BROWN AND WILLIAMSON TOBACCO CORPORATIION (EXPORT) LIMITED AND OTHERS v. REEMTSMA CIGARETTENFABRIKEN GMBH AND ANOTHER

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

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BETWEEN

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DECISION

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1. On the 6th February 1985 the 1st and 2nd plaintiffs were granted an ex-parte injunction by Barnes J. against the two defendants restraining them inter alia from advertising or manufacturing cigarettes under or by reference to the mark "West" upon their undertaking to issue a writ forthwith. The writ was issued on the following day, the 7th February. The writ claims an injunction to restrain the defendants from infringing two registered trade marks which relate to western cigarettes. There is also a claim in passing off.

2. At the hearing of the inter-partes summons before Barnes J. on the 12th February the order of the 6th February was discharged, but certain directions including the filing of evidence were given. As a result of the directions given, the summons was restored on the 25th March for hearing before me today.

3. The 1st, 2nd and 3rd plaintiffs are associated companies and subsidiary companies of BAT Industries plc. The 1st plaintiff is the registered proprietor of the two trade marks which have been assigned to the 3rd plaintiff. The 2nd plaintiff represents the marketing interests of the 1st and 3rd plaintiffs in Hong Kong.

4. It is alleged by the plaintiffs that the mark "West" is deceptively similar to the mark "Western" and it is also contended that the first characters of the Chinese name are identical and the second characters are phonetically very similar. The plaintiffs contend that if the defendants are permitted to introduce "West" the commercial value and exclusivity of the plaintiffs' trade mark will be destroyed.

5. An application by the defendants to register the trade mark "West" has been refused by the Registrar as it conflicted with the existing registration of the plaintiffs' trade mark. Proceedings by way of originating summons have been instituted by the defendants to remove the plaintiffs' trade mark from the Register.

6. The defendants' trade mark "West" has been registered in at least twenty eight countries and registration is also pending in other countries. No opposition to the applications to register have been made except in Hong Kong.

7. It is apparent that since 1960 sales of "Western" cigarettes in Hong Kong have been very limited and in January 1985 only 29,800 cigarettes were sold out of an average monthly sale in Hong Kong of between five hundred million and six hundred million.  A market survey has been carried out by both the plaintiffs and the defendants.  Each side takes issue with the survey of the other.

8. Having seen the product of the plaintiffs and the defendants, I found nothing in the get up or packaging of the defendants' "West" brand which would cause confusion with the plaintiffs' packets.

9. The pleadings were closed on the 15th April and a summons for directions issued by the defendants was heard by a Master on the 7th May when inter alia he made an order for speedy trial in the running list. The estimated time for trial was between two and three days. The action has not yet been set down for trial, but I am told that discovery has been completed, and the action can be entered right away.

10. However, I am informed by Mr. Liao who appeared today for the plaintiffs that the position had changed recently because sales of the defendants' cigarettes to the Wellcome Supermarket Chain commenced on the 18th May so that it is imperative that injunctive relief be granted now otherwise the plaintiffs will suffer irreparable damage. However, no evidence was adduced to support this contention. It is conceded that the defendants are well known firms with substantial assets and there is no likelihood that any award of damages that might be made at the trial could not be met.

11. In my judgment it is inappropriate to determine the issues in dispute between the parties by way of interlocutory relief for it is clearly desirable that the facts be canvassed by way of a speedy trial pursuant to the provisions of Order 29(5) of the Rules of the Supreme Court. In fact, having regard to observations that I made in an earlier case this year in which the plaintiffs' counsel appeared, I am surprised that the plaintiffs did not proceed in this manner particularly as they had already agreed to a speedy trial at the hearing of the summons for directions.

12. May I say that the plaintiffs do not appear to have proceeded as expeditiously as they should have done. Although Barnes J. directed on the 12th February that the parties should attend the Clerk of the Court the following day to fix a date for the hearing of the summons after the 9th March, the plaintiffs took no action for a period of over five weeks before the summons was restored for hearing.

13. A further matter to which I drew counsel's attention this morning so far as the matter of urgency is concerned relates to paragraph 21 of an affidavit sworn by Mr. Joseph Leung, the Company Secretary of the 2nd plaintiff, on the 3rd June in which he says: -

"I would also point out that as soon as the Plaintiff came to know about the Defendants' imminent sale of their “West" cigarettes on the 10th of May I immediately instructed my solicitors to make an application to advance the hearing of the Inter Partes Summons. My solicitors on several occasions approached the Clerk of the Court, Mr. Hassan, to request the hearing date to be advanced but with no success (except at such a late stage that it was impracticable to alter). I was advised that this was impossible because no judge was free to hear the matter which was estimated to last for two days."

In fact I am informed by the Clerk of the Court that the solicitors did approach him to advance the date although he was not given the full reasons as to the necessity for this action to be taken. Nevertheless when he informed the solicitors that a judge had become available about ten days before the hearing no steps were taken to bring the matter forward. Even when I informed the parties that the hearing could be fixed for the 1st August or the 1st October it was the defendant's counsel who opted for the earlier date whilst Mr. Liao indicated a preference for September as he would be on leave. However, I was unable to accede to this request which was only for the convenience of counsel. The case should be heard as quickly as possible and I certify that it is fit for hearing in the vacation.

14. Another summons was also before me which had been issued by the plaintiffs against the Wellcome Company Limited (Wellcome), the company to whom the cigarettes had been distributed by the defendant. Prior to this summons being issued there had been some correspondence by way of telex between the solicitors acting for the plaintiffs and the solicitors acting for Wellcome. It appears from the correspondence that the plaintiffs sought an undertaking from Wellcome to abide by any order that the court might make today in respect of the interlocutory application. However, Wellcome were not prepared to give a blanket undertaking as a result of which a writ was issued together with the present summons.

15. It was indicated to me and I gained the impression that Wellcome might not abide by any order that the court might make so that it was necessary to issue a writ. The relevant part of a telex from wellcome's solicitors to the plaintiffs reads:

"We submit it is premature for our client at this stage to give a blanket undertaking that it will be bound by each and every order which may be made vs Reemtsma in that action."

16. The plaintiff's fear was that unless an order was obtained Wellcome would proceed to sell their stock of West cigarettes to their detriment. Wellcome is a big company, well known in Hong Kong and a company of repute and it seems to me quite clear and as was submitted by Mr. Garland who appeared on their behalf today that any order that I make today would by analogy have the same effect as a Mareva injunction. In my opinion it was wholly inappropriate that proceedings at this stage should have been instituted against Wellcome and for them to be brought before the court today at such short notice. It has been agreed that the proceedings against Wellcome will be stayed so there will be an order to this effect. The costs of and occasioned by the summons will be to Wellcome in any event to be taxed and paid forthwith.