ORIENTAL LOGISTICS CO LTD v. ORIENTAL LOGISTICS GROUP LTD

HCA1804/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1804 OF 2005

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J U D G M E N T

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1.  This is a passing off action. The main issues are whether the plaintiff has proved sufficient goodwill in the words “Oriental Logistics”, whether there is any actionable misrepresentation by the defendant in using “Oriental Logistics” as its company name and whether the plaintiff has suffered or is likely to suffer any damage as a result of misrepresentation by the defendant.

2.  Much of the facts in this case is not in dispute and can be simply put.

The plaintiff

3.  The plaintiff is a Hong Kong company incorporated on 21 November 1996.  Its name in English and Chinese are “Oriental Logistics Company Limited” and “東方儲運有限公司”. 

4.  The company was founded by Mr Lau Wai Kwong Gilbert, who previously had many years of experience working in large warehousing company.  Mr Lau also engages actively in a number of public duties in Hong Kong and China, including acting as the president of the Hong Kong Logistics Association from 1997 to 1999.  Mr Lau is one of the three plaintiff witnesses.  The witness statement of Miss Margaret Lau, the plaintiff’s executive director, was agreed for admission.  The third witness is Mr Wong Foo Wah, the president of the Hong Kong Logistics Association.

5.  As its name suggests, the plaintiff is engaged in the provision of logistics services.  It started as third party logistics provider of physical cargo distribution and public warehousing.  By 1999, it had moved on to provide other services, including e-commerce logistics, third party warehousing, total logistics, inventory management and freight forwarding management through partnership with major shipping lines and air freight companies.  The plaintiff, however, never issued bill of ladings in its own name.

6.  The plaintiff is now part of a group of companies.  The holding company is Oriental Logistics Holding Company Limited, incorporated in 2002.  Apart from the plaintiff and the holding company, the group now has four Hong Kong companies, three of which were incorporated before 2003. The group also has three PRC companies incorporated in 2002, 2004 and 2005.  Apart from one Hong Kong company called Eastern Investment Holdings Limited, all companies in the plaintiff’s group of companies have included in their English names the word “oriental”.

7.  The plaintiff focuses mainly on the provision of industrial logistics services.  Its clients include US Fortune 500 companies and well-known international corporations and brand names. The plaintiff prides itself in being able to provide one-stop full logistics services.  It is common ground that logistics services or management is about the geographical repositioning of raw materials.  According to the plaintiff’s expert, Mr Wong Foo Wah, who has been in the logistics trade for 30 years, integrated logistics services should comprise five stages, being warehousing, physical distribution (transportation), inventory management, freight forwarding and import/ export.

8.  According to Mr Lau, the plaintiff has a fleet of 24 container trucks and lorries and six warehouses in Hong Kong. It has branch offices in Beijing, Shanghai, Guangzhou and Taiwan.  It also has agents and warehouses in eight cities in China. The plaintiff, through alliance service agreements, is connected to a sea/ air freight worldwide forwarding network and is further in partnership with a number of companies engaged in logistics services, transportation and freight forwarding services.  It provides services in Southeast Asia and also Europe and the USA.

9.  Mr Lau says that the plaintiff is one of the few companies in Hong Kong that offers comprehensive and integrated third party logistics services.  Most of the other logistics companies in Hong Kong, however, only focus on services for one or some of the five stages identified by Mr Wong. 

10.  It is Mr Lau’s evidence that the plaintiff had between its incorporation and 2007, spent about HK$ 1.44 million on advertising and promoting its business and promoting the business name of “Oriental Logistics”.  The plaintiff’s annual business turnover had grown since its incorporation, from about HK$ 8 million in 1997 to over HK$ 66 million in the year ending 31 March 2004.

11.  Over the years, the plaintiff had also received various awards and recognitions in connection with its business performance and management quality. It had also promoted the study of logistics in Hong Kong by sponsoring scholarships and academic exchanges at vocational institute and universities. 

12.  Both Mr Lau and Mr Wong say that the plaintiff is an established and reputable logistics service provider in Hong Kong.

The defendant

13.  The defendant was incorporated in Hong Kong on 3 March 2004.  Its English and Chinese names are “Oriental Logistics Group Limited” and “超捷國際物流有限公司”.

