CHOW KWOK WAH t/a FAT CHOI PRINTING CO v. HALLMARK PRINTING CO (a firm)

1984, No. 1594

IN THE SUPREME COURT OF HONG KONG

HONG KONG

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JUDGMENT

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1. This is an action for breach of copyright which, according to the Statement of Claim, the plaintiff claims subsists in the artwork relating to the nine rosters listed there as follows:

Miss Stewart (for the plaintiff) said in her opening address that for the purpose of these proceedings, the plaintiff's action would be pursued only in respect of the alleged infringing copies of the poster "Gods guarding the doors'.

2. It was not disputed that 'fai chuns', that is, spring greetings scrolls, have existed in the Chinese tradition for over a century and before 1965 handwritten versions and wood-block prints were being sold locally. The plaintiff said that in that year, he introduced printed fai chun scrolls based on drawings made by a local commercial artist, Mr. KWAN Ho-sang (P.W.1)

3. In 1979, the plaintiff thought of printing posters of the 'Gods guarding the doors', which come in a pair-one for each leaf of the door. He commissioned the same artist - P.W.1 - to make two drawings, and gave him some old style wood-block prints of the subject matter, Ex. P3 (A-G), for guidance. Besides this material, P.W.1 referred to some books with traditional Chinese drawings, published in China. Improving on the style of the old wood-block prints and adopting or selecting some other features or concepts from the Chinese reference books, P. W. 1 produced his two water-colour drawings - Ex. P2 (A & B) - after about a month. He was paid $3,000 for the set and, in accordance with the custom, copyright in those drawings vested in the plaintiff. Using the colour separation process, the plaintiff printed off-set posters of those drawings in the shape of Ex. P5 (A & B).

4. The fact that the demand for such posters is confined to only some twenty days annually before the Chinese Lunar New Year was not disputed. The plaintiff said that his sales of these posters rose from two to three thousand in 1979 to about fifteen thousand in 1982. But the sales dropped to nine thousand in 1983 which made him suspect that some other people might be selling the same product. He found that Cheung Shing Paper Products Company in Kwan Yick Building, Des Voeux Road, were selling such posters. His daughter (P.W.3) went to this business and bought two or three pairs of these posters. About ten days later, on 19th January 1984, the plaintiff sent her to the defendant company at No.194, Yee Kuk Street, Shamshuipo. P.W.3 went to the defendant company's premises at the ground floor where she saw some machines. Two elderly men directed her to the first floor where she saw some printing products, including the posters in question, displayed on the walls. She bought ten pairs of the large, medium and small sizes for $72.00. She asked for and was given the receipt, Ex.P7, which is in the defendant company's name.

5. The posters bought from these two places make up Ex. P6. The plaintiff was unable to separate those which came from Cheung Shing Paper products Company.

6. The plaintiff consulted P.W.1 who, on the 1st March 1984 executed a deed of assignment - Ex. P4 - in respect of the nine posters mentioned earlier, whereby he as beneficial owner and for consideration of HK$10.00 assigned to the plaintiff "all the copyright in the said drawings absolutely for the term of the copyright therein in Hong Kong and all countries in which copyright in the said drawings subsists for the residue of the term of copyright subsisting therein together with all rights to sue for infringement of the copyright and to recover and retain damages in respect of all acts of infringement of the copyright in the said drawings whensoever and wheresoever such acts of infringement occur." The data stated on this document appears as the 1st March 1983. No point has been taken by the defence of this discrepancy in the year mentioned in the date, or as to the assignment as such.

7. The plaintiff claims that those posters in Ex. P6 infringe his copyright, and claims an injunction restraining the defendant company, its servants or agents (a) from infringing or causing, enabling or assisting the infringement of the plaintiff's said copyright; (b) from restraining the defendant company, its servants or agents from converting to its own use infringing copies of the artistic works in which copyright subsists and all plates used or intended to be used for making the same; (c) for delivery up of all infringing articles and plates as are in the defendant company's possession, custody, power or control the use or sale of which would offend against either of the foregoing injunctions. The plaintiff also claimed for an inquiry as to damages or alternatively damages or, at his option, an account of profits, additional damages and exemplary damages.

