Reckitt & Colman (Overseas) Health Ltd and Another v. Whealthfields (Hong Kong) Ltd

HCIP 2/2022

[2024] HKCFI 760

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 2 OF 2022

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JUDGMENT

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1.This is the Plaintiffs’ application for summary judgment based on copyright infringement and passing-off against the Defendant.

Background and the parties

2.The Plaintiffs and the Defendant are competitors engaged in the business of manufacturing and merchandizing hygiene and personal care products.  The subject matter of the complaint is an outer packaging adopted by the Defendant (“the Defendant’s Get-Up”) for its bundled hand and body wash bottled products (“the Defendant’s Bundled Products”).  The Plaintiffs alleges that the design of the Defendant’s Get-Up closely imitates that created on behalf of the Plaintiffs (“the Plaintiffs’ Get-Up”) for their bundled products of the same kind (“the Plaintiffs’ Bundled Products”).  Though the parties used their respective trade marks on their own get-ups, the Plaintiffs claim that there are close similarities in the designs.

3.The Plaintiffs are companies ultimately owned by Reckitt Benckiser Group plc (together with its subsidiaries, “the Reckitt Group”).  The Reckitt Group’s companies manufacture and sell a wide range of hygiene, health and personal care products under numerous brands, many of which are well-known in Hong Kong and internationally, including the “Dettol” brand which is the subject matter of the claim.[1] The origin of the Reckitt Group’s business can be traced back more than 200 years ago.

4.The 1^st Plaintiff owns certain intellectual property rights of the Reckitt Group, whereas the 2^nd Plaintiff distributes and markets, inter alia, the Plaintiffs’ “Dettol” branded hand and body wash products in Hong Kong. 

5.It is the Plaintiffs’ case that, in or around November 2018, a new product packaging design (“the Plaintiff’s Packaging Design”) incorporating the Plaintiffs’ copyright work (“the Plaintiffs’ Copyright Work”) was launched to market “Dettol” bottled body wash and hand wash products^[2] (i.e. the Plaintiffs’ Bundled Products).  For easy reference, a copy of the Plaintiffs’ Copyright Work and a photograph showing the Plaintiffs’ Get-Up are now attached in Annexes 1(a) and 1(b) of this Judgment respectively.

6.The Defendant, which is a company incorporated in Hong Kong, is part of the Whealthfields Group founded in 2000 engaging in the business of manufacturing, marketing and distributing hygiene and personal care products. 

7.It is the Defendant’s case that:

(i)     The brand “Walch” is one of Whealthfields Group’s largest and most successful brands, which has received numerous awards in places including Singapore, Malaysia and China, and is widely recognised and accepted as a household brand name in Hong Kong.

(ii)    According to the “Marketing China – China Cleaning Products Market Guide”, “Walch” is the leading brand in the market with a 45.1% market share, compared to “Dettol” which has a 16.6% market share.

(iii)   In Hong Kong, a wide variety of hygiene and personal care products are sold under the “Walch” brand including disinfectants, laundry detergent, body wash, hand wash, hand sanitisers and disinfectant wet wipes.  “Walch” is a household brand well-known and recognised by the public in Hong Kong, easily accessed at an approachable price point and available for sale at a wide variety of merchants both online and offline.

(iv)   The volume of sale of the “Walch” branded products during COVID-19 pandemic was substantial.  The Whealthfields Group also initiated a number of corporate social responsibility campaigns under the “Walch” brand, widely recognised and seen by the general public in Hong Kong.

(v)    Substantial amount of money has been spent for the marketing of the “Walch” branded products in Hong Kong.

(vi)   The Whealthfields Group alone launched over 70 different varieties of bundles or bonus packs under its various brands, including “Walch” and “Ka”.

8.The Plaintiffs claim that the Defendant has, since around 2021, sold and offered for sale the Defendant’s Bundled Products under the Defendant’s Get-Up.  A photograph of the Defendant’s Get-Up with the Defendant’s Bundled Products can be found in Annex 2 of this Judgment.   The Plaintiffs’ complaint only concerns the alleged offensive get-up, and no complaint is made about the Defendant’s Bundled Products sold without such get-up.

9.The Plaintiffs’ claim is based on copyright infringement and passing-off.

10.The legal principles for summary judgment applications are trite and I do not want to repeat the same here.  The law and practice relating to applications for summary judgment in intellectual property cases are no different from those in other cases.[3]

Copyright infringement claim

11.I start with the copyright infringement claim.

