HONGKONG YEEWOTONG VENTUREPHARM TECHNOLOGY GROUPS LTD v. CHINA BEIJING TONG REN TANG GROUP CO., LTD. AND ANOTHER

HCIP 3/2024

[2025] HKCFI 2977

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 3 OF 2024

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DECISIONS

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1.  By decisions all dated 11 August 2023, the Registrar of Trade Marks (“the Registrar”)  upheld the opposition by China Beijing Tong Ren Tang Group Co Ltd and Beijing Tong Ren Tang Chinese Medicine Company Ltd, the 1^st and 2^nd Respondents respectively herein (collectively “the Opponents”), against the applications (“the Subject Applications”)  by Hongkong Yeewotong Venturepharm Technology Groups Limited, the Appellant herein (“the Applicant”), for registration of the marks (being the subject matters of the intended appeal)(“the Subject Marks”)  on the ground of bad faith under s 11(5)(b)  of the Trade Marks Ordinance, Cap 559 (“the TMO”).

2.  The Applicant now seeks to appeal against the said decisions of the Registrar (“the Decisions”).

3.  There are now 3 applications before me:

(i)  the Applicant’s application for leave to appeal out of time (“the Leave Application”);

(ii)  the Applicant’s application to adduce new evidence in the intended appeal (“the New Evidence Application”); and

(iii)  the Opponents’ application for security for costs of the intended appeal (“the Security for Costs Application”).

BACKGROUND AND THE DECISIONS OF THE REGISTRAR

4.  The Opponents are the owners of, inter alia, the well-known “同仁堂” (Tong Ren Tang)  and “北京同仁堂” (Beijing Tong Ren Tang)  marks.  The Opponents have been selling numerous Chinese medicine products using these marks.  The Applicant is a company incorporated in Hong Kong, mainly carrying on the business of supply and merchandizing of Chinese medicine.

5.  The intended appeal relates to 10 trade mark applications (i.e. the Subject Applications).  All the Subject Marks are applied to be registered in relation to “中成藥藥品（丸劑），以上貨品於香港製造” (Chinese medicine products (pills), the abovementioned products being manufactured in Hong Kong)  in Class 5.

6.  For easy reference, I will refer the respective Subject Marks as “TM 1” to “TM 10” in this Decisions.

7.  The Applicant claims the colours red and golden yellow as elements of all the Subject Marks, save and except that the Applicant claims the colours dark red and golden yellow as elements of TM 1.

8.  Like what Ms Ma, counsel for the Opponents, has done in her skeleton submissions, the Subject Applications are grouped according to their respective filing dates as below:

Group A： Date of Application 23 July 2018

Defined as:-	TM App No.	Representation of mark
“TM 1”	304606100

Group B： Date of Application 31 July 2018

Defined as:-	TM App No.	Representation of mark
“TM 2”	304617225
“TM 3”	304626405
“TM 4”	304626414
“TM 5”	304626423

Group C： Date of Application 8 August 2018

Defined as:-	TM App No.	Representation of mark
“TM 6”	304763494
“TM 7”	304763593
“TM 8”	304763601
“TM 9”	304763610

Group D： Date of Application 21 January 2019

Defined as:-	TM App No.	Representation of mark
“TM 10”	304807044

9.  The Opponents opposed the Subject Applications. The opposition was heard by the hearing officer (“the Hearing Officer”)  on 14 February 2023.  The Applicant filed a written submissions in support of the Subject Applications on 8 February 2023 but did not appear in the hearing.

10.  In each of the Decisions, the Hearing Officer found, inter alia, that:

(i)  The Opponents have since 2008 in Hong Kong sold “安宮牛黃丸” products under and by reference to the “安宮牛黃丸” mark “” (“the Opponents’ Mark”)  and the package “” (“the Opponents’ Package”).

(ii)  The Opponents’ Mark and the Opponents’ Package were widely displayed in newspapers, buses, outdoor advertisement boards and online media in Hong Kong between 2013 and 2019.

(iii)  The Applicant (which carried on the business of supply and merchandizing of Chinese medicine)  has known the Opponents’ Mark, the Opponents’ Package and the goodwill thereof before April 2017.

(iv)  In respect of the similarity between the Subject Marks and the Opponents’ Mark and the Opponents’ Package:

(a)  For “TM 1”, “TM 3” to “TM 9” : The Subject Mark is strikingly similar (“非常相似”)  to the Opponents’ Mark and also the Opponents’ Package.

