THE CHAMBER OF HONG KONG COMPUTER INDUSTRY CO LTD v. HONG KONG COMPUTER ASSOCIAATION LTD

HCA621/2010

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.621 OF 2010

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REASONS FOR JUDGMENT

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Introduction

1.  What Bill Gates brought to this world has enabled him to be a multi-billionaire.  In fact the computer business has become so widespread that it has been said that the human race has been “computerised” ever since the creation of computer.  Moreover, not only is the computer business so active and profitable, the business of organizing a computer festival is an incidental business by itself. 

The plaintiff

2.  The plaintiff “the Chamber of Hong Kong Computer Industry Co. Ltd (香港電腦商會[1]有限公司), together with the Shamshuipo “District Council”, had been organizing since 2002 up to 2010 except 2009, what they called a “Large-Scale Computer Exhibition” (“LSCE”) in the Shamshuipo District.  The said District Council provided the site or the venue of the LSCE, as a program to assist the development of the local economy, especially in the SARS period in 2003. 

3.  The plaintiff claims that its LSCE which is called “Hong Kong Computer Festival” (香港電腦節) is a trade name.  It has established its own goodwill and reputation.  Further, as a result of media reporting, it has also acquired goodwill and reputation in the name of “Shamshuipo Computer Festival” (深水埗電腦節), “Hong Kong Computer Festival I.T. Show” (香港電腦節資訊科技大匯展), and/or “Computer Festival” (電腦節). 

The defendant

4.  The defendant, Hong Kong Computer Association Ltd (香港電腦業協會有限公司) organized a LSCE from 12 to 18 January 2010.  This was called “Shamshuipo Computer Malls Computer Festival” (深水埗腦場電腦節) at 4 computer shopping malls in Shamshuipo, namely :

(i)      Golden Computer Arcade (黃金電腦商場),

(ii)     Golden Computer Centre (高登電腦中心),

(iii)    Golden Computer Plaza (高登電腦廣場), and

(iv)    New Capital Computer Plaza (新高登電腦廣場). 

5.  That was just 3 days before the plaintiff’s LSCE of “Hong Kong Computer Festival 2009 I.T. Show” (香港電腦節2009資訊科技大匯展) at the Cheung Sha Wan Playground which is about 600 m from the aforesaid 4 malls. 

The dispute

6.  On 11 January 2010, the defendant received a letter of complaint and warning from the plaintiff’s solicitors.  The plaintiff complained that the defendant has passed off its LSCE as that of the plaintiff’s.

7.  Thereafter in this case, the Writ of Summons with the Statement of Claim endorsed therein was issued on 4 May 2010.  It is a passing-off action against the defendant.  The defence was filed on 15 June 2010 and the Reply on 13 July 2010.  

8.  Two days afterwards, the plaintiff’s summons for interlocutory injunction against the defendant was filed and served.  It was seeking an injunction to restrain the defendant from holding another LSCE on 18 to 25 August 2010 by the name of “Shamshuipo Computer Malls Summer Computer Festival” (深水埗腦場夏日電腦節).

9.  The plaintiff alleged that since it has already acquired the goodwill and reputation in the trade name of “Hong Kong Computer Festival” (香港電腦節) and/or “Shamshuipo Computer Festival” (深水埗電腦節), the defendant’s name is passing off the trade name of the plaintiff. 

10.  However the defendant pointed out that in fact the reason behind this application of the plaintiff (i.e. the plaintiff only without the Shamshuipo District Council) is that it is organizing a commercially profit-seeking LSCE at the Hong Kong Convention and Exhibition Centre 2 days thereafter from 20 to 23 August 2010.  This is called “Hong Kong Computer & Communications Festival 2010 (香港電腦通訊節2010)”.  However it was not the one organized jointly with the Shamshuipo District Council, and the venue is not in Shamshuipo, but one by the plaintiff alone elsewhere at the HKCEC in Wanchai.  The defendant said that the plaintiff is furious and jealous of the defendant’s LSCE because any computer festival would promote products at a bigger discount, (e.g. here the defendant’s retailer is offering 300 Notebooks at half price).  The plaintiff is said to be afraid that its retailers would suffer if they are selling the same products even at the same rate of discount.  It is not, therefore, genuinely complaining that the defendant is passing off the plaintiff’s goodwill and reputation, if any, in the name of the Computer Festival in Shamshuipo.  It is actually going after the defendant to protect the plaintiff’s Exhibition in Wanchai, in which the plaintiff has no prior goodwill and reputation. 

