International Hotel Investments Plc and Another v. Jet Union Development Ltd and Another

HCA 1941/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1941 OF 2015

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DECISION
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Index Paragraph

A.  INTRODUCTION

1.This is the plaintiffs’ application for an interlocutory injunction restraining the defendants from engaging in mass promotion of a residential development using the English name “Corinthia”. The plaintiffs rely on the tort of passing off and its claim under section 63 of the Trade Marks Ordinance, Cap 559 (“TMO”).  The defendants oppose the application on virtually all fronts.

B.  THE PARTIES

2.The plaintiffs own the “Corinthia” brand and operate the Corinthia Hotel chain.  They also develop up-market residential and commercial properties in Europe, Russia and Africa.  They have used the name Corinthia for their hotels, since 1962.  Although P1 (a listed company) was only established in 2000, all the intellectual property associated with the Corinthia brand is now vested in P1.  P1 has over 90 registered and pending trademarks worldwide. 

3.According to their Annual Report & Financial Statements 2014, P1 owns and P2 manages the Corinthia Hotel in London, St. Petersburg, Budapest, Prague, Lisbon, Tripoli, St. George’s Bay Malta and Malta.  P2 manages, among others, the Corinthia Palace Hotel and Spa, Corinthia Hotel Khartoum (both of which are not owned by P1). 

4.Infinite Luxury Limited (“ILL”) has been engaged to market Corinthia Hotels in Hong Kong, Singapore and China.

5.D1 is the developer of a residential property development known as “Corinthia by the Sea” and “帝景灣”(“the Development”) currently under construction in Tseung Kwan O in Hong Kong.  D2 is to be the manager of the Development under the deed of mutual covenant.

6.The defendants are beneficially owned by Sino Land Co Ltd (“Sino Land”) and K. Wah International Holdings Ltd (“K. Wah”), which  are engaged in property development and hotel business.  It is no exaggeration to say that Sino Land and K.Wah are household names in Hong Kong, especially to those who own or are interested in buying residential properties.

7.Sino Land was first founded in 1971 and has been listed on the Hong Kong Stock Exchange since 1981.  It has completed 51 property developments in Hong Kong.  “Sino”, “Sino Land”, “信和” and “” a white S logo in orange or black circle are registered trade marks of Sino Land.  Since 1981, these registered marks have been used on Sino Land’s property developments, including construction sites in Hong Kong. 

8.The K. Wah Group (of which K. Wah is part) was founded in 1955.  K. Wah has been listed on the Hong Stock Exchange since 1987.  Since 2000, K. Wah has, solely or jointly with other developers developed about 21 residential property developments.

9.The K. Wah Group trades under the trade names and trade marks of "K. WAH", "嘉華", the logo mark "  " and the composite mark " ".  K. Wah also trades under the mark "  ".  The logo marks " " and "  " feature on and at K. Wah's property developments, including construction sites.

C.  THE BACKGROUND

10.In June 2014, D1 registered the “Corinthia” mark and in November 2014, the “Corinthia by the Sea” mark, in classes 36 and 37 in Hong Kong.

11.On 13 January 2015, D1 held a widely publicized press conference (“the press conference”) to introduce the Development to the Hong Kong public under the Chinese name “ 帝景灣”, the English name “Corinthia By The Sea” (“the Mark”) and the logo  (“the Logo”).  There was extensive press coverage showing that the Development was jointly developed by Sino Land and K. Wah. 

12.The promotion campaign of the Development began in June 2015.  It included operation of the website at www.corinthiabythesea.hk ("the Website"), opening of a Sales Office, and various forms of advertisement on newspaper, TV spots, buses and lightboxes in the MTR (“the mass advertising”). 

13.Section 73(3)(a) of the Residential Properties (First-hand Sales) Ordinance, Cap 621 (“Cap 621”), provides that the holding company of the vendor must be stated in advertisements.  The copyright notice on the Website refers to the copyright being owned by Sino Land. All the advertisements bore the Mark and the Logo together with the marks of Sino Land and K.Wah in a conspicuous manner.

14.Further, the Mark has been used on both the exterior of the Development (under construction) and in the Sales Office, including a building model showing use of the Logo. At the construction site of the Development, the buildings under construction are covered in green fabric, whilst large banners showing the Mark and the Logo, alongside the names and marks of Sino Land and K.Wah, have been displayed since March 2015.

15.The first date of sales was on 17 June 2015 at the Sales Office.  

16.Seven months after the press conference, on 25 August 2015, the writ and this injunction summons were taken out.

17.The plaintiffs sue the defendants in passing off and infringement of Corinthia’s trade marks.  The mass advertising at roadside hoardings, MTR stations, buses etc has the alleged effect of damaging the exclusive and up-market reputation of luxurious hotels and residential developments under the “Corinthia” brand.  The plaintiffs seek to restrain the defendants from using the English name “Corinthia”.

D.  PRINCIPLES FOR GRANT OF INTERLOCUTORY INJUNCTION

18.The principles in American Cyanamid are not in dispute.  The court must be satisfied (1) that there are serious issues to be tried; (2) that damages are not an adequate remedy; and (3) that on the balance of convenience, it is just and convenient to grant the injunction.

19.There shall not be trial on affidavits and the court should not resolve difficult questions of law and fact in an application for interlocutory relief.  However, if the court can come to a view on the relative strength of the parties' cases on the credible evidence then it could do so: Series 5 Software Ltd. v. Philip Clarke & ors [1996] FSR 273 at 286, Laddie J.