(b)  For “TM 2”: The Subject Mark is very similar (“很相似”)  to the Opponents’ Mark and also the Opponents’ Package.

(c)  For “TM 10”: The Subject Mark is strikingly similar to the Opponents’ Mark.  The Opponents’ Mark also adopted the colour scheme of red and golden yellow in actual use.

(v)  Given the uniqueness of the design and the colour scheme of the Opponents’ Mark, it is unlikely that the Applicant had coincidentally adopted such similar elements in devising the Subject Marks.

11.  Ms Ma also refers me to the following comparison of the representation of the Opponents’ Package (where the Opponents’ Mark was used), and two of the Subject Marks (one being in circular shape and one being in rectangular shape):

The Opponents’ Mark (actual use of which can be seen at the Opponents’ Package)	“TM 10” (304807044)
The Opponents’ Package	“TM 6” (304763494)

12.  It was only upon the above findings that the Hearing Officer considered the absence of explanation from the Applicant as to why it adopted such similar design and colour scheme, and the absence of evidence as to how the Subject Marks were created, which led to the ultimate finding that the Subject Applications were made in bad faith.

13.  The Hearing Officer handed down the Decisions on 11 August 2023.  The original deadline for appeal fell on 8 September 2023.  Upon the application by the Applicant, the Hearing Officer extended the time for appeal to 24 October 2023.   On the last day of the extended deadline, a director of the Applicant, Mr Sun Qunwei (“Sun”), filed an application to the Registry of the High Court seeking leave for him to represent the Applicant in the intended appeal.  Such application was refused by the Master on 25 October 2023. On 26 October 2023, the Applicant filed a second application to extend the time for appeal which was refused by the Hearing Officer on 6 November 2023.  On 1 December 2023, Sun made the second application for leave to represent the Applicant but was rejected by the Master on the same day. According to Sun, he then tried to seek legal representation for the Applicant and it was only on about 20 December 2023 that the present solicitors for the Applicant agreed to act for it.  On 26 January 2024, the Applicant, acting with legal representation, filed the Notice of Motion for the intended appeal and the summons for the Leave Application and the New Evidence Application.

14.  I will first deal with the Leave Application and the New Evidence Application.  Since both applications are interrelated, I will deal with them together.  If the court were to rule against the Applicant on these applications, the Security Application would become academic.

THE LEAVE APPLICATION AND THE NEW EVIDENCE APPLICATION

15.  The Applicant has put forward 4 proposed grounds of appeal in the Notice of Originating Motion:

(i)  Proposed Ground (1): the Hearing Officer erred at law by taking into account 3 trade marks of the 2^nd Opponent in reaching the Decisions, the applications for registration of which were filed after the date of the Subject Applications.

(ii)  Proposed Ground (2): the Hearing Officer erred at law by taking into account the Opponents’ marks which are at law unregistrable, the use of which would be in contravention of the statutory requirement relating to registration of Chinese medicine under the Chinese Medicine Ordinance, Cap 549.

(iii)  Proposed Ground (3): the Hearing Officer erred in finding that the Subject Marks were of confusing similarity to or copied from the Opponents’ various registered or unregistered marks.

(iv)  Proposed Ground (4): the Hearing Officer erred in finding that the Subject Applications were made in bad faith.

16.  There is no challenge against the factual findings made by the Hearing Officer.

(i)  The legal principles

17.  In exercising its discretion as to whether to extend time for an appeal, there is no dispute that the court will take into account:[1]

(i)  the length of the delay;

(ii)  the reasons for the delay;

(iii)  the chances of the appeal succeeding if an extension of time is granted; and

(iv)  the degree of prejudice to the other party if the application is granted.

18.  Further, where a delay is inexcusable even if insubstantial, a party seeking an extension of time must show a real prospect of success on the merits of the intended appeal.[2]

19.  This approach will also be applicable in considering whether to grant leave to appeal against decisions of the Trade Marks Registry out of time.[3]

20.  On the other hand, the legal principles as to whether the court should allow a party to adduce new evidence in an appeal from the Trade Marks Registry have been summarised by me in 樂氏同仁藥業科技集團有限公司v 中國北京同仁堂(集團)有限責任公司.[4]  Though the restrictive approach under Ladd v Marshall[5] for receiving new evidence in an appeal is not applicable, the following factors are relevant in considering whether to grant leave to adduce new evidence in such kind of proceedings:

(i)  whether the evidence could have been filed earlier and, if so, how much earlier;

(ii)  if it could have been, what explanation for the late filing has been offered to explain the delay;

(iii)  the nature of the mark;

(iv)  the nature of the objections to it;

(v)  the potential significance of the new evidence; and

(vi)  whether or not the other side will be significantly prejudiced by the admission of the evidence in a way which cannot be compensated, for example, by an order for costs.

