Kjeldsen & Co. A/S v. Hong Kong Peggy Foods Co Ltd

HCA000165/1981

Application for an interlocutory injunction - principles enunciated in American Cyanamid case, as explained and analysed followed - the prolonged undisturbed use of a get-up tolerated by the applicant on other wrappers and packaging rendered further damage to the plaintiff's goodwill too negligible to warrant the grant of an interlocutory injunction against recent use of the same get-up on cylindrical tins - application for interlocutory relief denied also by reason of delay - a delay of five weeks in the face of determined effort to use the offending get-up was sufficient to defeat the application.

BETWEEN

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Coram: Hon. Liu, J. in Chambers

Date: 6 March 1982

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JUDGMENT

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1. The plaintiff corporation is an established Danish manufacturer and exporter of biscuits including butter cookies. Its export reached the shores of Hong Kong as early as 1962. Henceforth, its trade flourished. Between 1970 to 1980, shipments to Hong Kong jumped from Danish Kroner 3½ million to Danish Kroner 26 million. In 1980, butter cookies production represented 66% of the plaintiff's total output. For the first 9 months in 1981, its expenditure in advertising and promotion was over HK$1 million. In the year 1980, the range of the plaintiff's products available in Hong Kong encompassed a small 0.7 oz. round tinfoil cup containing a pair of butter cookies, a 4 oz. rectangular cardboard packet, an 8 oz. flat cardboard packet, a 1 1b. tin, a 1½ 1b. tin and a 2 1b. tin replacing its predecessor the 35 oz. tin. The get-up of the plaintiff's range of product comprises a decorative design against a blue background with a yellowish ribbon and bow. From the outset, it should be noted that no special characteristics is being claimed in the size, shape, construction or material of the packaging and that there seems to be nothing uncommon in the 1 1b., 1½ 1b. and 2 1b. tins or their respective cardboard gift boxes. They are just ordinary cylindrical biscuits tins. The sides and the lid are being decorated with a pattern representing a variety of butter cookies on display against a blue background on which a device in the form of a red label is superimposed. The blue background on the lid, however, recedes to a third of its surface area which is spanned from rim to rim by a yellow ribbon with a bow. It is on this decorative pattern that the plaintiff bases its claim of exclusivity. The tins are each encased in a squarish cardboard gift box, which also carries the plaintiff's get-up on all but two sides.

2. The pattern of the plaintiff's get-up on the tins was slightly rearranged in March 1978 when its 35 oz. tin was replaced by the 2 1b. tin, but the plaintiff's get-up can be said to be throughout consistent despite such 1978 slight modification.

3. The defendant is also a substantial company incorporated here in 1971, and its present corporate name was adopted in 1975. Its current total assets are in the region of HK$93 million. Its trade mark "Jack'n Jill" was registered in Hong Kong in 1971; the same trade mark has since 1966 been registered in the Philippines by a group of companies to which the defendant belongs. Its Chinese trade name "Chun Chun" has since 1971 been adopted, which however is not a registered mark. Apart from manufacturing potato chips, the defendant has been importing snack items from the Philippines under its registered mark and its Chinese trade name of "Chun Chun". In June 1980, the defendant launched into the production of drinks and in October of the same year cookies. In October 1980, the defendant introduced to the local market flexy plastic trays of butter cookies wrapped in a cellophane wrapper, each of 40 grammes in weight. In December, a similar production of 125 grammes or 250 grammes each was put into circulation. Also in December, the defendant brought in its flat cardboard pack of 500 grammes, which was replaced in November 1981 by its 1 1b. tin. The 2 1b. tin of the defendant's made its debut in the local market in December 1981.

4. It would be convenient to list these events in chronological order :

5. As at the date of the writ, the 9th January 1981, the defendant's 1 1b. and 2 1b. tins had not been launched, and by the time of the inter partes summons, the defendant had replaced its 500 gramme pack. Therefore, the complaints against these tins, introduced later in time, could not have been included in this action commenced by the plaintiff's writ issued on the 9th January 1981, and the defendant no longer manufactured in 500 gramme pack when the plaintiff's inter partes summons was filed on the 21st December, 1981.