11.  Mr Johnny So, counsel for the defendant, in his oral submissions asked rhetorically :

(i)      If the plaintiff has organized :

(a)     a Beer Festival (啤酒節);

(b)     a Food Festival (美食節); or

(c)      a Fleas Market Festival (跳蚤[2]市場節);

does it mean that no one else could organize any Beer, Food or Fleas Market Festival?

(ii)     What if San Miguel organized a San Miguel Beer Festival, does it mean that Carlsberg or Heineken cannot organize a Beer Festival in their own trade name?

(iii)    If one organized a German Beer Festival, does it mean that Tsing Tao Beer[3] cannot organize a Tsing Tao Beer Festival?

12.  On the other hand, Mr Vincent Poon, counsel for the plaintiff was asked whether the Hong Kong Arts Festival can object to another organization holding a Hong Kong Orchestral Music Festival. He submitted that the former cannot object to the latter’s name and operation.  It turned out that he was not familiar with the Hong Kong Arts Festival which usually takes place in February and March each year since 1973.  It included orchestral music with usually one foreign and world-class orchestra together with our 2 local orchestras. 

13.  Mr Poon was asked to the effect of this question : what if the Hong Kong Orchestral Music Festival invited the Berlin Philharmonic, the Weiner Philharmonic, the New York Philharmonic, together with the Hong Kong Philharmonic to perform in Hong Kong for the whole month of January 2011, (I must be dreaming), just before the Hong Kong Arts Festival which has invited the Leipzig Gewandhaus Symphony in February/March 2011, can the latter successfully obtain an injunction from the Court, prohibiting the former from doing so? 

14.  At first Mr Poon submitted in the negative.  But admittedly as he is not familiar with these things, he then said he will have to do some research on these things. 

15.  The defence counsel’s aforesaid rhetorical question together with the plaintiff counsel’s answer to the question from the bench will show the unreasonable attitude and action of the plaintiff.  In order to demonstrate that, the legal positions of the parties’ arguments will be examined more closely hereinbelow.

The law

16.  The plaintiff’s cause of action herein is the tort of passing off.  It has been said in Kerly’s Law of Trade Marks and Trade Names (14 ed.) at p. 431 that :

“Passing off is a single common law cause of action which can apply in a very wide range of factual situations. The breadth of the tort is such that, despite some views to the contrary, it now appears to be generally accepted that it is permissible to define two forms of the cause of action : the classic form, defined by the ‘classical trinity’, and the ‘extended form’,…”

17.  The “classical trinity” is enough for the circumstances of this case.  This has been explained by the House of Lords in the “Jif Lemon”[4] case :

“The ‘Jif Lemon’ case is important in at least two respects. First, the House of Lords confirmed that each passing off case depended on its own facts. Secondly, their Lordships reverted to the ‘classical trinity’ for their definition of the elements of the cause of action. Lord Oliver put the matters a successful claimant must prove as follows :

‘First, he must establish a goodwill or reputation attached to the goods or services which he 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 labeling 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.

Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to belief that the goods or services offered by him are the goods or services of the plaintiff.

Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage 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.’”[5]

I.     The goodwill and reputation of the plaintiff

18.  The defendant admitted that the plaintiff has organized various activities in LSCE and the dates and locations on which each LSCE was held are set out herein below :

“	LSCE	From	To	Location
	香港電腦節2002資訊科技嘉年華Hong Kong Computer Festival 2002 I.T. Carnival	12/12/2002	15/12/2002	深水埗 Shamshuipo
	香港電腦節2003資訊科技大匯展Hong Kong Computer Festival 2003 I.T. Show	29/5/2003	1/6/2003	深水埗 Shamshuipo
	香港電腦節2003千人砌機大匯演Hong Kong Computer Festival 2003 Do-It-Yourself Assembly	1/10/2003	1/10/2003	石硤尾 Shek Kip Mei
	香港電腦節2003聖誕資訊科技大匯展Hong Kong Computer Festival 2003 Christmas I.T. Show	11/12/2003	14/12/2003	深水埗 Shamshuipo
	香港電腦節2004聖誕資訊科技大匯展Hong Kong Computer Festival 2004 Christmas I.T. Show	10/12/2004	13/12/2004	深水埗 Shamshuipo
	香港電腦節2005-2006資訊科技大匯展Hong Kong Computer Festival 2005-2006 I.T. Show	6/1/2006	9/1/2006	深水埗 Shamshuipo
	香港電腦節2006-2007資訊科技大匯展Hong Kong Computer Festival 2006-2007 I.T. Show	12/1/2007	15/1/2007	深水埗 Shamshuipo
	香港電腦節2008資訊科技大匯展Hong Kong Computer Festival 2008 I.T. Show	5/12/2008	8/12/2008	深水埗 Shamshuipo
	香港電腦節2009資訊科技大匯展Hong Kong Computer Festival 2009 I.T. Show	15/1/2010	18/1/2010	長沙灣 Cheung Sha Wan	”