14.  The defendant is a subsidiary of a Taiwan company called Oriental Logistics Group Limited (超捷國際物流股份有限公司) (“OLG”).  OLG was incorporated in Taiwan in March 2000 and before changing to its present name in 2005, it was known as Oriental Logistics Company Limited (超捷國際有限公司).  The majority shareholder of OLG is Mr Tsou Yun Lien who has been in logistics business since 1987 and has held responsible positions with various logistics and freight forwarding trade organizations in Taiwan. He is the only witness called by the defendant. 

15.  OLG is a Taiwan based logistics company. It has branches or subsidiaries in Taichung and Kaoshoung in Taiwan, Shanghai, Xiamen, Fouzhou and Shenzhen (since 2006) in China and also Hong Kong (i.e. the defendant).  The core business of OLG is international freight forwarding services with the majority of its customers being based in Taiwan, mainland China and Hong Kong.  

16.  According to Mr Tsou, OLG was initially named “Oriental Logistics Company Limited” because the word “oriental” means and refers to the East and East Asia region and signifies that OLG is founded and based in the East and East Asia. These are also the areas on which OLG focuses its logistics services.  As for the words “Logistics Company Limited”, they were chosen to reflect that the nature of the company business is in logistics services and is a company limited by shares.  OLG was subsequently renamed “Oriental Logistics Group Limited” to reflect the development and the expanded scale of the company. 

17.  The two words “超捷” in the Chinese name of OLG carry the meanings of “going beyond” (or surpassing) and “speed and victory”.  Mr Tsou explained that they were chosen to reflect the company’s aim to surpass its past and to provide speedy and convenient logistics services for its customers.

18.  Mr Tsou’s evidence shows that before the incorporation of the defendant, OLG was already engaged in transportation and delivery of cargoes to Hong Kong.  The relevant bills of lading were all issued in the name of OLG and carried its trademark. The decision to set up the defendant in 2004 was to provide end-to-end services to the customers of OLG and to handle the business in Hong Kong through a subsidiary.  Accordingly, it was decided that the defendant was to have the same Chinese and English names as well as the same mark as OLG, which already enjoyed a certain level of popularity in Hong Kong. And as OLG was then in the process of changing its English name, the defendant adopted the new English name of Oriental Logistics Group Limited. 

19.  The incorporation of the defendant was arranged by an accounting and secretarial company.  Mr Tsou’s evidence is that neither he nor OLG was aware of the existence of the plaintiff at the time the defendant was set up and named.  When cross-examined, he accepted that they did not ask for a search to be done as they had entrusted the work to the accountant and relied on his professional expertise and advice.  

20.  The defendant’s logo, which is also the trademark of OLG and used by the other group companies, is registered as a trademark in Hong Kong on 8 February 2005, with a date of priority of 27 July 2004.  The evidence of Mr Tsou is that the mark is always used together with the Chinese and English names of the defendant or of OLG on the business documentation (such as invoices, bills of lading or other shipping documents) and advertisements and promotion materials.  

21.  Since incorporation in Hong Kong, the core business of the defendant is the provision of ocean freight and airfreight forwarding services.  It is registered with the Hong Kong Marine Department and the freight forwarding liaison team of Hong Kong airlines.  The defendant advertises regularly in the Hong Kong Shipping Gazette (published weekly), which is a key trade magazine and also shipping newspapers.  Within the first year of its incorporation, the defendant had a business turnover of over HK$ 47 million.  Most of the customers at the time were from Taiwan.  Since then, the defendant’s clientele had developed and expanded.

22.  In cross-examination, Mr Tsou stated that since about 2006 or 2007, the defendant also offers transportation services for its sea freight-forwarding customers.  At about the same time, the defendant also started to offer warehousing services to provide temporary and short-term storage service to its freight-forwarding customers.

The dispute

23.  In July 2004, it came to the attention of the plaintiff that in an online directory known as “Hong Kong Shipping Companies and Freight Agencies List”, the plaintiff’s website was mistakably stated to be that of the defendant.  At about the same time, HSBC also mistakably sent to the plaintiff bills of ladings relating to shipments handled by the defendant.

