LEHMANBROWN LTD v. UNION TRADE HOLDINGS INC. AND OTHERS

HCIP 20/2025

[2026] HKCFI 3699

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO 20 OF 2025

(TRANSFERRED FROM HIGH COURT MISCELLANEOUS PROCEEDINGS NO 775 OF 2012)

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BETWEEN

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D E C I S I O N

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Introduction

1.  P commenced these proceedings principally for invalidation and/or revocation of the registrations of two trade marks by an Originating Summons dated 20 April 2012 (“the OS”).

2.  By summons dated 24 November 2025 (“the Summons”), Ds apply for an order that the present action be struck out on the ground that it is an abuse of process of the court pursuant to O.18 r.19, Rules of the High Court (“RHC”). Alternatively, Ds asks for paragraph 33 of the Statement of Claim filed on 1 September 2025 (“the SOC”) be struck out by reason of its inconsistency with paragraph 34 without reasonable grounds.

3.  By another summons dated 19 March 2026 (“the Amendment Summons”), Ds apply to amend the Summons to add an alternative relief, i.e. certain paragraphs of the SOC be struck out on the grounds that they disclose no reasonable cause of action and/or are scandalous, frivolous or vexatious and/or may prejudice, embarrass or delay the fair trial of the action and/or constitute an abuse of the process of the court.

4.  Ds’ applications are supported by two affirmations made by D3. Madam Han Brown Zhou (“Zhou”) who is a director of P made an affirmation in opposition for P.

5.  At the hearing, Mr Philips Wong appears for P and Mr Alder together with Ms Tang appears for Ds. Mr Wong indicates that P agrees to the amendment application and opposes the striking out application. Therefore, I allow the Amendment Summons and shall dispose of the Summons with the agreed amendments (“the Amended Summons”) attached to the Amendment Summons.

6.  By the Amended Summons, Ds sought to invoke the Court’s jurisdiction under all the four grounds under O.18 r.19(1). Mr Alder confirms that Ds are not relying on r.19(1)(a).

7.  In broad terms, Ds’ core complaint is that P has warehoused the present action and by reason of the inordinate and inexcusable delay in P’s prosecution of its claim against Ds, this action is an abuse of the process of the court and prejudice has been caused to Ds.

8.  It is necessary to set out the background facts and the procedural history of the present action at the outset.

Background facts

9.  D3 and D4 are husband and wife. They own and control D1 and D2 which were incorporated under the laws of the British Virgin Islands.

10.  P is a locally incorporated company. Effiscient Limited (“Effiscient”) and Lehman & Co. Management Limited (“LM”) were originally the two equal shareholders of P.

11.  Russell Brown (“Mr Brown”) and Zhou, his wife, own and control Effiscient.

12.  D3 and D4 own LM. D3 controls LM and is its authorized representative.

13.  P was basically established by Mr Brown and D3 in 2001. Its principal business was the provision of full accounting services both in the Mainland and in Hong Kong under and by reference to two trading names and marks “LehmanBrown” and “雷博” (collectively “the Subject Marks”).

14.  P alleges that as a result of its long and extensive use of the Subject Marks, P enjoyed substantial goodwill and reputation in the Subject Marks in respect of its professional services rendered by P.

15.  In or about 2004, the relationship between Mr Brown and D3 turned sour. Mr Brown, Zhou on one part and D3 and D4 on the other part were involved in some other litigations in Hong Kong and the Mainland over the years beside this action.

16.  Two of such litigations were a petition issued by LM against Effiscient and P under HCCW 377/2010 (“the LM Petition”) and a cross petition issued by Effiscient against LM and P under HCCW 383/2010 (“the Effiscient Petition”) (collectively “the Two Petitions”). In each of these Petitions, Mr Brown and D3 made serious allegations against the opposite parties. LM sought to buy out the shares of Effiscient in P in the LM Petition whereas Effiscient sought to buy out LM’s shares in the Effiscient Petition.