8. The defence states that the plaintiff's posters are known in the trade as divine paper products which were "no more than forms of expression of the Chinese traditional beliefs in the gods and other signs of good omen. " Whilst admitting that the defendant's posters bore "some similarity" to those of the plaintiff, infringement of any copyright is denied.

9. Mr. LAI Chung-wan (D.W.2) is the general manager of the defendant company which has been in business for some twenty years. Its business includes, inter alia, printing divine paper products pertaining to the worship of the gods, including the door god posters. He said that before 1983, the company sold wood-block prints of door gods posters which were made in China like Ex. P3(F) and Ex. P3(G), but unlike some printed posters which he had seen in China, like Ex. D4(A & B). He said that due to demands from his customers over a period of two years, in June or July 1983 his company commissioned a local artist, Mr. WONG Yuk-yue who is presently in China and did not testify at the trial, to make drawings of the door gods. The original drawings made by this artist are Ex. D5(A & B). PW2 denied that he had by then seen such posters made by any other person, and maintained that he first became aware of the plaintiff's posters about ten days after putting his own in the market, that is, Ex. D1, D2 and D3. It was these posters which the proprietor of Cheung Shine Papers Products Company (D.W.1) claimed that were supplied to him by the defendant company for the first time between December 1983 and January 1984. He said that he took a supply of some eight hundred pairs of similar posters some three or four years ago from another supplier called the Dai Wah which were sold out in about two years. He said that ever since the defendant company started printing these posters, he did not sell any posters from other suppliers. He agreed that he could possibly have had some posters similar to Ex. P6 at his shop in January 1984 but could not say for sure if those from Dai Wah were like Ex. P6.

10. The general manager of the defendant company denied having a sales office at No. 194, Yee Kuk Street, and said that the residential premises on the first floor were owned by another person; in cross-examination he said that posters were displayed there by a wholesaler, husband and wife team, to earn pocket money and when re-examined he said that living on the first floor were the parents of his boss. He agreed the receipt, Ex. P7, was his company's document but maintained that it was not its properly issued document, nor did he know how it got into the plaintiff's hands. That evidence came from DW4 whose parents occupy the first floor of No.194. He said that his wife runs a business at the time of the Lunar New Year under the business name of Kam Sang Company, which is unregistered, from the parents home, selling posters supplied by the defendant company, which he said were Ex. Dl (A & B), He admitted that the receipt, Ex. P7, bears his handwriting but did not remember selling posters to a young lady on 14th January 1984. He said that as the stock of the receipts of Kam Sang was exhausted, he obtained a receipt of the defendant company from their office downstairs. He denied selling Ex. P6 on the 14th January 1984.

11. On other matter need be mentioned. At the close of her case, Miss Stewart wished to add two letters which passed between the solicitors of the parties to her bundle of documents. One is the letter dated 18th January 1984 from Messrs. Robert W. H. Wang & Co. to the defendant company; the other is the letter dated 24th January 1984 from Deacons in reply. I allowed, those letters to be inserted and the plaintiff was recalled for further cross-examination on matters arising from these letters. He agreed that D.W.2 had telephoned him and said that what the plaintiff was doing would make him close down his business. The plaintiff said that D.W.2 suggested a meeting for a discussion. He denied that DW2 asked him why he was suing him, or that he told him it was because, as is stated in his solicitors" letter, DW2 was copying his posters. He said that he told DW2 that he would study the situation and call him back. He denied that there had been a price war between them for the past one or two years. The version of DW2 was different. He said that the plaintiff told him that the defendant company's posters looked very similar to his. DW2 denied this had suggested a meeting to compare the posters and find a solution. The plaintiff told him that he would call him back after consulting his solicitors, which he did telling DW2 to speak to his solicitors. DW2 agreed that the letter from Deacons does not say that he did not sell those posters. He explained that he changed solicitors after facing communication problems with his former solicitors.