24.  By letter dated 15 July 2004, the plaintiff through its solicitors demanded the defendant to cease using in the course of trade the name “Oriental Logistics” and to change its company name to a name different from  “Oriental Logistics”.  The defendant’s solicitors replied by letter dated 19 July 2004, refusing to comply with the demand.

25.  Thereafter, the plaintiff continued to receive from HSBC, bills of lading of the defendant and other correspondences intended for the defendant.  The plaintiff also received the defendant’s bills of ladings from another bank, Liu Chong Hing Bank.  Both banks have dealings with the plaintiff.

26.  The plaintiff has also over the years received emails and letters from entities with whom it has no business dealing, that were intended for a company called “Oriental Logistics”.  The evidence of Miss Margaret Lau also refers to an incident in 2007, in which one of the plaintiff’s long standing business partners had mistakably transferred payments to the defendant’s account.   

27.  The documents before the court show that some time before May 2005, the plaintiff had written to the Company Registrar to object to the defendant’s name under section 22A of the Companies Ordinance (namely, the name gives a misleading indication of the nature of its activities as to be likely to cause harm to the public).  After receiving representations of the defendant made through its solicitors, the Company Registrar advised by letter dated 19 May 2005 that he did not consider it appropriate to exercise his power under section 22A to direct the defendant to change its name.

28.  On 15 September 2005, the plaintiff issued the Writ herein.

The plaintiff’s claim

29.  The plaintiff’s case is that when the defendant was incorporated in 2004, it was already well established in Hong Kong as a logistics services provider, with substantial and valuable goodwill and reputation in its name “Oriental Logistics”.  It is said that a substantial number of members of the public in Hong Kong and traders from the Mainland identify “Oriental Logistics” when used in relation to the provision of logistics services as indicating a business of or connected with the plaintiff. 

30.  The acts of passing off pleaded in the Statement of Claim are: (i) the registration of the name “Oriental Logistics Group Limited” on the register of the Company Registry in Hong Kong; and (ii) the provision by the defendant of logistics services similar to those provided by the plaintiff under and by reference to the name “Oriental Logistics”.

31.  As to deceit or intention to cause confusion in the trade and members of the public in Hong Kong, the plaintiff relied on specific instances of confusion.  The instances of confusion pleaded are: (i) two bills of ladings of the defendant that were mistakably sent by HSBC to it, (ii) a letter from Toplis and Harding (Recoveries) Ltd intended for the defendant was sent to it by mistake; and (iii) the name of the defendant as well as that of the defendant will show up in the results of Internet searches on the term “Oriental Logistics”.

32.  A number of relief was pleaded. At the trial, however, the plaintiff only pursues items (1) to (4) and costs.  The other pleaded relief of orders for delivery up of offending articles, inquiry as to damages and, alternatively, an account of profit are not pursued.

33.  The principal relief sought is an injunction.  Although the pleading also sought to restrain the use of the name of “Oriental Logistics Group Limited”, Mr Harris SC indicated in his closing submission that the plaintiff is confining the scope of the injunction to the trading style or name of “Oriental Logistics”.  The plaintiff also seeks orders directing the defendant: (i) to take steps to remove from the Register of Companies the registration for the company name of “Oriental Logistics Group Limited” or to change its name to another name that does not include the words “Oriental Logistics”; and (ii) to remove or obliterate references to “Oriental Logistics” in the signs of the defendant.

The defence case

34.  The defendant’s case is that it has based on its parent company’s existing goodwill, built up its goodwill and reputation in Hong Kong. 

35.  The defendant disputes the claim of passing off on a number of grounds.  First, it disputes that the name or words “Oriental Logistics” are distinctive of the plaintiff’s services and business.  It also does not accept that the plaintiff’s goodwill and reputation extends to freight forwarding services. Second, it denies the English name of the defendant was chosen with the object of causing deception or confusion to the public. Third, it is said that there are sufficient differences between the plaintiff and the defendant having regard to the fact that: (i) the defendant advertises and provides services under both its English and Chinese names together with its logo, the latter two are very different from those of the plaintiff; and (ii) the specific services of the plaintiff (i.e. warehousing, inventory management, local physical transportation and repacking services) and those of the defendant (i.e. ocean freight and air freight forwarding services) are different.  Fourth, the defendant also denies that the plaintiff has suffered loss or damage.   

