Then Maschinen-und Apparatebau Gmbh v. Fong's National Engineering Co Ltd and Others

HCA008102/1982

BETWEEN

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Coram: Penlington, J. in Court

Date: 9 - 11 November 1982

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JUDGMENT

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1. This is an application in which the plaintiff seeks an interim injunction against the defendants whereby they would be prohibited from manufacturing or selling a fabric dyeing machine known as a "FONGSFLOW MK 4".

2. The 1st defendant is the company which manufactures this machine and the 1st and the 2nd defendants are both directors of that company. The 2nd defendant is the Managing Director and major shareholder while the 2nd defendant is his wife.

3. The plaintiff is a German company and is the manufacturer of textile dyeing machines and other industrial equipment. It is not in dispute that it manufactures a high quality expensive jet dyeing machine known as a "THENFLOW". This is a large piece of equipment which enables textiles to be dyed under very considerable pressure and high temperature. This technique, while it calls for machines of a high technical quality, and no doubt skill in their use, has proved to be extremely efficient, particularly in relation to the dyeing of materials made from synthetic yarn.

4. Affidavits have been filed on behalf of the plaintiff by its Chief Designer and also its Sales Manager. The design drawings which were prepared in the course of production of the plaintiff's machine were exhibited, as were sales pamphlets and photographs of the "THENFLOW" machine. Similarly production drawings of the 1st defendant's machine have also been exhibited to an affidavit sworn on its behalf by the 2nd defendant. Again photographs have also been produced depicting the "FONGSFLOW" machine and its predecessors, produced by the 1st defendant.

5. It is not in dispute that the plaintiff's machine is considerably more expensive than the 1st defendants. It is the plaintiff's case that because the 1st defendant's machine is a copy of their product and is being sold at approximately half the price they are unable to compete in the South-East Asian area and that despite an active sales campaign potential customers have been lost due to the attraction of the 1st defendant's machine.

6. The 1st defendant has filed an affidavit from a surveyor who has examined both machines. His conclusion is that while the machines do clearly have a similar appearance there are substantial and foundamental differences in their manner of operation. Unfortunately, however, I do not consider that the surveyor, although he describes himself as independent, has in fact taken an independent view in reaching his conclusions. Nevertheless I am satisfied that there are differences in the construction and manner of operation of the two machines, similar though they may be in appearance.

7. I am therefore satisfied that there is between the plaintiff and the defendants a serious question to be tried as to whether the defendants have infringed the plaintiff's copyright in its drawings for the "THENFLOW" machine. I therefore turn to the second limb of the tests laid (down in American Cyanamid v. Ethicon Lt.d ⁽¹⁾ to where lies the balance of convenience between the parties. It was laid down in that case that the court should first consider that if the plaintiff succeeds at the trial in obtaining a permanent injunction will he be adequately compensated by an award of damages for the loss he will have substained as a result of the defendant continuing his course of action pending the trial. While it may be-not possible to calculate these damages exactly in any particular case I am satisfied that in this case damages would be an adequate remedy and could be calculated. There has been some argument as to the defendant's financial ability to meet a substantial award of damages. In his affidavit the 2nd defendant says that the 1st defendant has some three million dollars available in cash and has been granted overdraft facilities amounting to a further 4.5 million dollars. The 1st defendant appears to be a small but prosperous company and there seems to be every indication that it would be able to meet a reasonable claim for damages. Even if these were not so it does seem to me that the balance of convenience lies in refusing the application. While the sales of the "THENFLOW" machine in South-East Asia are no doubt important to the plaintiff they are vital to the 1st defendant. Counsel for the defendants has undertaken that in the event of the application being refused they will not attempt sell the "FONGSFLOW" machine in Europe, North or South America or in Africa. He says himself that this is an undertaking in which he can give quite freely because in fact there has been no attempt as yet to make such sales. The 1st defendant's whole market is South East Asia and it is virtually a one product firm. The plaintiff is a company selling its products on a world-wide basis and it has several other machines as well as the "THENFLOW". I am satisfied that if the injunction was granted this must inevitably have a very serious effect on the 1st defendant and inevitably would result in a considerable number of its workers finding themselves unemployed.

8. This is also not a case of a person about to embark on a business enterprise. Quite clearly the 1st defendant has been engaged in the manufacture of jet dyeing machines for some considerable time and indeed the "FONGSFLOW MK 4" machine is apparently a development of their previous machine the "FONGSFLOW MK 3" of which photographs have been produced. In fairness it should be said that it is the plaintiff's Case that the MK 3 machine was also probably manufactured in breach of copyright.

9. The application for an interim injunction is refused. By agreement the costs of this application will be costs in the cause. There will also be an order for speedy trial, the matter to be placed on the fixture list, the estimated time being five days. There will be an order that a defence be filed within 14 days and there will be 7 days for filing a reply, if any. There will be discovery within 14 days thereafter and inspection of documents 7 days after that. That matter to be set down within 3 days of inspection. There will be liberty for either side to apply for further directions on 3 days notice.

(1)    1975 A.C. 396

Representation:

Andrew Liao (Deacons) for Plaintiff.

Anthony Rogers (Hastings & Co.) for Defendants.