21.  The onus is on the applicant to justify the exercise of the court’s discretion in its favour, and merely showing the evidence sought to be introduced is relevant is not enough. Litigants are expected to put the best evidence available to them before the Trade Marks Registry, and they should not be allowed to redesign their evidence looking at the decision adverse to them in the Registry and start the matter again on appeal.[6]

(ii)  The merits of the New Evidence Application

22.  The new evidence sought to be filed by the Applicant is contained in the 1^st Affirmation of Sun (“the New Evidence”).  As pointed by Ms Ma, the New Evidence can be divided in two parts: “the Brand of Hongkong Yeewotong”(“the Brand Evidence”)[7] and “the origin of the Applicant’s Marks” with 3 exhibits in relation to the latter, namely, Exhibits “SQ-1”, “SQ-2” and “SQ-3” (collectively, “the Origin Evidence”)[8].

23.  For the Brand Evidence, it mainly consists of assertions by Sun as to how the Applicant conducted its business.

24.  In respect of the Origin Evidence, Sun claims that the Subject Marks are all based on one of the 7 designs that was bought from one Ng Chi Ming (“Ng”)  who was a “freelance designer”  (自由設計撰稿擁有人”), and “there is simply nothing that the [Applicant] copied or need or need to copy from [the Opponents’ Mark]”.  There are also arguments on the differences between the Opponents’ Mark and the Subject Marks and an argument accusing dishonesty on the part of the Opponents.  Regarding the exhibits, “SQ-1”is a statement made by Sun in the capacity of director of the Applicant on 23 January 2024 (i.e. one day before the date of the Leave Application)  and “SQ-3” is a board resolution passed by the Applicant on the same day, both asserting the origin of the Applicant’s Marks.  “SQ-2” consists of a copy of a purported agreement entitled “transfer of property” dated 13 August 2016 entered into between Ng and the Applicant and a purported related receipt.

25.  Given the circumstances of this case, there is no good reason as to why the court should exercise the discretion to allow the filing of the New Evidence.

26.  First, all the alleged New Evidence could have been filed when the Applicant filed its evidence back on 4 November 2020 or 13 January 2021 (as the case may be). As pointed out by Ms Ma, the Applicant could also have sought leave to file the new evidence by way of further evidence pursuant to r 20 of the Trade Marks Rules, Cap 559A (“the TM Rules”)  after the Opponents filed its reply evidence on 18 October 2021.  In fact, the Applicant had plenty of time to do so any time before the hearing which was only held on 14 February 2023.  Yet, the Applicant only made the New Evidence Application on 26 January 2024.  There has been a significant delay of more than 3 years.

27.  Mr Chan, counsel for the Applicant, tries to argue that the Hearing Officer was informed of the New Evidence at the hearing but refused to consider it because the New Evidence was not adduced in the proper format.  However, r 79(1)  of the TM Rules expressly requires that the evidence for proceedings before the Registrar be filed by way of a statutory declaration or affidavit.  Since the evidence was not filed that way, and in fact no application to adduce further evidence was made, the Hearing Officer was entitled and indeed required by law to disregard the assertions made in the attachment to the Applicant’s written submissions that the design of the Subject Marks was purchased from Ng.

28.  I also agree with the observation made by Ms Ma that the Applicant, by seeking to adduce the New Evidence at such a late stage, is actually trying to redesign its evidence having regard to the adverse decision against it, which should not be allowed according to the principle mentioned in §21 above.

29.  In fact, when an allegation of bad faith is made in opposing an application for registration of a trade mark, the applicant is expected to and should file evidence as to how it came to use a particular design for the subject mark.  It is not a concept which is difficult to understand. If someone accuses you of copying his or her mark, even a person without legal training should know what sort of evidence one should adduce to rebut such kind of allegation.

30.  Second, the explanation given for the substantial delay is unsatisfactory.

31.  The Applicant puts the blame on lack of legal advice and its incorrect understanding of the statutory requirement.  I agree with Ms Ma that such explanation is wholly unsatisfactory:

(i)  The statutory requirement concerned, r 79 of the TM Rules, is very clear.  As pointed out in Barton v Wright Hassall LLP[9], unless the rules and practice directions are particularly inaccessible or obscure, it is reasonable to expect a litigant in person to familiarise himself or herself with the rules which apply to any step which he or she is about to take.