The issues

36.  There are three broad issues for determination in this trial. They are:

(1)  Whether at the time of the incorporation of the defendant, the plaintiff had acquired substantial goodwill in Hong Kong in the name or words “Oriental Logistics” in relation to its logistics services.  This in turn entails considerations of whether the name is descriptive or of common use and in turn whether the name has acquired a secondary meaning so as to become distinctive of the plaintiff’s services.

(2)  Whether there is any actionable misrepresentation on the defendant’s part. This in turn involves questions of whether the adoption of the English name by the defendant and the offer or provision of services under its English name was calculated to confuse or mislead the public into believing that the defendant’s business is, or is connected to, the plaintiff’s business, and whether there are differences between the trading name and style of the plaintiff and that of the defendant that would avert confusion.

(3)  Whether the plaintiff has suffered or likely to suffer loss and damage as a result of the defendant’s misrepresentation that would found and support the claim and relief sought.   

The law

37.  The applicable principles are not in dispute.  In Erven Warnink Besloten Vennootschap & Anor v. J Townsend & Sons (Hull) Ltd & Anor [1979] AC 731, 742, Lord Diplock stated that there are five characteristics that must be present to create a valid cause of action in passing up. They are

(1)  a misrepresentation;

(2)  made by a trader in the course of trade;

(3)  to prospective customers of his or ultimate consumers of goods;

(4)  which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonable foreseeable consequence); and

(5)  which causes actual damage to the business or goodwill of the trader by whom the action is brought.

38.  In summary, the three elements that a plaintiff must prove to make a case of passing off are goodwill or reputation, misrepresentation leading to deception and damage.  In Reckitt  & Colman Products Ltd v. Borden Inc & Ors [1990] RPC 341, 406, Lord Oliver elaborated the three elements as follows:

(1)  A goodwill or reputation attached to the goods or services which the plaintiff supplies in the mind of the purchasing public by association with the identifying get-up (whether it consists simply of a brand name or a trade description or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognized by the public as distinctive specifically of the plaintiff’s goods or services;

(2)  A misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff; and

(3)  The plaintiff suffers, or in a quia timet action that he is likely to suffer, damages by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.   

39.  The relevant date for deciding whether the conduct of the defendant amounts to passing off is the date on which that conduct commenced.  Hence, the plaintiff must show that his name or mark had become distinctive of him before the date the defendant first commenced the activities complained of: Wadlow’s The Law of Passing Off, 3^rd Edition, para.5-133, see also Cadbury-Schweppes Pty Ltd v. The Pub Squash Co Ltd [1981] FSR 429, 494. 

40.  In the context of the plaintiff’s reputation and goodwill, where the trade name involves descriptive word (whether descriptive of the business or geographically descriptive) or word of common use, the plaintiff must prove that the expression has lost its primary descriptive meaning and has acquired a secondary meaning, as a term distinctive of his goods or services.  It is not a light burden and the court will easily accept comparatively small differences as sufficient to avert confusion: Office Cleaning Services Ltd v. Westminster Window and General Cleaners Ltd (1946) 63 RPC 39, 43 applied in Land Power International Holdings Ltd v. Inter-Land Properties (HK) Ltd [1995] 2 HKC 146 (CA).

41.  As to misrepresentation, the essence of the tort is that a man shall not by misrepresentation pass off his own goods as those of the others: Erven Warnink v. Townsend & Sons (Hull) Ltd [1979] AC 731, 742 applied in Land Power International Holdings Ltd v. Inter-Land Properties (HK) Ltd [1995] 2 HKC 146 (CA).  However, the defendant’s state of mind is irrelevant. It is not necessary to prove fraud or knowledge of the existence of the plaintiff’s business on the defendant’s part: Singer Machine Manufacturers v. Wilson (1877) 3 App Case 376, 391. 