20.In trade mark and passing off cases, it is hard to avoid assessing the strength of each party’s case since it has a bearing on the extent of damage the plaintiff may suffer and the balance of convenience. The weaker its case, the lesser the risk of substantial damage to the plaintiff pending trial: The Financial Times Ltd v Evening Standard Co [1991] FSR 7 at 10-11.  

21.The fundamental principle is that the Court will take whichever course that appears to carry the lower risk of injustice if it should turn out that it is wrong.  This “fundamental” principle is the source of the guidelines that have evolved for the determination of interlocutory injunctions (included are, of course, the American Cyanamid guidelines) and therefore, in the application of any guidelines, sight must not be lost of this principle.  See Music Advance Ltd v Incorporated Owners of Argyle Centre Phase I [2010] 2 HKLRD 1041, §12(d), Ma J (as he then was).

E.  THE PASSING OFF CLAIM

22.The elements for passing off are the classic trinity of goodwill, misrepresentation and damage: Reckitt & Colman Products Ltd v Borden Inc (No.3) [1990] RPC 341 per Lord Oliver of Aylmerton at 406, better known as the Jif Lemon case.

E1.  Relevant date

23.The relevant date for considering whether there has been passing off and whether the plaintiffs had the necessary goodwill is the date of commencement of the conduct complained of: Cadbury-Schweppes Pty Ltd & ors v The Pub Squash Co Pty Ltd[1981] RPC 429 at 494, line 27.  This was 18 June 2014, the date of the defendants’ application of registration of the mark “The Corinthia” in Hong Kong (§21 soc).

E2.  Goodwill, not just reputation

24.It is arguable that Hong Kong recognizes international goodwill: Kabushiki Kaisha Yakult Honshsa v Yakudo Group Holdings Ltd [2002] 3 HKLRD 595, at §15, Deputy Judge Lam (as he then was).

25.What the plaintiffs have to prove is “not a reputation in his brand name or get-up but a goodwill or reputation attached to the goods or services which he supplies by association with the identifying name or get-up”: Harrods Limited v Harrodian School Limited [1996] R.P.C. 697 at 711, per Millett LJ.

26.It is not sufficient to prove mere reputation. Goodwill is territorial.  The plaintiff needs to have customers within Hong Kong although it does not have to have any presence here: Starbucks (HK) Ltd v British Sky Broadcasting Group PLC [2015] E.T.M.R. 31, UK Supreme Court.

27.In Starbucks, the issue was whether a claimant in a passing off claim was required to establish that it has a business with customers within the jurisdiction, or whether it was sufficient for it to establish only that it possessed a reputation among a significant section of the public within the jurisdiction.  Lord Neuberger held (at §52) as follows:

“The claimant must show that it has a significant goodwill, in the form of customers, in the jurisdiction, but it is not necessary that the claimant actually has an establishment or office in this country. In order to establish goodwill, the claimant must have customers within the jurisdiction, as opposed to people in the jurisdiction who happen to be customers elsewhere. Thus, where the claimant’s business is carried on abroad, it is not enough for a claimant to show that there are people in this jurisdiction who happen to be its customers when they are abroad. However, it could be enough if the claimant could show that there were people in this jurisdiction who, by booking with, or purchasing from, an entity in this country, obtained the right to receive the claimant’s service abroad. And, in such a case, the entity need not be a part or branch of the claimant: it can be someone acting for or on behalf of the claimant.”

28.It is the plaintiffs’ case that they have long-standing reputation both internationally and in Hong Kong.  The Corinthia brand has for more than 53 years come to be associated with a hallmark of excellence in relation to mixed-use hotel, residential and commercial developments.  There was substantial revenue and huge amounts were spent on marketing.  Corinthia Hotel London has been awarded multiple awards and accolades.  However, the plaintiffs have never developed or advertised for sale residential properties in Hong Kong.

29.It is the plaintiff’s case that they have an image of exclusivity and strong presence in Hong Kong since 2011.  Specifically, there has been a substantial number of guests from Hong Kong.  Just the Corinthia Hotel London has had 4-digit room nights booked by people/businesses based in Hong Kong (including high-ranking officers of Sino Land) and generated revenue of millions of HK dollars from 2011.  The plaintiffs have 80 domain names worldwide, of which 12 are in Hong Kong.  People from Hong Kong have visited their website. 

30.The evidence, however, shows that the plaintiffs’ predecessor has used the Corinthia mark since 1968 for 32 years before other hotels of the Corinthia Group came into being/were acquired.  P1’s Annual Report stated that the Group only started trading in 2000. 

31.It was 11 years later that ILL was engaged in Hong Kong, to assist Corinthia Hotel London. ILL is not located in a Grade A office building in Hong Kong. That does not matter as customers of the plaintiffs’ hotels would not visit ILL’s office.  ILL’s monthly reports showed this picture: 

(a) For 2011, ILL was doing promotion in Hong Kong.

(b) For 2012, an airline had produced low 2-digit room nights and was expecting to produce more in 2015.

(c) For 2013, referred to year to day low 2-digit room nights to Corinthia Hotel London against 3-digit room nights to “comp set” (ie a group of competing hotels).

(d) For 2014, it was stated that “Corinthia London is beginning to be acknowledged in the industry and in comparison with 2013, agents feel it is relatively easier to sell/recommend.” One agency confused Corinthia with Savoy.  Another had “very positive feedback”. Yet another has “been using Corinthia a lot especially for [a bank], will continue supporting Corinthia.” “Brand awareness was still an issue”.  “Corinthia London” was beginning to have a very good reputation in terms of facility and services.” Corinthia was not among the top 10 hotels in Hong Kong.  (underline added)

32.The impression one gets from ILL’s reports is that business for Corinthia hotels has been building up in Hong Kong since 2011 but not as flourishing as the plaintiffs would want the court to accept.  Moreover, evidence of bookings of Corinthia hotels (other than London) after the Relevant Date is not relevant to assessment of goodwill.