12.In opposing the claim, the Defendant is trying to challenge the Plaintiffs’ case on subsistence of copyright on the ground of lack of originality. According to the Defendant, the bundle packaging of fast-moving consumer goods (“FMCG”), which include hygiene and personal care products, is a common industry-wide promotion strategy, and many other highly reputable FMCG brands such as “Dove”, “Biore” and “Mannings” have similar bundle get-ups as well.  On the other hand, Ms Tam SC, counsel for the Plaintiffs, argue that the Defendant is not entitled to run such unpleaded defence.  In any event, the bundle get-ups adopted by the other brands are quite different from those of the Plaintiffs’ and the Defendant’s Bundled Products.

13.For the purpose of this application, I do not consider it necessary for me to resolve this particular issue.  In my judgment, there is another arguable defence which is sufficient to entitle the Defendant to defend the Plaintiffs’ claim on copyright infringement.  As I see it, there is a triable issue as to whether there was sufficient copying of the Plaintiffs’ Copyright Work which constitutes copyright infringement.

14.On the issue of copying, Ms Tam is relying on the well-established principles summarized in Designers Guild v Russell Williams[4]:

(i)     The first step is to identify features of the defendant’s design alleged to have been copied from the copyright work for the purpose of judging whether the similarities relied on are “sufficiently close, numerous or extensive” to be the result of copying than of coincidence.  Similarities that are commonplace, unoriginal or consist of general ideas may be disregarded.[5]

(ii)    Once sufficient similarity and prior access to the copyright work are established, the burden passes to the defendant to show that the similarities did not result from copying.[6]

(iii)   The next question is whether what has been taken constitutes all or a substantial part of the copyright work.[7]

(iv)   A copyright work should be taken as a whole and not dissected into elements for assessing substantial reproduction.  Lord Hoffmann in particular disapproved the approach of comparing “the copied features piecemeal instead of considering… their cumulative effect”.[8]

15.Ms Tam then points out the similarities between the subject two get-ups:

(i)     coloured horizontal banner on top of the packaging, enclosing a logo on the left and with Chinese words in white lettering on the right-hand side;

(ii)    underneath the horizontal banner, a wavy line design in two colours, with large Chinese phrase appearing on top in a coloured outline and similar font, smaller Chinese text appearing beneath;

(iii)   identical red device enclosing “送” (gifting) at bottom left corner of packaging;

(iv)   same font for “優惠裝” (bonus pack) and also in red and white outline;

(v)    placement of photo of woman embracing girl at bottom right corner of packaging; and

(vi)   placement of photo of product at bottom right corner of product packaging.

16.According to Ms Tam, the Plaintiffs’ complaint concerns the combination of design features that have been copied, such as the use of exactly the same red device together with the same word “送” inside it, the placement of design elements of the same nature in exactly the same position in the overall packaging and, in relation to the text, the choice of the same colour, font and outline.   Further, there is extensive use of the colour green in one version of the Defendant’s Get-Up, which hardly matches the dominant colour (blue) of the Defendant’s Bottled Products in the packaging.  The Defendant is unable to explain why the so-called commonplace elements have all been copied in the same combination, with placement, colour and proportion of the various elements all so similar to those in the Plaintiffs’ Copyright Work and the Plaintiffs’ Get-Up.

17.While I agree that there are close similarities between the designs of the two get-ups, the court cannot make a final determination on whether a substantial part of the Plaintiffs Copyright Work had been copied.  The general formats of the two get-ups are similar, in particular the placement of the photographs, the respective trade marks and the texts.  Further, what appear to be identical are the red device enclosing “送” at bottom left corner of packaging and the same font for “優惠裝” in red and white outline.  However, there are also other differences such as: (i) most of the texts in the two get-ups are different; (ii) the photographs in the two get-ups are different (though both involve a woman embracing a child); and (iii) the shapes of the handles in the two get-ups are different.

18.Ms Tam submits that the court should take into account the cumulative effect of the substantial similarities between the two get-ups rather than to spot their differences.   Nevertheless, the court cannot ignore the facts that: (i) “送” and “優惠裝” are common words used in the packagings of such kind of promotion bundled packs; (ii) for such kind of promotion packagings, the word “送” is usually presented in an eye-catching colour and font in order to attract the attention of the consumers, bearing in mind that the theme of bonus packs is the provision of gift items to the consumers.  As copying is a fact-sensitive issue depending on the evidence of the person who created the design of the Defendant’s Get-Up (“the Defendant’s Packaging Design”), it would be inappropriate, and indeed dangerous, for the court to debar the Defendant from defending the Plaintiffs’ claim at this stage.  In particular, there are voluminous similar and perhaps generic designs for such kind of promotion packagings, and the Defendant should be allowed to present its case fully at the trial.