17.  Harris J heard the trial of the Two Petitions together and handed down a judgment dated 15 November 2011 (“the Petition Judgment”). One of the issues calling for the determination of the learned judge was the allegation of D3’s misappropriation of the Subject Marks. Contrary to the understanding and agreement between Mr Brown and D3, D3 filed trade mark applications for the Subject Marks in the Mainland without the knowledge and consent of P prior to November 2011 (“the Mainland Applications”). Upon confrontation by Mr Brown, D3 executed an irrevocable agreement to transfer the Mainland Applications to P on 16 November 2001 (“the Irrevocable Agreement”). The Mainland Applications were subsequently approved and the Subject Marks were registered in the Mainland under the name of D3.

18.  Notwithstanding the Irrevocable Agreement, D3 did not transfer the registrations of the Subject Marks in the Mainland (“the Mainland Registrations”) but instead he transferred them to D2 between March to April 2003 without the consent of P.

19.  In the Petition Judgment, Harris J found that D3 breached the Irrevocable Agreement and misappropriated the Mainland Registrations by transferring the same to D2, which belongs to D4. Having found that the unfairly prejudicial conduct of LM had a serious negative impact on P and the interest of Effiscient in P, Harris J, among other things, ordered that LM should sell its shares in P to Effiscient.

20.  There were subsequent applications and appeals arising from the Petition Judgment. All the proceedings in respect of the Two Petitions were finally concluded in early 2018.

21.  On the other hand, D2 further applied for more registrations of the Subject Marks in the Mainland without the knowledge and consent of P (“Further Mainland Registrations”).

22.  P then commenced legal actions against D2 in the Mainland to recover such registrations from D2. P succeeded at last.

23.  P’s rights in the Subject Marks were also allegedly infringed in Hong Kong. On 18 November 2006, D1 through its agent Lehman, Lee & Xu Patent & Trademarks Limited (“LLX”) applied for and eventually obtained the registrations of the Subject Marks without the knowledge and consent of P (collectively “the Hong Kong Registrations”). D3 is the managing director and the founding partner of LLX, which is a law firm based in the Mainland.

24.  It was found out that the Hong Kong Intellectual Property Department (“the HKIPD”) had once raised requisitions to D1 by way of a letter dated 14 November 2006. The HKIPD pointed out that D1’s application appeared to be made in bad faith for want of any connection with P and any consent given by P.

25.  LLX, on behalf of D1, by a letter dated 13 December 2006, replied to HKIPD that P was affiliated with LLX and vice versa.

26.  On 14 October 2011, D1 transferred the Hong Kong Registrations to D2 without the knowledge and consent of P.

27.  On 26 April 2012, D2 through LLX filed two further trade mark applications in Hong Kong for the Subject Marks (“the Hong Kong Applications”).

28.  P commenced opposition proceedings to raise objection to the Hong Kong Applications (“the Opposition Proceedings”). The HKIPD has allowed a stay of the Opposition Proceedings pending the determination of these proceedings.

29.  Thus, these proceedings mainly concern the legality and validity of the Mainland Registrations, Further Mainland Registrations, the Hong Kong Registrations and the Hong Kong Applications.

Procedural history

30.  The following matters are evidenced by indisputable documentary evidence and there is little room for argument.

31.  After the commencement of these proceedings, Ds issued a summons for various relief in relation to service, jurisdiction and forum non conveniens pursuant to the O.12 r.8 dated 3 July 2012 (“the O.12 Summons”). The O.12 Summons was heard by a judge on 26 November 2012 and the judge dismissed the O.12 Summons by his decision dated 18 February 2015. Ds applied to the judge for leave to appeal and their application was rejected by a decision dated 9 April 2015.

32.  Ds renewed their application to the Court of Appeal and by a judgment dated 17 June 2015, Lam VP (as he then was) and Barma JA dismissed their application.

33.  On 21 January 2021, P served its first Notice of Intention to Proceed (“the 1^st NIP”).

34.  Without having taken any steps further in the proceedings, P issued another Notice of Intention to Proceed (“the 2^nd NIP”) on 14 November 2023. On the same date, P issued a summons for its application to re-amend the OS. On 28 November 2023, P issued another summons for its application to convert these proceedings into a writ action.

35.  A master heard the said summons of P on 1 December 2023 and the master indicated to the parties that P should write directly to Lok J, the Intellectual Property Judge.

