Leadwell Cnc Machines Mfg Corp. v. Global Crown International Ltd

HCA853/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO.853 OF 2005

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BETWEEN

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Before : Hon Yam J in Chambers

Date of Hearing : 23 November 2005

Date of Judgment : 23 November 2005

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JUDGMENT

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The Plaintiff Company — Leadwell

1.Dr Paul Chang (張堅浚[1]博士) obtained his PhD degree in Advanced Manufacturing Engineering Management from Southern Methodist University in Dallas, Texas.  That, of course, was some time ago already.  He was in fact a founder of the plaintiff company, one Leadwell CNC Machines Manufacturing Corporation, in Taiwan.  He had served the plaintiff company as its Chairman and CEO from the time the company was incorporated. 

2.After 20 years, the plaintiff company became an internationally known company in the trade of manufacturing computerised numerical control (“CNC”) machines.  As far as I understand, CNC machines consist primarily of a computerised numerical control system.  Both the plaintiff and the defendant herein have been described as a manufacturing company which produces vertical machining centres, turning centres, and metal-cutting systems with high-speed spindles.  This description is in one of the brochures produced by the plaintiff.  They are applicable to both parties.  It comprises a broad range of machines which require the most rigorous, critical and demanding manufacturing technology sectors, including automobile, aerospace, medical, military aircraft and missiles segment. 

3.Dr Chang resigned from and left the plaintiff company (“Leadwell”) altogether on 20 September 2000.  Shortly afterwards in December 2000, he founded his own company, one Leaderway Machinery Company Limited.  It was subsequently discovered by the plaintiff company that before Dr Chang left them, he, as the president thereof, had assigned the trade mark of the plaintiff’s company in the name of “Leadwell” to he himself in June 2000.  This trade mark of the plaintiff company has been registered worldwide by the plaintiff in Taiwan and other places all over the world, including Hong Kong, Korea, certain parts in Australia, Italy and the Mainland. 

4.Thereafter, Dr Chang completed the registration of all these assignments to himself in various places outside Taiwan and they included Hong Kong and elsewhere, except four countries, and they are Korea, certain parts in Australia, Italy and the Mainland. 

5.Sadly enough, his conduct was discovered by the authority in Taiwan and he was prosecuted and convicted by the Taichung District Court in Taiwan (臺灣臺中地方法院).  He was sentenced on 12 August 2004 to imprisonment for 2 years.  His conviction was upheld by the Taiwan Court of Appeal on 31 December 2004 but the sentence was reduced to 18 months.  In other words, Dr Chang is now at this moment serving his sentence in Taiwan. 

6.The Brief Facts and the charge could be found in the judgment of the Taichung District Court in Taiwan (at page 580) as follows :

“	主文 ：
	張堅浚連續為他人處理事務，意圖為自己不法之利益，而為違背其任務之行為，致生損害於本人之財產，處有期徒刑貳年。
	事實
	一、張堅浚於民國六十九年至八十九年九月二十日間，長期擔任「臺灣麗偉電腦機械股份有限公司」(下稱麗偉公司)…… —— [即本高院853/05一案之原告人] ……之董事長，為受麗偉公司委任處理事務之人，詎其竟基於為自己不法利益之意圖及為違背其任務行為之概括犯意，於即將卸任董事長職務之際，未經公司章程或股東會之決議或授權，亦未召開董事會提案討論，即民國八十九年六月十二日，以麗偉公司代表人之名義，致臺北市長安東路二段八十一號，「亞泰(太)國際專利商標事務所」總所處，委任不知情之商標代理人徐建興(另經臺灣臺中地方法院檢察署檢察官以九十年度偵字第一六三三六號為不起訴處分確定)，將麗偉公司於美國、挪威、日本、新加坡、香港、澳大利亞、英國、法國、德國、荷比盧聯盟、意大利、CTM歐體組織、南非聯邦、加拿大等十三個(起訴書誤載為十四個)國家或地區登記註冊之主要商標「LEADWELL」，辦理轉讓至其個人名下。”[2]

7.In this case, I said “sadly enough” in the sense that a person of such a high reputation and respect in the CNC machinery industry, has in the end fallen so low, ending in imprisonment.  But, in this case, of course, we are not dealing with Dr Chang himself.  What happened in this case is, thereafter — i.e. after Dr Chang had resigned from the plaintiff company — he founded another company in Taiwan and that is Leaderway and he became the CEO of this new CNC machines manufacturing company. 

