PREMIUM COLLECTION INDUSTRIES LTD v. JAGUAR PEN (HK) LTD AND OTHERS

HCA1029/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

ACTION NO. 1029 OF 2005

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D E C I S I O N

1.  This is the plaintiff’s application for costs of the action.  This is a copyright action. 

2.  The plaintiff claimed that the defendants have infringed its copyright in certain artistic works in relation to the design of an LED light pen.  The copyright has been proved by the plaintiff’s affirmation and the exhibits thereto.  The action was settled with the usual undertakings given by the defendants and the usual orders for discovery.

3.  The defendants say that they should not be ordered to pay costs.  A number of points have been advanced.

4.  The first point is that the 1st defendant has not taken part in the infringement.  No doubt there is no evidence that the 1st defendant has engaged in any sale of the infringement pen.  However, the infringement copies were promoted in a website jointly owned by the 1st and 2nd defendants and both their names appear therein.  Furthermore, the email for promoting this infringement pen was sent in the names of the 1st and 2nd defendants to their customers.  I therefore do not think that the 1st defendant has a defence to primary infringement of the copyright as referred to in sections 22 and 23 of the Copyright Ordinance. 

5.  The second point is that the 2nd defendant is an innocent infringer.  Be that as it may, knowledge is not an ingredient for primary infringement.  The 2nd defendant has not only promoted the sale of the infringement pen, it has in fact sold some samples to a customer and to the plaintiff’s investigator.  It has also given an order confirmation to sell 18,000 pieces of it at a unit price of US$0.30 to the plaintiff’s investigator.

6.  The 2nd defendant further argues that the plaintiff had not given any solicitor’s demand letter before issuing the writ.  There were in fact two letters dated 8 April, 2005 and 19 May 2005 issued by the plaintiff itself to the 1st defendant advising it of the plaintiff’s ownership of the copyright.  On admission, such letters had been passed to the 2nd defendant, but the 2nd defendant continued to infringe the plaintiff’s rights.  It gave the above-mentioned order confirmation on 30 May 2005 to the investigator.  I see no reason why the plaintiff should not have issued and served the writ on the defendants on 1 June 2005.  Furthermore, there is no need for any pre-action notice to be issued.  (See Copinger & Skone James on Copyright, 1999 edition, paragraph 22-101 and Copinger & Skone James on Copyright, 2005 edition, paragraphs 22-185 and 22-192)

7.  The next argument was that the defendants had on 6 June 2005 undertook not to infringe the plaintiff’s right pending the action.  But that undertaking was limited to the pendency of the action and the defendants expressly excluded costs and compensation from it.  Since the undertaking was not in terms of what the plaintiff was entitled in the action, which included costs, it could not have stopped the progress of the action or the further accrual of costs.

8.  The defendants also argue that the plaintiff did not withhold preparation of the statement of claim upon the defendants’ request and was difficult on granting extension of time to the defendants to prepare the defence.  I accept that when the defendants requested the plaintiff not to prepare the statement of claim, that document was in fact to be finalised.  On the time to file defence, if the defendants indeed wanted to settle the matter, I do not see why they should have found it necessary to file a defence.  The defence as filed also did not improve their position at all.  In any case, the plaintiff granted them 10 days’ extension in addition to the 14 days provided by the Rules of the High Court.  I do not see any merit in this point.

9.  The defendants also argued that the settlement reached between the parties did not include the giving of judgment to the plaintiff.  I do not see this as a material point as all the usual undertakings and orders for discoveries have been given by the defendants in the settlement.

10.  The defendants also argued that the settlement did not require them to pay any damages.  However, there was indeed infringement of the plaintiff’s copyright, which right I find the plaintiff has proved by his affirmation and the exhibits thereto.  The question of costs was also reserved in the settlement to be argued.  I do not see how the lack of provision of damages in the settlement can improve the defendants’ position on costs.

11.  The defendants also argue that the costs should be taxed at the District Court scale.  I accept the plaintiff’s reply that the plaintiff did not know the quantum of damages until very late in the progress of the action.  By then, it might not be worthwhile to transfer the action to the District Court just to deal with costs.

12.  Lastly, I accept the defendants’ submission that they were all along eager to settle the matter.  However, they have throughout refused to pay any costs to the plaintiff.  In order to stop costs running they should have offered the plaintiff the relief that the plaintiff was entitled to in the action as well as costs to be taxed.  Only such an offer could have stopped further costs from mounting as against the defendants.

13.  However, in light of the minimal involvement of the 1st defendant and the lack of evidence of infringement by it apart from the matters I have referred to above, I am willing to limit its liability on costs to the filing and service of the defence. 

14.  I therefore order that the 1st and 2nd defendants do pay the plaintiff costs of this action up to the filing and service of the defence, and the 2nd defendant do pay the plaintiff the rest of the costs of this action.