33.It is the plaintiffs’ own evidence that whilst they refer to ILL’s office as a sales office on Corinthia’s website, the office is not used to take actual bookings but instead to deal with booking enquiries and other general enquiries, and to undertake promotional activities.  This falls short of the requirement of the Starbucks case of having a business with customers in Hong Kong.

34.The plaintiffs, however, claim that bookings are made online, via travel agents based in Hong Kong to whom ILL promote the Corinthia brand or directly between representatives of ILL and/or Corinthia.  Documentary evidence is lacking in this aspect.

35.The standard of showing a serious question to be tried is not very high.  I am prepared to find a serious issue to be tried on whether the plaintiffs have goodwill in Hong Kong.  However, any goodwill is limited to hotel business but not residential developments in Hong Kong. 

E3.  Misrepresentation

36.What needs to be proved is “a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff”: The Jif Lemon case, at p.406, lines 31-34, per Lord Oliver of Aylmerton.

37.The misrepresentation is in the nature of “deception” though it need not be made fraudulently or with any intention to deceive: Wadlow: The Law of Passing-Off (4^th ed), §§5-009, 5-051, 5-052; Tsit Wing (HK) Co Ltd & ors v TWG Tea Company Pte Ltd HCA 2210/2011, 24 July 2013[1] per Saunders J at §146.  However, an intention to deceive on the part of the defendant is itself strong evidence that deception will occur: Wadlow, §5-057.

38.The plaintiff needs to prove more than confusion.  In Premier Luggage & Bags Ltd v Premier Company (UK) Ltd [2003] FSR 5, §37, Chadwick LJ held that :

“A risk of confusion is not enough ….

… even actual confusion does not show that there has been misrepresentation by anyone; all that it shows is “that people make assumptions, jump to unjustified conclusions, and put two and two together to make five.”

39.The plaintiff has to show that it has achieved brand name recognition on the part of someone and hence the plaintiff has goodwill.  Then he has to show that the brand name of the defendant is so similar to the plaintiff’s that such people will be deceived.  It is not misrepresentation as regards someone who has never heard of a plaintiff or his badge of trade: HFC Bank Plc v Midland Bank Plc[2000] FSR 176 at 182.

40.It is not sufficient to show that a consumer wonders if there is connection between the plaintiff and the defendant: Reed Executive Plc v Reed Business Information Ltd [2004] RPC 40, at §111.

41.Nor is it sufficient to demonstrate that there must be a connection in some way between the defendant and the plaintiff.  It must be a connection which would lead the public to suppose that the plaintiff has made himself responsible for the quality of the defendant's goods or services: Harrods Limited v Harrodian School Limited [1996] RPC 697, at 713, lines 25-28, Millet L.J.

42.There must be deception of a substantial number of members of the public who will be misled into purchasing the defendant’s product in the belief that it was the plaintiff’s: Neutrogena Corporation & Anor v Golden Limited & Anor [1996] RPC 473, at 493-4.

43.The level of perspicacity or care expected of the relevant public depends on the transaction contemplated: HFC Bank Plc v Midland Bank Plc[2000] FSR 176 at 184-185.  In that case, potential customers wishing to borrow what, for them, may well be quite large sums of money from a bank can reasonably be expected to pay more attention to the details of the entity with whom they are doing or seeking to do business.

44.In considering whether or not there has been misrepresentation by the defendant, the Court has to look at all the circumstances of the case.  The court may take into account facts which would remove any likelihood of any consumer being misled.  If, for example, the defendant makes clear by any means such as the use of his own name, that the goods or services are his and not those of the plaintiff’s, there is no misrepresentation: BP Amoco Plc v John Kelly Ltd [2002] FSR 5 at §48-49. 

45.In the BP Amoco case, the defendant used green (as the plaintiff did) for new brand image in the Republic of Ireland.  Its stations had green in the canopy, main identification sign, the use of the letters TOP in lower case in white with a five colour spectrum forming a wings pattern.  It was held, following the Jif Lemon case, that mere confusion which did not lead to a sale was not sufficient.  If a customer could see sufficiently clearly when he got close to the station that the product sold was not that of BP, he did not buy the petrol under the mistaken impression that he was getting BP petrol into the tank of his vehicle and there was no passing off.

46.Although there is no such requirement in the law of passing off (Tsit Wing, at §148), the absence of a common field of activity between the parties is highly relevant to whether there was misrepresentation on the part of the defendants.  The further removed from each other the respective field of activities, the less likely any relevant confusion would arise: Harrods Limited v Harrodian School Limited [1996] R.P.C. 697 per Millett L.J. at 714, lines 17-19, 43-46, 715 & 717.

47.Applying the law, whilst the mark of “Corinthia” bears a resemblance to that of the plaintiffs’ at first sight, there are many features of its use to distinguish it from the plaintiffs’.  The marks and logos of Sino Land and K.Wah appear on the construction site and advertising materials in relation to the Development.  Even if one were initially confused as to whether “Corinthia By the Sea” refers to the plaintiffs’ hotels, when one gets to the Sales Office, reads the advertisement or the sales brochure, there can be no doubt that the Development was that of Sino Land and K.Wah: the BP Amoco case. 

