RTX PRODUCTS HONG KONG LTD v. LI YIU FAI

HCA1777/2009

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1777 OF 2009

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BETWEEN

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JUDGMENT

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1.  In this action the plaintiff sues the defendant for infringement of its copyright. The plaintiff was and is a subsidiary of RTX Telecom A/S, which is an international company founded in 1993 and headquartered in Denmark. At all material times, the plaintiff carried on the business of developing and producing innovative wireless products, including wireless telephones, and selling the same to wholesalers.

2.  One of the plaintiff’s products was a wireless telephone model RTX 8050.  In the course of developing that product, various design drawings were created (“the Copyright Works”).  There is no dispute that the plaintiff owned and continues to own the copyright subsisting in the Copyright Works[1].  Those drawings can be found at C/3142–83.

3.  At all material times, the defendant was employed by the plaintiff as a Senior Product Engineer (Mechanical) of its Research and Development Department, and he had participated in the development of RTX 8050.  It appears to this court that, given the position of the defendant and his obvious knowledge over the plaintiff’s business, he must have appreciated that :

(1)  the plaintiff owned the copyright in the Copyright Works; and

(2)  he had a duty not to infringe such right by copying the Copyright Works save as authorized by the plaintiff.

Further, Clause 15.1 of the defendant’s employment agreement with the plaintiff provided as follows :

“Employees are not allowed, either during employment wit [sic] the Company or at any time after termination thereof, for whatever reason without limit in time, use of [sic] divulge any commercial information of the Company either verbally, in writing or using any means of electronic transmission to any third party. The Company reserves the right to seek for further legal proceedings for the damage.”

4.  It is not disputed that in the course of his employment with the plaintiff, the defendant was provided by the plaintiff with a laptop computer for his use.  The plaintiff’s case is that the provision of laptops to those employees who worked on design drawings was to protect its copyright in the same.  In cases where such employees were required to work outside the plaintiff’s premises, they were able to take the laptops with them.  These employees were not allowed to copy the design drawings from the laptops or the computer at the plaintiff’s office to any other computers (“the Policy”).  The Policy was, according to the plaintiff, explained to the defendant.

5.  The defendant disputes that the Policy was ever explained to him.  His evidence is that there were occasions when he had to work outside the plaintiff’s premises, and having left the laptop at home, he had to copy, inter alia, design drawings using other computers.  He maintains that it was done solely for the purpose of his employment. 

6.  Notwithstanding the fact that the plaintiff’s witness has no firsthand knowledge as to whether the Policy was explained to the plaintiff, I am inclined to accept the plaintiff’s case.  There must have been a reason for providing the relevant employees with costly laptops.  More likely than not, the purpose for so doing would have been explained to them. 

7.  Unfortunately, the relationship between the plaintiff and defendant did not end amicably.  By a one month notice issued on 26 February 2009, the defendant’s employment was terminated on 25 March 2009.  There were arguments between the parties over the defendant’s performance during his employment and the defendant’s various entitlements upon termination of his employment.  The merits of those disputes are not relevant to the resolution of these proceedings.

8.  However, there was a letter written by the defendant to the plaintiff and dated 7 April 2009 (“the Letter”).  It was part of the exchange between the parties concerning the disagreements over the termination of employment and the defendant’s post-termination entitlements.  A set of the Copyright Works, which was produced from the memory of the defendant’s personal computer, was attached to the Letter.  Regrettably, the Letter was copied to the Labour Department from whom the defendant had sought assistance on the dispute concerning his entitlements. 

9.  The plaintiff complains that the copying of the Copyright Works by the defendant onto his personal computer and the reproduction of the same as an attachment to the Letter, which had been copied to the Labour Department, were not authorised by it and constituted infringements of its copyright.  Save for the argument based on fair dealing (see below), the defendant can provide no real answer to these complaints.

10.  For completeness, I should mention that the Letter was also, on its face, copied to the Labour Tribunal[2].  However, I accept the defendant’s evidence that the Letter was actually not sent to the Labour Tribunal until after he had initiated his proceedings there.

