Sun Microsystems Inc. v. Lai Sun Hotels International Ltd.

HCA002955/2000

HCA 2955/2000

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 2955 OF 2000

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Coram: Deputy High Court Judge Gill in Chambers

Dates of Hearing: 12-14 April 2000

Date of Judgment: 15 May 2000

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J U D G M E N T

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1. This is an application for interlocutory injunctions pending trial of an action for wrongful passing off or threat to pass off brought by the plaintiff against the defendant.

Background

2. The plaintiff is called Sun Microsystems Inc. (Sun Microsystems). It is an American company incorporated in Delaware in 1982 and now operates out of Palo Alto, California. In the words of counsel, Mr Garland SC:-

"[Sun Microsystems] enjoys worldwide fame in the business of designing, manufacturing, selling and providing products in the information technology field, namely computer hardware and software, network servers, network systems, systems enabling Internet access, information technology, e-commerce and media and telecommunications networks."

3. Its business has consistently expanded to the extent it now operates in 170 countries. In 1999 its worldwide income was US$11 billion.

4. Much of its products and services have been promoted and marketed under or by reference to the word "Sun" or a name or mark of which sun is the dominant feature.

5. Sun Microsystems began doing business in Hong Kong in 1987 when it incorporated two wholly owned subsidiaries called Sun Microsystems of California Limited and Sun Microsystems of California (Services) Limited whose objects are to promote and market Sun Microsystems' products and services in Hong Kong. It has amongst its customers here major banks and financial institutions, universities, government departments, major telecommunications companies, transportation companies and multi-nationals. Here, as elsewhere, it promotes and markets its products and services under the mark "Sun" or a mark in which the word sun features prominently. Given the extent and size of its business here and elsewhere it claims that its customer base and others have come to recognise these marks as synonymous with excellence and as hallmarks of a market leader in innovative information technology, a reputation it has striven hard to achieve and which now it jealously wants to guard.

6. The defendant is called Lai Sun Hotels International Limited (Lai Sun). It was incorporated in Bermuda but is publicly listed in Hong Kong. It is one of a number of inter-connected companies in the Lai Sun Group of Companies (the Group) which began life in 1947 as a small, family-controlled garment manufacturer. Nowadays, the Group is prominent not only in the garment industry but in real estate, property development and the ownership and management of hotels. Hitherto Lai Sun's prime raison d'être has been (as the name suggests) to own and manage the Group's hotel interests, which include the Furama and Ritz Carlton hotels in Hong Kong.

7. But the directors of Lai Sun and of the other members of the Group had a change of direction in mind. As the forerunner of this on 1 March 2000 Lai Sun founded a new website on the Internet called www.eSun.com. Then on 15 March 2000 Lai Sun together with others of the Group made a public announcement that, subject to shareholders' approval, it had agreed with another corporate member of the Group to purchase a 50% interest in a newly incorporated subsidiary of Asia Television (ATV) called HKATV.com Limited (HKATV.com) for $300m. The announcement portrayed HKATV.com as a vehicle which would found and then develop a website and exploit programme rights through its website and the Internet worldwide. ATV is to retain the remaining 50% of HKATV.com. The announcement included the following extracts (in which LSH refers to Lai Sun):-

"Proposed change of name for LSH to eSun.com Holdings Limited.

The directors of LSH further announce that in light of LSH's increasing focus on Internet and technology-related businesses and the relative decrease of its emphasis on hotel investments, shareholders approval will be sought to change the name of LSH to eSun.com Holdings Limited to reflect such change of principal business direction of LSH. Details concerning such proposed change of name will also be included in LSH's circular to shareholders referred to above."

"III Proposed Change of Name of LSH

1. LSH intends to change its name from Lai Sun Hotels International Limited to eSun.com Holdings Limited, subject to shareholders' approval at a special general meeting and approval by the relevant authorities. It is the intention of the directors of LSH for LSH to change its focus from simply ownership and management of hotels to developing, operating and/or investing in Internet telecommunications, media and information technology related business. The directors of LSH are of the opinion that the new name will properly reflect this change in focus."

"V Other Information

............

Principal business of LSGI, LSD and LSH

3. .... The principal businesses of LSH include development and investment of property, investment in and operation of hotels and restaurants, and an increasing emphasis on investment in Internet and technology-related business."