48.Further, the subject goods and services are first hand residential units. The cheapest unit cost close to HK$5,000,000. Who the developer is often is representation as to the quality and management of a development.  In my view, an average consumer in Hong Kong knows that he does not come as a buyer of hotel accommodation.  He can reasonably be expected to pay rather more attention to the details of the developer:  HFC Bank Plc v Midland Bank Plc.  In fact, it is really the name of the developer rather than that of the vendor that would attract such buyers and leave an impression in their minds.

49.It is questionable whether there has been misrepresentation.

E4.  Conduct calculated to deceive

50.Paragraph 22 of the statement of claim (“soc”) pleaded 15 aspects of the defendants’ conduct which are said to be calculated to deceive. 

51.Paragraph 22(a) soc pleads that at least 2 travel agencies in Hong Kong had enquired of the plaintiffs whether the Development was developed by the plaintiffs. 

52.These travel agencies have not been identified, but the important thing was the content of their enquiries.  Ivy Jenkins (Corinthia’s head of sales in Asia) emailed Corinthia’s director of finance in London on 15 June 2015, a few days after the massive advertising began.  She stated that 2 agencies “wondered if we have anything to do with this new development”.

53.It is not sufficient to show that people might be caused to wonder: Reed Executive v Reed Business Information.  The plaintiffs have to show that potential buyers of a unit in the Development are likely to be misled into thinking that the Development is that of the plaintiffs’. 

54.Paragraph 22(b) soc pleads that Mr Xuereb, a Hong Kong resident, believed that the Development was being developed by the plaintiffs.  On 7 July 2015, he emailed Marcus Pisani (a member of the Pisani family who founded the plaintiffs’ group) stating, amongst others, that “it’s so great to see Corinthia finally branching out into Asia.”

55.In one of the photographs attached to the email, the names and logos of Sino Land and K Wah were prominently displayed. The average Hong Kong consumer would immediately recognize the Development as belonging to 2 local developers and not the plaintiffs.  It is not clear for how long Mr Xuereb has resided in Hong Kong.  He might not be an average customer exercising reasonable case.  He might fall within the description of a person making assumptions, jumping to conclusions and putting two and two together to make five: Premier Luggage & Bags Ltd v Premier Company (UK) Ltd. 

56.Paragraph 22(c) soc pleads that the mark chosen by the defendants substantially replicates the distinctive font used by the plaintiffs:

Plaintiffs’ Mark

Defendants’ Mark

57.As is apparent from the defendants’ evidence, the font used by the plaintiffs is not distinctive but fairly common, known as Berling.  The Logo was an original design by Alchemist and the font used was Weiss.  The Weiss font belongs to a family of fonts called Serif fonts which have been used in relation to the names and logos of many of Sino Land's previous residential projects (including 8 named ones) to reflect their classical or neo-classical architectural style. 

58.Fenech-1^st[2] filed on behalf of the plaintiff pointed out that Alchemist had devised at least 38 options for the Logo.  I agree with Mr Fenech that the defendants’ final choice was visually almost identical to the plaintiff’s Corinthia mark in terms of font, except for the swoosh on the letter A in the Logo.  It would require a font specialist or professional in the advertising industry to be able to recognize any real difference between the 2 marks. 

59.I find there to be a serious issue to be tried on §22(c) soc itself, but see the discussion on §22(d) below.

60.Paragraph 22(d) soc pleaded that the dominant part of the mark used by the defendants is identical to the “Corinthia” mark, the remainder of the mark being the descriptive term “BY THE SEA” used in substantially smaller font:

Plaintiffs’ Mark

Defendants’ Mark

61.The plaintiffs submit that the likelihood to mislead is compounded by the similarity of font, actual usage of the mark and the nature of the Development.

62.The evidence shows that the defendants’ Corinthia mark was invariably used in conjunction with the equally prominent Chinese part “帝景灣”, alongside the names, marks and logos of Sino Land and K. Wah.  The average Hong Kong consumer, exercising a reasonable level of perspicacity or care, would recognize that the Development is being developed by not just 1 but 2 locally well-known developers, instead of associating it with a hotel. 

63.Further, whilst I agree with Mr Wong SC that “by the Sea” is descriptive of a location at a bay, I am of the view that the Chinese name “帝景灣” more than describes a location.  “帝” connotes a sense of royalty/luxury, “景” refers to view, and 帝景may portray grandeur.  The description “by the Sea” and the Chinese name likely preclude misrepresentation. This would apply to the complaint under §22(c) soc.

64.Paragraph 22(e) soc pleads that it is common in the industry for hotel operators to be involved in residential development and for residential property developers to be involved in hotel development.

65.The plaintiffs operate hotel services in Europe, Russia, Africa, and the Middle East.  They have been actively advertising and promoting the plaintiffs’ Corinthia properties across Asia and in the USA.  They had sold 11 residential units in Whitehall Place but not Hong Kong.  The 2014 Annual Report shows the development of real estate into luxury properties as something “to be done” but “not yet”.  In the Directors’ Report of P1 for the year ended 31 December 2014, P1’s principal activities did not include residential property development.

66.In contrast, whilst Sino Land and K.Wah also operate hotels, their core business is property developments in Hong Kong.

67.Fenech-1^st refers to other international hotel chains that provides management services to residential properties in Hong Kong, eg the Four Seasons manages Four Seasons Place and the accommodation is advertised as suite hotel living.  Shangri-la offers serviced apartments in Asian and Emirates hotels.  Mandarin Oriental sells residences in Macau and Taipei.

68.On the other hand, it is the defendants’ unchallenged evidence that there is no known instance in Hong Kong of any collaboration between a Hong Kong residential property developer and a foreign and independent hotel group to develop residential development for sale in Hong Kong.  In fact, Sino Land and K.Wah have their own hotels and would hardly have any cause to use the name of another hotel chain.  Accordingly, there is little reason why the relevant public in Hong Kong would be deceived into believing that the plaintiffs are involved in the Development. 