6. At the hearing of the inter partes summons for an injunction on the 25th February, 1982, the plaintiff sought to confine its claims to only the 1 1b. tin and the 2 1b. tin of the defendant's. The plaintiff undertook to issue a new writ against the defendant in respect to its 1 1b. and 2 1b. tins, and by consent the summons was thereupon proceeded with as if an application for an injunction had been made in the proposed new action with liberty to use the existing affidavits.

"The get-up of an article means a capricious addition to the article itself, the colour, or shape, it may be, of the wrapper, of anything of that kind": per Fletcher Moulton L.J. in J.B. Williams & Co. v. Bronnley⁽¹⁾. It is simply the dress in which the goods are presented to the consumers.

7. The plaintiff complains of loss of goodwill and reputation by the alleged pirating of its get-up for the defendant's 1 1b. and 2 1b. tins and their cardboard gift boxes in which these tins are marketted. Nothing in the size, shape, construction or material of the 1b. and 2 1b. tins of the parties or of their respective cardboard gift boxes strikes me as unusual or distinctive. The plaintiff hurled its accusation at the close resemblance in the decorative pattern on the defendant's tins and cardboard gift boxes - i.e. the layout and arrangement of colours, designs and labels, including the yellow ribbon and bow. Thus, the defendant was attacked as having indulged in deliberate imitation. But the crux of the matter really lies in whether in promoting its range of product, the defendant will likely confuse or deceive the buying public by passing off its product as that of the plaintiff's. After all, an action for passing off is founded on the likelihood of injury to goodwill and not on imitation. A deliberate intent to reproduce another trader's get-up "in itself is not necessarily actionable, for one may copy without intent to deceive : it may be done solely for the purpose of saving trouble and expense" : per Huggins, J., as he then was, in Rox Industrial Co. Ltd. v. Japan Stationery Co. Ltd.⁽²⁾ Even when an intent to deceive may reasonably be inferred from the deliberate copying, a complainant still has to establish that the intended deceit has succeeded in causing or is likely to cause confusion. At the same page of 167 in Rox Industrial Co. Ltd.,⁽²⁾ a passing off action, Huggins, J., as he then was, continued :

"An intent to deceive is not (as I have already said), an essential ingredient of this action, nor is it actionable per se."

An observation of Lord Loreburn, L.C. in Ash (Claudios) Sons & Co. v. Invicta Manufacturing Co. Ltd.⁽³⁾ seems to be pure common sense :

"When once you establish intent to deceive, it is only a short step to proving that the intent has been successful, but still it is a step, even though it is a short step."

Obviously, once an intention to mislead is detected, it would not be difficult to infer that the desired result has in all probability been achieved : per Lindley, L.J. in Slazenger & Sons v. Feltham & Co.⁽⁴⁾

8. The defendant produced blue tins of butter cookies resembling those of the plaintiff. Similar blue tins have been brought into circulation by other Danish and local manufacturers, but we know not if these are also recent promotions like the defendant's. Thus, these other tins on the market can offer little assistance save for the fact that the plaintiff has not declared any intention to seek a similar restraint on the sale and display of these other tins.

9. The plaintiff sought to attach special significance to the means by which the get-up under consideration was put to use on the tins, but it need be constantly remembered that it is the decorative pattern which forms the subject-matter of complaint and not the shape, size, material or construction of the containers for biscuits.

10. The defendant was prepared to concede, for the purpose of the present application, that the plaintiff had established an arguably good reputation in the get-up on its goods, but it was submitted that the appearance of the defendant's registered trade mark "Jack'n Jill" and Chinese trade name "Chun Chun" on its own product had removed any real cause for confusion.

