Television Broadcasts Ltd v. Home Guide Publication Co (A Firm)

HCA002657/1982

Passing off. Interim injunctions sought to prevent a magazine proprietor from changing the name of a magazine with a minimal circulation published by him to that of a highly successful television programme televised by the plaintiff.

Whether common field of activity and whether likelihood of damage to the plaintiff.

Injunctions granted.

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

___________

BETWEEN

______________

Coram: Hon. Macdougall, J. in Chambers

Date: 15 April 1982

_______________________

REASONS FOR DECISION

_______________________

Macdougall, J. :

This is an application by way of summons for two interim injunctions.

2. In an affidavit sworn by its company secretary the plaintiff claims that since October 1981 it has been broadcasting on its Jade channel a woman's programme entitled Fu Mui Sun Tsz which means New Looks of Women. As the name suggests, this is a magazine type television programme aimed predominantly at women. The programme is conducted by two women comperes, and guest speakers are frequently invited to participate as experts in their particular fields. The format is flexible and is intended to cover all subjects of interest to housewives. One segment of the programme is devoted to news about local television and film stars and concentrates both on their social life and on films in which they are likely to appear in in the near future. Other segments include physical fitness demonstrations, palm reading, interviews with famous people and such like.

3. Since its inception the programme has proved extremely popular and, as the viewing audience is composed principally of young to middle aged housewives, it has become increasingly attractive as an advertising medium to business enterprises specialising in domestic goods and products that would be of use to housewives. Although the average viewing figure for each segment of the programme is approximately 300,000, one segment that is broadcast on Fridays attracts as many as 460,000 viewers.

4. An example of the popularity enjoyed by the programme is that the Hong Kong Family Welfare Society has invited the plaintiff to lend support to the Society in running a "Good Parents" Campaign by using the programme as a medium of cooperation. An exhibition is to be held at the New World Centre in connexion with this joint campaign and banners and posters bearing the characters Fu Nui Sun Tsz have been produced for display purposes at the exhibition.

5. In January 1981 the defendant firm commenced publishing a magazine entitled Yee Gar which means Suitable for the Family In fact, however, the English title used by the magazine in conjunction with its Chinese title is "Home Guide". The distributors of the magazine have informed the plaintiff that its circulation is minimal. The plaintiff assumes that this means that the circulation figures are in the region of 10,000 copies per month. This has not been disputed by the defendant.

6. In its March 1982 issue "Yee Kar" contained an announcement that commencing with the April issue the publishers proposed changing the name and format of the magazine, and that the new Chinese and English titles would be "Fu Nui Sun Tsz" and "Lady" respectively. The Chinese characters are identical to the Chinese characters in the title used by the plaintiff for its television programme.

7. From the date of its first publication Yee Kar has concentrated on subjects similar to those featured in the television programme and the defendant's intention is that this policy will continue after the proposed change in title.

8. It is not disputed that the plaintiff has been considering the idea of forming a club bearing the title Fu Nui Sun Tsz and that one of the benefits of membership of the proposed club would be that members would be able to obtain discounts on various items including household products. It is also not disputed that the plaintiff has been contemplating the publication of a magazine to be issued in conjunction with its television programme. In this connexion there have been meetings among the relevant members of the plaintiff's staff to consider the feasibility of such a venture but the idea has been temporarily shelved.

9. The plaintiff alleges that the proposed publication by the defendant of its magazine under the new title Fu Nui Sun Tsz is nothing but a deliberate attempt to capitalise on the reputation that has been gained by the plaintiff's television programme in order to boost the magazine's minimal circulation.

10. There is further evidence that the plaintiff produces a magazine entitled K-100 in conjunction with a programme of the same name televised on TVB Jade channel. The plaintiff contends that not only does the public associate with television programmes magazines published under the same name as those programmes, but it expects authorised magazines to be produced in conjunction with certain of the plaintiff's programmes. The plaintiff contends therefore that unless an injunction is granted restraining the defendant from using for its magazine the title "Fu Nui Sun Tsz" confusion will inevitably arise, not only in the minds of those members of the general public who view the programme, but also in the minds of potential viewers.