8. Sun Microsystems took immediate exception to the announced proposals and the new website, upon the grounds that the prominent use of the word "Sun" in the proposed change of name, coupled with the dramatic change of direction of Lai Sun's mainstream activity from hotel ownership and management into information technology under the banner eSun, would inevitably cause widespread belief that this was to be an enterprise of or connected with Sun Microsystems, and put its hard-won reputation at risk. Such confusion and concerns could only be avoided if Lai Sun did not change its name to incorporate the phrase eSun.com or similar, and changed its website to a new unrelated name as well.

9. Seeking immediate redress it issued a writ on 20 March 2000 alleging wrongful passing off against Lai Sun quia timet. The remedies it seeks are an injunction that Lai Sun be restrained from carrying on any activity in the field of information technology under the names "eSun.com", "eSun.com Holdings Limited" or any other name incorporating the word sun other than as part of the name "Lai Sun." It also seeks an order requiring Lai Sun to change the name of its website www.eSun.com to one which is consistent with such restraint.

The Claim

10. Contemporaneously with the writ Sun Microsystems issued a summons seeking interlocutory injunctions in terms of its writ pending the outcome of the trial of the action, backed up by an undertaking given that it will meet any award of damages to Lai Sun if having been granted the interlocutory injunctions it loses the action.

11. Lai Sun has undertaken that pending the outcome of the substantive trial it will not manufacture, sell, or offer for sale, or offer installation, maintenance or repair services of computer hardware or software under the names of "esun", "eSun", "ESUN", www.esun.com or eSun.com Holdings Limited, but otherwise opposes the summons.

12. The summons came before Stone J for mention on 24 March. By consent it was adjourned upon Lai Sun undertaking that it would not, prior to determination of the summons, change its name.

13. These are the matters before me for resolution.

The Evidence

14. In support of its case Sun Microsystems relies on affidavits sworn by Peter John Connor (Mr Connor) who is in the Sun Microsystems work-force as inhouse attorney for its operations in the Asia Pacific region including Hong Kong.

15. His evidence is that since its incorporation in 1982 the company has been a pioneer and market leader in the industry that has had such a dramatic growth over the last two decades known broadly as information technology. The company's expansion and success were such that it made the Fortune 500 list in 1993 and it is now in the Fortune 200. It spends a significant amount of its income on research and development (last year US$1.2 billion) and continues to be innovative and expansive in markets worldwide.

16. Since 1987 Sun Microsystems has promoted and marketed its various products and services under the name "Sun" or a mark whose principal characteristic is the word sun. Through the Internet it conducts business worldwide using its domain name Sun.com. In Hong Kong this marketing strategy is no different. So it is that here as elsewhere Sun Microsystems' businesses are synonymous in the industry with the name "Sun", under which it has acquired an extensive goodwill. Hence its customers and the general public have come to associate it with any computer related product marketed under the name "Sun" or a mark in which the word sun is dominant. If any other entity is permitted to use the name eSun and found a website called www.eSun and then conduct business in the field of information technology utilising such titles that will at once cause confusion because there will arise the mistaken belief that Sun Microsystems is in some way involved, where no such connection exists. Such misconception might unjustly deprive Sun Microsystems of its market share. But worse, with no quality control, a potentially inferior product might irreparably damage its reputation that has been the hallmark of its success. If Lai Sun is permitted to proceed as announced and develop its website under the chosen name then the confusion he fears will result and Sun Microsystems' market share goodwill and reputation will be seriously eroded.

17. For Lai Sun evidence was adduced by affidavits sworn by Victor Yang (Mr Yang) a director Lai Sun and Eric Kong (Mr Kong) employed by Lai Sun for the purpose of pursuing its information technology goals under the proposed new format.