11. In order to fully appreciate the defendant's approach, I should reiterate the principles in the American Cyanamid Company v. Ethicon Limited⁽⁵⁾ as subsequently explained in In re Lord Cable, deceased⁽⁶⁾ and Mothercare Limited v. Robson Books Limited⁽⁷⁾. Of the principlespropounded by the Cyanamid⁽⁵⁾ case, Sir John Pennycuick's summary in Fellowes v. Fisher⁽⁸⁾ was adopted with approval by Huggins, J. as he then was in J.C. Penney Company and Another v. Penneys Limited and Another⁽⁹⁾:

"(1) Provided that the court is satisfied that there is a serious question to be tried, there is no rule that the parties seeking an interlocutory injunction must show a prima facie case. (2) The court must consider whether the balance of convenience lies in favour of granting or refusing the interlocutory relief. (3) 'As to that' the court should first consider whether, if the plaintiff succeeds, he would be adequately compensated by damages for the loss sustained between the application and the trial, in which case no interlocutory injunction should normally be granted. (4) If damages would not provide an adequate remedy the court should then consider whether if the plaintiff fails the defendant would be adequately compensated under the plaintiff's undertaking in damages, in which case there would be no reason upon this ground to refuse an interlocutory injunction. (5) Then one goes on to consider all other matters relevant to the balance of convenience, an important factor in the balance, should this otherwise be even, being preservation of the status quo. By the expression 'status quo' I understand to be meant the position prevailing when the defendant embarked upon the activity sought to be restrained. Different considerations might apply if the plaintiff delays unduly his application for relief. (6) Finally, and apparently only when the balance still appears even :

'it may not be improper to take into account in tipping the balance the relative strength of each party's case as revealed by the affidavit evidence.'"

12. In In re Lord Cable, decd.,⁽⁶⁾ at page 19F Slade J. had this to say of the American Cyanamid⁽⁵⁾ case and the then current decisions of the English Court of Appeal :

"On any claim for an interlocutory injunction the court must still, as a first step, consider whether the evidence available to the court discloses or fails to disclose that the plaintiff has any real prospect of succeeding in his claim for a permanent injunction at the trial; if the available evidence fails to disclose this, the motion must fail in limine and questions of balance of convenience will not fall to be considered at all."

13. In Mothercare,⁽⁷⁾ at page 473 Megarry V.-C. advanced what he considered as the true interpretation of the American Cyanamid⁽⁵⁾ decision in their Lordship's House :

"Speaking with all the respect and deference that is due from a judge sitting at first instance to a unanimous decision of the House of Lords (and rather more), I would suggest that the phrase 'frivolous or vexatious" in the American Cyanamid⁽⁵⁾ case should be read and understood in a sense somewhat different from its sense as used in relation to striking out actions as being frivolous or vexatious, and as resembling, rather than affecting, in natural meaning of the other two phrases, 'a serious question to be tried' and a 'real prospect of succeeding'."

14. It was thus submitted on behalf of the defendant in the instant case that even should the plaintiff be taken as having acquired goodwill and reputation in their decorative pattern as a get-up, it was a "virtually hopeless claim" in the sense that there was no real prospect of their succeeding in establishing confusion or likely confusion by virtue of the very presence of the defendant's registered trade mark "Jack'n Jill" and Chinese trade name "Chun Chun" on its own tins and the cardboard gift boxes.

15. The mere exhibition of a trade mark or name will not necessarily make a similar get-up distinctive or avoid likely confusion. The criterion, as Lord Halsbury L.C. so reminded us of in Schweppes Ltd. v. Gibbens,⁽¹⁰⁾ is :

"whether the thing - taken in his entirety, looking at the whole thing - is such that in ordinary course of things a person with reasonable apprehension and with proper eyesight would be deceived."

The get-up should be judged from "a reasonable distance" : per Roxburgh, J. in Tavener Rutledge Limited v. Specters Limited.⁽¹¹⁾ And of course, as Lord Halsbury observed in Schweppes⁽¹⁰⁾ at page 606 line 30, the insertion of a trade name in a get-up may not always prove conspicuous :

"I can quite understand a case in which, although colourably a defendant has introduced his own name, yet the nature of the wrapping up, the nature of the package itself, or, as in this case, the shape of the bottle, may all have been so closely imitated that the mere introduction of some distinctive mark, to which no ordinary observer would have applied his mind, will not get rid of the obvious intention to pass the one goods off as the other."

