樂氏同仁藥業科技集團有限公司 v. 中國北京同仁堂(集團)有限責任公司

HCIP 62/2020

[2021] HKCFI 1025

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 62 OF 2020

________________________

	IN THE MATTER OF the Trade Marks Ordinance (Cap. 559) (the “Ordinance”)
	and
	IN THE MATTER OF an application to appeal the decision of Ms 羅淑儀 (Connie Law) acting for the Registrar of Trade Marks dated 20 August 2020 in relation to an Opposition by 中國北京同仁堂(集團)有限責任公司 (the “Opponent”/“Respondent”) to Trade Mark Application No. 303570679 for in Classes 3 and 5 (the “Subject Application”/“Opposed Mark”) applied for by 樂氏同仁藥業科技集團有限公司 (the “Applicant”/“Appellant”)

________________________

HCIP 63/2020

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 63 OF 2020

________________________

	IN THE MATTER OF the Trade Marks Ordinance (Cap. 559) (the “Ordinance”)
	and
	IN THE MATTER OF an application to appeal the decision of Ms 羅淑儀 (Connie Law) acting for the Registrar of Trade Marks dated 20 August 2020 in relation to an Opposition by 中國北京同仁堂(集團)有限責任公司 (the “Opponent”/“Respondent”) to Trade Mark Application No. 303197197AB for in Classes 32, 33, 36 and 41 (the “Subject Application”/“Opposed Mark”) applied for by 樂氏同仁藥業科技集團有限公司 (the “Applicant”/“Appellant”)

________________________

Before: Hon Lok J in Chambers (Open to Public)

Date of Hearing: 14 April 2021

Date of Decision: 14 April 2021

Date of Reasons for Decision: 19 April 2021

__________________________________

R E A S O N S   F O R   D E C I S I O N

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1.This is an application (“the Application”) by the Appellant to adduce new evidence for the purpose of the appeals against the decisions made by the Registrar of Trade Marks (“the Registrar”).  In the hearing on 14 April 2021, I dismissed the Application with costs and I now give my reasons.

2.The Respondent is the owner of the well-known “同仁堂” and “北京同仁堂” marks.  The Appellant is a company incorporated in the Mainland on 17 May 2013. By decisions both dated 20 August 2020 (“the Decisions”), the Registrar upheld the Respondent’s opposition against the Appellant’s Trade Mark Application nos 303570679 (the subject matter of the appeal in HCIP 62/2020) on the ground of likelihood of confusion under s 12(3) of the Trade Marks Ordinance (Cap 559) (“TMO”) and 303197197AB (the subject matter of the appeal in HCIP 63/2020) on the ground of bad faith under s 11(5)(b) of the TMO.

3.The representation of the marks is produced below (collectively “the Subject Marks”):

303570679 (HCIP 62/2020) (“the 679 Mark”)	303197197 (HCIP 63/2020) (“the 197 Mark”)

4.The Appellant appeals against the Decisions. The Appellant also seeks leave to adduce fresh evidence on appeal.  The Appellant filed the affirmation of Mr Douglas Stephen Clark (“Mr Clark’s Affirmation”) exhibiting the draft affirmation of Mr Yueh Chueh Hsin (“Mr Yueh’s Draft Affirmation”) in support of the Application.  Although the Respondent has not filed any affirmation in response, it is made clear in the Respondent’s letter to the Appellant dated 4 February 2021 that non-filing of the affirmation should not be taken as the Respondent’s admission to any of the matters set forth in the supporting affirmation and the Respondent does object to the Application and would make legal submissions at the substantive hearing.

Legal principles for applications to adduce new evidence in the case of Trade Marks Registry appeals

5.In the case of an appeal against the decision of the Registrar, s 85 of the TMO provides:

“The court may, for the purpose of determining any question in the exercise of its original or appellate jurisdiction under this Ordinance, make any order or exercise any other power which the Registrar could have made or exercised for the purpose of determining that question.”

6.The procedures for the appeal are set out in O 55 of RHC. O 55 r 3(1) provides:

“An appeal to which this Order applies shall be by way of rehearing and must be brought by originating motion.”

7.O 55 r 7(2) makes provision for admitting new evidence on appeal:

“The Court shall have power to receive further evidence on questions of fact, and the evidence may be given in such manner as the Court may direct either by oral examination in court, by affidavit, by deposition taken before an examiner or in some other manner.”