19.  One can see that, in the plaintiff’s name of each LSCE after the name of “Hong Kong Computer Festival” and the year, it has always been inserted with the discriptive words of either “資訊科技嘉年華I.T. Carnival”; or “千人砌機大匯演Do-It-Yourself Assembly”; or “聖誕資訊科技大匯展Christmas I.T. Show”. In other words, whilst each name, of course, began with Hong Kong Computer Festival (香港電腦節), it also ended with another phrase of descriptive words. 

20.  The question is : has the plaintiff acquired a goodwill and reputation in the name of Hong Kong Computer Festival (香港電腦節) simpliciter to such an extent that anyone using these few words in any combination would be guilty of passing off its own name as that of the plaintiff’s?  Putting it in another way as in line with the first element in the “classical trinity”, has the name of “Hong Kong Computer Festival” under which the plaintiff’s service are offered to the public, become so distinctive such that the get-up is recognised by the public as distinctive specifically of the plaintiff’s services. 

21.  In this respect, one can compare the name Hong Kong Arts Festival and Hong Kong Orchestral Music Festival.  The question is whether the former’s goodwill and reputation would include all kinds of Hong Kong festivals in arts and thus no one is allowed to hold Hong Kong Orchestral Music Festival, Hong Kong Opera, Drama, Film or Dance Festival?  In other words, can the plaintiff “monopolise” the name of “Hong Kong Computer Festival” by the actual name it used for the Shamshuipo Computer Festival with all the other descriptive words following the first 4 words?

22.  Further, there are no “goods” in respect of which the plaintiff has acquired a goodwill and reputation.  The plaintiff’s goodwill and reputation is only in the services of organizing a LSCE.  The goods shown or offered in the festival belonged to the individual booth owner, some of whom were selling one brand and others were selling different brands of computer items.  These different brands have their own trademark and/or goodwill and reputation which should not be confused with the goodwill and reputation of the plaintiff.  People attending the plaintiff’s LSCE are more interested in looking for computer items offered at competitive prices of different brands, rather than who organized the exhibition or festival. In respect of the goodwill and reputation of the services offered by the plaintiff, it would be the concern of the prospective individual booth owner who intended to participate in the festival.  However there should not be any confusion from the prospective booth owners (being experienced merchants in the computer business) as to who is the organizer of the festival. 

23.  Thus in respect of the first point in the “classical trinity”, the plaintiff has not acquired a goodwill and reputation in the simple name of the “Hong Kong Computer Festival (香港電腦節)” to such an extent that anyone in Hong Kong using the words “Computer Festival (電腦節)” in any combination would be passing off the goodwill and reputation of the plaintiff.  The question of confusion will be discussed in the second point of the classical trinity. 

II.    Misrepresentation

24.  After we have ascertained that the plaintiff’s customers are primarily the booth owners participating in its LSCE who accepted the services of the plaintiff in organizing the same, then first of all, one has to ascertain whether these owners would confuse the plaintiff’s services for those of the defendant’s or vice versa.  The booth owners are admittedly, merchants in the trade of computer items.  There is no suggestion at all that these merchants who participated or intended to participate in the plaintiff’s LSCE would have confused the defendant’s services for that of the plaintiff’s.  Afterall the defendant’s services in organizing the LSCE would be offered to those shop owners in the four shopping malls in Shamshuipo.  It is inconceivable that the shop owners of the malls would have confused the defendant’s services for those of the plaintiff’s, who has been organizing the Shamshuipo Computer Festival in terms of I.T. Carnival Show, or Do-It-Yourself Assembly or Christmas I.T. Show elsewhere in the same district. 

25.  In any event those shop owners in the four malls would not have confused the festival organized by the defendant for that of the plaintiff in the HKCEC of Wanchai.  But obviously both sides admitted that the plaintiff’s services offered at the HKCEC in Wanchai should have nothing to do with the defendant’s LSCE.  The plaintiff is not saying that because of its organization of the Shamshuipo Computer Festival, they have gained the goodwill and reputation in the name of the Hong Kong Computer Festival and this goodwill and reputation has somehow passed on to it when it is now organizing the one in Wanchai.  But the defendant pointed out that this is the ulterior motive of the plaintiff, which shall be discussed in the next section under the title of “material non-disclosure”. 

