XCHRX HUGO BOSS AG AND ANOTHER v. Y & FUNG GARMENT CO. LTD. t/a Westwood

HCA608/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 608 OF 2000

-------------

--------------

--------------------------

J U D G M E N T

--------------------------

1. This is an application for summary judgment. The plaintiff seeks injunctive and other relief, and an inquiry as to damages against the defendant, for trade mark infringement and passing off.

2. The 1st plaintiff is a well-known German designer and manufacturer of men's clothing and the 2nd plaintiff is its Hong Kong subsidiary. The defendant is a Hong Kong garment trading company which operates various clothing sales outlets in the name of Westwood. At the relevant time it had four shops, particularised by their addresses in the Statement of Claim as Shops B to E; the plaintiff says there was also a Shop A but this is denied; the defendant's evidence is that this shop was closed in 1997.

3. The 1st plaintiff is the registered proprietor of Hong Kong registered trade marks including BOSS, BOSS HUGO BOSS and BIG BOSS. The 1st plaintiff manufacturer and the 2nd plaintiff sells men's clothing bearing these trade marks in various franchised shops under the name "BOSS" in Hong Kong, as well as in various other clothing shops and prestigious retail outlets.

4. The plaintiffs allege that the defendant has used in the course of trade the marks BOSS, BOSS CLUB and BOSS GIRL, which are marks identical with or nearly resembling the 1st plaintiff's marks. This amounts to infringement of trade mark and also for the purposes of passing off to acts calculated to deceive and confuse the public into the belief that the goods sold were products of or connected with the plaintiffs. The defendants have filed a defence which is a bare denial.

5. The plaintiffs have filed affidavit evidence and physical evidence including garments to show that the defendant offered and sold garments bearing these marks from its shops. The defendant says that the evidence is not credible, and that its denial raises a triable issue. It also says that the plaintiffs do not make out an overwhelming case of infringement or passing off such as to justify summary judgment.

Evidence

6. The plaintiffs produce before me six garments which are said to have come from the defendant's shops. Four of them are padded sleeveless vests, three in green and one in blue. They all have, embroidered on the front, the words BOSS CLUB with SPORTS underneath and neck labels bearing BOSS CLUB and the same style number DVC-003; they have inner washing instruction labels written in Korean characters; three carry the same price tag and bar code number; two have identical hang tags also bearing BOSS CLUB SPORTS and indicating that they came from the same factory, Leeda Apparel Co. Ltd.

7. Two of the garments are intended for the female market; one is a jacket and one a sweatshirt, in the same material and colours. They have BOSS embroidered on the front and neck labels bearing BOSS GIRL.

8. Two of the vests are said to have been bought by a clerk, Au Yeung Kwok On, employed by the plaintiff's solicitors. The rest of the vests and the two women's garments came into the possession of the 2nd plaintiff from investigation companies which apparently carry out general investigation and then offer their findings to trade mark proprietors. The investigators' sighting notes are produced. There is one till receipt for $149, and one EPS receipt for $149 which are said to refer to two of the vests.

9. There is also an affirmation of an assistant solicitor in the employ of the plaintiff's solicitors who says that he saw but did not buy similar vests in two of the defendant's shops.

10. There is evidence from the 2nd plaintiff's managing director to the effect that all these garments are counterfeits and not manufactured or the merchandise of the plaintiffs. He goes into detail which I need not reproduce here.

11. On the defendant's side the evidence comes from a director of the defendant, its purchase and quality control officer, and one of its shop managers, to the effect that the defendant never bought, stocked or sold these garments. There is also some evidence contradicting the sighting notes of the investigators mainly on the basis that the shop personnel would never tell anyone how many pieces of garments they had in stock.

Appropriateness of Order 14 on the evidence

12. Mr Chow, for the defendant, argues that the documentary evidence is not credible. The till receipt does not bear any mark identifying it as coming from any of the defendant's shops and the EPS receipt does not say what sort of garment it is for. The investigators' sighting notes bear handwritten addresses of the shops, whereas everything else on them is typewritten. There is no evidence as to when and by whom the addresses were added so the authenticity and reliability of the notes are in doubt.