19.It is trite that copying of ideas is not actionable per se.  It is the copying of a substantial part of the Plaintiffs’ Copyright Work that constitutes copyright infringement.  In determining this particular question, the court has to examine other designs for such kind of promotion packagings in the market, whether they follow a particular design pattern such as placement of slogans, logos, photographs and texts about provision of gift items.  As mentioned above, similarities that are commonplace, unoriginal or consist of general ideas may be disregarded in the comparison exercise.[9] These are fact-sensitive matters which have to be properly investigated at the trial.

20.The Plaintiffs confirm that they are not claiming for an exclusive right to use colour green, which is the dominant colour of the Plaintiffs’ “Dettol” branded products, for such kind of promotion packagings.  In any event, the available evidence shows that some other brands also used such colour for their promotion packagings even if the dominant colours of their products were not green.  Hence, the use of the colour green in the Defendant’s Get-Up should not carry a lot of weight in determining whether a substantial part of the Plaintiffs’ Copyright Work had been copied.

21.Ms Tam also relies on the Defendant’s prior access to the Plaintiffs’ Copyright Work to argue that, where the objective similarity is coupled with prior access to the copyright work, the burden shifts onto the Defendant to show that the similarities did not result from copying.[10]

22.According to Ms Tam, the Defendant has not discharged such burden.  The Defendant’s affirmation made by Ms Zheng Xueqi (“Zheng”) suggests that the Defendant’s Packaging Design was initially designed by one Ms Wong Wing Shan, a designer hired by the Defendant’s Guangdong branch, who allegedly left the company in November 2021.  Zheng claims that she is the leader of the Defendant’s design team and was kept informed of the design process.  In her affirmation, Zheng has exhibited the alleged drafts and prototypes of the Defendant’s Packaging Design.[11] She then explains why certain slogans and words were used in the Defendant’s Packaging Design, why a photograph of a family was chosen, and why certain colours were chosen.  However, Ms Tam submits that Zheng has not explained the reasons for adopting the same combination of features which are the subject of the Plaintiffs’ complaint.

23.Despite the similarity of the Plaintiffs’ and the Defendant’s Packaging Designs, I am not prepared to say that the Defendant’s evidence is incapable of being believed at this stage.  Even if the Defendant’s designer might have referred to the Plaintiffs’ Packaging Design in designing the Defendant’s Packing Design, it does not automatically mean that there was sufficient copying for the purpose of infringement.  Since the designs for such promotion packagings are quite generic, the Defendant, given the opportunity of a trial, may be able to give a genuine explanation for designing the Defendant’s Get-Up.

24.Further, one of the unusual features in the present case is that, at least according to the evidence presented by the Defendant at this stage, the Defendant’s “Walch” branded products have significant higher market shares as compared with the similar Plaintiffs’ “Dettol” branded products.  Under such circumstances, there would have been much lesser incentive for the Defendant to copy the Plaintiffs’ Packaging Design for the Defendant’s own Bundled Products.

25.For these reasons, though the Plaintiffs may have a perfectly respectable case on copyright infringement, it is not appropriate for the court to dispose of such claim in a summary manner.

The passing-off claim

26.I then turn to the passing-off claim.  As I see it, it would be more difficult for the Plaintiffs to obtain summary judgment for such claim.

27.The three basic elements for the tort of passing-off are trite: (i) goodwill; (ii) misrepresentation; and (iii) damage. It is often referred to as the “classic trinity” for passing-off.

28.These three elements usually involve fact-sensitive matters.  In the present context, even if there are similarities between the Plaintiffs’ and the Defendant’s Get-Ups, there may be triable issues as follows.

29.First, there may be an issue as to whether there are goodwill associated with the Plaintiffs’ particular Get-Up.  The Plaintiffs’ Get-Up is used in relation to the promotion of the Plaintiffs’ Bundled Products which are FMCG.  There are various designs for the packagings of these promotion products, usually emphasizing that these are bonus packs involving the provision of gift items.  As most of the designs of these packagings carry the same message and there are numerous similar packagings in the market, the average consumers may not be able to associate the Plaintiffs’ Get-Up with the Plaintiffs’ products. Indeed, the consumers may not pay attention to the designs on these packagings in making their purchase decisions.  At least, these matters ought to be investigated at the trial, and this is the case even if there is a close similarity between the Plaintiffs’ and the Defendant’s Get-Ups.