69.However, the dividing line between purely residential developments and luxury hotel or resort developments is no longer pronounced.  There is ongoing convergence between 2 erstwhile separate industries: Novelty Pte Ltd v Amanresorts Ltd [2009] FSR 20 at §§85‑91.

70.In Amanresorts, the respondents used the name “Aman” in high-end hotel and resort business while the appellant sought to use the name “Amanusa” for middle-class residential accommodation.  The Singapore Court of Appeal held that:

“We have said that the bulk of those who have goodwill towards the ‘Aman’ names are high-income individuals. These individuals are not likely to be actual or potential purchasers of units in the Project. Hence, if an initial confusion as to the source of the Project or its connection with the Aman resorts sets in (for example, from a cursory glance at one of the appellant’s advertisement featuring the Project in the newspapers), there is not likely to be further investigation by the aforementioned individuals into the nature of the Project out of an interest in purchasing units in that project, which investigation (if carried out) would reveal the differences between the Project and the Amanusa Bali so as to dispel such confusion. Further, it is also difficult to dispel confusion where news of the Project gets passed around by word of mouth. Thus, we agree with the Judge's view that:

‘It is no answer to an allegation of misrepresentation in such a case to say that one could easily check the facts with the [appellant] or its agents or through its sales brochures (which would indicate the name of the developers for the project) or otherwise check with the [respondents] or other independent sources. The [appellant] should also not be allowed to say that the relevant section of the public in this case would tend to be more intelligent and would verify matters which they are not certain about. The fact that such checking or verification is required is itself evidence of confusion.’” (at §92)

71.For present purposes, I find there to be a serious issue to be tried as to whether the plaintiffs and the defendants’ beneficial owners are engaged in a common field of business.

72.Paragraph 22(f) soc pleads that the defendants’ use of the tagline "WORLD-CLASS SEASIDE RESORT LIVING" suggested a direct link to hotel or resort style accommodation.

73.With respect, this tagline was descriptive of the environment and relaxed living style of the Development.  It is the unchallenged evidence of the defendants that it is common for residential property developers in Hong Kong to use variations of the tagline to promote the claimed luxurious nature of their property developments in Hong Kong.  For example, Sino Land has used the word “resort” to promote its residential property development, “Island Resort”.  Other developers also described their developments (completed or not completed, from 2007 to 2017) as “world-class”.

74.Paragraph 22(g) soc pleads that in day to day use the name of the Development is likely to be shortened to Corinthia.

75.Whilst I agree with Mr Yan SC that many purchasers of the development are Chinese speaking, there may be English speaking owners or occupiers of the Development or even local residents who may need to refer their addresses in English.  There is a serious issue to be tried on this sub-paragraph.

76.Paragraphs 22(h) to (m) soc are dealt with together as they all concern the facilities of the Development and the way in which the defendants advertised it.  In summary, it is said that the television commercials feature a western model with background shots filed in Europe, suggesting a link to European style hotel and resort accommodation. The following features would give prospective purchasers a sense that they would be living in hotel style complex: inclusion of a “Club Corinthia” (which bears a striking resemblance to the lobby area of the Corinthia Hotel London with a chandelier) and a “Crystal Lounge”, and the set-up of outdoor space and driveways. 

77.Mr Wong SC also points out that the mark “Corinthia” was sometimes used alone by the defendants without any Chinese name.  For example, all references to Club Corinthia are in English, even in Chinese documents. The awnings of the mock-up of retail shops and artists’ impression of them all show “Corinthia” in English.  The Development would also be orally described by name and so the printed materials with the developers’ names would not reduce confusion.

78.The local circumstances have to be taken into account. Developers in Hong Kong have, as early as in 1996, been using the names of European places for their developments (eg Mayfair by the Sea,  The Hermitage).

79.The indisputable evidence is that some residential properties derive their names from famous locations.  For example, “Bellagio” developed by Wheelock Properties, derives its name from a location in Europe, and a famous hotel in Las Vegas.  It can hardly be suggested that anyone in Hong Kong has been misled into thinking that Bellagio in Hong Kong has anything to do with the Las Vegas “Bellagio” hotel. 

80.It is also the undisputed evidence of the defendants that property developers in Hong Kong do use Eurasian models in the promotion of their property developments.  The average Hong Kong consumer will hardly be misled by the promotional materials, without more, into thinking that a development is that of a hotel group or even a European developer. This is especially when the promotional materials make deliberate, clear and prominent reference to the developers, as required by law. 

81.Moreover, it is not uncommon for large residential developments (especially those wish to be regarded as luxury residences 豪宅) to have their own club or lounge facilities.  The club is usually located inside the development and accessible only to residents and their guests. The club facilities often include swimming pool, children’s playground, outdoor seating areas and lounges. In my view, it is unlikely for an average Hong Kong consumer to associate the club at Corinthia by the Sea to the plaintiffs’ hotels merely because of the red awning and the English name of the club, and the facilities provided.

82.Without disrespect to the plaintiffs, there is no evidence to prove that eg a chandelier hanging from a circular window ceiling is a distinctive feature of its hotels or would be recognized as such by the average consumer in Hong Kong.  To the contrary, this feature can be found in the common areas of property developments in Hong Kong developed by Sino Land (eg “One SilverSea”), K.Wah (“Chantilly”) and other developers (eg “Wing Tai-Seymour”).  They can also be found in the common areas of numerous hotels, residences, parks and restaurants in the world.  See exhibits “TVSU-25” and “TSUV-26”.