42.  On the other hand, confusion per se is insufficient. This is particularly the case of a plaintiff who adopts words in common use for his trade name for, in such a case, some risk of confusion is inevitable.  It is important to consider the nature and cause of the confusion: Office Cleaning Services, Ld v. Westminster Window and General Cleaners, Ld. (1946) 63 RPC 39, Land Power International Holdings Ltd v. Inter-Land Properties (HK) Ltd [1995] 2 HKC 146. 

43.  What is important is whether the use of the potentially confusing descriptive word in the defendant’s trading style or name was an operative misrepresentation calculated in the circumstances to lead a substantial section of the public to the belief that the defendant’s business is connected to the plaintiff: My Kinda Town Ltd v. Soll & Anor [1983] RPC 407, 418-419, 424-425.  If the confusion is caused not by misrepresentation on the defendant’s part, but merely because the word in question is descriptive or of common use, then the plaintiff has no claim in passing off:  Land Power International Holdings Ltd v. Inter-Land Properties (HK) Ltd, 152D-E. 

44.  Finally, in damages or likelihood of damage, the plaintiff must at least show some likelihood of injury resulting from the defendant’s activities complained of.  Where there is no loss or division of business or reasonable likelihood of such loss resulting from a confusion of names, there is no cause of action in passing off: Halsbury’s Laws of England, Fourth Edition (2007 Reissue) vol.48 para.335, Jet Aviation (Singapore) Pte Ltd v. Jet Maintenance Pte Ltd [1998] 3 SLR 287.

45.  With these principles in mind, I turn to the issues between the parties.

The plaintiff’s goodwill

46.  The first question in the context of the plaintiff’s goodwill is whether the name “Oriental Logistics” are common words in ordinary usage and descriptive.  As I understand it, Mr Harris SC does not dispute the word “logistics” is descriptive of the business and services offered by the plaintiff.  He, however, does not accept that the word “oriental” is a descriptive word. 

47.  The Shorter Oxford English Dictionary, Sixth edition, Volume 2 gives the meaning of “oriental” as, inter alia,  “belonging to or situated in the eastern part of the sky or (formerly) of a specified country or region;” and “belonging to, occurring in, or characteristics of, the countries east of the Mediterranean, especially those of eastern Asia”.  In my view, “oriental” is both a common English word and a geographically descriptive word, describing and referring to the East and East Asia region.

48.  The main thrust of Mr Harris SC’s closing submission, however, is that the combination of “oriental” and “logistics” does not make up a descriptive term.  It is said that the two-word term does not describe a particular kind of logistics service.  While acknowledging that “oriental” is a word popularly used in Hong Kong to form part of company or business names, he argued that the word is conceptually a fancy word and as no definite meaning could be attributed to the word when it is combined with the word “logistics”, the two-word term is not a descriptive term.   

49.  I do not agree.  “Oriental” and “logistics” are common English words. The former is a geographical expression while the latter is the most natural word to describe the business of a logistics services provider.  As Mr Wong for the defendant observed, logistics businesses attach importance to their geographical location, network and scope of services.  Logistics is after all about the geographical repositioning of raw materials and products. This point is best illustrated by the evidence of Mr Lau and Mr Tsou.  Mr Lau testified that the plaintiff chose the name “oriental logistics” because “oriental” carries the meaning of mainland China and the two-word term signifies that the plaintiff provides China-related services.  He stated that the plaintiff used the Greater China as its base, from where it sets off to develop the whole Asian market.  Admittedly, “oriental logistics” is regarded as a name indicative of the network and scope of the plaintiff’s business, being China-related logistics services.  In the same vein, Mr Tsou said that OLG adopted the two-word term as its name because it is descriptive of the East and East Asian region from which it originated and operated.  The term “oriental logistics”, objectively viewed, is a natural and descriptive term to denote the business of the plaintiff, namely, it is based and operated or specialized in China and the Eastern or Asian region.

50.  It follows that the plaintiff has to show that “oriental logistics” has acquired secondary meaning and the public recognizes and associates the name as denoting its services and none other.  The relevant time is March 2004 when the defendant was incorporated.  This is a heavy burden as trade name that describes the service rendered is jealously safeguarded by the court: Cellular Clothing Co Ltd v. Maxton and Murray [1899] AC 326; Office Cleaning Services, Ld v. Westminster Window & General Cleaners, Ld (1946) 63 RPC 39, 42.  