18. Mr Yang says that the proposed acquisition of HKATV.com is not an isolated venture. It is already involved in a joint venture with China Star Entertainment (BVI) Limited, and also in the pipeline is that Lai Sun take a stake in Golden Harvest Entertainment Holdings Limited which is locally based and engaged in worldwide film distribution. Mr Yang says these activities highlight the extent to which Lai Sun's exposure to information technology is to be limited namely, in the fields of media and entertainment incorporating leisure activities, sport, lifestyle, magazines and the like. These are areas of direct participation by Lai Sun in which Sun Microsystems as provider of systems' technology has no involvement; confusion and erosion of its market share and possible damage to reputation are all groundless fears that will simply not materialize. And nor was it intended that by making continued use of the word sun it would enjoy an unjust association with Sun Microsystems. He says it is only for the purpose of utilizing its own foreshortened name, incorporating a small 'e' to indicate an intention to go on line where its products are to be marketed. He reiterates that there is not and never has been an intention to trade off Sun Microsystems' goodwill or reputation. He protests that its writ and this application are tantamount to its seeking a monopoly of the word sun, which is incorporated in the names of thousands of Hong Kong companies, and products, and services, and millions of websites worldwide.

19. Mr Kong expanded on Mr Yang's account. He went to some lengths to show that Sun Microsystems describes and portrays itself as the provider of technology which enables its customers to pursue their own endeavours in the field of information technology. This contrasts with Lai Sun's intentions, which are to provide media and entertainment content within its joint ventures; a totally different business altogether. He says Sun Microsystems' customers are in the main computer technology professionals unlikely to associate Sun Microsystems with entertainment or media content. On the other hand Lai Sun's target audience is the public at large not being technologically educated professionals. He reiterates sun is a commonly used word in English and in this territory is the phonetic expression of the character meaning new or innovative. There are many commercial entities using the word in their titles and websites. An example is the Sun Newspaper, whose website is the-sun.comhk, through which it provides media and entertainment content as one would expect from a daily newspaper.

20. He says Sun Microsystems has not nor will it be likely to suffer commercially if Lai Sun is permitted to pursue its intended programme. He concludes that there could be no confusion as Sun Microsystems is simply not known as an Internet content provider; certainly not in a media and entertainment related website.

The Legal Principles

21. The House of Lords case American Cyanamid v. Ethicon [1975] AC 396 is a leading authority for how a court should exercise its discretion in an interim injunction application pending trial. The plaintiff must first show that there is a serious question to be tried. The court then assesses where the balance of convenience lies. In considering the balance of convenience, it first has to consider whether an award of damages at trial would be adequate compensation to the respective parties should an injunction be granted or refused. It will then consider other aspects of the balance of convenience which will vary from case to case. If other matters appear to be evenly balanced, the court as a counsel of prudence will probably preserve the status quo, on the basis that it will probably cause much less inconvenience stopping a defendant embarking on something new than stopping him carrying on an established enterprise.

22. Lord Diplock said, when considering the test the judge should adopt as to the strength of the plaintiff's case, at p.407:-

"The use of such expressions as "a probability," "a prima facie case," or "a strong prima facie case" in the context of the exercise of a discretionary power to grant an interlocutory injunction leads to confusion as to the object sought to be achieved by this form of temporary relief. The court no doubt must be satisfied that the claim is not frivolous or vexatious; in other words, that there is a serious question to be tried."

23. He then went on to say at pp.408:-

"So unless the material available to the court at the hearing of the application for an interlocutory injunction fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial, the court should go on to consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief that is sought.

As to that, the governing principle is that the court should first consider whether, if the plaintiff were to succeed at the trial in establishing his right to a permanent injunction, he would be adequately compensated by an award of damages for the loss he would have sustained as a result of the defendant's continuing to do what was sought to be enjoined between the time of the application and the time of the trial. If damages in the measure recoverable at common law would be adequate remedy and the defendant would be in a financial position to pay them, no interlocutory injunction should normally be granted, however strong the plaintiff's claim appeared to be at that stage. If, on the other hand, damages would not provide an adequate remedy for the plaintiff in the event of his succeeding at the trial, the court should then consider whether, on the contrary hypothesis that the defendant were to succeed at the trial in establishing his right to do that which was sought to be enjoined, he would be adequately compensated under the plaintiff's undertaking as to damages for the loss he would have sustained by being prevented from doing so between the time of the application and the time of the trial. If damages in the measure recoverable under such an undertaking would be an adequate remedy and the plaintiff would be in a financial position to pay them, there would be no reason upon this ground to refuse an interlocutory injunction.

