Jellycat Ltd (A Uk Company) v. Jellycat Ltd (A Hong Kong Company) and Another

HCIP 73/2020

[2021] HKCFI 2106

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 73 OF 2020

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

Date of Hearing: 14 July 2021

Date of Judgment: 14 July 2021

Date of Reasons for Judgment: 19 July 2021

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REASONS FOR JUDGMENT

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1.This is an application for summary judgment.  I allowed the application in the hearing on 14 July 2021 and I now give my reasons.

Background

2.This is a straight-forward case of passing off and trade mark infringement.

3.The Plaintiff is a renowned global toy manufacturer and is best known for its luxury soft toy products.  It was incorporated in the United Kingdom on 2 July 1998.  At all material times, the Plaintiff’s products were (and are still) marketed under and by reference to the mark “JELLYCAT”.

4.The Plaintiff’s products are categorized into different collections, including but not limited to “Bashful Bunnies”, “Toothys”, “Amuseables”, “Fuddlewuddle” and “Kutie Pops”.  In particular, the “Bashful Bunnies” collection is one of the Plaintiff’s best-selling collections.  The “Bashful Bunnies” collection is also promoted under and by reference to the Chinese mark “害羞邦尼兔” in Chinese speaking markets.  This line has become so iconic and so representative that the “JELLYCAT” brand has very often been used interchangeably or in conjunction with the Chinese mark “邦尼兔” by the trade and the public in Hong Kong and the Mainland.

5.The Plaintiff is also the registered proprietor of the mark “JELLYCAT” in many jurisdictions around the world.  The one in the United Kingdom was registered as early as in 1999.  In Hong Kong, the Plaintiff is the registered proprietor of Hong Kong Trade Mark Reg. No. 301899343, registered for the mark “JELLYCAT” in Class 28 (“the Plaintiff’s Registered Mark”).  The registration date was 27 April 2011.  The validity of this trade mark registration is not in dispute.

6.The Plaintiff’s soft toy products have been extensively and widely promoted and marketed around the world since around 1999.  They were first marketed in Hong Kong in 2003.  In support of the Plaintiff’s claim on goodwill and reputation, the Plaintiff has provided the court with the sales figures of the products.  It also exhibited to its supporting affidavits materials including: (i) printouts of the Plaintiff’s website showing some of the Plaintiff’s products; (ii) the Plaintiff’s catalogues showing the range of its products; and (iii) printouts from the internet showing the use of the Chinese mark “邦尼兔” in the Chinese markets.  Since 2003, the Plaintiff has achieved substantial sales in respect of products bearing the marks, and has also substantially and extensively promoted the marks in Hong Kong.  Under such circumstances, I agree with Mr Wong, counsel for the Plaintiff, that the evidence is overwhelming that at the time when the Defendants commenced their wrongful acts, the Plaintiff had already enjoyed substantial goodwill and reputation in respect of its marks.

7.The 1^st Defendant is a limited company incorporated under the laws of Hong Kong on 14 September 2017 under the name “JELLYCAT LIMITED”.  The 1^st Defendant’s company name plainly constitutes instrument of deception.  At all material times, the 2^nd Defendant is and was the sole director and shareholder of the 1^st Defendant.  Neither the 1^st nor the 2^nd Defendant has any relationship with the Plaintiff.

8.On 7 February 2018, the 1^st Defendant applied to register the mark “JELLYCAT” in Hong Kong (under App. No. 304425895) in Classes 8, 10, 12, 18, 20, 25, 35.  The said application was subsequently divided into App. No. 304425895AA (for Classes 8, 10, 12, 18, 20 and 25) and App. No. 304425895AB (for Class 35).  The latter has subsequently been refused registration by the Registrar of Trade Marks, whilst the former was opposed by the Plaintiff, and later withdrawn by the 1^st Defendant.

9.On 1 June 2020 (i.e. after the commencement of the present proceedings), the 1^st Defendant further applied to register the marks “邦尼兔” and “邦尼兔&朋友們” in Hong Kong under App. Nos. 305289292 and 305289283 respectively.  The applications were subsequently surrendered by the 1^st Defendant on 23 February 2021.

10.The 1^st Defendant is further the applicant or registrant of 52 trade mark applications or registrations in the Mainland in relation to the marks “JELLYCAT”, “邦尼兔”, “JELLYCAT 邦尼兔”, “JELLYRABBIT”, “JELLYCAT’S FRIENDS”, “邦尼兔 & 朋友們”.  The 1^st Defendant uses the name “邦尼兔有限公司” as the Chinese name of the company in the said applications or registrations.  Some of the applications were made after the commencement of the present action.  The Plaintiff has opposed or applied to invalidate all the aforesaid applications and registrations.  As of 22 July 2020, the China Trademark Office has issued 8 decisions which are all in favour of the Plaintiff.  In some of the decisions, the China Trademark Office expressly found that the 1^st Defendant had intended to copy and imitate the Plaintiff’s trade marks riding upon the Plaintiff’s goodwill.  The remaining cases are pending.