51.  By 2004, the plaintiff had been in business in Hong Kong for some eight years.  Mr Lau testified that the plaintiff had throughout the years incurred about HK$1.7 million on advertising and promoting the business of the plaintiff.  Mr Wong for the defendant pointed out that the plaintiff had not adduced primary documents to support the assertion.  I accept this is not entirely satisfactory.  However, the other objective evidence, including the various awards and prizes received by the plaintiff after its incorporation, indicates that the plaintiff had enjoyed recognition and approval for its business and services. This would not have come about if the plaintiff had not been actively promoting its business and services. I am prepared to accept Mr Lau’s testimony that the plaintiff had incurred not insubstantial expenses on promoting its business. 

52.  The evidence also shows that the plaintiff’s annual business turnover had grown steadily and was fairly substantial by 2004. It is also said that the plaintiff had a wide range of clientele and a good business network.  Mr Wong for the defendant is correct to say that the evidence does not show that the plaintiff’s present clientele is exactly the same as that in 2004.  However, the objective evidence is that the plaintiff’s business was already quite sizable in 2004.  As Mr Harris SC submitted, it is unlikely that the profile of the plaintiff’s clientele would undergo fundamental or substantial changes within a short period of time.  Notwithstanding the shortcomings identified by the defence, I am prepared to accept that the plaintiff did have a sizeable volume of business and clientele by 2004.

53.  I am also prepared to accept Mr Lau’s and Mr Wong’s evidence that the plaintiff was a reputable logistics services provider in Hong Kong.  However, that is not conclusive of the issue.  What has to be proved is that the term “oriental logistics” had by 2004 lost its primary descriptive meaning and had acquired a secondary meaning as indicating the services of the plaintiff and no other.  In this connection, the plaintiff’s witness, Mr Wong had stated in his witness statement (at para.15) that:

“The plaintiff is among the most reputable and established logistics services providers in Hong Kong.  As a consequence of the extensive use and substantial reputation of the name ‘Oriental Logistics’, I am of the view that a substantial number of members of the public in Hong Kong, traders from the PRC, and customers worldwide would have come to identify the names ‘Oriental Logistics’, whenever used in relation to the provision of logistics services, as indicating a business of or connected in the course of trade with the plaintiff and their sister companies and none other.”  

54.  Mr Wong’s reference to the reputation of the plaintiff’s sister companies is irrelevant as these companies are not joined in these proceedings.  As to his statement on the plaintiff’s reputation, Mr Wong was twice asked in re-examination to explain the basis for it.  Despite giving a long answer, he did not really elucidate the reasons for his view that “Oriental Logistics” was distinctive of the plaintiff’s business and none other.  Neither did Mr Wong elaborate on what led him to say and what was he referring to when he said there was extensive use of the name “Oriental Logistics”. 

55.  No doubt, he can only speak to what he knows of the logistics trade and market in Hong Kong.  His evidence is that he was not aware of other companies in the trade using the name “oriental” and he had not previously heard of the defendant.  He however readily accepted that it is quite possible that the Hong Kong Logistics Association, of which he is the president, has members bearing the name “oriental”.  As demonstrated to him during cross-examination, there are indeed other companies in the logistics field using the name “oriental”. 

56.  Looking at Mr Wong’s evidence in the round, there is no objective and convincing basis for his view that a substantial number of members of the public in Hong Kong, traders from the PRC, and customers worldwide would identify the name “Oriental Logistics”, when used in relation to logistics services, as indicating the plaintiff and none other.  Neither can the court come to that conclusion on the basis of his evidence.  

57.  In my view, the totality of the evidence before the court is insufficient to make out a case that at the time of the incorporation of the defendant, the name “Oriental Logistics” had acquired a secondary meaning that is distinctive of the plaintiff’s services.  The fact that the plaintiff was one of the early logistics services companies in Hong Kong and had consequently enjoyed a factual monopoly over the use of the name “oriental” for a certain period of time, does not automatically lead to the conclusion that the name has acquired a secondary meaning as indicating the plaintiff’s services.  It is also relevant to note that the plaintiff does not only trade or use the English name of “Oriental Logistics Company Limited”.  Instead, it has in the course of trade used the English name in conjunction with its Chinese name.