It is where there is doubt as to the adequacy of the respective remedies in damages available to either party or to both, that the question of balance of convenience arises. It would be unwise to attempt even to list all the various matters which may need to be taken into consideration in deciding where the balance lies, let alone to suggest the relative weight to be attached to them. These will vary from case to case.

Where other factors appear to be evenly balanced it is a counsel of prudence to take such measures as are calculated to preserve the status quo. If the defendant is enjoined temporarily from doing something that he has not done before, the only effect of the interlocutory injunction in the event of his succeeding at the trial is to postpone the date at which he is able to embark upon a course of action which he has not previously found it necessary to undertake; whereas to interrupt him in the conduct of an established enterprise would cause much greater inconvenience to him since he would have to start again to establish it in the event of his succeeding at the trial.

24. In this case whether or not there is a serious question to decide is dependant upon whether Sun Microsystems is capable of presenting an arguable case that Lai Sun's proposed activity if not restrained will amount to a wrongful passing off.

25. The House of Lords case Rickett v. Coleman Products Limited v. Borden Inc. and Others [1990] 1 WLR 491 (known as the jif lemon case) is one of a number of leading authorities on what passing off amounts to. The essential ingredients are threefold, namely:-

1. that the plaintiff has acquired a reputation in his product or service;

2. that the defendant misrepresents (whether intentionally or not) that a product or service offered by him is that of the plaintiff so as to confuse or deceive; and

3. that causes damage to the plaintiff.

26. Lord Oliver said, at page 499:-

"Although your Lordships were referred in the course of the argument to a large number of reported cases, this is not a branch of the law in which reference to other cases is of any real assistance except analogically. It has been observed more than once that the questions which arise are, in general, questions of fact. Neither the appellants nor the respondents contend that the principles of law are in any doubt. The law of passing off can be summarised in one short general proposition - no man may pass off his goods as those of another. More specifically, it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed. These are three in number. First, he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying "get-up" (whether it consists simply of a brand name or a trade description, or the individual features of labelling or packaging) under which his particular goods or services are offered to the public, such that the get-up is recognised by the public as distinctive specifically of the plaintiff's goods or services. Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether or not intentional) leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff. Whether the public is aware of the plaintiff's identity as the manufacturer or supplier of the goods or services is immaterial, as long as they are identified with a particular source which is in fact the plaintiff. For example, if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description, it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name. Thirdly, he must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant's misrepresentation that the source of the defendant's goods or services is the same as the source of those offered by the plaintiff."

27. It is not an essential ingredient for a passing off action that the competing products or services are identical or even similar. Clearly if they are then that increases the chances of confusion and deception. But there is no such thing as the requirement of a common field of activity. Authority for this is found in the case Lego System Aktieselkab v. Lego M Lemelstrich Limited [1983] FSR 155 (the LEGO case). In that case the plaintiff being manufacturers of the well-known construction kits comprising interlocking plastic bricks had, by the 70's, established in England a substantial reputation in the product marketed under the brand name Lego. The defendant, an old established Israeli company whose name coincidentally also began with the word Lego, manufactured plastic irrigation equipment. It sought to extend its activity into Britain. The plaintiff brought an action in passing off quia timet. It was held that the reputation the plaintiff enjoyed was wide enough to extend to the sort of goods the defendant was proposing to market notwithstanding the obvious differences. Falconer J said at p.187:-

"Although Mr. Morcom [counsel for the defendant] contended strongly that the respective fields of the plaintiffs and the defendants, toys such as construction sets and building bricks on the one hand, and irrigation equipment, particularly for gardens, on the other, are too far apart for the defendants' use of LEGO to amount to misrepresentation and, indeed, as I have indicated, went so far as to submit that a decision in this case in favour of the plaintiffs would be extending passing off further than it has hitherto been extended in the absence of fraudulent intention, nevertheless he conceded that, in the light of all the cases including the Advocaat case, he could not submit that as a matter of law (my emphasis) passing off could never be established when the respective activities of the plaintiff and the defendant were completely unrelated. In my judgment, he was right in making that concession. Of course, that is not to say that the proximity of a defendant's field of activity to that of the plaintiff will not be relevant to whether the defendant's acts complained of amount to a misrepresentation in any particular case - plainly it will, at least in most cases. But, in my judgment, there is much force in Mr. Aldous's [counsel for the plaintiff's] submission, based on the extent of the plaintiffs' reputation in their mark LEGO, that if, as he contended was this case, the plaintiffs' mark has become part of the English language in the sense that everybody associates LEGO with a particular company, namely, the manufacturers of the LEGO toy construction sets and building bricks, then the misrepresentation by the defendants' use of the mark is easier to assume and to prove; on the other hand, if the mark or name concerned has only a limited field of recognition it is obviously more difficult to establish its understanding as denoting the plaintiff's goods in a field which is not directly comparable with the field of that plaintiff's goods.