36.  On 12 December 2023, P wrote to Lok J. Lok J on 19 December 2023 invited Ds for comments on P’s applications. Ds never replied to the judge.

37.  On 27 March 2024, Lok J indicated to P that there was a pending application on the part of Ds’ former solicitors to cease to act for Ds. It was directed that P’s applications should be disposed of after the determination of the said application.

38.  On 10 May 2024, Ds’ former solicitors obtained leave to cease to act for Ds.

39.  On 18 March 2025, Lok J made his decision on P’s applications and transfer these proceedings to the Intellectual Property List. It was further directed that P do apply for a case management conference (“CMC”) before an Intellectual Property Judge within 14 days thereof.

40.  P did so and a CMC hearing was fixed before this court. On 6 May 2025, at the CMC hearing, none of the Ds appeared though prior to the hearing, they wrote to the court to indicate their opposition. In light of their position, I gave leave to Ds to file proper affidavit evidence to oppose P’s applications.

41.  Ds did not file any evidence subsequently. Instead, on 24 June 2025, D3 and D4, acting in person, by a homemade summons, applied for (1) their attendance on the adjourned CMC via video link (2) consolidation of various proceedings and (3) striking out P’s claim against them for want of prosecution.

42.  At the adjourned CMC hearing on 7 July 2025, Ds were purportedly represented by one Ms Lo with an authorization letter. This court refused to allow Ms Lo to represent Ds and ordered that P should file and serve its SOC within 28 days.

43.  On 4 August 2025, P took out a summons for an extension of time to file and serve its SOC (“P’s EOT Summons”).

44.  On 18 August 2025, D3, acting in person, filed his written submission on behalf of D1, D2 and himself for their application for, among other things, striking out the present action.

45.  On 1 September 2025, P filed the SOC.

46.  On 9 September 2025, this court heard P’s EOT Summons and found the application to be unnecessary due to the summer vacation.

47.  On 22 September 2025, Ds by a letter asked P for its consent to an extension of time for them to file their Defence.

48.  On 26 September 2025, Ds’ current solicitors filed a Notice to Act for all Ds. On the same day, Ds issued a time summons to file their Defence within 49 days. This court disposed of the said summons on 27 October 2025 and allowed Ds 28 days to file their Defence.

49.  On 30 October 2025, Ds’ solicitors wrote to the solicitors of P and asked for certain key documents including the Irrevocable Agreement and the correspondence exchanged between HKIPD and LLX. P complied with the request.

50.  On 24 November 2025, Ds took out the Summons and another summons seeking for an extension of time to file their Defence until the determination of the Summons.

51.  On 12 December 2025, this court gave directions for the parties to file evidence and allowed Ds to file their Defence within 14 days after the determination of the Summons.

Relevant legal principles

52.  The heated debate is about whether P’s action and its SOC should be dismissed for want of prosecution. Both Mr Alder and Mr Wong draw my attention to the relevant authorities expounding the guiding principles, which are indeed well-established.

53.  The starting point must be the judgement of Ma CJ in Wing Fai Construction Co. Ltd v Yip Kwong Robert (2011) 14 HKCFAR 935 (§§75 to 80). Mr Alder cites to me a recent decision of Mimmie Chan J in Confederated Assets Group Ltd v Ng Kwok Ching [2025] 5 HKLRD 671. There, the learned judge made a comprehensive review of the authorities dealing with similar applications, which included Wing Fai. The learned judge provided a summary of the principles set out by Ma CJ therein (at §32) and I conveniently adopt her summary as follows:

a. Striking out is a remedy of the last resort, and should only be used where it would be plain and obvious to do so. If there are other measures that are more appropriate to be taken, those alternative measures ought to be taken.

b. Abuse of the process of the court is the foundation for the exercise of the jurisdiction to strike out for delay.

c. Abuse can take many forms. Mere delay will not necessarily amount to abuse. The delay should be both inordinate and inexcusable, and abuse should be shown. Abuse included (per Birkett v James) inordinate and inexcusable delay causing prejudice to a defendant or contumelious conduct. It might also take many other forms such as inexcusable non-compliance with or wholesale disregard of an order of the court or the rules of court, litigation anxiety (Biss prejudice) and the existence of an interim injunction pending trial which aggravates the prejudice.