26.  Is there any misrepresentation by the defendant that their Shamshuipo Computer Malls Computer Festival (深水埗腦場電腦節) or Shamshuipo Computer Malls Summer Computer Festival (深水埗腦場夏日電腦節), is the computer festival organized by the plaintiff?  Here I accept the submission of Mr So for the defendant that there could not possibly be any confusion even amoung the attendants of the LSCE.  The defendant’s LSCE is categorically held at those 4 malls in the Shamshuipo area, and in fact the 4 malls are very near to each other; whereas the plaintiff’s LSCE in Shamshuipo has always been either in a playground or a designated place offered by the Shamshuipo District Council in the Shamshuipo or Cheung Sha Wan area as stated in the table hereinbefore between the years 2002 up to January 2010.  

27.  Accordingly there is no misrepresentation by the defendant or passing-off by the defendant that their LSCE is the one organized by the plaintiff in the past.  Further the defendant has, by means of press conferences and statements issued to the press, made it very clear that it is a separate computer exhibition in competition with the LSCE organized by the Shamshuipo District Council and the plaintiff.  It is a new and separate LSCE organized by the defendant and it is not the Hong Kong Computer Festival (香港電腦節) organized by the plaintiff.  In fact the media has widely published that there were two exhibitions competing with each other commercially at approximately the same time. 

III.   Damages

28.  The plaintiff had no financial benefit to itself in the services organized by it together with Shamshuipo District Council in the past Hong Kong Computer Festivals held in Shamshuipo/Cheung Sha Wan District.  The District Council has make it clear by the letter dated 10 May 2010 that any profit made in the LSCE organized by them would be used in other computer activities promoting I.T. application for the Shamshuipo District. Accordingly, as submitted by the defendant, even if (which is denied by the defendant) the first element of passing-off have been established as a serious issue to be tried, the plaintiff’s LSCE in which it said it has gained a goodwill and reputation by it, jointly with the District Council, the plaintiff would not suffer any damage as it has not gained any profit for its own in the past years. 

29.  What the plaintiff is actually complaining is that when they are organizing a LSCE commercially in HKCEC in Wanchai, they would have suffered damage when the defendant’s LSCE is held just two days before its LSCE in Wanchai.  But the plaintiff’s cause of action does not depend on the LSCE held by it in Wanchai.  Accordingly that could not be considered.  Instead the fact that the plaintiff failed to disclose that they were organizing the Computer Festival in Wahchai, is relied on by the defendant as a kind of material non-disclosure which I shall deal with hereinbelow. 

Material non-disclosure

30.  The Shamshuipo District Council had decided not to organize the Hong Kong Computer Festival this year in the Shamshuipo District or at all.  However the plaintiff is now organizing a commercially profit-taking LSCE (not the subject of the LSCE organized jointly with the District Council from which the plaintiff alleged that it has gained goodwill and reputation).  This LSCE is called “Hong Kong Computer and Communications Festival 2010” (香港電腦通訊節2010).  It apparently is the real purpose for the plaintiff’s application for an injunction against the defendant.  In other words the plaintiff is using a legal method by claiming that it has to protect the goodwill and reputation acquired by it in order to achieve its another commercial purpose with ulterior motive.  As submitted by the defendant, the plaintiff just wanted to eliminate its potential business competitors. 

31.  I consider that the plaintiff, in failing to disclose all these matters, would attract no sympathy from a court of justice in granting an interlocutory injunction before trial, when it is quite obvious that the ulterior motive behind the injunction was to gain an unfair advantage over its competitor with no valid legal ground. 

Balance of convenience

32.  Both parties are limited companies.  They have been keeping an account of their own LSCE in the past and in the future.  The account would show whether the defendant has damaged the alleged goodwill and reputation acquired by the plaintiff, if any.  The account would also show whether the defendant acquired any benefit from the LCSE “Shamshuipo Computer Malls Summer Computer Festival” to be organized on 18 to 25 August 2010.  In other words, damages would be sufficient if the plaintiff can prove at the trial that the plaintiff has suffered damage because of the Shamshuipo Computer Malls Computer Festival 2010 organized by the defendant in the four shopping malls.  This obviously has nothing to do with the plaintiff’s computer festival organized by it alone in the HKCEC. 

33.  On the contrary if the defendant is restrained by the injunction, especially when the Shamshuipo District Council has already decided not to organize a LCSE with the plaintiff under the name “Hong Kong Computer Festival” this year, the defendant would have suffered damage by cancelling the LSCE in these four shopping malls.  There is a dispute between the parties as to the total amount of damages anticipated at this stage.  The plaintiff submitted that it is no more than $80,000 whereas the defendant submitted that it would have suffered more than $80,000.  Without going into detail, I consider that the injunction restricting the four shopping malls from holding their LSCE organized by the defendant would have a greater impact on the defendant’s organization rather than on the plaintiff in refusing to grant the injunction. 