(ii)  The mere fact that an applicant is not legally represented does not constitute a valid excuse for failing to comply with the court’s procedural rules.[10]

(iii)  The Applicant had been specifically reminded of the relevant statutory requirement by the Registrar as seen in the various letters sent to the Applicant.[11]

(iv)  The clear understanding of such statutory requirement on the part of the Applicant can be demonstrated by its filing of the evidence by way of statutory declaration in 2020 and 2021.  Upon the Opponents’ filing of the reply evidence, the Hearing Officer further reminded the Applicant that unless with leave, no party shall file further evidence.

32.  According to my dicta in 樂氏同仁藥業科技集團有限公司v 中國北京同仁堂(集團)有限責任公司[12], application for admission of new evidence can be dismissed simply because there is substantial delay with no satisfactory explanation.  This is certainly the case here.

33.  Third, the Opponents will be prejudiced by the admission of the New Evidence.  Assuming that such evidence would be relevant in the intended appeal (which I do not accept in light of my analysis in the next few paragraphs), new evidence may have to be filed by the Opponents.  The Opponents may even have to consider cross-examining Sun on the New Evidence.  It would no doubt further delay the hearing of the appeal and require unnecessary costs to be incurred. Further, the proceedings have already been pending for a long time and there is prejudice in pending litigation itself, bearing in mind the opposition proceedings were commenced in 2018 or 2019, namely, about 6 or 7 years ago.  In any event, as observed by Au-Yeung J in Gemology Headquarters International LLC v Gemological Institute of America Inc[13], this requirement on prejudice is not something that an applicant (here the Applicant)  can freely use to override the other requirements.  Otherwise, an applicant can simply buy an opportunity to adduce new evidence.  This cannot be fair or just to the counter-party.

34.  Fourth, the new evidence sought to be adduced cannot advance its case in the intended appeal.  I consider this an important reason as to why this court should disallow the New Evidence Application and indeed the Leave Application.

35.  None of the new evidence is relevant as to the Proposed Grounds (1)  and (2).

36.  For the Brand Evidence, it is irrelevant as to the issue of bad faith under the Proposed Grounds (3)  and (4).  In any event, the way in which the Applicant conducted its business is quite irrelevant in assessing whether the Subject Applications were made in bad faith.

37.  More importantly, the Origin Evidence is either irrelevant or insignificant in the intended appeal.  As pointed out by Ms Ma, it is irrelevant as to the finding of similarity (whether strikingly similar or very similar)  under attack in the Proposed Ground (3), as such finding was reached simply by the Hearing Officer in assessing the marks concerned.

38.  For the other attack in Ground (3)  against the finding that the Subject Marks were copied from the Opponents’ various registered or unregistered marks, the New Evidence also cannot advance the Applicant’s case in the intended appeal.

39.  In making the Decisions, the Hearing Officer had rightly found that the Subject Marks and the Opponents’ Mark are very if not strikingly similar.  Under such circumstances, the Hearing Officer was entitled to find that the Subject Marks were copied from the Opponents’ Mark in the absence of explanation as to why such similar devices and colour schemes were used, and in the absence of evidence as to how the subject marks were designed in the ways they were.  Where the devices as they ultimately became are so similar, a court or tribunal is entitled to conclude that one is derived from the other unless there is acceptable evidence from the originator of the idea to the contrary.[14]

40.  Regarding the Origin Evidence, apart from the lack of particulars about the background of this random freelance designer Ng, there is no explanation as to why such similar devices and colour schemes were used, and how the Subject Marks were designed in the ways by Ng.  Ms Ma has rightly pointed out that by the time Ng was allegedly commissioned to design the Subject Marks, according to the undisputed findings made by the Registrar, the Opponent’s Mark and the Opponents’ Package were already in use with wide coverage in public arena.  In the absence of the said explanation or evidence, any tribunal would similarly conclude that the alleged designs by Ng were also copied from the Opponents’ Mark and the Opponents’ Package.  Therefore, the Origin Evidence would have no impact on the findings that the Subject Marks were results of copying from the Opponents’ Marks and the Opponents’ Package.  Because even accepting the Applicant’s case that the Subject Marks were all based on the purported designs made by Ng, the Subject Marks would simply be copies derived from the Opponents’ Mark and the Opponents’ Package.  Hence, with the complete absence of evidence as to how Ng allegedly created the alleged designs and any knowledge thereof on the part of the Applicant, in the light of the other findings (which are either indisputable or undisputed)  made by Hearing Officer, the Origin Evidence has no bearing on the Hearing Officer’s ultimate conclusion of bad faith.

