THE QUEEN v. CHOW NG LAU AND ANOTHER

BETWEEN:

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JUDGMENT

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Preliminary

1. The two appellants, CHOW Ng-lau (''D.1") and CHOW Kim-sing ("D.2"), were charged with a number of offences against the Trade Descriptions Ordinance (Cap. 362).

2. At the conclusion of the trial, the magistrate convicted D.1 on Charges A, B and C and D.2 on Charge F.

3. D.1 did not pursue his appeal against conviction on Charges A and B, which are accordingly dismissed.

4. At the conclusion of the arguments before me, I upheld the appeals of D.1 against conviction on Charge C and of D.2 against his conviction on Charge F and said that I would give reasons later, which I now do.

Conviction on Charge C

5. It was not in dispute that Mr. CHOW Chi-tak ("P.W.1"), an Industry Officer of the Customs and Excise Department, visited the premises of the business owned by D.1 on 3rd February, 1986.

6. P.W.1 found six pairs of white socks marked with a red kangaroo on a shelf in the premises, which consisted of a counter with no partition. The socks were hanging up on top of a showcase with a price tag showing $15 per pair attached to then. With them was a notice which said "Pure Cotton. Japanese socks. $15 per pair."

7. In a written statement which was admitted in evidence after agreement between counsel, Mr. MA Hing-wai, Sales Executive of Excelsior Sport Ltd., stated that the Kangaroo brand and device was owned by his company. After examining the socks, he confirmed that they were counterfeit because the packaging was different, the quality was poor and the style was different.

8. At page 37 of the record, in the course of his judgment, the magistrate states correctly that the words in section 9(2) of Cap. 362 do not involve necessarily an intention to deceive but rather whether it is likely that deception will be caused.

9. However, counsel for the appellant attacked the magistrate's decision on two grounds, firstly, that as a matter of fact the registered design is so different from the design of the socks that it would not be calculated to deceive. And, secondly, that in any event the magistrate has based his decision solely on a visual appreciation of the socks and the design and has not taken into account other factors which he should have considered.

10. So far as the first submission is concerned, this is, I think, one of those rare occasions on which it is open to an appellate court to disagree with the finding of fact of a magistrate, since this depended upon a visual comparison of two real objects and the forming of an opinion as to their similarity and not upon any judgment as to the credibility of witnesses.

11. Not without hesitation, I feel obliged to differ from the magistrate's view that the two designs were so similar as to be likely to cause confusion. To my eyes, there are more substantial differences between the two designs than there are similarities. The registered trade mark contains a kangaroo in a circle with the words "Kangaroo Brand" in English and Chinese written outside the circle. The socks bear a red kangaroo, of peculiar shape, without any circle or wording. Save for the presence of a kangaroo in each case, there seems to me to be little similarity between the two designs.

12. Nobody seeing the two designs side by side would in my view be misled into thinking that the goods bearing the red kangaroo were manufactured by the same company as that which manufactured clothing bearing the registered trade mark.

13. My attention was drawn to The Queen v. YANG Yiu-wing and Others⁽¹⁾, in which a Deputy High Court Judge sets out the correct approach to the interpretation of section 9(2). This case establishes, and this accords with the views expressed in the leading textbook on The Law of Merchandise Marks by Fletcher Moulton and Langdon-Davies, that all the relevant circumstances must be considered including the nature of the goods, their price, their uses, the class of prospective customers and so on when a court is deciding whether a design is likely to deceive.

14. Clearly the price at which the socks were offered for sale was a factor that was in the magistrate's mind. The other matters referred to in the above passage, however, do not seem to have been. It may well be that had he considered them he would still have come to the same conclusion that he did. Nevertheless, his failure to refer to them in his judgment must leave doubt as to whether he did direct his attention to them.

15. I have thus felt obliged to disagree with the magistrate's conclusion that the Kangaroo design affixed to the socks in question was calculated to deceive.

Conviction on Charge F

16. When P.W.1 entered the premises on 3rd February, he found a briefcase on the ground containing a watch. This bore the name "Dunhill" which, according to the evidence, was a forded trade mark.

17. D.2 gave evidence that he had bought this "Dunhill" watch in Temple Street, two days before the raid, intending to use the movement as a replacement for the faulty one in another watch which had been left by a customer for repair.

18. He said that he would not have used the dial of the watch which carried the forged trade mark.

19. The sole point at issue is whether the watch was in the possession of D.2 for the purpose of trade or manufacture.

20. The magistrate, commenting on the defence raised to Charge F said -

"One point raised by the defence in respect of Charge F was that D.2 did not intend to use the offending part of the watch i.e the dial. Only the movement which was not shown to carry any' trade mark was to be used. I did not think this point valid. D.2's intention of dismantling the watch and of using the movement as a replacement part in another watch was clearly, in my view, a use of the watch as a whole for trade."

21. Inherent in this finding by the magistrate is, as I see it, an acceptance of the evidence of D.2 as to what he intended to do with the watch as true.

22. It is clear that the intention of the Ordinance is to prevent the passing off of products as being those made by the person who is the lawful owner of a trade mark.

23. In this instance, D.2 only intended to use the working parts of the watch, not that portion of the entire watch which bore the false trade mark.

24. The Crown contends that the wording of the Trade Descriptions Ordinance, section 9(2), is such that the offence is committed by a person who has in his possession for the purpose of trade or manufacture, any goods to which a forged trade mark is applied, and that therefore the use of any part of the goods for such a purpose will amount to an offence against that subsection.

25. It must be remembered that the mere possession of an article bearing a false trade mark is not an offence. Only when possession is coupled with an intention to use the goods bearing the forged trade mark for one of the purposes set out in the subsection, is an offence committed.

26. I cannot think that this section of the Ordinance was intended to catch a person who is in possession of an article bearing a forged trade mark for the purpose of using parts of it for repairs to another article of a similar nature. On the special facts of this case, which are unlikely to recur, I therefore feel obliged to differ from the magistrate in his conclusion on this charge.

27. I would like, however, to make it clear that the fact that I have allowed the appeals on both charges should not be taken as a criticism of the manner in which the magistrate conducted the case.

28. The record is very well kept. The judgment is written in clear and careful language and bears all the marks of a patient and diligent consideration both of the evidence and the law.

(1)    Mag. App. No. 390 of 1986