11.I agree with Mr Wong that there is no justification for the Defendants to use the name and mark “JELLYCAT”, which is neither descriptive nor common.  It also cannot be a matter of coincidence that the Defendants chose to use “邦尼兔” as the Chinese name of the 1^st Defendant.  “邦尼兔” has nothing to do with, and is not a translation or transliteration of “JELLYCAT”.  It is plain and obvious that the Defendants deliberately intended to ride upon the goodwill and reputation of the Plaintiff and tried to mislead members of the trade and the public.

12.The Plaintiff commenced the present action against the Defendants on 22 February 2019.  The Defendants contested the claims and filed their Defence on 20 May 2019.  The Plaintiff made the present application for summary judgment on 4 November 2020.

13.After the Plaintiff has taken out the application for summary judgment, the 1^st Defendant has changed its company name to “GANTZ E-COMMERCE LIMITED” on 16 February 2021.

14.The 1^st Defendant has further withdrawn the Trade Mark App. No. 304425895AA on 2 March 2021.

15.In the light of the aforesaid, the Plaintiff’s solicitors wrote to the Defendants’ solicitors on 3 May 2021 and proposed to conclude the present action by way of consent order.  However, the Defendants have failed to reply to the said offer and have decided to proceed and contest the present application.

The issues in the summary judgment application

16.The 1^st Defendant’s company name contains the word “JELLYCAT” which is identical to the trade mark of the Plaintiff.  There is no serious dispute that any use by the Defendants of the mark “JELLYCAT” or any company name incorporating the same will likely cause confusion for the purpose of the passing off and trade mark infringement claims.

17.Ms Herbert, counsel for the Defendants, raises a few grounds to oppose the passing off claim.

18.First, the Defendants make a bare allegation that the Plaintiff’s marks were not well-known in Hong Kong.  In my judgment, there cannot be any triable issue on the question of the Plaintiff’s goodwill and reputation for the following reasons:

(i)  As mentioned above, the Plaintiff has produced overwhelming evidence to support its case on goodwill and reputation and the Defendants have not adduced any evidence to challenge or dispute the Plaintiff’s evidence.

(ii)  According to the Defendants’ case, the 2^nd Defendant was willing to pay RMB210,000 for the 5 trade mark registrations of the mark “JELLYCAT” in the Mainland.  If the mark did not enjoy any pre-existing reputation and goodwill, it begs the question as to why the 2^nd Defendant was willing to pay so much money to acquire the trade mark registrations.  I agree with Mr Wong that it cries out for an explanation by the Defendants and they have provided none.

19.Second, Ms Herbert argues that there was no misrepresentation.

20.However, the company names of the 1^st Defendant and the trade mark applications and registrations in Hong Kong clearly constitute instruments of deception.  In particular, “JELLYCAT” is neither descriptive nor common (and there is no evidence suggesting so), and the use of “JELLYCAT” in the 1^st Defendant’s company name is inherently deceptive.

21.By incorporating the 1^st Defendant with the name “JELLYCAT”, applying for its business registration and applying to register the various marks in Hong Kong, the Defendants have clearly shown an intention to use the marks.  The acts of the Defendants were clearly deliberate and were intended to ride upon the goodwill of the Plaintiff, and to deceive or confuse members of the public.  In particular, the Defendants continued to apply for or proceed with the application to register the marks despite being aware of the Plaintiff’s rights.

22.In so far as the Defendants claim innocence and rely on the agreement with Xiamen Chang Tian Trading Company Ltd (“Xiamen Chang Tian”) to justify the use of the name “JELLYCAT” and “邦尼兔”, innocence is irrelevant as passing off does not require the proof of mental state of the Defendants.  So even assuming that the Defendants had indeed innocently adopted the marks, that does not mean that there is no actionable passing off.

23.In any event, the Defendants’ purported story of innocence is utterly incredible for the following reasons:

(i)  The Defendants allege that the 1^st Defendant’s name was selected after a “search” was conducted in or around September 2017 for a suitable brand name which was the subject of an existing trade mark registration in the Mainland and which could be used for the business of trading in a variety of branded goods through Chinese e-commerce platforms such as “TMall” and “TMall Global”.  However, the Defendants’ purported story is unsupported by any documents and fundamentally lacks particulars.  They have failed to explain what kind of search the 2^nd Defendant had purportedly conducted.  More importantly, the Defendants have completely failed to explain that of the hundreds of thousands of registered trade marks in the Mainland, how and why he came to choose “JELLYCAT”.

