Reed Business Information Ltd v. Rever Creative Press Ltd and Others

HCA 1157/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1157 OF 2005

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BETWEEN

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Before: Hon Sakhrani J in Chambers

Date of Hearing: 19 August 2005

Date of Judgment: 19 August 2005

Date of Handing Down Reasons for Judgment: 30 August 2005

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REASON FOR JUDGMENT

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1.On 19 August 2005 I made an order in the terms of the plaintiff’s summons save that in respect of paras 2,3 and 4, the defendants were given more time to comply with the order made under those paras.  The order I made was as follows:

“	1.	That the Defendants, in the case of the 1st and 2nd Defendants, whether acting by themselves, their directors, officers, servants or agents or any of them or otherwise howsoever, and in the case of the 3rd Defendant, whether acting by herself, her servants or agents or any of them or otherwise howsoever, be restrained until after judgment in this Action or further order from :-
		(a)	publishing, advertising, promoting, offering for sale and supply, selling, supplying, distributing and/or otherwise howsoever dealing in or with any publication, including a magazine, bearing, incorporating and/or under and/or by reference to and/or by the use of the name and/or mark “HAIRDRESSERS JOURNAL” or “HAIRDRESSERS JOURNAL ASIA” or any other name and/or mark confusingly similar thereto, in particular:
			(i)	by publishing, advertising, promoting, offering for sale and supply, selling, supplying, distributing and/or otherwise howsoever dealing in or with a publication or magazine named “HAIRDRESSERS JOURNAL” or “HAIRDRESSERS JOURNAL ASIA” or any other name and/or mark confusingly similar thereto;
			(ii)	by advertising, promoting, offering for sale and supply, selling, supplying, distributing and/or otherwise howsoever dealing in or with any publication, including a magazine, by claiming that such was “Formerly known as Hairdressers Journal Asia”; and/or
			(iii)	by representing that such publication and/or magazine was produced pursuant to an agreement with the Plaintiff, with “Hairdressers Journal International” and/or with the publishers of “Hairdressers Journal International”;
		and/or
		(b)	causing, enabling, procuring and/or assisting any of the aforesaid acts to be done.
	2.	That the Defendants do each within 21 days after personal service upon it/her of the Order to be made hereunder deliver up to the Plaintiffs solicitors for safekeeping all items, including but not limited to magazines and promotional and/or advertising materials, which are in the possession, power, custody or control of the Defendants or any of them, the continued use of which or otherwise howsoever dealing in or with which by any of the Defendants would offend against the foregoing injunction.
	3.	That the Defendants do each within 24 days of the personal service of the Order to be made hereunder upon it/her make and file an affidavit/affirmation and serve a copy thereof on the Plaintiffs solicitors verifying that it/she has complied with Paragraph 2 hereof and that it/she no longer has in its/her possession, power, custody or control any of the items required to be delivered up under Paragraph 2 hereof.
	4.	That the Defendants do within 21 days of the service of the Order to be made hereunder upon it/her, in the case of the 1st and 2nd Defendants, by a director, and in the case of the 3rd Defendant, by herself, make and file an affidavit/affirmation and serve a copy thereof on the Plaintiffs solicitors setting forth so far as is known to the Defendants and/or each of them the names and addresses of all persons, firms or companies :-
		(a)	to whom any of the Defendants has sold and/or supplied and/or offered to sell and/or supply any publications and/or magazines of the types referred to in Paragraph 1 hereof;
		(b)	from whom any of the Defendants has ordered, bought and/or obtained supplies of any publications and/or magazines of the types referred to in Paragraph 1 hereof;
		(c)	who has offered to supply to any of the Defendants or either of them any publications and/or magazines of the types referred to in Paragraph 1 hereof;
		(d)	who has ordered from the Defendants or any of them any publications and/or magazines of the types referred to in Paragraph 1 hereof;
		(e)	to whom any of the Defendants has represented that any publication and/or magazine published by any of the Defendants is/was produced pursuant to an agreement with the Plaintiff, with “Hairdressers Journal International” and/or with the publishers of “Hairdressers Journal International”;
		together with the full details of the respective dates of such acts and the quantities and prices of any products involved and do disclose in the said affidavit the exact whereabouts of any person, firm or company known or believed by the Defendants or any of them to be in possession of any such publications and/or magazines and further do exhibit to such affidavit copies of all documents relevant to the aforesaid acts in the possession, power, custody or control of any of the Defendants.
	5.	That injunctions be granted accordingly.
	6.	That the Plaintiff be at liberty to use any affidavit/affirmation, document, article or information obtained in accordance with or as a result of the Order to be made hereunder in any manner that should be required for the protection or further protection of the rights of the Plaintiff the subject of this Action and/or any similar rights enjoyed by the Plaintiff in other countries throughout the world whether in Hong Kong or elsewhere.
	7.	That the costs of this application be the Plaintiff’s costs in the cause.”