58.  The defendant has challenged whether the plaintiff’s goodwill extended to freight forwarding business.  While it is clear that the plaintiff is not the actual freight forwarder and never issues airway bills and bills of lading in its name, it is Mr Lau’s evidence that the plaintiff did arrange freight forwarding services for its customers.  I accept that by 2004, freight forwarding was among the services the plaintiff would offer and procure for its customers.  Hence, if I were to find that the name “Oriental Logistics” had become indicative of the plaintiff, I would be prepared to accept that the plaintiff’s goodwill also extended to freight forwarding services.

59.  For the reasons above, I am not satisfied that the plaintiff has proved sufficient goodwill in the name “Oriental Logistics” to found the action of passing off.

Misrepresentation

60.  I move next to consider whether there was any misrepresentation by the defendant, which is an essential element of the tort. 

61.  Paragraph 11 of the Statement of Claim pleads:

“The said acts of the defendant are calculated to deceive and to cause confusion and to lead members in the trade and members of the public in Hong Kong into the belief that the defendant’s business is the business of the plaintiff or otherwise endorsed by or howsoever connected or associated with the plaintiff which is contrary to the fact.”

62.  Despite these wide terms, the particulars given are confined to incidents of confusion by HSBC and Toplis and Harding (Recoveries) Ltd and the results of Internet searches (see para.31 above).  Insofar as Mr Harris SC had in his submissions commented on differences in the quality of the services of the plaintiff and of the defendant, this is not part of the pleaded case.  Allegation of disparity in quality of goods and services of the parties is fact sensitive. If a plaintiff seeks to rely on it to build a case of misrepresentation, this should be pleaded and properly particularized so that the defendant is afforded a proper opportunity to meet the claim.  In the present case, because the matter was only raised in counsel’s submissions, the defendant was not given a proper opportunity to adduce evidence on the quality and standard of its services.  It is therefore not permissible for the plaintiff to base its case of misrepresentation on inferior quality of services.

63.  Turning to confusion, the authorities have established that mere confusion is not sufficient to support an action of passing off.  Confusion arising from the defendant’s use of “oriental logistics” as part of its trade name does not necessarily mean that there is an actionable misrepresentation. Because of the use of the descriptive words in their business name and as the plaintiff and the defendant are both in the logistics field, albeit the focus of their services is different, blunders by members of the public, hence some confusion, are inevitable.  But confusion arising from that very fact and/or the adoption of the descriptive name is to be disregarded for the purpose of determining whether there is a misrepresentation.  It is therefore important to show the confusion was the result of deception by the defendant.

64.  Miss Lau had in appendix 2 of her witness statement set out a series of incidents of confusion.  The evidence before the court does not show that the confusions are the acts of or caused by the defendant.  There is no evidence as to how the mistake in the website address in the online directory referred to by Miss Lau came about.  Mr Harris SC was mistaken when he suggested in the cross-examination of Mr Tsou that this was an advertisement placed by the defendant.  There is in short no evidence of actual deception or representation by the defendant that its business is that of or is associated or connected with the business of the plaintiff. 

65.  In my view, the incidents of confusion at the most serve to show that staff of the two banks and certain members of the public were under the impression that the two companies are the same or connected.  They only show confusions had taken place but do not explain why they had taken place. The court cannot readily infer that the operating cause of the confusions is deception or misrepresentation by the defendant.  The position is Oliver LJ said in My Kinda Town Ltd v. Soll & Anor [1983] RPC 407, 424: “where inherent in the factual situation in which the parties are operating that there is some risk of confusion in any event from the mere fact that the parties are conducting the same trade and using in it descriptive titles of which neither can claim any legitimate monopoly … a closer analysis [of the operative cause of the confusion] is essential, as the simple fact of confusion does not by itself prove the plaintiff’s case for him.” 