d. Where abuse is clearly demonstrated, proceedings can be struck out even where prejudice to the defendant cannot be shown. However, in the majority of applications to strike out for delay, the aspect of prejudice will often be extremely relevant.

e. The conduct of the parties is a relevant consideration for the court, both to the question of abuse as well as to the overall justice of the case.

f. Post-CJR, all parties to the proceedings have an obligation to prosecute the proceedings and assist the court in furthering the underlying objectives, so that it is highly relevant to consider any failure on the part of the parties in this regard.

g. The court must also have regard to the considerations wider than those of the immediate parties. There are other litigants who are entitled to have their disputes resolved and their day in court. Thus, the fact that the limitation period has not expired is not a factor militating against striking out for want of prosecution.

h. The power to strike out for delay is discretionary and derives from the inherent jurisdiction of the court. The inherent jurisdiction of the court exists to avoid injustice, prevent abuse, preserve the dignity of the court and facilitate the administration of justice. In exercising its discretion, a court must ultimately ask itself the question of whether or not in the circumstances, it is just to strike out. A mechanistic approach in which the bigger picture is lost sight of is to be eschewed.

54.  Since Mr Alder’s argument is heavily premised on the alleged warehousing of the present action on the part of P, I pay particular attention to what Ma CJ said about warehousing in Wing Fai (at §75):

“In the context of abuse, some mention should be made of ‘warehousing’. I have already referred to this earlier. Merely for a party to start proceedings and then delay (which will often involve a failure to comply with the applicable rules of court) will not necessarily amount to an abuse justifying an order to strike out an action. The appropriate remedy in such cases may be for the court to exercise some of the powers I have already mentioned (such as the making of peremptory orders, the payment into court of substantial sums etc). In order for the ‘warehousing’ of claims to justify striking out, it must be clear that the plaintiff is abusing the process of the court. Accordingly, where the ‘warehousing’ of claims indicates that there is simply no intention to bring proceedings to a conclusion or there is a “wholesale disregard” of the rules or court orders, abuse can be found to exist:- see Grovit v Doctor at 647G-H; Arbuthnot Latham at 1436F-G. In Arbuthnot Latham, reference was made to “stale proceedings which bring the litigation process into disrespect” (at 1437C-D). I also place emphasis on another passage contained in Lord Woolf’s judgment in that case (at 1437E): “The courts exist to assist parties to resolve disputes and they should not be used by litigants for other purposes”. In Grovit v Doctor, as we have seen, the abuse took the form of the plaintiff refusing to progress the proceedings despite a letter from the defendants’ solicitors asking the plaintiff to proceed with the action or abandon it:- at 645H-646A.”

55.  Further, Mr Alder emphasizes that this is a late start case and the OS was issued only shortly before the 6-year limitation period. He relies on Re Wing Fai (unreported, HCCW735/2002, 7.10.2009) to support his submission that the additional prejudice caused by the post-writ delay need not be great compared with that already caused by the time elapsed before the writ though it must be more than minimal.

56.  Actually, in Re Wing Fai, Kwan J (as she then was) cited the summary of Neill LJ of the principles in Birkett v James in Trill v Sacher [1993] 1 WLR 1398A. The relevant part (at §35(3)) is as follows:

“Where a plaintiff delays issuing proceedings until towards the end of the period of limitation, he is under an obligation to proceed with the case with reasonable diligence. The court is likely to look strictly at any subsequent delay which is in excess of the period allowed by the rules of court for taking the relevant step, and may regard such subsequent delay as inordinate even though a similar lapse of time might have been treated less strictly had the action been started earlier (at 1398E).”

57.  Lastly, both Mr Wong and Mr Alder refer to the following summary of the principles germane to this application made by G Lam J (as he then was) in Tsang Foo Keung and Anor. v Chu Jim Mi Jimmy and Ors. [2013] HKEC 1086 at §80:

(1) The burden lies on the defendant to show prejudice or the impossibility of a fair trial.