There may exist a further likelihood of confusion even with a conspicuous display of the name of a rival firm, as pointed out by Megarry, V.-C. in Mothercare case⁽⁷⁾:

"It is at least possible that purchasers of the defendant company's book would buy it in the belief that it was in some way the product of the plaintiff company, or associated in some way with that company."

16. It was strenuously urged upon me by counsel for the plaintiff that the presence of the trade mark and name of the defendant on the get-up had not achieved the effect of removing any likelihood of confusion. Whether the get-ups are likely to be confounded with each other and whether the names of the parties on the tins and cardboard gift boxes have succeeded in sufficiently identifying each trader's own product are both ultimately jury questions. But merely on visual inspection without more at this juncture, I am unable to say that sufficient prominence must necessarily be found at the trial in the marks "Jack'n Jill" and "Chun Chun", which also appear in the form of red labels, for distinguishing the rivals. In my view, the defendant has not shown the plaintiff to have no real prospect of succeeding in its claim for a permanent injunction on the alleged likelihood of injury to reputation and goodwill. Therefore, but for the matters to which I will address my mind shortly the aspects of "balance of convenience" need be examined.

17. The plaintiff no longer pursued any injunction in respect to the other packagings than the defendant's 1 1b. and 2 1b. tins and their respective cardboard gift boxes. It was claimed that the consumers had associated "blue tin cookies" with the plaintiff's product and that the buying public had long recognized the features in the plaintiff's get-up as exclusive of the plaintiff's Danish butter cookies. The live issue was whether there was any likelihood of injury to the plaintiff's goodwill and reputation in the sense of whether the Hong Kong public was likely to be confused or misled by the defendant's get-up. It was urged that the plaintiff's right of property in its goodwill and reputation was likely to be injured by the defendant's imitation. There would seem to be no distinguishing features in the size, shape, construction or material of the tins and their cardboard gift boxes although by "blue tin cookies" allegedly associated by the general public with the plaintiff's product, some emphasis was put on the word "tin". It was thus pressed upon me that the application of the same offending get-up to the tins and the cardboard gift boxes would greatly increase the risk of confusion and strike at the very root of the plaintiff's reputation and goodwill. But it is the same get-up of the plaintiff which was said to have been imitated, and by the same condemned imitation the defendant was accused of attempting to deceive the public. As the defendant's 40 gramme, 125 gramme and 250 gramme packets will continue to be sold and exposed for sale here, there would be little left of the plaintiff's alleged reputation and goodwill in this same get-up to be protected pending trial. In addition, the defendant's former 500 gramme pack, which was very similar to the plaintiff's rectangular 4 oz. (113.5 gramme) pack CAS-1B, and 8 oz. (227 gramme) pack, CAS-1C, had been on the market from December 1980 to November 1981, a period of twelve months. Even from the plaintiff's discovery of the defendant's 500 gramme pack in June 1981 to its replacement by the defendant's 1 1b. tin in November 1981, there was an interval of five months. Such protracted period of circulation of the defendant's 500 gramme pack in the local market could hardly lend support to the contention that the plaintiff had any more real interest to protect from now until hearing. Moreover, the plaintiff has not intimated that like proceedings would be instituted against the manufacturers or distributors of the other Danish and local products in blue tins. I can envisage no significant further damage to the plaintiff's goodwill and reputation pending trial.

18. The intangible loss, if any, brought about by the further application of the same offending get-up to the 1 1b. and 2 1b. tins must therefore be minimal. It has not been suggested that the alleged irreparable damage already suffered will be aggrevated or substantially aggrevated. There remains little significant right in aid of which protection can be called. In the situation the plaintiff now finds itself, an interlocutory injunction cannot be justified.

19. In conclusion, further loss of reputation or goodwill to the plaintiff can only be negligible in the circumstances, and further damages to be endured by the plaintiff must be insubstantial, whether it be reparable or irreparable. With virtually no gain to the plaintiff, judicial intervention should not be invoked to disrupt the business of the defendant which is a considerable business concern.