Leaderway

8.In February 2001, another person called Mr Terrence Chang resigned from the plaintiff company and immediately he became the president and chief operation officer of Leaderway.[3]  There is a dispute by the defendant herein that Terrence Chang only joined Leaderway in May 2001 but from the brochure of Leaderway, which is produced by the plaintiff, it is clearly stated by Leaderway, themselves that Terrence Chang joined in February 2001 and served as the president thereof. 

9.Terrence Chang obtained his Bachelor of Science Degree in Mechanical Engineering and specialised in CNC machinery centres and turning centres from National Cheng Kung University, Taiwan (臺灣成功大學).  His main sphere of work in Leaderway was in international sales and marketing and he supervised and co-ordinated, (as he has said in Leaderway’s brochure), many international machine tools trade shows.  He has a broad range of experience in international sales technology and executive management, etc. 

10.In mid-2000, Dr Chang tried to assign the Australian registration of the trade mark “Leadwell” to Leaderway.  On or about 8 June 2001, Dr Chang, as assignor, assigned other registration of the trade mark in his hands to Leaderway and it was Terrence Chang acting as the president of Leaderway signing for the assignee.  By October 2002, the registration of all assignments in all other countries in respect of trade mark in the hands of Dr Chang was completed. 

The Taiwan Prohibition Order and the Defendant Company

11.The plaintiff had successfully obtained a prohibition order on or about 20 November 2001 from Taichung District Court in Taiwan as an interim order restraining Leaderway from using its trade mark.  (This order was successfully served on Leaderway later on 14 March 2002.)  Shortly after the prohibition order, on or about 7 December 2001 the defendant company herein (Global Crown) was incorporated in Hong Kong.  There was an agreement thereafter in January 2002 to assign the plaintiff’s trade mark from Leaderway to the defendant company.  However, on 14 March 2002 the Taiwan prohibition order was served on Leaderway and it was only thereafter, Leaderway on or about 16 April 2002 assigned the trade mark to the defendant company. 

12.The defendant company was a company incorporated only in December 2001 with Terrence Chang as the majority shareholder of 51 per cent and one Mr Li Tat Cheung as the other shareholder of 49 per cent.  Both of them are directors of the defendant company.  In the assignment from Leaderway to the defendant company, Terrence Chang signed as president of Leaderway and Mr Li signed for and on behalf of the defendant company as an assignee. 

The Action herein

13.The present action of the plaintiff is based on two causes of action : 

(1)	wrongful assignment of the trade mark from Leaderway to the defendant; and
(2)	passing-off of the plaintiff’s trade mark by the defendant.

By way of relief, they ask for an injunction restraining the defendant from using the plaintiff’s trade mark and an order of assignment or reassignment of this trade mark back to the plaintiff. 

14.The plaintiff alleged that the defendant had the necessary knowledge of the wrongful acts of Dr Chang in relation to those original assignments to him.  Terrence Chang, being a close colleague of Dr Chang from 1980 up to the date Dr Chang resigned from the plaintiff company and thereafter working together with Dr Paul Chang, being the founder and CEO of Leaderway, and he himself being the President and the Chief Operation Officer, must have the necessary knowledge of the first wrongful assignment from the defendant company to Dr Chang.  Further, Terrence Chang, as the majority shareholder and the director of the defendant company, had the duty to receive this piece of information from Leaderway and, on the other hand, he has the duty as a director of Leaderway to communicate the same to the defendant. 

15.This is, in fact, an application by the plaintiff for summary judgment under Order 14 against the defendant.  The plaintiff says the defendant has no defence in this action and the defendant cannot raise any triable issues at all. 

16.The question before the court now is whether the defendant, being a limited company, had the actual and if not imputed knowledge of this unlawful act.  Mr Li Tak-cheung for the defendant company filed a total of four affidavits and Mr Patrick Szeto, his counsel, submitted before this court that there were triable issues requiring a trial of the action.  The court, he submitted, should not give summary judgment at this stage and try the case on affidavits.  Obviously, the court could not and would not try the case on affidavits. 