83.In my view, paragraphs 22(h) to (m) do not assist the plaintiffs.

84.Paragraph 20(n) soc pleads that a director of D1, a member of a related company’s marketing team and architects had stayed at the plaintiffs’ hotels prior to the launch of the Development.

85.There is no dispute that 5 senior officers of Sino Land had stayed at the plaintiffs’ Corinthia Hotel London from 30 September to 3 October 2014.  They included a director of a Singapore hotel, Project Assistant of Sino Land, Associate Director of Sino Land (Interior Design), Senior Manager (Projects of Sino Land) and Assistant General Manager (Sales of Sino Land).  None of them was a director of D1.  One was a qualified architect. 

86.The objective documentary evidence shows that their stay at the Corinthia Hotel London was long after the defendants’ adoption of the name “Corinthia” on 30 January 2014, the conception of the design of the Development and the date of application to register “The Corinthia” on 18 June 2014.  The fact that the 5 officials resided at Corinthia Hotel London one month before the application to register “Corinthia by the Sea” on 7 November 2014 does little to assist the plaintiffs.

87.There was also a General Manager (Customer Relationship Management) of the Sino Group who stayed at Corinthia Hotel London in November 2013.  The defendants claim that she has never had anything to do with the conception, design or naming of any of the property developments of Sino Land, or involved in any aspects of the Development. 

88.In the light of the objective evidence, the plaintiffs’ assertion in paragraph 22(n) soc, though arguable, is thinly supported by evidence.

89.Paragraph 22(o) soc pleads that based on the rest of paragraph 22, the defendants have copied the name “Corinthia” from the plaintiffs.

90.The defendants have strenuously denied copying. In view of the above analyses, the rest of paragraph 22 soc, whether taken collectively or individually, can hardly support the assertion of copying.

E5.  Damage

91.The plaintiffs complain that the mass advertising is not a way any luxurious hotel will advertise itself.  It will cause damage to the plaintiffs by tarnishing, blurring and/or degrading the distinctive character of the “Corinthia” name and mark in the mind of the relevant public and prejudices the plaintiffs’ potential expansion of business into the Hong Kong and Asia market.  See Tsit Wing at §158-160.  If the defendants are allowed to continue the mass advertising pending trial, the plaintiffs’ reputation in the Hong Kong market will be swamped and crushed: Provident Financial PLC & anor v Halifax Building Society [1994] FSR 81, at 96-97.

92.The plaintiffs’ complaint is, to some extent, contradicted by its own witness, Mr Xuereb.  He, having referred to “the massive advert plastered all over the wall of the MTR station in Tseung Kwan O” was “sure the development will deliver Corinthia’s famous high standards to Hong Kong”.

93.The manner of the defendants’ advertising, in itself, would not necessarily tarnish the luxurious character of the name Corinthia, especially since Sino Land and K.Wah clearly want the Development to be regarded as a luxurious development (豪宅) as well.  In any case, the plaintiffs may perhaps not be aware that the Mandarin Oriental (which they themselves acknowledge as being famous) places advertisement on the outer wall of a public car park. 

94.For present purposes, I do accept that if the plaintiffs can establish goodwill and misrepresentation, there will be a serious issue to be tried on damage to reputation of the plaintiffs.

95.Despite serious issues to be tried on goodwill, some of the sub-paragraphs of paragraph 22 soc, and damage to the plaintiffs’ reputation, there is doubt as to whether there had been misrepresentation.

F.  CLAIM UNDER TMO

F1.  General principles

96.The plaintiffs claim that “Corinthia” is entitled to protection as a well-known trade mark under the Paris Convention.  They have set out in §23 soc and schedule 1 soc their service marks worldwide including those that are pending registration.  They all contain the word “Corinthia”. 

97.The plaintiffs rely on s.63 TMO which provides that:

“Subject to section 59 (effect of acquiescence), the owner of a trade mark which is entitled to protection under the Paris Convention as a well-known trade mark is entitled to restrain by injunction the use in Hong Kong of a trade mark which, or the essential part of which, is identical or similar to his trade mark, in relation to identical or similar goods or services, where such use is likely to cause confusion on the part of the public.” (underline added to show the elements that the plaintiffs have to prove)

Schedule 2 TMO sets out the type of evidence that can establish that a mark is well-known.

F2.  Relevant date

98.Again, the relevant date is 18 June 2014, as in the claim for passing off: Stichting BDO & ors v BDO Unibank, Inc & ors [2013] EWHC 418 (Ch) at § 94. 

F3.  Well-known mark

99.The mark sought to be relied upon must be famous: Kerly’s Law of Trade Marks & Trade Names, 15^th ed., at §14-136. 

100.Merely showing reputation is not sufficient: Advocate General Jacobs in General Motors Corp v Yplon SA [1999] ECR I-5421.

“The protection of well-known marks under the Paris Convention and TRIPs is accordingly an exceptional type of protection afforded even to unregistered marks. It would not be surprising therefore if the requirement of being well-known imposed a relatively high standard for a mark to benefit from such exceptional protection. (§33)

…

Whether a mark with a reputation is a quantitative or qualitative concept, or both, it is possible to conclude … although the concept of a well-known mark is itself not clearly defined, a mark with a ‘reputation’ need not be as well known as a well-known mark.” (§37)

101.By way of example, in Le Mans Autoparts (O/012/05), Trade Marks Registry, the Appointed Person hearing an appeal from the Trade Marks Registry took judicial notice of the fact that the name Le Mans was famous for a race, as a notorious fact and one would be living in a cave in the UK not to have heard of it in that context.