Whether or not the acts of a defendant complained of in a passing off action amount to a misrepresentation must be a question of fact and, in the end, that was common ground between Mr. Aldous and Mr. Morcom. I think Mr. Morcom expressed it correctly when, at the conclusion of that part of his argument dealing with misrepresentation, he submitted that what has to be established by a plaintiff is that there is a real risk that a substantial number of persons among the relevant section of the public will in fact believe that there is a business connection between the plaintiff and the defendant. That, as I have found, has been established by the plaintiffs in this case."

28. Lord Oliver in jif lemon spelt out that whether the three ingredients exist in any given case is dependent on the facts of the case. Of those in this case I shall deal first with those that are not in dispute.

The Unassailable Facts

29. First, Sun Microsystems is without doubt a market leader in the fields of research, design, manufacture and sale of computer hardware and software. It is also a dominant player in providing service and support solutions for building and maintaining network computer environments. And that is how it promotes itself.

30. Sun Microsystems' 1999 annual report (Bundle 1at pages 49 to 73) refers to several commentators on the industry who said "Sun continues to be a leading TECHNOLOGY PROVIDER to the enterprise, internet and work group markets" and "Sun is now on the verge of the filing and establishing in itself as a leader of a new category ... INTERNET ENABLERS".

31. It goes on to state:-

"We compete in hardware and software products and services markets ... Our competitors are some of the largest, most successful companies in the world. They include Hewlett-Packard Company (HP), International Business Machines Corporation (IBM), Compaq Computer Corporation (Compaq) and EMC Corporation (EMC)... We also compete with systems manufacturers and resalers of systems based on microprocessors from Intel Corporation (Intel) and Windows NT Operating System Software for Microsoft Corporation (Microsoft). These competitors include Dell Computer Corporation (Dell), HP and Compaq, in addition to Intel and Microsoft ... The computer systems that we sell are made up of many products and components including workstation, service, storage product, microprocessors, Solarais operating environment and other software products. In addition, we sell some of these components separately and as add-ons to installed systems".

32. And further:-

"Sun designs, manufactures, markets and services network computing systems and software solutions that feature networked desktops and servers; ........"

33. In a press release obtained from Sun Microsystem's website (Bundle 7 at pages 2437 and 2438), Mr Scott McNealy, its Chairman and CEO says:- "Network computing is the heart and soul of this company. Always has been; always will be ... Our aim is to connect anyone, anywhere, anytime - using virtually anything - to the resources they need ... First, last, and always, network computing is what we do; ......."

34. In Mr Connor's second affidavit, paragraph 5(a) on pages 2 and 3 (Bundle 8 at pages 2529 and 2530) he describes Sun Microsystems as a provider of solutions, working with partners in the entertainment and media industry to provide entertainment industry websites, and that it provides the technology that powers the internet and delivers the expertise required to enable the entertainment and media industries to more effectively manage and distribute content.

35. Secondly, a dominant feature of Sun Microsystems' self-promotion and advertising of its products and services is the word "sun" in lower and upper case, or in a mixture, standing alone or as part of a mark, in ordinary print or stylised. It refers to itself by the shorthand "Sun"; an example of this is its 1999 annual report. It has at least 70 trade marks worldwide in which sun is a dominant part. In Hong Kong 23 more have been applied for and are pending. It is the registered owner of the domain name sun.com by which name it runs a website through which it promotes itself and conducts business worldwide. It fosters its connections with the word sun and on many occasions has mounted opposition to another's application for a trade mark in which the word or syllable plays a predominant role.

