MONTRES ROLEX S A AND ANOTHER v. COLGATE-PALMOLIVE (HK) LTD

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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DECISION

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1. This is an application for an interlocutory injunction. It is made ex parte on notice because the writ and the summons were issued on Wednesday of this week and it comes before me today. In effect, however, probably what I decide today will decide the outcome of the inter partes hearing proper because the threatened activities of the Defendant, in fact the actual activities of the Defendant, will cease by the end of this year. Hence the purpose of an interlocutory injunction will be gone by the time the inter partes summons comes on for hearing.

2. The Plaintiff is the well-known manufacturer of watches and the Defendant is the well-known manufacturer of inter alia shampoos, soaps and a good many other products. Which of the parties has bigger resources, I know not. Suffice it to say that I approach this case on the basis that each party is sufficiently affiuent to be good for any question of damages or cross-undertaking as to damages as the case may be.

3. In July of this year, the Defendant wrote to the Plaintiffs and told them it wanted to put on an advertising campaign for their Optima shampoo in which there would be given away as prizes, three "Rolex" watches. The Plaintiffs wrote back immediately and said that they were not prepared under any circumstances to allow the use of their products or trade marks for promotion. The letter was polite and it wished the Defendant well in its promotion campaign.

4. The Defendant repeated its request later in July explaining that it would be a particular advertising campaign. It used the expression that it would only be using the name "Rolex" as a generic name. I am not quite sure what is meant by that, but it does not really matter. Nevertheless the Plaintiffs again reiterated that under no circumstances would they allow the use of their products or trade marks for promotion.

5. Everything went quiet until exactly a week ago when the Defendant's advertising campaign hit the market, as it were. I have been shown a full colour copy of the advertisement which is exhibited KWM-5 and the certified translation which has been exhibited TLMH-3. That advertisement is quite clearly an advertisement for the Palmolive Optima shampoo. It is in Chinese. In the centre is a photograph of what to most people would look like one of the Plaintiffs' watches with the words "wish coming true" around it. The advertisement makes clear that there is a promotional campaign on and in the course of that promotional campaign watches to the value $170,000.00 will be available to those who enter the lucky draw. Those who enter the lucky draw will only be able to do so if they purchase the Defendant's shampoo. At the bottom of the page is the description of the prizes. The 1st prize is to be a 18K gold and diamond"勞"calendar ladies watch valued $110,000.00. The 2nd prize is another similar watch but this time gold and silver and the third prize is a steel calendar watch, again with the character "勞".

6. The Plaintiffs complain in three respects. First, it is said there is an infringement of trade mark. They say that the character "勞" is so close to their registered trade mark no. 1270 of 1986 which comprises the "Rolex" crown with the characters "勞力士" underneath, that the use of the character "勞" in relation to watches, as it clearly is here, is taking the central feature of the trade mark and therefore an infringement. They also claim in passing off and in malicious falsehood.

7. Despite the shortness of time, the curious feature of this case is that there was time for some inter partes correspondence. The Plaintiffs immediately sent a letter through their solicitors on the 9th November and that inter alia finishes as follows:

"The purpose of this letter, however is to see whether this matter can be amicably resolved without the need to resort to legal action. Our clients' main objective is to ensure that the advertisements and any other materials featuring their products or trade marks, are discontinued immediately and that no further use of our clients' products or trade marks is made."

8. That, it seems to me, in essence may be understandable from a commercial point of view but from a legal point of view goes too far. What the Plaintiffs are clearly seeking to do is to stop any use of their products as well as their trade marks.

9. Mr. Garland Q.C. has very forcefully and clearly outlined the basis of the allegation of infringement of trade mark. Given the wording of our Trademarks Ordinance, I see the force of the argument that there is an arguable case as to infringement of trade mark. The use is clearly a business use and the use of the character "勞" may be argued to be of a substantial part of the trade mark 1270 of 1986 and it is in connection with goods.

10. That, of course however, is something of a technical argument because to the average person in the street, the use of the mark is really a use in connection with the Plaintiffs' own goods. It is able to succeed in this case, on a provisional basis at any rate, because the Plaintiffs do not use trade mark no. 1270 of 1986 on their watches and one of the features which has to be remembered in this case is that if the Defendant had used the trade mark of a crown and probably the name "Rolex" itself, in relation to the Plaintiffs' own watch, probably no complaint could be made because those marks, as I understand, are used on the watch itself.

11. Immediately following the Plaintiffs' solicitors' letter, the Defendant's solicitors wrote back on the 12th November saying that they were prepared to remove the Chinese character "勞" from all the relevant advertisement and promotional materials printed or otherwise and to demonstrate their clients' goodwill, the clients would confirm that no use or reference to the name "Rolex" or its Chinese equivalent would be made in the advertising campaign. That letter was a "without prejudice" letter although the without prejudice aspect has been waived because of its inclusion in the affidavit on behalf of the Defendant.

12. That offer fell on stoney ground because the Plaintiffs' solicitors reiterated in a letter of the same date their claim in respect of trade mark infringement, passing off and malicious falsehood.

13. Of course the question of passing off is a question of how the matter would appear to the public, but giving this advertisement what I consider a reasonable construction and looking at it as best I can, given the difficulties of translation and putting the translated words in the place where the Chinese characters are, I cannot see at the moment that there is really any realistic possibility that members of the public would think that this was a joint promotion campaign by the Plaintiffs and the Defendant. I think that they would think simply that there would be a valuable prize to be won if they happened to be successful in the draw which they could enter by purchasing the Defendant's Optima shampoo.

14. I did enquire of the Defendant's counsel, Miss Tam, as to whether the offer that was made in the letter of the 12th November was still outstanding. The Defendant really reserved its position and indicated that it may well be taking the mark off but were not disposed necessarily to offer the undertaking unless as I saw it, I was going to force it to do so. I do not think it right to force it to do so having given this matter careful consideration. It seems to me that this advertising campaign as it is, is not going to be misconstrued by the public, it is simply going to be construed as a campaign where the public will receive or may receive if they are very lucky, one of the three watches which clearly the Defendant had purchased sometime ago.

15. I can see as I say no conceivable reason why the look of the product and in that respect the picture of the watch which appears, should not be used in the advertisement. In my view, the Plaintiffs are really seeking to go too far in trying to prevent others using their products at all which is really as I see what they are seeking to do. I have to say that the Defendant did take something of a chance by proceeding with their campaign, knowing the attitude which the Plaintiffs took and realising, as they must have done, that there was a considerable danger of antagonising the Plaintiffs to such an extent that litigation may follow. But nevertheless, I do not see it right at this stage to grant an injunction. The effect in relation to the trade mark in my view would be minimal because as I say the Defendant could take out that character and use what indeed would be a name indicating the Plaintiff far more directly without there being a valid argument of passing off and with a clear defence as to infringement of trade mark.

16. I regret that at this stage I do not consider that the strength of the Plaintiffs' case in respect of likely damage is such that I should grant an injunction. Assuming that the Plaintiff has established an arguable case the likelihood of irreparable damage which is necessary for the grant of an interlocutory injunction is not there.

17. Nothing more turns on the other causes of action except as was conceded by Mr. Garland Q.C. the strength of the case on malicious falsehood has to be that much greater than on passing off.