2.I now give my reasons for so ordering.

3.The plaintiff’s action is in relation to wrongful acts of passing off by the defendants in relation to the use of the name and/or mark “HAIRDRESSERS JOURNAL” (“HJ”) and the misrepresentation by the defendants that their magazine was produced pursuant to an agreement with the plaintiff.

4.On 24 June 2005 Deputy Judge Poon granted the plaintiff an interim injunction pending the filing of evidence by the defendants.  Although the order as drawn up and sealed shows that an interlocutory injunction until after judgment was granted by Deputy Judge Poon, Mr Yan, SC, for the plaintiff, confirmed that the intention was to obtain an interim injunction pending the filing of evidence by the defendants and the adjourned application of the plaintiff.  That was what Deputy Judge Poon in fact ordered.  The application before me was the plaintiff’s adjourned application of its summons dated 21 June 2005.

5.Mr Yau, for the defendants, did not dispute that the plaintiff has shown that there is a serious question to be tried.  On the undisputed evidence before me it would have been difficult for Mr Yau to contend otherwise.

6.The plaintiff is part of the Reed Elsevier Group which is one of the world’s leading publishers and information providers.  One of the many publications published by the plaintiff is “HAIRDRESSERS JOURNAL INTERNATIONAL”(“HJI”).  HJI was first published in the United Kingdom in 1882 and has been published continuously since then.  It was originally called “HAIRDRESSERS’ WEEKLY JOURNAL”.  The magazine changed its name to HJ and has been published by the plaintiff under the name HJI since at least July 1984.  HJI is a weekly magazine for professionals in the hair care and beauty industry.

7.On the undisputed evidence the plaintiff has acquired a substantial reputation and goodwill in the names HJ and HJI not only in the United Kingdom but in many countries including Hong Kong.

8.In September 2003 the plaintiff was approached by the 3^rd defendant of the Rever Group of companies in Hong Kong expressing an interest in publishing an Asian version of HJI.  The 3^rd defendant is a director of both the 1^st and 2^nd defendants.  Her approach to the plaintiff led to discussions and negotiations between the parties with a view to obtaining a licence from the plaintiff to publish HJI in Asia.

9.In an e-mail sent on 13 September 2003 by the 3^rd defendant as the Executive Director of Rever Corporation to Michael Hancock, the Vice-President of Global Business Development for the plaintiff, the 3^rd defendant stated, inter alia:

“I firmly believe that Rever, with a solid background in hair and beauty industry, in addition to our team’s experience and connection in media and publication, would be a qualified distributor and licensee for Hairdresser’s Journal in Asia”

10.The fact that the defendants approached the plaintiff for a licence to use HJ demonstrates that the defendants knew full well that the plaintiff has a reputation and goodwill in Hong Kong in the name and mark. In the various e-mails from the defendants to the plaintiff which Mr Yan has helpfully identified at para 6 of his skeleton submissions the defendants have acknowledged the plaintiff’s reputation and goodwill in HJ and HJI.