36. Thirdly, Sun Microsystems' income derived from business generated in Hong Kong has been significant, with regular increases such that in four years it has more than doubled. Mr Connor quotes the following figures:-

Particulars of Net Revenues in Hong Kong

Fiscal Year	US$ million
1996	19.7
1997	30.5
1998	35.4
1999	42.2

38. Fourthly, Sun Microsystems has provided innovative and cutting edge technology to corporations engaged in the business of media and entertainment, to the mutual advantage of both parties. It exhibits press releases, some of which I reproduce as follows:-

39. Fifthly, though Sun Microsystems calls itself "Sun" and has certain trade mark protection it shares the name with a large number of registered companies in Hong Kong. Mr Yang has counted more than 8,000. And there are over 3,000 trade marks registered or pending in which sun plays a dominant part not owned or applied for by Sun Microsystems. There are more than 4 million websites in which sun is part of the name.

40. Sixthly, Lai Sun has chosen the proposed name by preceding its foreshortened name Sun by the letter e in lower case for the purpose of signifying to intended customers its intention of going on line. This is a form of identification finding increasing favour with companies wanting to be seen to be associated with the Internet or information technology. Though its proposed name and website name are very similar to Sun Microsystems' own foreshortened name and website, it was not as I find a deliberate act designed to confuse its customers or potential customers into the belief that it is somehow connected with Sun Microsystems.

Matters in Contention

41. Mr Garland argues that the history of his client's dramatic growth in the field of information technology has made it world famous and instantly recognizable through its distinctive marks incorporating "sun" in its various forms, particularly because of the huge growth of the Internet in recent years. Its fame extends into all sorts of activity including the fields of entertainment and media due to its working in liaison with those specialists in the entertainment field many of which have extolled its virtues as I have already reproduced. That alone will cause a clash with what Mr Kong says is the intended change of direction for Lai Sun. But of more concern is that Lai Sun's announcement evinces far wider intentions than to provide media and entertainment content, and if unchecked might expose to the public a much greater scope of activity. And he asks: "How can one rely on Mr Kong's word, for he is not a director, whilst the announcement he seeks to impose strict boundaries on was made by the board?" He goes further. If notwithstanding the generous options afforded by the announcement I find Lai Sun is to proceed more restrictively and into a field of endeavour where there is no clash, he submits that there will still inevitably be confusion as was found to be the case in LEGO.

42. Mr Kotewall SC representing Lai Sun contends that nowhere can Sun Microsystems, through its own literature or elsewhere, produce evidence that it provides media and entertainment content whether via the Internet or elsewhere. The press releases serve to highlight that it is the provider of the technology in which it has undoubted expertise; that is a different matter altogether. Its website features video clips and interviews and documentaries that in a broad sense could fall into the categories of informing or entertaining, but in fact their primary function is to promote Sun Microsystems and are not productions which stand alone. It follows, he says, that for all its size and strength in the market place as a supplier of computer hardware, software and solutions, it is not a provider of content in the fields of media and entertainment. And that is precisely what, and the sum total of what Lai Sun is proposing to be involved in.

43. However Sun Microsystems or those representing it might interpret the announcement, Mr Kong as the man in charge of Lai Sun's change of focus is in the best position to elaborate, for these proceedings, on what the board's plans for Lai Sun are. It has already expended a great deal of money in joint ventures and those and others in the pipeline are graphic illustrations of its intended course. Furthermore Mr Yang, who is a director, says in his affidavit at paras. 26 and 27 in which the plaintiff refers to Sun Microsystems and the defendant Lai Sun:-

"... the intended business direction of the Defendant's group of companies is the provision of the following media and entertainment facilities: animation; sports; leisure lifestyle; magazine and tabloids; television serials; motion pictures and television broadcast network.

Mr Connor is incorrect when he alleges in paragraph 41 of his Affidavit that, "it is the clear intention of the Defendant to conduct its new "Internet telecommunications, media and information technology related business" under and by reference to the name "eSun.com Holdings Limited" and on and through the website "www.eSun.com"" The Defendant has no intention other than to offer entertainment and media facilities of the type referred to in paragraph 26 above, in relation to which the Plaintiff has no reputation, via the internet or other electronic means of communication."