(2) The discharge of that burden will normally require evidence specifying the particular disadvantage suffered or anticipated by the defendant, though in appropriate cases inferences may be drawn by the judge: Shtun v Zalejske [1996] 1 WLR 1270, 1283B, 1285A.

(3) The court has to look at all the circumstances when considering whether there is prejudice or whether it will not be possible to have a fair trial: Trill v Sacher, supra, at 980d.

(4) The prejudicial effect of delay on a defendant and the effect of delay on the possibility of a fair trial depend in large measure on the nature of the issues in the case, in particular whether the evidence is predominantly in documentary form or whether the crucial evidence may be largely oral: Shtun v Zalejske, supra, at 1290A.

(5) Where the prejudice relied on is the dimming of witnesses’ memories due to the lapse of time, a generalised assertion that memories must have grown fainter will generally not be sufficient: Rowe v Glenister, The Times, 7 August 1995, per Waite LJ, cited in Shtun v Zalejske, supra, at 1283E. However, it is not essential in every case that there should be evidence of particular respects in which potential witnesses’ memories have faded. So long as there are primary facts from which inferences can properly be drawn, there is nothing wrong with doing so: Yeung Kit Ling v Ma Kwan Ho Lawrence & Anor [2011] 3 HKC 115 at para 26, per Stock VP; A & M Manufacturing and Marketing Ltd v Iu Po Shing, CACV 15/2011, 6 September 2011, at para 48, per Fok JA.

(6) The defendant must also show that there is prejudice or inability to have a fair trial, as the case may be, caused by the delay in the action. The defendant cannot therefore merely rely on prejudice caused by the delay of the plaintiff in issuing the writ: Trill v Sacher, supra, at 979j-980b.

(7) The court may take into account what the defendant could reasonably be expected to have done which could have avoided or mitigated the prejudice he suffers or anticipates. If, for example, the defendant relies on the dimming of witnesses’ memories through the passing of time, the court will usually want to know what steps the defendant has taken in locating and proofing the potential witnesses: Wing Fai, para 75(8); Hymer, supra, at p 610.

Dismissal for want of prosecution?

58.  With the foregoing principles in mind, I turn to assess the merit of Ds’ striking out application based on the want of prosecution.

59.  First, there is a debate about pre-action delay. Mr Alder argues that the Hong Kong Registrations were applied for in late 2006 and were completed in early 2007 but P waited until April 2012 to commence this legal action against Ds. He submits that, though he accepts that there is no limitation period applicable to applications for invalidation or revocation of trade mark registrations, this court should take into account this pre-action delay in light of Re Wing Fai.

60.  Mr Wong submits that, as a matter of fact, the Hong Kong Registrations were registered on 26 June 2007. He points out that Ds do not allege or complain about any pre-action delay in D3’s affirmations and Mr Alder merely raises this allegation for the first time in his skeleton submissions. P has not been given any chance to deny any pre-action delay by way of evidence and it would be unfair for Ds to take this issue at the hearing.

61.  I agree with Mr Wong that Ds should not be allowed to rely on any alleged pre-action delay in this application. To start with, it cannot be assumed that P was aware of the Hong Kong Registrations as soon as they were registered. P should be given a chance to explain away such apparent delay.

62.  Next Mr Alder complains that it took almost 3 years to resolve the O.12 Summons and P does not give any explanation for the long delay. Again, D3 does not make such a complaint in his affirmations. More importantly, this complaint is baseless in light of the non-controversial procedure history. I fail to understand how P could be held responsible for the time taken for the final determination of the O.12 Summons. Also, in my view, the O.12 Summons should not have been taken in the first place and it caused unnecessary delay.

63.  Sensibly, D3 in his affirmations only takes issue with P’s inaction from April 2015 to 2020 and between the 1^st NIP and the 2^nd NIP, i.e. from January 2021 to November 2023. Mr Wong accepts that P did not take any steps in this action during these periods.