12. Mr. LAI addressed me on four main points. The first was: do the plaintiff's drawings of the door gods have any copyright? If yes, what is the extent of that copyright? He did not dispute that Mr. Kwan's work would be protected presumably within the meaning of "drawing" under section 3(1)(a) of the Copyright Act, 1956. He went on to distinguish between ideas which are not protected, and the craftsmanship, that is, the lines drawn on paper which represent the labour and skill of the artist, which is protected. With this, Miss Stewart did not quarrel. But Mr. LAI submitted that the ideas in a drawing which are not protected include "not only the choice of materials and features but also as to their arrangement and representation." With this Miss Stewart did not agree and, in my opinion, rightly so. Mr. LAI relied on the case of Bauman v. Fussell, (1978) R.P.C. 485. With respect I do not read that case as deriding the point raised by Mr. Lai. That case concerned a photograph of two fighting cocks from which a painting of the same subject matter was made, the painter drawing his inspiration from it. At p.487, BIRKETT, L.J. mentioned the example of a procession or the laying of a foundation stone of which a photograph is taken. He said:

"The order and arrangement of the procession has been, no doubt, carefully planned and designed by someone else. It is an individual work that the Act is intended to protect. I do not think that a painter who was minded to make a picture of the procession, in his own style would be committing a breach of copyright if he used the photograph to enable him to get accurately the relative positions of those taking part. What he would be taking would not be a substantial portion of the plaintiff's work. At the other end of the photographic scale one can imagine a case where the photographer has made an original arrangement of the objects animate and inanimate which he photographs in order to create a harmonious design representing, for example, Spring. Here the design would be his work."

13. That may be said to be the ratio decidendi of that case of the fighting cocks. In such cases, quite clearly the artist's originality must reside purely in his special treatment of the subject and in his skill and labour in draughtsmanship. There is, therefore, no copyright in the idea of a recruit coupled with "the orders of the day". The only copyright that can exist is in the expression of such an idea, and the question in all such cases must be whether the expression of the ides has been imitated. It seems to me that Mr. Lai nevertheless came round to the crux of the case when he said that, in the instant case, the copyright in Mr. Kwan's drawings is confined to his craftsmanship of the drawing, which I take to mean his expression of the idea of the door gods.

14. Mr. Kwan readily admitted that this kind of drawing is a traditional Chinese drawing, the idea being to put in all symbols for good fortune, of which there are many like the bat, dragon, phoenix. He agreed that features like flags, big knives, swords, fish, gold coins, etc. are an accumulation of the Chinese traditional ideas. Mr. Kwan agreed that the labour and skill he put into his drawings consisted mainly in the actual craftsmanship. This is amply demonstrated by a quick comparison of the old style wood block - prints - Ex. P3(A-G) - and his drawings. The quality of paper used in those prints apart, it is obvious that they are what may be described, not by way of denigration or being offensive, as crude portrayals of the idea of the door gods; the fact however remaining that they too incorporate most of the traditional paraphernalia which has been mentioned. Miss Stewart's comment in that Mr. Chow's idea was to modernise those old wood-block prints is quite apt. And I accept, as Mr. Lai submitted, that the core of the artistic work or the drawing was that art which was not predetermined by traditional conceptual ideas.

15. I have no doubt that Mr. Kwan is a qualified person within the definition in section 3(3) of the Act. I are satisfied also that he expended a substantial amount of his own independent skill, knowledge, creative and useful labour, taste and judgment in producing a portrayal of the traditional idea of a door god, thus imparting to it some quality and character quite apart and distinct from that which had hitherto existed in the old crude wood-block prints. It is not disputed that the copyright in those drawings Ex. p2(A & B) - vested in the plaintiff.

16. Mr. LAI's second point is: which is the poster published by the defendant company - Ex. P6 or Ex. D1, D2 and D3? It will be recalled that Ex. P6 comprises 64 posters of different sizes, of which two set (four in number) were bought by Miss CHOW from Cheung Shing Paper Products Company, and the remainder from the first, floor of the defendant company's address at No. 194 Yee Kuk Street. Ex. D1, D2 & D3 are the posters which the defendant company admits it printed and supplied to its wholesalers including Cheung Shing, based on the drawings it commissioned, i.e. Ex D5 (A & B). It is true that there is direct conflict in evidence on this issue, and, as was appreciated by Mr. Lai, it turns on the sole issue of credibility. He submitted that cost wise it would not have been profitable for the defendant company to pirate the plaintiff's posters, the sale was minimal and there were other more profitable posters which could have been pirated instead. He said that it was implicit in the direct conflict of evidence between the two cases that the defendant company changed its version of the posters from Ex. P6 to Ex D1, D2 & D3 and he supposed that Miss Stewart would ask the court to draw such an inference. In the event, Miss Stewart did note However, these submissions and the motive for the defendant company to change its posters as submitted do not, as far as I can understand the argument, affect the issue of credibility. The entire trend of the defence case was a denial that it had printed posters like Ex. P6, maintaining that those which it printed and marketed were Ex. D1, D2 and D3. It was not the case that these latter, posters were first printed and sold at any time after the commencement of these proceedings, and certainly that was not what the plaintiff alleged either.