11.In the course of the negotiations between the parties the plaintiff provided the 2^nd defendant with a letter of intent.  The 2^nd defendant was the proposed licensee but a licence agreement was never entered into as negotiations broke down in or about February 2005.

12.The evidence also shows that the defendants have made misrepresentations which were likely to lead the public to believe that their magazine was associated with the plaintiff’s HJI magazine.  There is no dispute that the 1^st defendant has published and distributed the magazine under the name “HAIRDRESSERS JOURNAL ASIA” (“HJA”) in April 2005 without the plaintiff’s licence or consent.  The name and mark HJ was used in the front cover in the identical and distinctive way in which the name and mark is represented in the front cover of the plaintiff’s HJI magazine.

13.The defendants have also without the plaintiff’s licence or consent placed advertisements for HJA where they have used the front covers of 4 past issues of the plaintiff’s HJI.

14.Mr Yau accepted that there was a serious question to be tried on the evidence before me.  However, he submitted that by the time the plaintiff’s summons dated 21 June 2005 was issued there was no threat of any further publication by the 1^st defendant of any magazine bearing the name HJA.  He submitted that the 1^st defendant had indicated that it had no intention to use the name HJA.

15.However, as Mr Yan has submitted, rightly in my view, the evidence does not bear this out.  The 3^rd defendant’s e-mails sent on behalf of the 2^nd defendant, the proposed licensee of the plaintiff, on 2May 2005 made it plain that the defendants’ position was that the plaintiff had no rights in the name HJ in Hong Kong and that the defendants could use it with impunity.  This was contrary to their previously acknowledged position that they required a licence from the plaintiffs to use the name and mark HJ.

16.The 3^rd defendant also made it plain that the defendants would continue to use the name HJA even though they had changed the type face of the title for the time being.  In an e-mail sent to the plaintiff on 2 May 2005 the 3^rd defendant stated as follows:

“We have changed the type face of the title for the time being and disconnected everything in relation to UK journal, we are starting to tell the industry that we no longer relate to the UK version, but to save embarrassment for [the plaintiff] and HJI, I would seek to make joint public announcement with [the plaintiff] and HJI at an appropriate time and possibly we would change the title as soon as time fit.”

She was there saying that they would continue to use the name HJA until such time as they saw fit not to do so.

17.The evidence also shows that on 1 June 2005 the 3^rd defendant had a conversation with the investigator engaged by the plaintiff where the investigator asked the 3^rd defendant about HJA’s relationship with HJI.  The 3^rd defendant was asked whether HJA and HJI were partners.  The effect of what the 3^rd defendant said was :

“Yes, we are partners, but we are not the same company and we have relation. International is only sold in England.  On the other hand, Asia is sold even in Italy and Germany.”

18.The evidence of Michael Hancock of the plaintiff is that on 15 June  2005 the plaintiff’s solicitors brought to his attention that the contents of the defendants’ website at www.hairdressersjournalasia.com had changed in that when entering the website users are directed to a website at www.expression-online.com (“the Expression Front page”).  The Expression Front page consisted of wording indicating that HJA had changed its name.  The wording was as follows:

“	Breaking News
	Media Controversy
	Why a Change of Title
	Enter EXPRESSION- A Media Of A Different Kind
	Formerly known as Hairdressers Journal Asia
	International Branding & Global Trading For Hair, Beauty & Trend Industry”

19.The announcement that was made contained the following statement:

“This news is released with great relief to report that [the 1^st defendant] had finally rectified the misstep of entering into an agreement in 2003 with Hairdressers Journal International to produce an Asia-focused hairstyling magazine”

20.The link to the website of the Expression magazine also showed that the even with the cessation of the use of the name HJA for the name of their magazine the defendants continued to use the name HJA to promote the new magazine by publishing the front cover of the issue of HJA.