102.However, it is not necessary for the mark to be well-known to the public at large in Hong Kong.  It is sufficient if it is well-known to a relevant sector of the public in Hong Kong: Novelty Pte Ltd v Amanresorts Ltd, at §§146-149; Schedule 2 of TMO, §2(e).

103.Mr Yan SC submits that if “Corinthia” is famous, it would not need to engage ILL to promote the brand.  I respectfully disagree.  Many famous hotels do have promotion in all sorts of ways. 

104.Mr Yan SC points to the plaintiffs’ statement in their 2014 Annual Report to its own shareholders that:

“The Group’s business is reliant on hotel properties and operations which are seasonal in nature. The hotel industry globally is marked by strong and increasing competition. Many of the Group’s current and potential competitors may have longer operating histories, bigger name recognition, larger customer bases and greater financial and other resources than the companies within the Group.”

105.With respect, the competitors may have those stated qualities but that would not necessarily mean that the plaintiffs have no fame.

106.Rather, I place more weight on the absence of any mention of Hong Kong, or even Asia, as being an important source of business for the Group in the 2014 Annual Report, compared to the express reference (on page 11) to the importance of the Russian domestic market which accounted for more than half of the hotel’s customers. I also repeat the observations on the ILL reports in paragraphs 31-33 above.

107.Whether the plaintiffs or Corinthia are famous is to be further proved.  For present purposes, there is a serious issue to be tried on it.

F4.  Identical or similar goods or services

108.In assessing the similarity of goods or services, all relevant factors have to be taken into account, including the nature of the goods or services, their end users, their method of use, whether they are in competition with each other, and the trade channels through which the goods or services are marketed: Canon Kabushiki Kaisha v MGM Inc [1999] RPC 117 at §§22-23; Kerly’s Law of Trade Marks and Trade Names, 15^th ed. §§9-073 to 9-074.

109.In Innodis PLC’s Appn [2004] E.T.M.R. 36, it was held that pharmaceutical products were not similar or complementary to medical devices because they originated from different sectors of manufacture, were sold through different channels and were targeted at different consumers.

110.The hotels and residential units originate from different sectors, are sold through different channels and are targeted at different consumers.  I repeat my observations in paragraphs 64-71 above. There may be a serious issue to be tried on similarity of goods and services between the parties.

F5.  Likely to cause confusion on the part of the public

111.The relevant confusion is the same as that for passing off, ie misrepresentation as to the origin of the goods or services: Canon Kabushiki Kaisha v MGM Inc [1999] R.P.C. 117, Jacobs AG of the European Court of Justice.

112.The law has been made clear in Specsavers International Healthcare Ltd v Asda Stores Ltd [2012] FSR 19.  In the past, the statutory protection conferred by a trade mark registration under section 63 TMO was absolute.  Once a mark had been shown to offend, the user of it could not escape by showing that by something outside the mark itself he had distinguished his goods from those of the registered proprietor (at §§51-52).  The English Court of Appeal held that to be no longer applicable in respect of claims for infringement under the Trade Marks Act 1994.  Use of the offending sign is to be considered in its context (§§73, 77-88). 

113.In the Specsavers case, the claimants’ registered mark and logo “SPECSAVERS” was reversed out and superimposed on the device of 2 intersecting shaded or unshaded ellipses.  The claimants also used the device of 2 unshaded intersecting ellipses.  In practice the claimants used green for the ellipses with the word “Specsavers” in white.  The defendant is a well-known supermarket chain. To promote its optical services, it used 2 types of logo.  One consisted of 2 white non-intersecting ellipses, the first containing the word “ASDA” in green and the second containing the word “Opticians” in green.  The second logo consisted of 2 green non-intersecting ellipses, the first containing the word “ASDA” in white and the second containing the word “Opticians” in white. 

114.The trial judge held that there was a clear similarity between plaintiff’s mark “Specsavers” and the defendant’s signs “spec saver” and “Spec savings” in the straplines.  He took into account the wording of the whole of the straplines and in particular, the defendant’s name “Asda”.  He considered that context was important and it dispelled any possibility of confusion.  He held that "Be a real spec saver at Asda” and “Spec savings at ASDA” would not give rise to confusion and constitute infringement of Specsavers’ trade marks.  That was upheld by the English Court of Appeal.

F6.    The average consumer

115.The average consumer is reasonably well-informed and reasonably observant and circumspect, taking into account social, cultural and linguistic factors.  e HeThe average consumer test has been described by Arnold J in Interflora v Marks & Spencer PLC [2013] FSR 33, §§208-211:

(a) The average consumer is a “legal construct”.

(b) He is reasonably well-informed and reasonably observant and circumspect; confusion on the part of those who are ill-informed or unobservant is discounted.

(c) In a case concerning ordinary consumer goods and services, the court is able to put itself into the position of the average consumer without requiring expert evidence or a consumer survey. The court is to inform itself, by evidence, of the matters of which a reasonably well informed and reasonably observant and circumspect consumer of the products would know; and then, treating itself as competent to evaluate the effect which those matters would have on the mind of such a person with that knowledge, ask the relevant question.

(d) The average consumer test is not a statistical test in the sense that, if the issue is likelihood of confusion, the court is not trying to decide whether a statistical majority of the relevant class of persons is likely to be confused.

116.Applying the contextual approach in the present case, from the names, marks and logos of Sino Land and K. Wah used together with “Corinthia by the Sea”, “Corinthia” and/or “帝景灣” , an average consumer who is reasonably well-informed and reasonably observant and circumspect will know that the Development is jointly developed by 2 locally well-known developers. He will not be deceived into thinking that the Development is that of a hotel group.  He is able to differentiate between a residential development (even with a club and hotel like services) and a hotel (even with apartments); and who the provider of the services are (a local developer or a hotel).