41.  According to the Applicant, Ng had died in the end of 2017.  But this can hardly assist the Applicant’s case.  Given the similarity of the marks and the widespread use of the Opponents’ Mark and the Opponents’ Package in the market, the absence of evidence for the alleged “creation” of the Subject Marks and their related designs is fatal. Furthermore, the Applicant had been carrying on business in the same trade. The striking similarity of the marks should have raised concern on the part of the Applicant.  Yet, no explanation has been given by the Applicant as to why it decided to use such a similar mark or design as those of its competitors, or whether it had sought any clarification from the “designer” as to why he came up with such a similar mark or design.

42.  Further, even if the Applicant were able to challenge the finding of bad faith, which I do not accept, it is extremely unlikely that the Subject Applications can survive the other grounds of objection put forward in the opposition proceedings.  Though the Hearing Officer did not make findings on the other grounds, such as likely passing-off under s 11(4)(b)  and confusing similarity under s 12(3)  of the TMO, it is not difficult to predict the results in light of the correct observations made by the Hearing Officer about the similarity of the marks concerned.  For these reasons, I dismiss the New Evidence Application.

(iii)     The merits of the Leave Application

43.  In my judgment, the Leave Application can be dismissed simply on the ground that the Applicant’s intended appeal has no reasonable prospect of success.

44.  The principles to be applied in considering an appeal form the Registrar are well-established.[15]  In a nutshell, unless there is sufficient clarity that there is an error, the appellate tribunal should not intervene or overturn the decision of the Registrar.

45.  In respect of the Proposed Grounds (1)  and (2), the Hearing Officer was perfectly entitled to take into account all the circumstances of the case, including the marks and packages in actual use by the Opponents prior to the date of the Subject Applications.  The Hearing Officer had committed no error in this regard.

46.  For the Proposed Grounds (3)  and (4), the Hearing Officer was also perfectly entitled to reach such findings on the basis of the evidence before her at the hearing.  Again, the Hearing Officer had committed no error.

47.  Even if this court were to allow the New Evidence Application, I have already explained above as to why the New Evidence cannot advance the Applicant’s case in the intended appeal.  Hence, the intended appeal has no reasonable prospect of success and the Leave Application should be refused on this ground alone.

48.  In any event, the Leave Application should also be dismissed on the grounds of delay without satisfactory explanation and prejudice to the Opponents.

49.  The Applicant has tried to rely on the absence of legal representation to justify the delay.  However, the mere fact that the Applicant was not legally represented does not constitute a valid excuse for failing to comply with the court’s procedural rules.[16] In the present case, the Decisions were delivered on 11 August 2023 and the original deadline for appeal fell on 8 September 2023.  The Hearing Officer had extended the time for appeal to 24 October 2023 on application by the Applicant.   It was only on the last day of the extended deadline that Sun filed an application to the High Court Registry seeking leave to represent the Applicant as a director.

50.  The Applicant further explained that it had been trying to engage lawyers since the first refusal by the Master of the High Court (which was on 25 October 2023), but it had not been able to find lawyers with the relevant experience taking into account the legal costs concerned, and it was only up to 20 December 2023 (almost two months from 25 October 2023)  that the current legal representatives of the Applicant agreed to take up the case.  However, this can hardly be a satisfactory explanation.  In particular, that was done at the time when the extended deadline had already expired, and the High Court Master had already refused Sun’s application to represent the Applicant.

51.  I have already explained above as to why the prolonged proceedings have caused prejudice to the Opponents.  These additional factors do not favour the granting of leave to appeal against the Decisions of the Hearing Officer.  I therefore refused the Leave Application.

THE SECURITY APPLICATION

52.  By reason of the dismissal of the Leave Application and the New Evidence Application, it is not necessary for me to deal with the Security Application.  In any event, the Applicant had previously indicated that it was willing to offer the sum of $900,000 as security for costs.  In the hearing, Mr Chan confirms that such offer is still valid.  The Opponents ask for a slightly higher sum of $901,155.  The difference is quite insignificant.  Hence, if this case goes elsewhere and a contrary view is taken about the merits of the Leave Application and the New Evidence Application, a sum of $900,000 should be ordered to cover the costs of the intended appeal. For the purpose of the present proceedings, I formally dismiss the Security Application.

53.  The parties have agreed that costs should follow the event.  If not for the intended appeal, the Opponents would not have taken out the Security Application.  I therefore award the costs of all three applications to the Opponents.