64.  Totally there is an 8-year inaction on the part of P. This delay is inordinate in any view.

65.  Zhou in her affirmation tries to explain the delay. First, P was involved in many litigations with Ds both in the Mainland and in Hong Kong including the Two Petitions. Ds seem to have adopted a scatter-gun approach and have caused maximum troubles to Mr Brown and P by various legal actions and complaints made to the professional bodies. Since Mr Brown did not know Chinese, Zhou had to deal with the Mainland litigations and complaints on his behalf. Most of P’s resources were spent on all other legal battles with Ds.

66.  Second, in 2000, Zhou was badly affected by the Covid 19 epidemic and was kept out of China with her 3 children. Between 2021 and 2022, she had to take care of her aging parents who suffered from a broken spine and Alzheimer’s disease.

67.  Third, the parties had serious global settlement negotiations intermittently between 2014 and 2021. Zhou in her affirmation sets out the details of such written communications and there are about 30 letters exchanged between the parties on a without prejudice basis during the said period.

68.  Though not impressed by the personal circumstances of Zhou, I find some validity in the other explanations for the delay proffered by her. P was indeed engaged in many other litigations with Ds. The Two Petitions, even after the Petition Judgment was handed down, looked heavy. There were also without prejudice negotiations throughout the relevant periods and P made a genuine effort to bring this action, together with all other litigations, to a conclusion by way of an amicable settlement. These matters do mitigate the culpability of P and render the delay less inexcusable.

69.  It is also remarkable that Ds did not do anything to secure the determination of the OS during these periods as well. The parties have completed filing of affidavit evidence and either parties could apply to fix a date for the substantive hearing of the OS. Ds did not attempt to explain why nothing had been done by them in these periods.

70.  The last delay that Ds complain about occurs from November 2023 to November 2025 when the Summons was issued.

71.  I am unable to see any delay caused by P during this period. I agree that the progress was slow but it is unfair to lay the blame on P.

72.  If anything, the delay in the conversion of the OS into a writ action and the subsequent transfer to the Intellectual Property List is more attributable to Ds. Ds do not argue that the conversion and transfer are not necessary and desirable for the resolution of their disputes. It is plain that the cease to act application of Ds’ former solicitors caused substantial delay.

73.  Moreover, if Ds had properly prepared their striking out application, the Summons could have been issued much earlier.

74.  Lastly, Mr Alder accuses P of causing further delay in this action by its consistent failure to join Grupo Rayco CA (“Rayco”). Mr Alder relies on a letter of HKIPD dated 23 January 2024 issued to P in which the HKIPD notified P that an application for the registration of the assignments of the Subject Marks was made on 20 December 2023. Mr Alder submits that this should prompt P to amend the SOC to join Rayco as an additional defendant pursuant to O.15, RHC. P has failed to do so. Mr Alder says that this demonstrates P’s lack of genuine will to prosecute the action properly.

75.  I have perused the application form (Form T10) lodged by LLX with the HKIPD. The date of the purported assignment is 9 December 2020. Rayco is a company incorporated in Venezuela with a Venezuelan address.

76.  To begin with, I am unable to see any commercial value of the Subject Marks presently given the existence of this action and the Opposition Proceedings. I have serious doubts about the bona fides of the purported assignment.

77.  I also find it alarming that Ds see nothing untoward about the assignment of the Subject Marks in the absence of any notice given to P, showing scant regard for this action and the Opposition Proceedings. Ds have merely left it to the HKIPD to notify P only 4 years after the execution of the purported assignment.

78.  If Ds had genuinely concerned about the joinder of Rayco in the wake of the purported assignment, Ds should have informed P immediately after its execution so that P could make a joinder application promptly.

79.  The purported assignment appears to be a tactical move to complicate the matter and delay the determination of the substantive rights of the parties.

80.  In any event, I believe that P could still proceed with its claim against Ds without joining Rayco in this action. There is no merit in the submission about the non-joinder of Rayco.

81.  In the particular circumstances of this action, despite P’s 8-year inaction in these proceedings, I am unable to find that P has warehoused the action without any intention to bring it to a conclusion. P did evince an intention to conclude this action by way of settlement, which should be encouraged. However, a global settlement was understandably complicated.

82.  Nor can I find that there was a wholesale disregard of the rules or court orders on the part of P during the 8 years. Ds have not identified any rules or orders disregarded by P.