17. In considering this second issue, it seems to me that the evidence of Miss CHOW(P.W.3), that of the proprietor of Cheung Shing Paper Products Company, Mr. TO Sum-yee (D.W.1) and Mr. SAT Hang (D.W.4) is relevant. P.W.3 is a young lady aged 26 and is a post-graduate research student at the Hong Kong University. She testified in a confident, clear and forthright manner about the two purchases she made. D.W.1 said that the defendant company was not producing door god posters before 1983. He said that amongst the other suppliers was one called Mr. Dai Wah from whom he had taken one consignment of posters similar to Ex. P6 three or four years ago, which were sold out in about two years. He agreed however to the possibility that such posters could have been in his shop in January 1984. In other words, his evidence indicates that any posters similar to Ex. P6 which might have been in his shop in January 1984 were those supplied by Dai Wah. At this juncture I may refer to the evidence of D.W.2 that as recently as the 5th January 1985 Dai Wah Company were selling similar posters as evidenced by their cash sale, Ex. D6, pertaining to the posters, Ex. D7 (A & B), which are the same as Ex. P6. This evidence is to be contrasted with that of D.W.4 who assisted his wife in the sale of door god posters at his father's first floor flat at the defendant company's premises at No. 194, Yee Yuk Street. He said that he obtained door god posters from his father's business since the end of 1983 which he identified as Ex. Dl (A & B). He admitted that his wife's business, Kum Sang Company, was not registered, yet he issued its receipts when asked for. However, the receipt which was produced by P.W.3 (i.e. Ex. P7) which D.W.4 admits is in his handwriting is that of the defendant company. I recall the general manager's evidence that they do not operate a sales office at that address, yet that is from where D.W.4 obtained the blank receipt. Miss Chow said that a man issued it to her. It was submitted as a matter of logic that Miss Chow could have been mistaken or it was a clear case of a frame-up. I have kept in mind also the letters exchanged between the solicitors upon which Mr. Lai relied. I do not take those letters as indicative of the instructions in every detail, which always is a matter of evidence. If Miss Chow is an interested witness, the same is equally true of Mr. SAT Hang. But if the defendant company were not operating any sales from their promises, the obvious inference must be that there would be no cash sales as Ex. P7 kept there either. I do not think that the evidence of Mr. SAT Hang rings true in this respect. Having seen and heard the witnesses, I find that Miss Chow is a thoroughly honest and genuine witness. I accept her evidence , and find as a fact that on the 14th January, 1984 she did buy 10 sets of the door god posters in the three sizes from D.W.4 for which she was given the receipt, Ex.P7, which relates to the posters in Ex. P6 .The receipt being in the name of the defendant company and D.W.4 obtaining his posters from the defendant company leads to the irresistible inference that the sale was on behalf of the defendant company of its own product. I find that the so called business of Kum Sang in the context of what 3 have said above was nothing but a sham. When this discussion is taken to its logical conclusion, it must follow that in January, 1984 the defendant company was in fact printing and marketing door god posters similar to those in Ex.P 6, which were supplied to Cheung Shing Paper Products Company also.

18. The third point raised by Mr. Lai refers to infringement of the plaintiff's copyright. He said that the Court will be troubled by this topic only if it finds that Ex. D1, D2 and D3 are posters printed by the defendant company, otherwise those in Ex. P6 are entirely similar to the plaintiff posters.