30.Second, there may also be an issue as to whether there is likelihood of confusion resulting from the use of the Defendant’s Get-Up. Though there may be similarities between the designs of the two get-ups, the respective trade marks of the parties and the photographs of their products are clearly displayed on these get-ups.  At this stage, there is evidence to show that both “Dettol” and “Walch” are well-known household marks in Hong Kong for the relevant products, and the average consumers may pay more attention to the trade marks in the packagings in deciding which products to purchase.  Hence, it is arguable whether there is likelihood of confusion.

31.In support of the Plaintiffs’ case that there is no triable issue on misrepresentation or likelihood of confusion, Ms Tam is putting forward the following arguments:

(i)     In shopping for inexpensive FMCG, customers are expected to rely on an imperfect recollection of the colour and pattern or design of the packaging of the targeted product, without necessarily verifying their choice by referring to the brand or logo. Though the parties’ respective trade marks were used on their own packagings, this would be insufficient to negate the deception arising from the similarity in get-ups.  The Plaintiffs’ and the Defendant’s products are usually sold in supermarkets where customers pick up products from the shelves packed close to various products of the same kind, from an array of different brands.  It is the graphic layout and colour scheme adopted by one’s packaging that is instantly recognised by the public and forms the basis of the consumer’s general recollection of the product when making repeat purchases.

(ii)    As the Defendant had borrowed aspects of the packaging of the Plaintiffs’ Get-up, it is reasonable inference that the Defendant considered that such borrowing was likely to deceive or confuse.[12]

(iii)   Whilst Ms Tam is saying that the market survey conducted by the Defendant is flawed, Question A3 of the main questionnaire showed that when the two packagings were put side-by-side and the respondents were asked whether the two products were from the same brand, 8.8% (36 out of 409) of respondents answered ‘yes’, despite the earlier questions in the questionnaire having already directed respondents to the different logos. Under the law, the issue is whether a substantial number of the plaintiff’s customers or potential customers are deceived “for there to be a real effect on the plaintiff’s trade or goodwill”.[13] Actual confusion by 36 out of 409 respondents is substantial enough for there to be a real effect on the Plaintiff’s trade or goodwill, and thus suffices to establish misrepresentation.  In any event, it is unnecessary for Plaintiffs to show actual deception.

32.In my judgment, the aforesaid matters are all fact-sensitive and the court should not conduct a mini-trial to resolve these issues.  In considering likelihood of confusion, the effects of inexpensive FMCG and the presence of different logos in the packagings on the consumers are somethings which need to be investigated at the trial.  As mentioned above, there is evidence to show that both “Dettol” and “Walch” are well known household brands for hygiene and personal care products, and the consumers may refer to the different brand logos in the get-ups in choosing which products to buy.  Further, if the average consumers do not regard the Plaintiffs’ packaging as distinctive because there are similar packagings in the market, the consumers may pay more attention to the brands and the logos in the packagings or the price in making the purchase decisions.  It is very difficult for the court to make a final judgment on these related matters in a summary application.

33.The Plaintiffs also rely on the “borrowing” of the Plaintiffs’ Packaging Design.  However, as I have analyzed above[14], the evidence shows that the Defendant’s “Walch” branded products enjoy significant higher market shares in the market.  Under such circumstances, there would have been much lesser incentive for the Defendant to copy the Plaintiffs’ Packaging Design.  At least, there is a triable issue as to whether this was the case.

34.Whilst I agree that 8.8% of the respondents giving an affirmative answer under Question 3A may be indicative of a significant number of consumers being confused, the court should not come to a conclusive view on the matter by just looking at the percentage of the respondents giving such affirmative answer.  Instead of conducting a mini-trial at this stage, the court should examine how the survey was conducted before reaching a final conclusion on likelihood of confusion.  There are indeed a number of authorities in which the courts questioned the reliability or relevance of such kind of market surveys.  It would be very dangerous for the court to determine the final outcome of the case just by looking at the answer to one particular question in a market survey.

35.For these reasons, I refuse to grant summary judgment against the Defendant.  Yet, I do not see it fit to dismiss the summons.  Based on the similarities between the two designs, I would not say, at the time of the making of the summary judgment application, there is no basis for the Plaintiffs’ belief that there is no arguable defence to the Plaintiffs’ claim.  Hence, I only grant the Defendant unconditional leave to defend the Plaintiffs’ claim but not to dismiss the summons.

36.I also make a costs order nisi that the costs of the summary judgment application be costs in the cause, which shall be made absolute 14 days after the handing down of this Judgment.

Ms Winnie Tam, SC and Mr Jason Yu, instructed by Deacons, for the Plaintiffs

Mr Osmond Lam and Ms Lareina Joan Chan, instructed by Chong & Partners LLP, for the Defendant

ANNEX 1(a)

ANNEX 1(b)

ANNEX 2