83.  The Hong Kong Registrations clearly have caused prejudice to P and there is a genuine need for P to invalidate or revoke them so that they could legitimately use the Subject Marks for its business. I do not think that P has no intention to resolve the disputes with Ds in this action.

84.  Now I come to the issue of prejudice. Ds have to discharge their burden to show prejudice or the impossibility of a fair trial due to the delay.

85.  D3 in his affirmation suggests some prejudice caused to Ds. Quite sensibly, Mr Alder says little about this in his submissions save the Biss prejudice.

86.  D3 first alleges that Ds find it difficult to locate evidence to defend this action given the allegations in the SOC relating to matters taking place two decades ago. He alleges that Ds no longer have access to certain key documents and they have difficulty in defending the passing off claim without the contemporaneous trading records. D3 also complains about fading memories of the relevant defence witnesses.

87.  On these alleged prejudice, Mr Wong makes a persuasive submission. First, he points out that the parties have already filed several rounds of evidence in 2012 to deal with the OS. P filed two affirmations and Ds filed 9 affidavits. The defence evidence has already been prepared and the relevant documents should have been exhibited.

88.  The alleged lack of access to key documents is not convincing. For example, the Irrevocable Agreement was the focal document in the Two Petitions as shown in the Petition Judgment and D3 should be well familiarized with the same.

89.  For the passing off claim, Mr Wong submits that P’s claim is essentially quia timet in nature and is not really based on any actual use of the Subject Marks by Ds in the course of their business. P’s complaint is about the unlawful registrations of the Subject Marks showing Ds’ intention to use the Subject Marks in Hong Kong. P claims such unauthorized use of the Subject Marks would constitute an act of passing off. There should not be any meaningful dispute about the fact that the Hong Kong Registrations and the Hong Kong Applications were made. Hence, Ds’ allegation of their difficulties in defending the passing off claim due to the delay sounds hollow.

90.  As regards the Bliss prejudice, I agree with Mr Wong that Ds have failed to adduce adequate evidence to prove causation. Moreover, I am of the view that if D3 and D4 feel troubled by the litigation anxiety arising from this action, they should not have adopted a “let sleeping dogs lie” approach. They should proactively procure the conclusion of this action. The procedural history tends to show that Ds have also dragged their feet in this action.

91.  I have considered all other allegations of prejudice and I do not think I have to deal with all of them here. Suffice it for me to say that I find them to be empty and invalid.

92.  Mr Wong submits that there is no limitation period to revoke or invalidate a registered trade mark. Thus, even if this action is dismissed summarily, in any event P could come back with a fresh action to seek the same relief and Ds still have to defend the validity of the Hong Kong Registrations. He must be right.

93.  I would also add that under the Trade Marks Ordinance, Cap.559 (“TMO”), any person can apply for the revocation of the registration of trade mark (section 52) or a declaration of invalidity of the registration of a trade mark (section 53) either to the Trade Marks Registry or to the court. The applicants of such applications need not be aggrieved persons. It follows that Ds cannot avoid any similar challenge to the validity of their Hong Kong Registrations even if P could no longer pursue this action against them.

94.  The delay is inordinate and is arguably inexcusable. I find no serious prejudice caused to Ds by the delay. I do not accept that it is an abuse. It is not plain and obvious that I should exercise my discretion to strike out P’s claim for want of prosecution as the last resort. P should be allowed to proceed with this action against Ds.

Inconsistency ground

95.  Mr Alder submits that §33 is inconsistent with §34 and this inconsistency renders the SOC embarrassing. His argument runs as follows.

96.  P’s ground for revocation in §33 is non-use. Section 52(2)(a) of the TMO provides that if a trade mark has not been genuinely used in Hong Kong by the owner or with his consent, in relation to the goods or services for which it is registered, for a continuous period of at least 3 years and there are no valid reasons for non-use, the registration of the trade mark may be revoked.

97.  In §34, the allegations are that Ds have passed off, threatened and/or intended to pass off the business of P by the Hong Kong Registrations. It is expressly pleaded that the particulars of passing off are given subject to further discovery and/or interrogatories.