19. Pausing here for a moment, it is trite to say that in such cases where the creation of the object or theme does not form part of the artist's work and his originality resides purely in his special treatment of the subject and in his skill and labour in draughtsmanship, the scope of copyright in such cases is comparatively narrow. I must be careful therefore not to jump to the conclusion that there has been copying merely because of similarity of stock symbols or features which are to be found in historical or fictional literature about such traditional characters as the door god posters. It would therefore appear that in order to succeed the plaintiff must show that there were substantial parts either actually copied or copied with mere colourable alterations, the underlying principle being that a defendant is "not at liberty to use or avail himself of the labour which the plaintiff has been at for the purpose of producing his work, that is, in fact, merely to take away the result of another man's labour, or, in other words, his property" - quotation from SIR ARTHUR WILSON in an Indian case cited in Macmillan & Co. Ltd. v. Cooper [1923] 130 L. T. at p.680. It is conceded, and properly so in my opinion, that the posters in Ex. P6 are entirely similar to the plaintiff's posters, Ex. P5 (A-H); they are exact copies, in fact; the only part which is omitted is what appears in the small print at the bottom, i.e. "Fat Choi, Tel: 5-701960, copyright reserved, no reproduction". I find that Ex. P6 are infringing copies of the plaintiff's copyright.

20. The other posters admittedly produced by the defendant company are Ex. D1 D2 and D3. In this regard, Mr. Lai relies on the case of Francis Day and Hunter Ltd. and Another v. Bron & Another[1963] 1 Ch. 587, which deals with subconscious copying. There, it was held in item 4:

21. It is correct that a comparison of the defendant company's posters - Ex. Dl, D2 and D3 with those of the plaintiff's - Ex. P2 (A. & B) -, all the traditional parapherenalia like the big knife, banners, quiver, sword, fish, basket, bow and arrows, and the fabric pattern have been repeated as Mr. Lai found. He said that there are some differences in detail, for example in the look of the gods. A closer look at the posters reveals some more differences of detail, viz. the colouring in the plaintiff's is darker, that on the defendant's it is lighter; the colour of the fabric is different; the quiver in the plaintiff's is empty, that of the defendant has some arrows; the hands of the full bearded god in the plaintiff's are clean, those of the defendant's have some black spots on the knuckles denoting presumably hair; the number of banners behind each god is different; there is tuft hanging from the sword handles of the defendant's gods; and the shoes worn by the defendant's gods have some studs in them. Mr. Lai Submitted that the most important, difference is in the looks of the gods which, he said is the essential thing in these posters. The gods, he says, look quite different. He said that the general impression of the plaintiff's god with the goatie beard is that it looks older and more solemn, its facial expression is more relaxed in keeping with the relaxed manner of holding his sword; that of the defendant is much younger and Looks more tense which is consistent with his manner of holding his sword. Regarding, the other pair, i.e. the gods in full beard, it is submitted that the same difference in style as to the look and the way in which they hold their swords is noticeable. In this case, their beards are very different which he described as very striking. Miss Stewart says that what is essential is not any one feature of the gods, it is the whole style, the artistic feeling and the overall effect of the work. She submitted that the fact that most of the details would normally be there is not the point, it is the interpretation of them by the artist that counts. Whereas it is correct that most of the symbols appear in both sets of posters, it must be recalled that P.W.1 said that although these gods are traditional, he could alter them and make them look different. The best way of looking at these posters is to see the character that has been given to his gods by P.W.1, this in my opinion must refer to the impact that the drawing makes on the beholder. Matters of detail seem to merge unobtrusively in the whole. I do not think that the character or the overall effect and impact is dictated by the kind of the beard the gods may have, it lies in this case in the general posture and stance which P.W.1's portrayal of the gods brings out so strikingly and dominatly that the beard, the facial expression and the other differences are but colourable alterations. I find that this makes the infringing copies substantially the same as the original work of P.W.1.

22. The question is whether this objective similarity is sufficient in the circumstances of this case to warrant the inference that there is a causal connection between the plaintiff's and the defendant's works. In the case of Francis Day this question was decided on the evidence of the composer which was accented by the learned trial judge. In our case, the artist - Mr. Wong-has not testified. It thus becomes necessary to fall back upon the evidence of the general manager, D.W.2, who said that his instructions to Mr. Wong were not to copy from other people's posters. He did not say which posters he had in mind, for at the time also in the market were the posters of the plaintiff. It seems to me that D.W.2's evidence indicates some awareness in him of the existence of other posters. He was not able to say, quite understandably, what his artist might or might not have seen. Herein lies the weakness of Mr. Lai's argument. Considering this evidence, the fact that the plaintiff's posters had been in the market since 1979 and the parties being in the same trade, I find in the absence of the artist that the objective similarity is such as to warrant the inference of there being a causal connection between the two. This would also sufficiently negative the defence of innocent copying. I find that the defendant company is liable for breach of the plaintiff's copyright.