Conclusion

34.  I consider that the plaintiff has not, even at this stage, established the three basic elements of passing-off, as described as the “classical trinity”.  There is no serious issue to be tried. Even if there is a goodwill and reputation acquired by the plaintiff, there is no passing-off by the defendant.  In any event damages is an adequate remedy for the plaintiff should the plaintiff succeed at the trial.  On a balance of convenience, it is probably more convenient to refuse granting the injunction than by granting it against the defendant. 

35.  For the aforesaid reasons, I have dismissed the plaintiff’s application for interlocutory injunction. 

Costs

36.  The plaintiff came to this court with a case which cannot hold water.  It has no basis under any one of the three elements of the “classical trinity”.  The plaintiff’s application is also tainted with the ulterior motive of “protecting” its commercial LSCE in Wanchai, but it is not entitled to do so.  For these reasons, I have awarded costs to the defendant in any event, to be taxed, if not agreed, and paid forthwith. 

附件1

「蝨」「蚤」之誤

《明報》八月七日報道本席誤指蘇大律師讀「蚤」為「蝨」，實為誤解當時庭上發生之事。

查蘇大律師當時並不是以庭上與席前文件讀出「蝨」字或「蚤」字。其實他只是突然在口頭陳詞時指出：

「若原告人曾舉辦Beer Festival『啤酒節』、Food Festival『美食節』，或Fleas Market Festival『跳[早]市場節』……」

本席隨後問他：「剛才你說什麽節？」他回答說：「我是想說『跳蝨市場節』的，但中學國文老師卻說『蝨』字應讀『早』，我從小講廣東話都是說『被蝨（音室或瑟）咬』、『蝨乸』，但後來經『指正』，便以『蝨』讀『早』。」

(本席在此理應指出，若然蘇大律師有此誤解，相信比較有可能情況乃是蘇大律師誤解國文老師的教導，以爲老師是說「蝨」字應讀「早」，又或蘇大律師是想說跳「蚤」市場節的，而本席以爲他是說跳「蝨」市場節，才有此誤會。)但無論如何，本席當時反應頗大，事因以前多次聽到有人讀「蚤」為「室」，偶爾也聽到有人讀「蝨」為「早」，所以在庭上指出廣東話很少人說「蚤乸」一詞，通常都說「蝨乸」的。

本席隨後提出「時間」與「刊物」的廣東話讀法之爭論。本席在此亦提出對《大宋重修廣韻》一書的拙見，但從沒說《廣韻》有以「蚤」讀「蝨」的説法，只是提出「蝨」字的讀法可從《廣韻》尋得正音。

記者諸君根據在庭上所「見」所「聞」的報道，只是「聽」到大律師口述之言，亦「看」見他席前的大量文件，因而誤以爲他是看著席前的文件内有「蚤」字，先讀「早」音，後被法官「指出」應讀「室」音，才有此誤會。

對此誤報，何博士對報道只是說「大律師並沒有讀錯字」，已是對本席非常客氣之「指正」。

對一位從中學求學時期已開始閲讀《明報》的讀者而言，當然對以上誤報頗覺遺憾。但坊間報刊誤報法庭案件内容，幾乎每週都會發生。司法機構亦不會隨便逐一澄清。

但此誤報引來頗大迴響，各界友人亦向本席查明原委。甚至有素未謀面的資深學者，也以關切摯誠的態度質詢，具悉其誤報後，便云：

「除為　閣下未能就傳媒報導公開澄清誤解深予同情外，亦為　閣下期間承受外界曲解之器量深表欽佩。

       個人深信語言表達對文化教育及對社會影響巨大而深遠，而所謂『正音』者，主要即針對學校語文教育與學習而言。本地於此一向傳承不輟，前輩讀書人皆知所講求。」

但亦勉曰：

「竊以爲若屬報刊誤載，則宜公開澄清，以解公衆之惑。」

由此可見，誤報並非只影響個人榮辱，而是關乎公衆或會因此而遭誤導，以為法官此「誤讀」才是正音，繼而誤入歧途！

最後，特以這位熱心學者引《廣韻》「蝨」「蚤」讀音考證如下，以資各界參考：

「《廣韻》内同時收錄『蝨』、『蚤』二字。『蝨』字在入聲櫛部，音所櫛切(音同『瑟』)；『蚤』字則收在上聲晧部，音子晧切(音同『早』）。」

謹以此勘誤，望解各界對此之疑竇。