8.The principles to be applied when determining whether to admit further evidence in trade marks registry (“the Registry”) appeals were set out by A Cheung J (as he then was) in Re CSS Jewellery Co Ltd[1] (citing the decision of Laddie J in Hunt-Wesson Inc’s Trade Mark Application[2]):

“I agree that in this regard, the Ladd v Marshall conditions are not applicable in an appeal from the Registrar to the Court of First Instance. On the other hand, one cannot assume that leave to adduce further evidence is to be had for the asking. The court will look at a number of factors, including whether the evidence could have been filed earlier, and, if so, how much earlier; the explanation for the delay; the nature of the mark; the potential significance of the new evidence; prejudice; the desirability of avoiding multiplicity of proceedings (where relevant); and the public interest in not admitting onto the Registrar invalid marks. Hunt-Wesson Inc’s Trade Mark Application [1996] RPC 233, 241-242.”

9.It is not disputed that the following factors are relevant for granting leave to adduce further evidence in such kind of appeals:[3]

(a)  whether the evidence could have been filed earlier and, if so, how much earlier;

(b)  if it could have been, what explanation for the late filing has been offered to explain the delay;

(c)  the nature of the mark;

(d)  the nature of the objections to it;

(e)  the potential significance of the new evidence; and

(f)  whether or not the other side will be significantly prejudiced by the admission of the evidence in a way which cannot be compensated, for example, by an order for costs.

10.The onus is on the Appellant to justify the exercise of the court’s discretion in its favour, and merely showing the evidence sought to be introduced is relevant is not enough. It was stated by Laddie J in Dualit Ltd v Rowlett Catering Appliances Ltd that:[4]

“… it is not enough simply to allow in any evidence which can be argued to be relevant and in effect to allow in any evidence which is relevant. If such a low hurdle is imposed, other applicants and opponents will no doubt look at the decision adverse to them in the Registry, redesign their evidence and start again on appeal. But proceedings before the Registry are not a dry run to test out the evidence to see which parts can be criticised so that the evidence can then be perfected for the purpose of the proper run before the High Court. It is important for parties to realise that the function of the Registry is to examine applications and to consider oppositions, and that they must put before the Registry the material which is to be relied upon in support of their cases.

In my view, it is just as important that it is brought home to litigants that they must put the best evidence available to them before the Registry as it is to ensure that the appeal is a fair resolution of the dispute between the parties. It appears to me, therefore, that it is still necessary for the court to consider the issue of how important the evidence is, whether it could have been put in earlier and why it was not and the weight that evidence is likely to have at the appeal.”

Discussions

11.Both the Subject Marks comprise of the Chinese words “同仁” and English words “Royal Herbalist since 1669”[5].  The Hearing Officer refused registration of the 197 Mark (HCIP 63/2020) on the ground of bad faith, where the major issue is whether the Appellant is entitled to register the subject mark in Hong Kong. For objection under s 12(3) which the Hearing Officer had relied on to refuse the registration of the 679 Mark (HCIP 62/2020), the only issue is whether the nominal use of the subject mark is likely to confuse in Hong Kong.

12.The Appellant only seeks to adduce new evidence on the issue of bad faith.  According to Mr Clark, solicitor advocate for the Appellant, a finding of bath faith is a serious matter for the Appellant.  Such finding may affect applications by the Appellant for similar marks for the same classes of goods or identical or similar marks for other classes of goods in the future.  He also draws my attention to another trade mark application for the Subject Marks for other classes of goods to which the Respondent raised no opposition.

13.As stated above, the onus is on the Appellant to justify the exercise of the court’s discretion in its favour.  In my judgment, it is clear that the Appellant has failed to discharge such burden.

14.Plainly, all the evidence sought to be adduced could have been filed earlier and the delay is significant.  All the evidence could have been filed well in advance of the hearing below.  In particular, all the evidence except the court decisions exhibited as “YCH-14” in Mr Yueh’s Draft Affirmation, i.e. the decision of the Higher People’s Court of Beijing Municipality dated 9 April 2018 (“the Mainland Court Decision”) and the decision of the Tribunal Judicial De Base of Macau dated 18 July 2018 (collectively “the Other Decisions”)) could have been filed when the Appellant filed its evidence on 27 March 2018.  The Appellant could also have sought leave to file the Other Decisions by way of further evidence pursuant to r 20 of the Trade Marks Rules (Cap 559A).  In fact, the Appellant had plenty of time to do so any time before the hearing which was only held on 23 March 2020.  There had been a significant delay for about 2.5 years.