98.  Mr Wong submits that the 3-year period can be any period before the application for revocation: section 52(8) of the TMO. By way of an illustration, he submits that it is possible that Ds had used the Subject Marks in 2007 and committed the tort of passing off and yet the ground of non-use can still be made out if there was no genuine use of the Subject Marks between 2008 and 2011. Hence, paragraphs 33 and 34 are not inherently inconsistent.

99.  I agree with Mr Wong’s submission.

100.  I would add that the tort of passing off can be established even in the absence of genuine use of the Subject Marks in Hong Kong. The mere fact that D3 has caused or procured the Hong Kong Registrations may suffice.

101.  I can conclude that there is no inherent inconsistency between the two pleas in paragraphs 33 and 34. It is plain and obvious that there exists no grounds to strike out paragraph 33.

Additional grounds

102.  Now I deal with the additional grounds added in the last minute by way of the Amended Summons.

103.  The gravamen of Ds’ complaint is that P includes references to matters or events taking place in the Mainland in the SOC. Mr Alder submits that they are irrelevant to P’s trade mark claim and the passing off claim in this action and must be struck out.

104.  I accept Mr Wong’s submission that all these matters are relevant to the allegation of bad faith and the trial judge is entitled to take into account such matters to determine whether the Hong Kong Registrations were made in bad faith.

105.  For example, if P is the lawful proprietor of the Mainland Registrations, it may point to the conclusion that the Hong Kong Registrations were made in bad faith.

106.  Next, Mr Alder takes exception to the use of the phrase “to take a risk and to live dangerously by adopting and using or intending to use marks confusingly and deceptively similar to the Subject Marks” in paragraph 36. He submits that this phrase is incomprehensible, irrelevant and unnecessary.

107.  Mr Wong’s short answer is that this phrase or similar phrases commonly appear in the UK judgments involving passing off actions. An example given by Mr Wong is the English Court of Appeal decision in Fine & Country Ltd v Okotoks Ltd [2014] FSR 11.

108.  Mr Wong’s submission is correct. Mr Alder may not appreciate the stylishness of the phrase and may prefer more direct expressions but this is not a valid ground to strike it out.

109.  Mr Alder adds a further ground. He submits that there is no specific allegation against D4 and there is no reason to hold her as a joint tortfeasor. He submits that P’s claim against D4 must be struck out for want of particulars.

110.  At the pleading level, I am satisfied that the case against D4 is sufficiently pleaded and if all the allegations against D4 are proved, she can be liable. Ds’ arguments are unmeritorious.

111.  Lastly, Mr Alder submits that P’s informed decision not to join Rayco despite the purported assignment is fatal to P’s claim. He relies on Re Chung Kong Materials (JV) Ltd [2019] HKCA 788 to support his submission.

112.  I cannot accept his submissions. In Re Chung Kong Materials (JV) Ltd, the Court of Appeal dealt with a very different question. Au JA reiterated that it is a procedural requirement for an equitable assignee to join the assignor to sue the debtor so as to perfect the title to claim the debt. This has no bearing on the present case.

113.  I would agree that joining Rayco is advisable but it is not essential. P could still prove its case and obtain appropriate relief against Ds even without the joinder.

Conclusion and order

114.  For the reasons given above, none of the grounds advanced by Ds is valid and the Amended Summons must be dismissed accordingly.

115.  Now that this action is in the Intellectual Property List, this court would make sure that this action should come to a conclusion expeditiously without further delay. To start with, I hereby direct that P do have 21 days from the date of this Decision to make an application by way of summons to amend the SOC and/or to join Rayco, if so advised. If P do make such an application, Ds should only file and serve their Defence within 28 days from the date of the determination of such an application.

116.  If P decides not to make such an application, P should give written notification to Ds and this court. Ds then do file and serve their Defence within 28 days from the date of receipt of such notification.

117.  There is no reason why costs should not follow the event. I make a costs order nisi that costs of and occasioned by the Amended Summons and the Amendment Summons be paid by Ds to P, to be taxed if not agreed.

118.  It remains for me to thank Mr Wong, Mr Alder and Ms Tang for their helpful assistance.