LUNG SUN PLASTIC & METAL FACTORY LIMITED v ANEX INDUSTRIAL COMPANY LIMITED

HCA006079/1980

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

ACTION NO. 6079 OF 1980

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Coram: Penlington J.

Date of Judgment: 22nd January, 1981

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DECISION

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1. The action in which this application for an interim injunction is brought relates to the plaintiff's British registered design No. 987303 and also to the plaintiff's copyright in certain original drawings and sketches for use in the production of a plastic lamp.

2. Mr. Chui Yin, the Managing Director of the plaintiff company in his affidavit says that in 1978 he made some research into plastic lamps then being manufactured and in particular those which could be plugged into the cigarette lighters of a motor car. He said that the studied a lamp being made in Japan whereby the light could be tilted at any angle and he also looked at a local product which was, however, deficient in that not only could it not be so tilted but the cord, with its connector, did not have a place to be neatly put away when the lamp was not in use. He therefore had prepared some drawings and registered a new design. Production was then commenced and sales were made from the 24th April 1979 onwards. He said that advertisements were placed in Trade Journals including "Hong Kong Enterprise" and orders came in rapidly for the plaintiff's light which he called "Magnetic Super Light". Mr. Chui said that sales increased rapidly and in the first four months of 1980 averaged approximately 300,000 pieces per month. He said however that in May there was a sudden drop in orders and investigations were made as to the reason for this. Proceedings were then instituted against three other manufacturers and in October 1980 these present proceedings were commenced.

3. One of the plaintiff's lamps was produced, as was a lamp manufactured by the defendant company.

4. The plaintiff's case is that the defendant's lamp is a substantial copy of the plaintiff's design in that in each of them there is an extended lower body of the casing which enables the plug to be neatly stored away the cable can be neatly wound into the back of the lamp and that the back is hinged so that when the lamp is placed on any surface by means of a magnet it can be tilted in any direction.

5. The plaintiff says that as the "Shape and Configuration" are so similar to the plaintiff's registered design that they are no novel. The defendant's design is also registered, No. 993238, and the plaintiff says that such registration is therefore invalid.

6. The plaintiff says that it has expended a great deal of money and effort on his lamp. including an advertising campaign, and that if the defendants are not restrained from manufacturing and selling their lamps the plaintiffs will suffer substantial damage. The plaintiff also submits that there is at very least a serious question to be tried and that the balance of convenience lies in the granting of the conjunction which it seeks.

7. The defendant through its Managing Director, Mr. Stephen Kwok Hon-lam says that it is a substantial business and manufactures a wide range of products, in particular ones which are designed for motor cars. Mr. Kwok says that he decided to design a light suitable for use in a car in about August 1979. He agrees with Mr. Chui that at this time there was a well known light on sale in Hong Kong called a "Roll Light" produced by the Tang Fung Kee Manufacturing Co. Ltd. and this light had been particularly successful. He said that this light had been used as a reference by many manufacturers in Hong Kong and he also said that like Mr. Chui he had regarded not only to that light but to other lights, including Japanese products. He said that during the time he was designing his lamp he was aware of the plaintiff's light but he did not copy its design. His lamp was produced as were some fifteen other lamps which were manufactured in Hong Kong. All have certain features in common, but there is no doubt that of all these lamps the one which most resembles the plaintiff's is the one produced by the defendant. The defendant however says that there are in fact substantial features about its lamp which makes it different to the plaintiff's, and shows that it is not a mere copy. Mr. Kwok points out that the design of the plug holder ensures that it is secure when the plug is placed in the holder. The hinge between the body of the lamp and the back is considerably wider and more robust the slot for the connecting plug is at the back of the lamp not at the bottom, which is a better feature, and the reflector is of a different design. Mr. Kwok says that his company began manufacture of their lamp in September of 1980 and that the drop in the plaintiff's sales in about May of that year could not have been due to their product. He does however point out that there are obviously a large number of similar products on the market and the fall off sales is no doubt due to that fact.

8. I am satisfied that there is a serious issues to be tried between the plaintiff and the defendant but the question is whether on a balance of convenience the injunction should be granted. It does not seem to be in dispute that this is a highly competitive field and that a considerable percentage of sales are made not to members of the public direct but to manufacturers of other products who use the lamps as sales promotion items. It seems clear that improvements are being made in these products all the time and that if the defendants are restrained from manufacturing until the hearing of this matter they will undoubtedly lose a great deal of the benefits which they might obtain by reasons of their design. The defendant says that it is a substantial company and I am satisfied it would be good for any damages which the plaintiff might obtain if it succeeds at the trial of the action.

9. The defendant undertook that if it was not restrained from manufacturing or selling its particular lamp full records would be kept relating to such sales and the profits therefrom. It seems to me that if the plaintiffs do succeed it would be a relatively easy matter to ascertain what the defendants profits would have been from such sales and that such profits would be relevant to the level of damages to which the plaintiffs would be entitled. If however the injunction is granted and the defendants are not able to manufacture and sell during the intervening period it would be difficult indeed to ascertain its damages.

10. The law relating to this question is well set out in the decision of Zimmern J. in United Agencies Limited and another The Tinic Watch Limited, Civil Case No. 7007 of 1980. There are three points to be decided. The first one is whether the plaintiffs have an arguable case on the design and copyright claims. The second issue is whether the plaintiff has also an arguable case that the defendant has infringed that design and copyright. I am satisfied that the plaintiff has such arguable case on those points. There is then the third point which is whether on a balance of convenience the injunction should be granted or not. Both the plaintiff and the defendant are selling a product in a highly competitive field. It seems to be agreed that a design has a very limited life-span. It has been suggested that about five years would be a good estimate. For the reasons given I think it would be difficult to ascertain the damages suffered by the defendant if an injunction is granted but relatively easy in the case of the plaintiff.

11. I accept the undertaking given by the defendant and am satisfied that, on a balance of convenience, the application should be refused.

12. Costs will be in the course.

Representation:

Andrew Liao (Deacons) for Plaintiff/Applicant.

Anthony Rogers (Robert W.H. Wang & Co.) for Defendant/Respondent.