21.The announcement contained a misrepresentation as there was never any agreement reached between the plaintiff and the 1^st defendant to produce HJA.

22.The evidence clearly shows that despite the announcement, the defendants were still trading on the plaintiff’s name and goodwill in HJ and HJI by misrepresenting that HJI and HJA were partners and that the defendants’ magazine was formerly known as HJA.

23.Mr Yau submitted that the 3^rd defendant as a director of the 1^st and 2^nd defendants should not be held personally liable for the torts of the corporate defendants.  He also submitted that there was no evidence that the 2^nd defendant was in any way involved in the publication of HJA.  There is no merit in the submissions.  As Mr Yan rightly pointed out, the e-mails that he referred me to were sent by the 3^rd defendant on behalf of the 2^nd defendant.  This is not disputed by Mr Yau.  The 3^rd defendant is sued personally in this action.  It seems to me that on the undisputed evidence a serious question to be tried has been shown as to whether the 3^rd defendant as a director had authorized, directed and procured the acts complained of so as to be liable as a joint tortfeasor.  The 2^nd defendant was also the proposed licensee of the plaintiff.  It seems to me that a serious question to be tried has also been shown against the 2^nd defendant.

24.Mr Yau offered an undertaking on behalf of the 1^st defendant, the publisher of the April issue of HJA, “not to publish, offer for sale or distribute a magazine bearing the name “Hairdressers Journal Asia” or any other name confusingly similar thereto”.  However, that is a narrow and limited undertaking and does not go far enough.  It does not give the plaintiff the protection that it is entitled to.  There is actual evidence of confusion by members of the public between HJA and HJI as shown in the undisputed evidence of Michael Hancock at para 88 of his affidavit.

25.I am satisfied that damages would not be an adequate remedy for the plaintiff.  The evidence shows that the plaintiff has plans to have a magazine in Asia.  It seems to me that unless the defendants are restrained in the terms of para 1 of the summons the exclusivity of the plaintiff’s HJ and HJI name and mark will be lost or seriously diluted.  Damages would not, in my view, be an adequate remedy for the plaintiff.

26.I also bear in mind that an interim injunction has been in place against the defendants’ since 24 June 2005.  There is no evidence that this has caused the defendants any loss or damage.  It seems to me that if an interlocutory injunction were granted to the plaintiff until after judgment it is highly unlikely that the defendants will suffer any damage as a result of the interlocutory injunction.

27.In the circumstances I made an order in the terms of para 1 of the plaintiff’s summons.

28.Paras 2 and 3 of the plaintiff’s summons were in relation to an order for delivery up of all items in the possession, power, custody or control of the defendants the continued use of which would offend the injunction.  It was, in my view, appropriate to grant the relief sought to the plaintiff.

29.Paras 4 and 6 of the plaintiff’s summons sought discovery from the defendants as set out therein.  In view of the undisputed evidence that the defendants continued to trade on the reputation and goodwill of HJ and HJI even after the announcement of the change of name of their magazine it was, in my view, appropriate to grant the plaintiff the relief sought.  The plaintiff sought the disclosure so as to pursue other tortfeasors and to communicate with recipients of the magazines which bore the HJA name and masthead and to whom the defendants had made misrepresentations so as to disabuse them of any false impression that the defendants were connected or associated with the plaintiff.  The plaintiff wishes to set the record straight and this is a legitimate purpose in respect of which discovery should be ordered.  I therefore made an order for discovery against the defendants.

30.It was also appropriate, in my view, to make an order that the costs of the application be the plaintiff’s costs in the cause.

31.For the above reasons, I made the order as set out in para 1 above.

Mr John M Y Yan, S C, instructed by Messrs Baker & McKenzie, for the Plaintiff

Mr Albert Yau, instructed by Messrs S H Chan & Co., for the 1^st – 3^rd Defendants