13. He also argues that, except for the evidence of the assistant solicitor and the solicitor's clerk, all the other witnesses give second hand information.

14. Mr Chow says that the threshold onus is on the defendant to show a triable issue and the court should not embark on a mini-trial on affidavit evidence. In particular he relies on the dictum of Godfrey JA in Ng Shou Chun v. Hung Chun Sau [1994] 1 HKC 155 to the effect that the question for the court in an Order 14 application is not whether the defendant's assertions are to be believed but whether they are believable.

15. Mr Tay, for the plaintiff, relies on the principles set out in Tandy/Rank Video v. Yee Hing Cassette Factory Ltd [1991] 1 HKC 3. The relevant principles here are that the mere assertion in an affidavit of a given situation which was to be the basis of a defence did not ipso facto provide leave to defend, and that the court must look at the whole situation and ask itself whether the defendant has satisfied the court that there was a fair or reasonable possibility of the defendant having a real or bona fide defence.

16. It must be remembered that in Tandy/Rank Video the court relied largely on the earlier decision in Murjani v. Bank of India [1990] 1 HKLR 586. As Godfrey JA put it in Ng Shou Chun, Murjani was decided before National Westminster Bank plc v. Daniel [1993] 1 WLR 1453. Following National Westminster Bank plc, Godfrey JA laid down the test as follows at page 159 :

"It will in future be sufficient for the court to ask itself the simple question 'Is what the defendant says credible?'. If so, he must have leave to defend. If not, the plaintiff is entitled to summary judgment."

17. The defendant's defence is a bare denial. It is often the case that a bare denial is not sufficient to raise a triable issue. This is especially so where such denial goes against the contemporaneous documents; for instance, if the plaintiff in a case of goods sold and delivered has a pile of invoices which he says are unpaid, it is not much use for the defendant to say he never received the goods; a fortiori where there are packing lists or consignment notes with the defendant's chop on them. That is not quite the position here. Only one document can be attributed to the defendant by what appears on the face of it and it does not show that it corresponds to the goods said to have been bought. Essentially the evidence against the defendant ultimately comes from the persons who say they went to the shops.

18. A bare denial is often regarded as incredible but it is not necessarily so. To grant summary judgment here would require me to decide on the affidavits that the defendant's bare denial is incredible in the light of the evidence put forward by the plaintiff of what its witnesses did. That sounds very much like a mini-trial on the affidavits to me.

Copyright infringement

19. There is an ample evidence that the 1st defendant owns the trade marks.

20. Infringement of trade marks in Part A of the register is governed by section 27 of the Trade Marks Ordinance, Cap. 43 which provides that the right of the proprietor of the trade mark :

"... that right shall be deemed to be infringed by any person who, not being the proprietor of the trade mark or a registered user thereof using by way of the permitted use, uses in the course of trade a mark identical with or nearly resembling it, in relation to any goods in respect of which it is registered, or in relation to goods of the same description where such use would result in a likelihood of confusion, and in such manner as to render the use of the mark likely to be taken either -

(a) as being use as a trade mark relating to goods; or

(b) in a case in which the use is use upon the goods or in physical relation thereto or in an advertising circular or other advertisement issued to the public, as importing a reference to some person having the right either as proprietor or as registered user to use the trade mark or to goods with which such a person as aforesaid is connected in the course of trade.

21. The defendant's argument is that the marks on the garments concerned here are not identical with the 1st defendant's trade marks. Section 2(4) of the Ordinance defines "near resemblance" as being a resemblance so near as to be likely to deceive or cause confusion. The burden of proving that likelihood of deception or confusion is on the plaintiffs.

22. The defendant says that in making the comparison between trade marks the court must consider the goods to which they are to be applied; the nature of the goods; the kind of customer who would be likely to buy the goods; all the surrounding circumstances; and what is likely to happen if each of the trade marks is used in a normal way as a trade mark for the goods of the respective owner of the marks. Re Pianolist Co.'s Application, (1906) 23 RPC 774 at 777.