The “Defences”

17.Now I shall turn to the various defences raised by the defendant.  I will start with how Terrence Chang and Mr Li had started the defendant company.

18.Mr Li said he first met Terrence Chang as early as 1984 in Hong Kong when they were studying their A-Level examination which, in those days, was called matriculation.  Thereafter, they went to National Cheng Kung University in Taiwan.  Apparently, they entered the university at different times and they became colleagues.  Thereafter, they were in contact with each other after graduation. 

19.In February 2001, Terrence Chang left his employment with the plaintiff and joined Leaderway, as aforesaid.  Mr Li said it was only in May the same year that Terrence Chang joined Leaderway as the overseas marketing manager.  That probably is a mistake on the part of Mr Li.  Thereafter, Terrence Chang used to accompany Dr Chang on business trips to the Mainland and, in so doing, they would be passing through Hong Kong.  (In fact, they have to pass through Hong Kong since there is no direct flight between Taiwan and the Mainland at the moment.)  It was on one of those occasions Terrence Chang introduced Mr Li to Dr Chang. 

20.In July 2001, Mr Li discussed with Dr Chang the topics of machinery industry.  Dr Chang then mentioned to him that Leadwell trade mark had already been assigned from the plaintiff to him.  Mr Li then said :

“Dr Chang did not tell me details thereof.  Given [Dr Chang’s] standing and position in the Plaintiff, there was simply no basis for me to raise an eyebrow at that time.  In particular, I have to emphasis that I was never told of the Plaintiff’s present allegation that the transfer of the subject trade mark to Dr Chang was illegal.  Further, I, of course, knew not that the subject trade marks were allegedly assigned without monetary consideration.”

21.Terrence Chang then discussed with Mr Li the possibility of setting up a production line in Mainland China.  Mr Li then, on the advice of Terrence Chang, established the defendant company in December 2001 for the purpose of CNC machines business.  He produced a business plan (which Mr Stewart K.M. Wong, counsel for the plaintiff, described as a laughable document.  I shall deal with it at a later stage).  Be that as it may, Mr Li then went on to say that at first they intended to have equal shareholdings but then : 

“Terrence Chang said that if he was one of the shareholders, he could use his reputation in the trade to help me in Taiwan.  Terrence Chang told me that if he became a partner with me, he may be able to use his standing and relationship to assist me in seeking permission to use the ‘Leadwell’ marks in my business.  He said to me that as I was a complete newcomer to the trade, it was important that there is a solid figure in the Defendant.  That was important both to attract customers and secure supplies and finances.  Terrence Chang further told me that he would not be making any financial contribution to the Defendant and would not be involved with any operation of the Defendant.  He would just offer his name to be a shareholder and director on the papers and would be a silent partner as a PR gesture.”  (Emphasis supplied)

Mr Li went on to say in the same paragraph :

“As for myself, I was interested in participating in the ‘CNC’ machinery industry because of Terrence Chang’s success in his career in promoting and marketing ‘CNC’ machines.  I considered that merely trading as agent or providing value-added services would limit the scope of development.  I was aiming at manufacturing my own brand to become leader of the market.  However, I lacked the expertise, know-how, technology support, as well as the market information regarding ‘CNC’ machines and had to rely on such expertise of Terrence Chang.”  (Emphasis supplied)

22.Stopping here for a moment, Mr Li was trying to convince the court that Terrence Chang’s position in the company is what we call a dormant partner or shareholder.  However, he is the only one who has the expertise and know-how, technology support as well as the market information regarding CNC machines.  Previously Mr Li also said that Terrence Chang was only a silent partner and he was only, on paper, a shareholder and director, albeit he was the majority shareholder and he would not be involved with any operation of the defendant.  This is what counsel for the plaintiff described as inconsistent and therefore incredible evidence. 

