EXXON MOBIL CORPORATION v. USA EXXON MOBIL OIL LTD

HCA 2188/2013

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 2188 OF 2013

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HCA 2189/2013

HCA 2190/2013

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1.  The defendants in each action are typical shadow companies. As mentioned in the Statements of Claim of each action, in recent years it has become fashionable for some unscrupulous individuals, primarily from the People’s Republic of China (PRC), to incorporate a “shadow company” in Hong Kong for the purpose of trading on another person’s reputation.

2.  As also mentioned in the Statements of Claim, a Hong Kong shadow company has one or more of the following features:

(a) The key part of its name is identical or confusingly similar to the reputable name or mark of another person with whom it has no connection;

(b) Its director(s)/shareholder(s) is/are PRC individuals;

(c) Its secretary is a Hong Kong secretarial company and usually involved in the incorporation of the shadow company;

(d) Its registered office address is the same as that of its secretary or those providing secretarial services to it; and

(e) It backs licenses or otherwise authorizes or permits its name to be used by one or more persons in China, usually a business entity set up by its director/shareholder.

3.  What is also a common feature is that when proceedings are instituted in Hong Kong against the shadow company for passing off and trademark infringement there is no contest and no one here in Hong Kong to answer the claim.

4.  I refer to my remarks in Power Dekor (Hong Kong) Ltd v Power Dekor Group Co Ltd, HCA 1139/2013, 9 January 2014 (unreported), which are apposite to this case.

5.  I agree with the above observations and reiterate that the problem of shadow companies is becoming an increasing concern to the courts.  This is yet another example of a case where a plaintiff which has established a reputation in a particular field of commercial endeavour  has become a victim of unscrupulous individuals seeking to trade off its  name and reputation through the incorporation of a company here in Hong Kong with a similar name to that of the plaintiff for the purpose of passing off.

6.  I am satisfied on the papers before me that the order sought should be granted, and I accordingly order that final judgment be entered against each defendant and in the terms as set out in the respective summonses. 

(Kevin Zervos) Judge of the Court of First Instance High Court