23. In fact the marks on the exhibits are not identical with the 1st plaintiff's marks. They do not resemble them, except insofar as the word "Boss" is used. The style of them is different. Although applied to garments, they are not applied to the same kind of garments as the garments appearing in the plaintiff's catalogues. The price was much lower and the workmanship was not so good.

24. The defendant says, therefore, that the marks would be unlikely to deceive ordinary customers or cause confusion to them; and in deciding whether they would deceive or cause confusion the court would have to hear evidence, and the defendant should not be shut out from leading evidence on this.

25. The defendant says that there is also some uncertainty in the evidence as to whether the plaintiff's marks are registered in Part A or Part B or the Register.

26. The plaintiff agrees that the likelihood of deception or confusion is a question of fact but says in effect that this court can decide it. The fact that there is no evidence of deception or lack of deception is irrelevant. Mr Tay relies on Re Sun's Jewellery Co. [2000] 2 HKC 210, a decision of the Assistant Registrar of Trade Marks which sets out further the principles for comparison of marks and also to comments referred to therein of Lord Diplock in the House of Lords in Re GE Trade Mark [1973] RPC 297 at 321-322 to the effect that the question whether buyers of goods sold to the general public for consumption or domestic use would be deceived or confused is a "jury question" and that a judge sitting alone should apply the same approach as a jury.

27. Mr Tay also relies on Re Gay Giano TM [1996] 2 HKC 646, a case of rectification of the Register, where it was held that a use of the trade mark "Gay Giano" on watches would cause confusion among the public who would think that the watches were connected with the applicant, a company which used that trade mark on clothing sold in boutiques. He applies this primarily to the question of passing off but says it is also relevant to confusion as it relates to infringement.

28. Looking at the garments before me, I cannot say that I would see it as necessarily probable that the use of BOSS on them would deceive ordinary members of the public, or cause confusion in their minds so that they would think that that use related to the plaintiffs. It is possible that such persons might think that this well-known German designer of men's garments had branched into cheap women's garments and cheap sportswear, as well-known designers may do, but I cannot say that they would automatically think that. They might equally think that Boss is a designer of upmarket boutique goods but the defendant's shops are not upmarket boutique outlets, so the marks on the goods cannot refer to the plaintiffs.

29. It must be borne in mind that Order 14 is for clear cases. See Man Earn Ltd v. Wing Ting Fong [1996] 1 HKC 225, CA. Godfrey JA stated at page 227 :

"Since the policy which underlies the summary procedure is to prevent the defendant from delaying the plaintiff from obtaining judgment in a case in which the defendant has clearly no defence to the plaintiff's claim, the procedure should by invoked only where this condition is satisfied."

30. I am not persuaded that this is such a clear case. It is not one in which I can say, if the plaintiff did sell these goods, it is clear that deceit or confusion would be caused to the public by the marks on them.

Passing Off

31. The defendant argues that, leaving aside any question of the plaintiffs' goodwill attaching to the goods, or the likelihood of damage to that goodwill, the plaintiff has to show a misrepresentation by the defendant to members of the public which leads them or is likely to lead them to believe that the goods he offers are the goods of the plaintiffs. The defendant says that for the same reasons as are advanced in respect of infringement, there was no misrepresentation. No reasonable person would be likely to be deceived by these goods and there is certainly no evidence that anyone has been so deceived.

32. I think the same considerations apply here. To grant a summary judgment, I would have to be satisfied that it was clear that there was such misrepresentation and if there was the public would be likely to be deceived by it. I do not think it is clear. I do not think one can look at these goods and say that the ordinary person would automatically think that what he was getting came from Hugo Boss.

Judgment

33. For these reasons, I do not see that this is an appropriate case for summary judgment. The defendant will have unconditional leave to defend. The defence is to be filed within 14 days from today. Liberty to apply for further directions. Costs (nisi) be in the cause.