23.It really baffled me as to how Terrence Chang would not be involved in the operation of the defendant but, at the same time, could assist Mr Li, a newcomer, to this CNC manufacturing to the extent that the defendant company could become a manufacturing factory somewhere in Dongguan or wherever in the Mainland and start to manufacture CNC machines?  We are not concerned with factories manufacturing soft toys or that kind of things.  We are concerned with high-precision machinery with computerised and digitally-controlled machines.  How could Mr Li develop such a factory without the direct involvement of Terrence Chang, an expert in this field and he was there and then the majority shareholder of the company?  How could Mr Terrence Chang divorce himself from the operation of the defendant company and the defendant company could still get on its feet?  That is really puzzling.  That apparently is the moonshine of the defendant, which Mr Wong, counsel for the plaintiff was submitting before this court. 

24.The question before this court in this Order 14 summons is whether there is any credible defence or just a so-called moonshine defence. 

25.In respect of the assignment of the trade mark from Leaderway to the defendant, Mr Li, in paragraph 23 of his affirmation said this :

“In or about November 2001, I was informed by Terrence Chang that the Chairman of Leaderway, Mr Wu Chao-yeh, was offering to assign the “LEADWELL” trade marks outside Taiwan, Mainland China, Korea and Italy due to a change in the business nature of Leaderway.”

26.Stopping here for a moment, Mr Li did not condescend onto particulars and explain what he meant by “change in the business nature of Leaderway.”  Did he mean that Leaderway would not, from then onwards, produce CNC machines?  If not, what did he mean?  We do not know. 

27.Back to the affidavit of Mr Li in respect of Terrence Chang’s involvement with the trade mark, he further said :

“Terrence Chang told me that given he was on papers my partner, he would be, as originally intended, able to assist me in getting the ownership of the subject marks.  He said it would be much easier to negotiate with Leaderway through his connections.  At that time, I considered that to be a golden opportunity since with a well-established brand name in Taiwan, the ‘LEADWELL’ trade marks could assist me in promoting my machines in the overseas market.  Terrence Chang then introduced me to Mr Wu.  Mr Wu and I negotiated on the terms of the agreement to acquire the subject trade mark directly.  I was at that time genuinely thinking that Terrence Chang was providing me with valuable connections by being a silent partner in my company.”  (Emphasis supplied)

28.It is not comprehensive as to why Mr Li said that in the last sentence as quoted above.  Why he genuinely thought Terrence Chang was providing him with valuable connections and, at the same time, that his role was only a silent partner in the defendant company.  In the first place, it was not only Mr Li’s company; it was their company.  It was a company where Terrence Chang had the majority shareholding.  But more importantly, the contention in his paragraph 23 clearly shows that Terrence Chang must be actively involved in pushing through the assignment of Leaderway (of which company he was the president and chief operation officer), to the defendant company of which he was still the majority shareholder and director.  He was wearing two hats, save and except that the negotiation was conducted, as Mr Li has conveniently said, with the Chairman of Leaderway, Mr Wu, instead of Terrence Chang. 

29.In any event, Mr Li frankly said in the same paragraph that that was because of Terrence Chang’s connection with Leaderway and it would make the negotiation easier.  It baffled me to accept the contention by Mr Li that Terrence Chang was not actively involved in the negotiation, if that is what he wanted this court to believe, or this was a so-called arm’s length deal between two limited companies.  The difficulty of Mr Li is that he wanted to establish a case that the defendant was a bona fide purchaser without notice of Dr Chang’s unlawful assignment and therefore he must, on one hand, explain how he became involved with Terrence Chang and how he could use all his so-called life savings to set up this limited company in terms of HK$2 million.  At the same time, he would have to distance himself from Terrence Chang otherwise it would give the impression that Terrence Chang was the one, the alter ego, behind the assignment.  However, he could not have it both ways.

30.Eventually the trade mark was purchased in the sum of US$100,000.  That represented already about 40 per cent of what Mr Li himself called his whole life savings.  No evidence has ever been produced as to how the sum was paid.  Was it paid by cheque, banker’s order, telegraphic transfer or cash?  If cash, where did the cash come from?  Was it underneath his pillow or a withdrawal from the bank, and if so, when and where is the Bank monthly statement in support?  Not a single piece of paper was produced before this court to evidence such a payment. 