11.  The defendant’s evidence is that in May 2009 his computer broke down and ever since then he was unable to retrieve any information therefrom, including those belonging to the plaintiff.  Further, on 7 December 2009, the defendant, through his solicitors, had delivered to the plaintiff’s solicitors all drawings and related materials which belonged to the plaintiff and were in his possession, custody, power or control.  Since then, the defendant no longer possesses any such materials.  Such evidence was not challenged in cross-examination.

12.  I now come to the only defence raised by the defendant, namely, fair dealing.  I accept the submission of Mr Lam, who appears for the plaintiff, that fair dealing is a statutory defence and is exhaustively defined in sections 38 to 88 of the Copyright Ordinance, Cap. 528.  It has not been made clear by the defendant which of those provisions are being relied upon.  However, I agree with Mr Lam that the only relevant provision is section 54(1) which provides :

“Copyright is not infringed by anything done for the propose of judicial proceedings.”

13.  Under section 198, “judicial proceedings” have been defined to include “proceedings before any court, tribunal or person having authority to decide any matter affecting a person’s legal rights or liabilities”.

14.  First of all, insofar as the copying of the Copyright Works onto the defendant’s personal computer is concerned, this defence is of no assistance to the defendant. 

15.  Secondly, it is clear from the evidence that the defendant’s proceedings in the Labour Tribunal were commenced on 10 July 2009[3].  At the time of the Letter, there was, at most, an anticipation that a conciliation exercise would be held between the parties with the assistance of the Labour Department.  Plainly, the requirements of section 54(1) cannot be met.  Further, I do not believe it can be maintained that the Letter (or the copying of it to the Labour Department) was in preparation for the Labour Tribunal proceedings which were instituted later.  The reasons being :

(1)  the conciliation suggests that proceedings might not be necessary; and

(2)  the Copyright Works were quite irrelevant to the disputes between the parties.  In the premises, this defence must fail.

16.  By reason of the foregoing, the plaintiff has succeeded in this action.  As regards the appropriate relief, it is perfectly plain that this is not the usual breach of copyright case where the wrongdoer had a commercial purpose in the infringement.  This court believes that the defendant acted in a very foolish way, not motivated by any financial gain, but a strong feeling that he had been wronged by the plaintiff.  However, Mr Lam has persuaded me, notwithstanding the evidence that the defendant no longer possesses any of the copyright materials, that the plaintiff should be protected with an injunction order against the defendant to prevent any infringement in the future, given the strong feeling the defendant has against the plaintiff.  I therefore make an order in terms of para. 1 of Mr Lam’s draft order.

17.  In respect of the delivery up of copyright materials and verification sought in para. 2 of the draft order.  Quite fairly, Mr Lam does not press for them strongly and I am unable to see any good reason why such relief is called for in light of the evidence before this court.

18.  I am not persuaded, despite Mr Lam’s attractive submissions, that there is any justification for ordering an inquiry as to damages.  It is accepted by Mr Lam that such relief should not be granted as a matter of course, but ought to be grounded upon evidence showing that damage has been caused to the plaintiff.  As pointed out above, there was no commercial element in the infringement but acts of foolishness on the part of the defendant.

19.  Modern judicial ethos, reflected by the Civil Justice Reform, is to minimise unnecessary proceedings and the wastage of resources.  It would be consonant with such ethos that proceedings should be concluded unless there is any real issue remaining.  I cannot therefore accept Mr Lam’s submission that it would be for the plaintiff to consider whether to pursue the inquiry after the order has been granted.  I am unable to see any real loss suffered by the plaintiff or any justification for the inquiry order.

20.  The plaintiff should have the costs of this action and I make an order nisi accordingly.

21.  Finally, I wish to say that I fully accept the defendant’s submission that this action has been a great strain on him emotionally and financially.  I very much hope that he can put this episode behind him and go forward with his life.  He is young and qualified.  His future is in his own hands.