11. The plaintiff contends that as it will have no control over the quality or subject content of the defendant's magazine it is likely that the excellent reputation enjoyed by its television programme will be placed in jeopardy with consequent financial loss.

12. The defendant, in an affirmation filed on its behalf, claims that its reason for deciding to change the name of its magazine is that the present name Yee Kar wrongly conveys the impression that its subject matter relates to furniture and interior design and that the name "Fu Nui Sun Tsz" is more descriptive of and suited to its actual content.

13. While admitting that it proposes to start a club of a similar nature to that contemplated by the plaintiff, with the object of enabling its readers to obtain discounts on purchases of products from certain designated shops, the defendant states that it does not intend to charge a club membership fee but proposes that as soon as a reader enters into a contract for a fixed term subscription to the magazine she will automatically become a club member with discount entitlement.

14. The defendant has informed its existing advertisers of the proposed change of name. Some of these advertisers have agreed to continue to advertise in the magazine after its change in name but others have indicated that they will suspend their advertisements until they have had an opportunity to see the first issue under the new name. The defendant has been able to attract some new advertisers for the magazine under the proposed new name but other prospective advertisers have indicated that they will defer their decision until after they have seen the first issue of the magazine under its new name. In this connexion the plaintiff claims that it has already obtained a number of fixed term advertising contracts for its magazine under the new name and that it will lose the benefit of these contracts if the name of the magazine cannot be changed as proposed. The actual number or value of these contracts has not been specified. The plaintiff however claims that the income from advertisements for the first issue is expected to be in the vicinity of $70,000 and that, if publication cannot proceed as intended, not only will this sum be lost but the defendant will become liable in damages to its advertisers for breach of contract. How all this will come to pass is not specified.

15. Arrangements have been made to distribute the new magazine abroad and the defendants claim that approximately $100,000 has already been incurred in launching the first issue of the magazine under the new name. No indication has been given, however, as to what proportion of this sum is directly attributable to expenses relating to publication under the new name. Since the items listed by the defendant cover those that would normally be expected to relate to the production of the magazine irrespective of whatever name is used, I do not think that it can reasonably be argued that the defendant is likely to suffer any more than a very minor loss should I be persuaded to grant an interim injunction.

16. It is submitted on behalf of the defendant that if publication is allowed to proceed there is little likelihood of confusion between the plaintiff's television programme and the defendant's magazine. The reasons advanced in support of this cortention are

17. Having seen the cover of the proposed first issue I must say that I cannot conceive that this device is likely to attract the attention of any purchaser or potential purchaser and that even it did, it is highly unlikely that it would have any impact on her mind as to the source of the magazine.

18. In this regard the defendant seeks to draw the inference that any purchaser or potential purchaser of its new magazine would detect the absence of the plaintiff's logo and thus deduce that the magazine is not produced by the plaintiff. I consider that the average person is highly unlikely to arrive at any such conclusion.

19. While conceding that nothing has appeared in previous issues of the defendant's magazine published under the name "Yee Kar" which suggests that the defendant has been guilty of poor taste or anything that would justify the plaintiff in making any criticism, Mr. Peter Garland, counsel for the plaintiff submits that since the plaintiff has no control over the editorial policy of the magazine, its content, features, taste and general production, and the effect that such might have on any viewer or potential viewer of the plaintiff's television programme, the plaintiff is likely to suffer unquantifiable financial loss. He contends that the defendant's proposed course of action is a blatant example of passing off and that damage is inferred in such a case. It is his submission that it fanciful to suggest that the defendant arrived at the decision to use the title "Fu Nui Sun Tsz" entirely uninfluenced by the plaintiff's well known title to its television programme and that the only reasonable conclusion that one can reach is that the choice of this title was the result of a deliberate decision on the part of the defendant to pass off its magazine as that of the plaintiff and so exploit the goodwill and reputation meritoriously earned and justly enjoyed by the plaintiff.