66.  On the other hand, Mr Tsou’s uncontroverted evidence is that the defendant was building on the goodwill and clientele of its parent company, OLG.  At the same time, there are notable differences between the names and style under which the plaintiff and the defendant carry out their business.  First, there is the difference between “company limited” and “group limited” in their English names.  This may appear to be a small difference, but in the context of descriptive names and where there is no actual evidence of deception, this is sufficient to avert confusion.  Mr Harris SC contended that the inclusion of the word “group” in the defendant’s name serves to confuse rather than elucidate because the plaintiff is in a group of companies.  But as Mr Wong for the defendant pointed out, this case is not concerned with the goodwill of the other companies in the plaintiff’s group or of the group as a whole. There is also no evidence of the goodwill of the group or the extent of it.  As for the Chinese names of the plaintiff and the defendant, they are entirely different. In addition, the logos or trademarks of the parties are also distinctive and very different. The evidence shows that the Chinese and English names of the defendant usually appear together and in conjunction with its logo, especially on stationary and shipping documentation.  The same is true of the plaintiff.  In light of all these, I am of the view that there are sufficient differences between the parties’ names and in the circumstances of the use of the name “oriental logistics” as to avoid deception.  

67.  Further, the confusions or risk of confusion is something that must be tolerated by a trader who uses descriptive words in its name.  As acknowledged by Miss Lau, the incidents of confusions she alluded to are “administrative inconvenience” (para.16 of her witness statement).  Likewise, the appearance of both the plaintiff and the defendant in results of Internet search, one of the particulars of confusion relied on by the plaintiff, is also an inconvenience.

68.  There is therefore no passing off by the defendant.

Damages

69.  I move finally to the issue of damages.  The question is, assuming that misrepresentation is proved, whether a case has been made out that the plaintiff has suffered or is likely to suffer damages as a result of the misrepresentation of the defendant.   

70.  There is no evidence before the court that the plaintiff has suffered any loss of business as a result of the activities of the defendant complained of.  The only evidence of loss comes from Miss Lau (at paras.16 to 18 of her witness statement).  They include administrative inconvenience and consumption of time and human resources arising from the correspondences that were intended for the defendant.  This is insufficient to sustain an action in passing off.  Further, as found above, these are what the plaintiff has to put up with for using descriptive words in its name. 

71.  Miss Lau also suggests that the mistaken reference to the plaintiff’s website as that of the defendant in the online directory would bring about loss of business opportunities to the plaintiff.  Her reasoning is not apparent.  And she has not elaborated on the point.  It would appear any loss of business opportunities should be to the defendant instead of the plaintiff because customers who were looking for the defendant would be linked to the plaintiff.  There is no evidential basis for suggesting that the converse would happen as a result of the mistake in the online directory.  Mr Wong for the defendant also took the objection, a proper one in my view, that this was not part of the pleaded case. 

72.  Relying on Russell LJ’s statement in Annabel’s (Berkeley Square) Ltd v. G Schock [1972] RPC 838,844 (27-35), Mr Harris SC argues that it is rare to have actual evidence of confusion and loss of business, and that in the present case, because of the similarity of the names of the plaintiff and the defendant and the overlap in their fields of activity, common sense suggests that confusion and loss of custom is bound to happen.

73.  The case of Annabel does not concern a descriptive name. The name “Annabel” is a fancy word. The parties had used the same name and their fields of activity overlapped.  Accordingly, the court was ready to infer a probability that some members of the public would associate the defendant’s escort agency with the plaintiff’s high-class nightclub and was further prepared to accept that there would be likelihood of harm to the plaintiff’s goodwill. And an interlocutory injunction was therefore granted.

74.  The present case is however rather different. It has been more than four years since the defendant’s incorporation, yet there is no actual evidence of confusion among the plaintiff’s customers or of loss or division of business.  There are at the same time a good deal of differences between their full names and logos.  In these circumstances, it is difficult for the court to infer that there must be some loss of business by reason of the similarity in the English names of the plaintiff and the defendant.  

75.  In short, the plaintiff has failed to make out a case of damage or likelihood of damage as would support the claim and relief sought.

Conclusion

76.  For the above reasons, the plaintiff’s claim is dismissed. I also make an order nisi that the plaintiff pays the defendant the costs of the action, to be taxed if not agreed.