G.  SUMMARY ON SERIOUS ISSUES TO BE TRIED

117.I find serious issues to be tried on whether the plaintiffs have goodwill in Hong Kong, whether the plaintiffs and the defendants are in a common field of business, whether the Corinthia mark of the defendants substantially replicates that of the plaintiffs’ and whether the name of the Development is likely to be shortened to “Corinthia” in daily use. Even so, it is questionable if there was risk of misrepresentation to the average consumer in Hong Kong in view of the manner in which the defendants’ Corinthia marks are used in English and Chinese, with the description “by the Sea”, and alongside the names, marks and logos of Sino Land and K.Wah.  The issues to be tried on passing off fall short of being serious.

118.I find a serious issue to be tried on whether the plaintiffs are famous and whether they provide similar goods and services as the beneficial owners of the defendants.  However, the average consumer will know that the Development is jointly developed by 2 locally well-known developers instead of a hotel group.  Again, the issues to be tried on the TMO claim fall short of being serious.

H.  INADEQUACY OF DAMAGES AS A REMEDY

119.Mr Yan SC submits that the plaintiffs’ alleged fears of suffering irreparable damage are patently fanciful.  He refers to a property development named 麗晶花園 (which was completed in 1985) and a commercial building named 麗晶中心(which was completed in 1996).  They co-existed with the famous 麗晶酒店 Regent Hotel (which was opened earlier in 1981 and renamed the “Intercontinental Hotel” in 2001) of the very well-known Regent Hotels & Resorts Group.  There was no suggestion or evidence that the marketing and sale of the units in 麗晶花園 had caused any damage to the goodwill enjoyed by the Regent Hotels & Resorts Group in Hong Kong.

120.With respect to Mr Yan SC, it is not for this court to second guess whether or not the Regent Hotels & Resorts Group had suffered damage to goodwill and why it did not sue the developers of 麗晶花園and 麗晶中心.  Each case must be decided on its own facts.

121.If damage to the plaintiffs’ reputation/goodwill is established, it is clearly hard to quantify.  Damages will not be an adequate remedy.    

122.In respect of the defendants, financial loss arising from the injunction (such as delay in sale or more costs incurred for a different manner of advertising) may be compensable by damages.  However, the defendants have goodwill as developers in Hong Kong.  Imposition of an interim injunction based on infringement of intellectual property rights is equally damaging to their reputation if it turns out at the trial that the infringement cannot be established.  Damages under the cross-undertaking as to damages will not be an adequate remedy to them either. 

J.  BALANCE OF CONVENIENCE

J1.  Restricted terms of the injunction order

123.The Plaintiffs have changed the draft terms of the injunction 3 times.  Mr Yan SC queries whether the Plaintiffs’ assertions of irreparable damage are serious or fanciful and whether the application is but a tactical exercise to try to put pressure on the defendants.

124.With respect, I do not agree.  The changes were proposed to reflect the position as it enfolded with the filing of evidence and were fair proposals to make in the context of an injunction application.

125.The draft terms are limited in scope.  They seek to restrain the defendants from (i) using the English name of “Corinthia” in their promotion of the Development, (ii) using the mark “Corinthia” in their website linked to the domain name “corinthiabythesea.hk” unless the reference is required under Cap 621 and/or any guidelines issued thereunder.  The defendants can promote the Development by the name Corinthia at the Sales Office, by direct contact to specific individuals by phone, email or face-to-face meeting and by reference only to the Chinese name 帝景灣.

126.If the plaintiffs could satisfy all other requirements of American Cyanamid, an injunction in the draft terms would, in my view, be appropriate as doing what is minimal to hold the ring pending trial.

J2.  Delay

127.The plaintiffs have delayed in coming to court – 14 months after the Relevant Date and 7 months after the defendants’ press conference.  They were first aware (through Ivy Jenkins) of the Development on 15 June 2015 and yet the writ was issued more than 2 months later.  Six days after the writ was issued, 525 out of 536 units in the Development have been sold, leaving 11 units unsold.  Whatever damage to the plaintiffs’ goodwill has been done by then.  The delay greatly tips the scale against the grant of the injunction even if all other requirements of American Cyanamid are met.

J3.  Speedy trial

128.In recent years there has been a growing trend for applications for interim injunctions to be refused or adjourned to trial, with an order for speedy trial.  This kind of order has much more frequently been made in cases where there is a legitimate dispute between the parties as to the defendant’s right to use the name or mark concerned (as opposed to counterfeiting cases): Kerly’s at §20-083.  In fact, an order for speedy trial has already been made by Madam Justice B. Chu. 

K.  CONCLUSION

129.Both parties have a reputation to protect.  The plaintiffs’ goodwill in the hotel business in Hong Kong is yet to be proved.  They have no goodwill in residential developments in Hong Kong, compared to the established goodwill of the defendants. The plaintiffs fall short of showing serious issues to be tried on both the passing off claim and the claim under TMO.  Even if the converse is true, there has been great delay in coming to court.  Balancing the convenience, refusing the injunction application would carry the lower risk of injustice and I so order.  On a nisi basis, there shall be costs to the defendants with certificates for 2 counsel to be taxed if not agreed.

130.I thank counsel for their thorough preparation and great assistance to the court.

Mr Anson Wong SC and Mr Douglas Clark, instructed by DLA Piper Hong Kong, for the 1^st and 2^nd plaintiffs

Mr John Yan SC and Mr Colin Shipp, instructed by Mayer Brown JSM, for the 1^st and 2^nd defendants