44. Of the proposition that Sun Microsystems should be entitled to the protection it asks for even if I find on the facts the parties are in different fields, Mr Kotewall says that there are significant differences between LEGO and this case. In LEGO the judge plainly found that the word had become so commonplace in the English language that it was instantly connected with the plaintiff. But the word sun in Hong Kong is an entirely different proposition altogether. A number of companies share the word in their names and many of them have trade mark protection; some of these are in the computer field. The extent to which there could or might be confusion in the market between two unrelated products or services would be correspondingly remote. He derives support from Parker J in Burberry's v. JC Cording & Co. Limited (1909) 2 RPC 693, who said, at p.701:-

"It is important for this purpose to consider whether the word or name is prima facie in the nature of a fancy word or name, or whether it is prima facie descriptive of the article in respect of which it is used. It is also important for the same purpose to consider its history, the nature of its use by the person who seeks the injunction, and the extent to which it is or has been used by others. If the word or name is prima facie descriptive or be in general use, the difficulty of establishing the probability of deception is greatly increased."

Findings of fact on the disputed issues

45. Dealing with those matters in contention I am satisfied on the evidence:-

1. Sun Microsystems is not justified in its claim that it operates within the field of media and entertainment to the extent that it has a reputation to protect in this field. I accept Mr Kotewall's argument that such role it does play is to provide technology in the production which I find is different altogether.

2. Sun Microsystems does have a reputation in the field of computers and computer technology, operating under the mark Sun, but not to the exclusion of others including others in the field. I state the obvious when I say sun is not a made up word but is in general use in English and Chinese.

3. I am also satisfied that Lai Sun's intentions to enter the world of information technology are limited to providing entertainment and media content through the Internet and otherwise through electronic means, as stated by Mr Kong. Though the announcement might appear to project a wider proposed field of endeavour, Mr Kong has gone on record to provide a more explicit specific goal and what he says is backed up by the actual and proposed joint venture activity. Though he is not a director and does not say he made his affidavit with the authority of the board, commonsense dictates that must be so.

Applying the law to the facts

46. Is there a serious question to be tried? Does Sun Microsystems have some prospect of satisfying the three stated elements of a passing off action?

47. Sun Microsystems has an undoubted reputation it is entitled to have protected in the field of systems and solutions tailor made for customers in media and entertainment. Judging by the glowing testimonials some of which have been reproduced in this judgment the likes of CNN and Television New Zealand in news broadcasting and Pixar Animation Studios in the production of full length feature movies are delighted with the technology provided by Sun Microsystems. But though it might have assisted in achieving a high quality end product for its customer in each case it cannot be described as having provided the content of those productions as I have already found as a fact. And that is precisely what, as another fact I have found, Lai Sun is proposing to do.

48. I find Sun Microsystems is not assisted by LEGO. That sort of blanket reputation must be reserved for the product whose name exceptionally is so much a household one that a potential customer of something else altogether will still be misled as to its source if marketed under that name. On the facts of this case Sun Microsystems falls well short of establishing that.

49. I conclude that a prospective future customer of Lai Sun's proposed activity in media and entertainment operating under its intended name is most unlikely to be under the misapprehension he is enjoying the benefit of a Sun Microsystems' production. The answer to the questions posed above is 'No'. Sun Microsystems' application must be declined for that fundamental reason.

50. Were I to have to consider the further question of balance of convenience, it seems to me that if Sun Microsystems is to succeed at the trial its loss (if it is found to have suffered any at all) will be ascertainable and adequately compensated by an award in damages, and Lai Sun will have no difficulty in meeting that. Accordingly I would have dismissed the application on that ground.

51. There remains the issue of costs. Having found against Sun Microsystems because it has not established there is a serious question to be tried I believe the appropriate order is that it pay Lai Sun's costs taxed if not agreed and paid forthwith. That is my order on costs, nisi at first instance because there has been no argument.

52. Lai Sun is now released from the undertaking it gave Stone J on 24 March 2000.

Representation:

Mr Peter Garland, SC leading Mr Stewart Wong, instructed by Messrs Deacons Graham & James, for the plaintiff

Mr Robert Kotewall, SC leading Mr Albert Xavier, instructed by Messrs Richards Butler, for the defendant