23. Knowledge is required for the secondary infringement in the sale of Ex. P6. With regard to the posters Ex. Dl-D3 the defendant company admit that they print and sell those posters. On this issue I propose to follow the approach which was adopted by the Court of Appeal in New South Wales in RCA Corpn. v. Custom Cleared Sales Pty. Ltd. [1978] 19 A.L.R. 123, and quoted in The Modern Law of Copyright by Laddie, Prescott and Vitoria, 1980 edn., at p.386:

"It seems to us that the principle is more accurately put by saying that a Court is entitled, to infer knowledge on the part of a particular person on the assumption that such a person has the ordinary understanding expected of persons in his line of business, unless by his or other evidence it is convinced otherwise. In other words, the true position is that the Court is not concerned with the knowledge of a reasonable man but is concerned with reasonable inference to be drawn from a concrete situation as disclosed in the evidence as it affects the particular person whose knowledge is in issue. In inferring knowledge, a Court is entitled to approach the matter in two stages; where opportunities for knowledge on the part of the particular person are proved and there is nothing to indicate that there are obstacles to the particular person acquiring the relevant knowledge, there is some evidence from which the Court can conclude that such a person has the Knowledge. However, this conclusion may easily be overturned by a denial on his part of the Knowledge which the Court accepts, or by a demonstration that he is properly excused from giving evidence of his actual knowledge."

The Plaintiff's posters have been in the market since 1979. D.W.2 has been in the printing business for 8 years in the defendant company which was printing divine products. He said that he had no reason to suspect that all the various traditional features might be protected by copyright. He went on to say that when his company printed the posters, he honestly believed that they had the right to print all those traditional features as everybody else had done for a number of years. These portions of his evidence relate to the general idea for, as has been seen, it is not the incorporation of those traditional paraphernalia that matters, it is the manner of the expression of that idea. Secondly, his instructions to the artist well before the printing stage not to copy other people's posters indicate not only his awareness in the existence of other posters but also that copyright might subsist in them. Thirdly, Ex. P6, is an exact copy of the plaintiff's posters which had stated their copyright in them at the bottom. Lastly, he did not cause any market research to be made. I find that it is reasonable in these circumstances to infer that he had the requisite Knowledge in terms of section 5(3) of the Act.

24. Lastly, Mr. Lai spoke on the issue of damages. I have indicated already that the defence of innocent copying was sufficiently negatived. With regard to additional damages, he relies on the case of Beloff v. Pressdram [1973] 1 All E. R. 241. There it was held inter alia that no additional damages could be awarded under section 17(3) if the plaintiff could obtain effective relief against the defendant through other causes of action, e. g. libel or breach of confidence. It is open to the Court to consider all the circumstances of the case, having particular regard to the flagrancy of the infringement and the benefit which has accrued to the defendant by it. I need not repeat the circumstances all over again. The benefit accrued to the defendant is quite clearly small considering the very limited sales over a period of some twenty days in the year. It has been said that flagrancy "implies the existence of scandalous conduct, deceit and such like which includes deliberate and calculated copyright infringement". With regard to Ex. P6, the infringement was no doubt deliberate, with the other it was more as a result of indifference as to what the artist produced. However, taking all these matters into account, I consider that the plaintiff can be adequately compensated in ordinary damages without any additional or exemplary damages.

25. Judgment entered for the Plaintiff.

26. Order in terms of paragraphs 1 - 5 of the draft which has been placed before me and is agreed to by the defence.

27. The pre-trial costs with regard to the work entailed in considering the 8 other posters which were not proceeded with at the trial to the defendant, and to be taxed, if not agreed.

28. The defendant do way or cause to be paid to the plaintiff the costs of this Action, to be taxed if not agreed.