20. Counsel referred to the five characteristics that Lord Diplock in Warnink v. Townend & Sons (Hull) Ltd. [1979] AC 731 at 742 identified with approval as being those which earlier cases had indicated must be present in order to create a valid cause of action for passing off, namely, (1) a misrepresentation (2) made of a trader in the course of trade, (3) to prospective customers of his or ultimate consumers of goods or services supplied by him, (4) which is calculated to injure the business or goodwill of another trader (in the sense that this is a reasonably forseeable consequence) and (5) which causes actual damage to a business or goodwill of the trader by whom the action is brought on (in a quia timet action) will probably do so.

21. While accepting Lord Diplock's admonition that one must be particularly careful to beware of the logical fallacy of the undistributed middle by assuming that all factual situations which present these five characteristics necessarily give rise to a cause of action for passing off, counsel contends that all five characteristics are present in this case and that the fallacy as to which Lord Diplock sounded his warning does not arise. He also referred to Lord Diplock's observation that the increasing recognition by Parliament of the need for more rigorous standards of commercial honesty is a factor which should not be overlooked by a judge confronted by the choice whether or not to extend by anology to circumstances in which it has not previously been applied a principle which has been applied in previous cases where the circumstances although different had some features in common with those of the case he has to decide.

22. Mr. Garland submits that the misrepresentation that arises in the present case is the adoption of a title identical to that given by the plaintiff to its highly popular and successful programme by a magazine of fifteen months standing with a minimal circulation and which features topics substantially identical to those forming the subject of the plaintiff's television programme. He contends that the reasonably ferseeable consequence of the defendant's adoption of the plaintiff's title is that readers of the magazine will assume that the defendant's publication is connected in the course of business with the plaintiff's programme and that this is likely to lead to damage to the business and goodwill of the plaintiff.

23. Counsel thus contends that there is a serious question to be tried and that accordingly the plaintiff has surmounted the first hurdle that it must clear in establishing its claim for interlocutory injunctions.

24. Mr. Garland contends that since goodwill and reputation are unquantifiable assets it follows that any damage that the plaintiff might sustain as a consequence of the defendant's proposed action would not be susceptible to financial assessment and that since the defendant has not yet embarked upon publication of the proposed new magazine the balance of convenience weighs heavily in favour of granting the injunctions. If, however, the court is not so satisfied, then he submits that it should preserve the status quo and that this can only be maintained by granting the interlocutory relief sought.

25. Mr. Philip Li for the defendant submits that there is no serious question to be tried. He argues that the plaintiff has not established a distinctive reputation and that if it is to succeed it must show that the public would conclude that the defendant's proposed magazine and the plaintiff's television programme have a common origin. He contends that it is essential that the plaintiff must establish that the title "Fu Nui Sun Tsz" is distinctive of the plaintiff's programme exclusively and that the defendant's use of that title will be likely to deceive.

26. It is Mr. Li's submission that the four Chinese characters that form the title are not distinctive but merely descriptive and that the mere fact that the plaintiff has used them does not therefore prevent the defendant from also using them. He contends that the four words are so common and so descriptive that no reasonable person would associate them with the television programme. In essence it is his contention that they simply describe the content of the magazine.

27. The defendant also submits that the Plaintiff must establish that both it and the defendant are engaged in a common field of activity. In support of this contention Mr. Li cited Derek McCullock v. Lewis A. May (Produce Distributors) Ltd. [1947] 65 PPC 58 (The Uncle Mac case), Wombles Limited v. Wombles Skips Limited [1975] FSR 488 and Tavener Rutledge Ltd. v. Trexapalm Ltd. [1975] FSR 479 (The Kojak Case).

28. That these cases embody this trite proposition of law cannot be in doubt. To my mind, however, there is a distinct danger in using the facts of those cases in an attempt to decide whether the parties in the present litigation are engaged in a common field of activity.

29. Mr. Li was at pains to emphasise that although the name "Uncle Mac" was a fancy name and not a mere descriptive name the plaintiff there failed. Since the title in the instant case is merely descriptive Mr. Li argues that, a fortiori, the plaintiff must fail. I do not agree. The Uncle Mac case was resolved in favour of the defendant on the ground that there was no common field of activity. The fact that Uncle Mac was a fancy name has therefore irrelevant to the decision.

