charges alternative wordings of ‘any mark so nearly resembling a trade mark as to be calculated to deceive’.  The issue of ‘calculated to deceive’ does not arise in this case.  The purpose of applying a forged trade mark to a product is to take advantage of the reputation of the trade mark so that the customer may be mistaken as to the genuineness of the product.  In any event, the Judge had identified in the Reasons for Verdict the evidence of deception even if this issue has to be considered.

Ground 3

45. Ground 3 is that the prosecution overloaded the charge sheet, by proceeding with two sets of charges in respect of each instance of alleged misconduct, which were not stated to be alternatives, and which, for all intents and purposes, covered the same subject matter and required proof of the same elements.

46. We have already addressed this point.  Further, counsel for the applicant accepted that the applicant was represented at the trial by an experienced criminal practitioner, and no application was made for severance.  In addition the Judge, when sentencing for the two sets of charges, imposed concurrent sentences, so that any prejudice to the applicant was minimal.

Ground 4

47. Ground 4 is that there was material non-disclosure by the prosecution in that Mr Chim made no reference in his proof of evidence that was served on the defence, to the presence or significance of the ‘swing tickets’ or ‘hang tickets’ which the Judge found were important exhibits establishing the falsity of the trade marks.

48. As properly conceded by the applicant, non-disclosure, or more accurately, late disclosure, can be cured by allowing the defence an adjournment to consider this evidence.  Again, it is accepted that the applicant was represented by experienced counsel, who did not make such an application.  As no prejudice is shown, we do not see how this ground could have assisted the applicant.

Conclusion on conviction

49. In our view the applicant was properly convicted and we dismissed his appeal against conviction.

Sentence

50. This is a large scale operation which spread over a two year period where the registered trade mark of an internationally well-known fashion brand was applied to the applicant’s products consisting of handbags and leather goods.  This Court in SJ v Lam Chi Wah [1999] 4 HKC 343, pointed out that for offences under the TDO the offender took advantage of the reputation of the owner of the trade mark and copied the trade mark.  Further, offences involving counterfeit goods under the TDO were becoming more prevalent.  This had damaged Hong Kong’s reputation.  While fines might have been adequate punishment in the past, more severe sentences were required for the future.  Deterrent sentences should be imposed.

51. Although the Court in Lam Chi Wah did not set guidelines, a sentence of 12 months’ imprisonment was used as a starting point in that case.  In this case the Judge used the same starting point but reduced it to eight months because the case was conducted mainly on agreed facts. 

52. In our view the sentence imposed on the applicant was not manifestly excessive at all. If anything, the Judge was lenient towards the applicant.

Conclusion on sentence

53. Accordingly, the application on sentence was dismissed.