20. The defendant was branching out into butter cookies as early as October 1980, and by November 1980 its alleged offending get-up was widely in use. Prior to the introduction of the tins, the defendant must have enjoyed, by the plaintiff's inaction, an ample opportunity to build up its trade in butter cookies marketted in the allegedly objectionable get-up. As I have endeavoured to emphasize, the containers of butter cookies, in terms of wrappers, packets, packs and tins, can claim no distinctiveness in size, shape, construction or material. It is and has since November 1980 been the very same get-up which is alleged to be causing likely confusion and whereby the defendant is accused of deliberately setting out to exploit the market created by the plaintiff and filch its business. Every conceivable damage to the plaintiff's goodwill and reputation in this alleged passing-off has had time enough to materialise and accumulate. The probability of causing any further significant injury can hardly be imagined. The extra delay of some five more weeks from the discovery of the 1 1b. tin in early November 1981 must have given the defendant added confidence. The defendant was, in the eyes of the plaintiff, unrepentent, and yet no attempt was made to put an end to its allegedly tortious activities, then intensified, for another five weeks. The 2 1b. tin is in every respect identical with the 1 1b. tin; though later in time, they cannot but stand or fall together. There has been no satisfactory explanation given for such persistent and inordinate delay. Even if the plaintiff had not abandoned its interlocutory application in respect to the other packagings, the same would have been defeated by delay, which must inevitably weaken its claim for interlocutory relief based on the same get-up as applied to the defendant's tins and their gift boxes. Independent of the earlier delay, the plaintiff has been less than diligent on account of the further five more weeks in the face of the defendant's determined effort to heighten its promotion of the allegedly offending get-up on these tins and their gift boxes. Such neglect to discourage the use and further application of this get-up has, in my view, disentitled the plaintiff to any interlocutory relief, though now confined to the tins and their cardboard gift boxes. It would not be impertinent to echo the reported observation of Whitford, J. in General Foods Limited and General Foods Corporation v. Chequer Foods Limited and Autobar Vending Supplies Limited⁽¹²⁾ where an interlocutory injunction was refused after a lapse of six months of extended negotiations :

"Interlocutory relief is, as has been pointed out by the House of Lords, relief of a very special kind only given in the most exceptional circumstances. It is appropriate to grant interlocutory relief when the failure to do so is going to prejudice a plaintiff in such a manner that it would be quite wrong to refuse relief of this character. The plaintiff can never have imagined that a failure to stop the defendants would prejudice them irreparably or they would never have entered upon this long course of negotiation and, in my judgment, it is just not good enough for persons who are considering interlocutory relief to wait and negotiate over such a long period as this."

21. For all these reasons I need venture no further. The circumstances do not warrant the issue of an interlocutory injunction against the defendant in respect to the 1 1b. and 2 1b. tins. In any event, I would not be prepared to accede to the plaintiff's application by reason of delay. The plaintiff's application must therefore be dismissed with costs to the defendant.

(1) (1909) 26 R.P.C.765 at p.773

(2) [1966] H.K.L.R. 145 at page 167

(3) (1912) 29 R.P.C.465, 475

(4) (1889) 6 R.P.C.531 at p.538

(5) [1975] 2 W.L.R. 396

(6) [1977] 1 W.L.R. 7 at p.19F

(7) [1979] F.S.R. 466 at p.471

(8) [1975] 3 W.L.R. 184 at p.199

(9) [1975] H.K.L.R. 598 at p.604

(10) (1905) 22 R.P.C.601 at p.607, line 4.

(11) (1957) R.P.C. 498 at p.501, line 29.

(12) Intellectual Property Decisions Vol.3, February 1981 No. 10 (IPD 3152)

Representation:

Mr. Ribeiro instructed by Messrs. Deacons for plaintiff.

Mr. Andrew Liao instructed by Messrs. Lo, Wong & Tsui for defendant.