15.Further, the explanation given (if any at all) is wholly unsatisfactory.  It appears that “unfortunate” is the only explanation that was given for the lengthy delay.  It is claimed in Mr Clark’s Affirmation that “[t]his case is the first time the Applicant/ Appellant have been involved in opposition proceedings in Hong Kong and they relied on their then legal advisors to prepare the evidence in an appropriate way.  Unfortunately, not all the evidence that could have been filed was filed”.[6]  In fact, it is nothing special at all for the Appellant to be involved in opposition proceedings in Hong Kong for the first time.  More importantly, legal advisors had been engaged to prepare the evidence in the opposition proceedings.  Mr Clark was not by then involved and there is no explanation from those who were responsible as to why the new evidence was not adduced at the hearing before the Hearing Officer.  The explanation (if any at all) thus given is wholly unsatisfactory and the court should guard against allowing the parties to treat the hearing in the Registry as a dry run to test out the evidence.[7]  In my judgment, these reasons would have been sufficient for me to exercise the discretion against the filing of new evidence.

16.In any event, I have serious doubt about the relevance, or at least the significance, of the proposed new evidence.

17.According to Mr Clark, §6 of Mr Yueh’s Draft Affirmation is most important to the Appellant as it provides the background of the family business of Mr Yueh Chueh Hsin (“Mr Yueh”) after 1949.  Mr Yueh acknowledged that the former business in the Mainland was taken over by the Respondent.  His family (i.e. the Yue’s family) continued to run the business in Taiwan.  He joined the Taiwanese business in 1994, and he decided to return the family business to the Mainland in the early 2010s.  Apparently, the new evidence seeks to establish that Mr Yueh, being a descendant of the Yue’s family, had some involvement with the Appellant’s business.

18.According to Mr Clark, such evidence is adduced in response to the finding of the Hearing Officer in §§50 and 55 of the decision in respect of the 197 Mark, under which the Hearing Officer remarked that there was no evidence to show that any descendent of the Yue’s family was involved in the business of the Appellant.

19.It is the Appellant’s case that the new evidence concerns only the issue of bad faith.  It is not disputed that to determine bad faith, the tribunal must first ascertain what the Appellant knew about the matters in question and then decide whether, in the light of that knowledge, the defendant’s conduct was dishonest (or otherwise fell short of the standards of acceptable commercial behaviour) judged by the ordinary standards of honest people.

20.Obviously, whether the descendants of the Yue’s family had any association with the Appellant’s business is only one of the many issues before the Hearing Officer.  In fact, the Appellant explicitly acknowledged that “北京同仁堂” has become nationalized and since then the Yue’s family has lost everything of “北京同仁堂” including tangible and intangible assets including the brand “北京同仁堂”.[8]  Further, the Hearing Officer found that, prior to the relevant date (i.e. time of filing of the application for registration, namely 12 November 2014 for the 197 Mark and 20 October 2015 for the 679 Mark), the Appellant knew that the Respondent had established substantial goodwill and reputation regarding “北京同仁堂” and “同仁堂” in Hong Kong and the Mainland^[9] and there is no suggestion that there has ever been any use of “同仁堂”, “臺灣同仁堂” or “樂氏同仁” marks by the Appellant or the Yue’s family in Hong Kong prior to the relevant date.  It was under such kind of circumstances that the Hearing Officer found that the application for the 197 Mark was made in a dishonest manner, or otherwise fell short of the standards of acceptable commercial behaviour, in Hong Kong.  For these reasons, the new evidence allegedly showing the involvement of Mr Yueh in the Appellant’s business is of limited significance.