(ii)  As mentioned above, it is inconceivable that the 2^nd Defendant was willing to pay RMB210,000 for the 5 trade mark registrations of the mark “JELLYCAT” in the Mainland if the mark did not enjoy any pre-existing reputation and goodwill.  The 2^nd Defendant must have realized the goodwill and reputation enjoyed by the Plaintiff in relation to the mark “JELLYCAT” before he was willing to pay such a substantial amount for the transfer of the trade marks.  The Defendants have otherwise failed to explain how the valuation came about.

(iii)  Whilst the agreement was allegedly concluded in September 2017, it was only signed by Xiamen Chang Tian in September 2019.  No explanation has been given to such glaring inconsistency.

24.In any event, the Defendants would have known the Plaintiff’s prior rights when their trade mark agent allegedly done the preliminary search.  The records show that the Plaintiff’s first registration of the “JELLYCAT” mark in the Mainland was obtained as early as 21 February 2012. Yet, they decided to apply for the applications and continued to defend the present claims and refused to give any undertakings.

25.In the premises, there is clearly no triable issue on the question of misrepresentation.

26.Damages or likelihood of damages can be a matter of inference.  In the context of the present case, it will necessarily flow from the wrongful acts of the Defendants.

27.For these reasons, there is no arguable defence to the passing off claim.

28.For the trade mark infringement claim, there is no issue that the Plaintiff’s Registered Mark is valid and subsisting.  It is clear that any use by the Defendants of the mark “JELLYCAT” or any name incorporating the same in relation to the registered goods or goods or services similar thereto will likely cause confusion.  In fact, the Defendants have already shown an intention to use the mark in relation to similar services under its application 304425895AB, and the Registrar has already expressed her view that confusion is likely.  There is again no triable issue in relation to the infringement claim.

29.For the claim against the 2^nd Defendant, it is clear that he is and was at all material times the sole director and shareholder of the 1^st Defendant and he was the mastermind behind all the wrongful acts complained of.  Accordingly, the 2^nd Defendant is jointly liable for the tortious acts.  In fact, the Defendants have not adduced any evidence to show any triable issue in this regard.

30.Ms Herbert also raises a few ancillary points. 

31.First, she submits that, as the tort of passing off and trade mark infringement are confined to acts within jurisdiction, it would not be right for the court to grant any injunction with extra-territorial effect.

32.It is trite law that Hong Kong courts have the power to order injunction to prevent instrument of deception incorporated or made in Hong Kong to be used to deceive the public or consumers outside Hong Kong.[1] Although the 1^st Defendant has changed its name after the taking out of the summary judgment application, the Plaintiff is concerned that the 1^st Defendant may continue to use its old name for, say, trade mark applications outside Hong Kong.  This is a legitimate concern in light of the history of this case, and Ms Herbert is not able to confirm whether the 1^st Defendant has ceased to use its old name to trade or process applications in other jurisdictions.  Under such circumstances, I see it fit to grant an injunction to prohibit the Defendants from using the 1^st Defendant bearing its old name as an instrument of deception outside Hong Kong.

33.Ms Herbert also complains that the Plaintiff has asked for some reliefs which have not been pleaded in the Statement of Claim, such as declaration as to passing off and trade mark infringement and order for disclosure.  This is a non-point.  It is trite law that, the court has jurisdiction to grant any further or other relief (including declaratory relief) that it thinks appropriate on the facts as proved or established though it has not been expressly pleaded, provided that any such relief is not inconsistent with the relief expressly pleaded.[2] All the reliefs sought in the summons for summary judgment are consistent with the Plaintiff’s established claims for passing off and trade mark infringement.  They are in fact the usual reliefs sought in such kind of claims.

34.For the above reasons, I find that there is no triable issue or arguable defence in this case and granted summary judgment in favour of the Plaintiff.

35.There is no dispute that costs should follow the event.  As the Plaintiff had made a sanctioned offer on 3 May 2021 the terms of which are the same if not more favourable to the Defendants, the Defendants should pay for the costs of the Plaintiff for the costs incurred after that on indemnity basis.[3] I therefore so ordered.  I also summarily assessed the Plaintiff’s costs in the sum of $750,000.  The Plaintiff claimed the sum of $950,000.  I allowed counsel’s fees in full but reduced the solicitors’ costs to slightly more than $500,000.

Mr Philips B F Wong, instructed by Robin Bridge & John Liu, for the Plaintiff

Ms Elizabeth Herbert and Mr Holden Slutsky, instructed by Eva Kwok & Co, for the 1^st and 2^nd Defendants