30. In developing his argument that there is no common field of activity in the instant case Mr. Li submitted that the defendant's proposed magazine is both factual and informative and therefore is of an entirely different character to the plaintiff's magazine ??K-100 which he contends, is merely promotional. It is his submission that the public will readily distinguish the difference between the subject matter of the two magazines and as a consequence will not conclude that that published by the defendant is in any way connected with the plaintiff. As I understand it, however, this argument, although bearing obliquely on whether there is a common field of activity, focuses more on whether there is a real likelihood of confusion in the minds of members of the public that the defendant's publication is connected in the course of business with the plaintiff's programme.

31. While conceding that the television programme and the proposed magazine superficially aim at a common market, Mr. Li contends that in reality there are two fundamental differences between the two in that, first, the magazine is aimed at the literate market whereas the television programme is directed at both literate and illiterate members of the public, and secondly, the programme is broadcast for an afternoon audience whereas the magazine can be read at any time. I must say that these subtle distinctions do not appeal to me.

32. Mr. Li submits that because the four Chinese characters in the title are so commonplace it is only natural that a publisher would seek to use them as a title for a magazine dealing with subject matter such as that appearing in the defendant's magazine and that therefore the defendant's proposed use of the title cannot reasonably be construed as an attempt to deceive the public.

33. I disagree. Bearing in mind the defendant's decision to use these four words in that combination for a magazine title so soon after the acknowledged success and popularity of the television programme using the same title, and the undisputed fact that both the magazine and the programme are concerned with very similar if not identical material, I am of the view that any court would be entirely justified in coming to the conclusion that the defendant's intention is indeed to deceive the public into thinking that both are linked, and that by marketing his magazine he will thus be able to capitalise on the widespread popularity enjoyed by the television programme. I think a court might well ask itself in these circumstances the same question posed by Lindley LJ in Sla??enger v. Feltham [1889] 6 RPC 531 at 538 - Why should we be astute to say that (the defendant) cannot succeed in doing what he is straining every nerve to do?

34. It seems to me that there is a significant association between the plaintiff's and defendant's fields of activities sufficient to make it highly likely that the general public would be confused into thinking that the defendant's magazine has something to do with or is associated with the plaintiff's business. In this regard I think it is relevant to cite a passage in the judgment of Power, J. of the Supreme Court of New South Wales in Fletcher Challenge Ltd. v. Fletcher Challenge Pty. Ltd. & Others [1982] FSR 1 at 11.

35. Mr. Li also submits that the plaintiff has not proved that there was a likelihood of damage to his business from the defendant's proposed publication of the new magazine. No doubt he has in mind the words of Wynn-Parry J. in the Uncle Mac case.

"It is of the essence of an action for passing off to show, first, that there has been an invasion by the defendant of a proprietary right of the plaintiff, in respect of which the plaintiff is entitled to protection, and secondly, that such invasion has resulted in damage or that it creates a real and tangible risk that damage will ensue. (emphasis mine).

36. Mr. Li argues that although it is not contested that the plaintiff has been contemplating the publication of its own magazine in conjunction with its television programme, it has not yet done so, and that even should it eventually do so it is not likely that the defendant's magazine would lead to the plaintiff losing revenue or audience. On the contrary, he maintains that the defendant's magazine would have the effect of publicising the plaintiff's programme and stimulate interest in those topics that form the subject matter of the programme and the magazine and thus increase audience ratings for the programme.

37. The argument that the magazine would have the effect of publicising the plaintiff's programme seems to me to bear out the plaintiff's contention that publication of the magazine under the same title as that used by the programme will inevitably lead the public to conclude that the magazine is published by or with the approval of the plaintiff.

38. I do not think that the plaintiff's failure to carry into prompt effect the publication of a magazine in association with the television programme is a matter that weighs in the defendant's favour. By stealing a march on the plaintiff the defendant would be likely to capture part of the plaintiff's potential readership market.