21.Further, the use of the Subject Marks by the Appellant or the Yue’s family as shown in the new exhibits is either irrelevant to the issues or has only insignificant weight.  For exhibits “YCH-3”, “YCH-4”, “YCH-13”, all the uses do not concern Hong Kong, and most if not all of the new evidence does not even show the use of the Subject Marks, let alone the use of the Subject Marks in relation to the goods applied for.  For exhibit “YCH-5”, it appears that “樂氏同仁” was only first adopted as the name of the products of “樂氏同仁藥業有限公司” (which was incorporated in Taiwan in 2011 only (exhibit “YCH-12”) in Taiwan in about 2014. Whether there had been actual use of the mark and the way how the trade mark was used is not shown.  For exhibits “YCH-6” to “YCH-11”, most if not all of the evidence post-dated the relevant date or even undated.

22.There may be some authorities to suggest that the use of the mark after the application date may be relevant if it casts light backwards on the intention of the applicant as at the application date. However, this is not applicable here as all the alleged uses do not concern Hong Kong, and most if not all of the new evidence does not even show the use of the Subject Marks, let alone the use of the Subject Marks in relation to the goods applied for in Hong Kong.

23.It is also hard to see how the Other Decisions are relevant as the evidence considered and the laws applied in those decisions are different from that in the present case and the laws of Hong Kong.[10]  In particular, the issue of bad faith involves mixed questions of law and fact, and different jurisdictions may have different laws governing the issue of bad faith. Further, the mark in question in the Mainland Court Decision is not identical to any of the Subject Marks.

24.Though the Respondent has not filed any evidence on prejudice, it is not too difficult to see the possible prejudice that may be caused to the Respondent by allowing the Application.  New evidence may have to be filed by the Respondent and the Respondent may have to consider cross-examining Mr Yueh on his new evidence.  It would further delay the hearing of the appeal and require unnecessary costs to be incurred.  In any event, as held by Au-Yeung J in Gemology Headquarters International LLC v Gemological Institute of America Inc, ibid ^[11], this requirement on prejudice is not something that an applicant (here the Appellant) can freely use to override the other requirements.  Otherwise, an applicant can simply buy an opportunity to adduce new evidence, and this simply cannot be fair and just to the opponent (here the Respondent). 

25.I agree with Ms Ma, counsel for the Respondent, that the attempt to adduce new evidence clearly violates the principles set out in Dualit Ltd v Rowlett Catering Appliances Ltd.[12] It is a classic case that the Appellant, as the losing party, wishes to redesign and tailor its evidence having regard to the adverse decision against it by way of adducing new evidence on appeal.  In my judgment, such kind of attempt should not be encouraged and there is no good reason for the court to exercise the discretion in allowing new evidence to be adduced in the present case.

26.Mr Clark has also over-exaggerated the effect of the finding on bad faith by the Hearing Officer.  In any event, the Appellant did manage to register the Subject Marks in respect of some other classes of goods in Hong Kong.  Further, such finding would not be relevant for the trade mark applications in other jurisdictions as the laws are different in different jurisdictions.  After all, the Appellant knew full well the grounds of opposition including the allegation of bad faith before the hearing, and so it is difficult to understand why the Appellant had not made proper preparation in the proceedings below when it claims that the matter is so important to it.

27.Mr Clark also submits that there is no bar for Mr Yueh himself to make the same applications in the future, and so it would be more convenient to deal with what he has to say in the present proceedings. However, it is clear that the Appellant and Mr Yueh are two separate entities. The Appellant seems to suggest that because Mr Yueh is a descendent of the Yue’s family, it would always be honest for Mr Yueh to use the Subject Marks in Hong Kong, despite the fact that he knows full well his family has lost all the rights associated with the use of the name “同仁堂” or “同仁” in the Mainland and that the Respondent, being the owner of such trade names, has substantially used the names in respect of its business in the Mainland and Hong Kong.  Even if the Appellant is right, the considerations for the respective applications by the Appellant and Mr Yueh would be different.  In particular, Mr Yueh was not even a shareholder of the Appellant as at the relevant date.  In any event, it is always open to Mr Yueh to reargue the same issue in the case of any future applications made by him.  Hence, this is not a good reason to justify the filing of new evidence in these appeals. 

28.For the above reasons, the Appellant has failed to justify the exercise of the court’s discretion in its favour and the Application was therefore dismissed with costs.

Mr Douglas Clark, of Ernest Li & Co., for the Appellant in both cases

Ms Ma On Ki, instructed by Benny Kong & Tsai, for the Respondent in both cases