39. Moreover, the defendant intends to form a club in association with its proposed magazine. It concedes that it proposes that the membership of its club would, like that of the club proposed by the plaintiff, be obtained by subscribers paying a subscription for a fixed term which will entitle them to obtain discounts on purchases from designated outlets. It requires no flight of the imagination to conclude that by setting up a club bearing the title of the plaintiff's television programme there is a strong likelihood that the plaintiff's proposed club will lose potential members.

40. As to the question of goodwill and reputation, it seems to me that the words of Evatt CJ and Myers J in Henderson & Others v. Radio Corporation Pty. Ltd. [1969] RPC 218 at 236, a decision of the High Court of New South Wales in its appellate jurisdiction, are particularly relevant:

"Without the permission of the respondents, and without any other right or justification, the appellant has appropriated the professional reputation of the respondents for its own commercial ends. It claims that a court of equity has no power to restrain the appellant from falsely representing that the respondents recommend its products, unless the respondents can prove that their professional reputation has thereby been injured, or that in some other way their capacity to earn money by the practice of their profession has thereby been impaired. We do not think that is the law.

It is true that the coercive power of the court cannot be invoked without proof of damage, but the wrongful appropriation of another's professional or business reputation is an injury in itself, no less, in our opinion, than the appropriation of his goods or money."

41. In that case the plaintiffs who were well known professional ballroom dancers alleged that the unauthorised publication of a photograph of them dancing and featured on the cover of a gramophone record of strict tempo music which was manufactured and distributed by the defendant company, amounted to passing off and that they were entitled to an injunction and an enquiry as to damages. The court affirmed the order for an injunction made in the lower court.

42. I am satisfied that the plaintiff has established that there is a serious question to be tried and that the material before me does not fail to disclose that the plaintiff has any real prospect of succeeding in his claim for permanent injunctions at the trial.

43. I am not satisfied that the defendant would be in a financial position to pay the unquantifiable damages that the plaintiff might sustain in the event that the injunctions are not granted. There is no evidence from which I can reasonably conclude that it would be able to meet an award of damages. Certainly the limited circulation of its magazine does not suggest any such ability on its part.

44. On the other hand, although there was no specific evidence as to the plaintiff's financial resources, bearing in mind the scale of its operations and the evidence that it is the more successful television station of the two operating in Hong Kong and has viewing figures greatly in excess of those of its competitor, I find it difficult to imagine that it would not be in a financial position to compensate the defendant for any damage the latter may suffer as a consequence of the grant of injunctions.

45. I do not consider that it would be reasonable to assume that anything more than a small part of the sums stated in paragraph 16 of the affirmation filed on behalf of the defendant relate directly to the proposed change in the name of the magazine. It seems to me that it is reasonable to assume that such damages as may flow from the matters referred to in paragraphs 17 and 18 of the affirmation are entirely within the financial power of the plaintiff to meet. Furthermore even if I were in any real doubt as to the adequacy of the respective remedies in damages available to the parties I would be disposed to grant the injunctions in order to preserve the status quo.

46. On the usual undertaking as to damages I therefore order that until trial on further order, the defendants, whether acting by their directors, officers, servants or agents, or otherwise howsoever, be restrained from printing, publishing or for the purposes of trade distributing magazines or other printed matter under or by reference to the Chinese title (Fu Nui Sun Tsz) or any other characters which so closely resemble it as to be likely to cause confusion, or from authorising or causing any of the aforesaid acts or from otherwise howsoever passing off or attempting to pass off their business as being in any way connected in the course of trade with the business of the plaintiff.

47. I further order that until trial or further order, the defendants, whether acting by their directors, officers, servants or agents or otherwise howsoever, be restrained from parting with possession, power, custody or control, other than to the plaintiff, of any materials the use of which would be a breach of the foregoing injunction.

48. Finally, I order that the costs of this application be the plaintiff's costs in the cause.

Representation:

Mr. Peter Garland instructed by Deacons for Plaintiff

Mr. Philip Li instructed by Edward C.T. Wong & Co. for Defendant