31.There is one further inconsistency in Mr Li’s version.  Mr Li said the factory of the defendant company was established.  The monthly outgoing was about $40,000.  That included the salary of 10 staff and rental.  Mr Wong for the plaintiff submitted that it really baffled him as to how 10 staff employed by the defendant company including Mr Li could establish a factory producing those kind of high-precision machines which are very expensive.  It is definitely also to my mind, contrary to the two brochures of Leadwell and Leaderway which advertised their establishment as an international machinery production corporation. 

32.Further, it is contrary to the document produced before this court, and that is the lease of a factory in the Mainland, showing that the monthly rental was about RMB85,000 already.  Further, Mr Wong submitted that in the fourth affirmation of Mr Li, he said that in establishing the CNC production line, machinery and other investment items totalling $7 million are said to be intended to be purchased together with a team of qualified and skilled quality controllers as well as high-quality raw materials with huge expenses to be spent on establishing a sales network.  Mr Wong doubted where the money would come from since Terrence Chang had sold all his 51 shareholdings to Mr Li on 11 December 2004 for the consideration of HK$1 and Mr Li himself had already exhausted all his savings.

33.This led Mr Wong to submit further that the only inference to be drawn would be that the defendant company could only produce CNC machines of inferior quality, “inferior” meaning inferior to the plaintiff’s products.  Eventually Mr Wong submitted that it is not only a moonshine defence, it is a dark moonshine defence in the new moon, bordering on being a fairytale. 

34.There is one further point of incredibility of the defendant’s version.  Mr Li said the factory in the Mainland was at the verge of testing the machines and he therefore produced a record sheet of three pages to evidence that they were ready to test the machines to be produced.  They turned out to be a direct Photostat copy of the test sheets used by the plaintiff except that the test result column was left blank as there was no test at all, otherwise — as we say in Chinese — the tail of the fox would be revealed. 

Bona Fide Purchaser Without Notice?

35.In respect of “lack of knowledge” of Dr Chang’s unlawful act of assignment, Mr Szeto for the defendant in his submissions tried to brighten up the defence by submitting that Mr Li and therefore the defendant company did not have the following pieces of information at all and therefore the plaintiff could not submit that :

(a)	Dr Chang got the trade mark unlawfully;
(b)	Leaderway, being Dr Chang’s company, knew it and Terrence Chang being the president and chief operation officer must have known the same;
(c)	Terrence Chang being the majority shareholder and the director of the defendant company, also knew of the wrongful acts of Dr Chang; and
(d)	eventually, the defendant got the necessary or actual or imputed knowledge of Dr Chang’s unlawful conduct.

36.In my judgment from the papers before me, I consider that the defendant knew before the assignment, at least of the Taiwan prohibition order when it was served on them and therefore knew of Dr Chang’s unlawful act before the assignment.  Terrence Chang must have known all these and, to my mind, this is entirely unarguable. 

37.The next question now before the court is twofold :

(a)

Did Terrence Chang for Leaderway have a duty to communicate the same to the defendant company?  The answer to my mind must be “yes”.

(b)

Did Terrence Chang for the defendant company have a duty to receive this information from Leaderway?  To my mind, the answer must also be “yes” even though Mr Li was trying in his affidavit to urge upon me to believe that Terrence Chang was just a silent partner, a silent shareholder, a silent director.  As aforesaid from the setting up of the defendant company, it is just moonshine to contend that Terrence Chang was not an active member of the company.

38.One would even say from all the evidence before this court, that Terrence Chang had “conveniently” sold his shareholdings in December 2004 to the Mr Li for $1 after all these things were done by Terrence Chang.  “Conveniently” meaning that Terrence Chang would have no explanation if he is still a shareholder and a director of the defendant company.  That is exactly why Terrence Chang did not make any affidavit in support of the defence, leaving Mr Li to hold the fortress or to face the plaintiff action and manoeuvred between facts presented by the plaintiff to set up a case that the defendant had no actual knowledge — not even imputed knowledge — of Dr Chang’s unlawful act. 

39.However, for reasons as aforesaid, to my mind, on the contrary, Terrence Chang was not a silent director and he was not a silent shareholder.  He was the majority shareholder and he must be the one in charge of the defendant company.  Otherwise the defendant could not get on its feet by, to quote a Chinese saying, the bare two fists or hands of Mr Li. 

40.From the evidence before this court, it is quite clear that the defendant company was used as a vehicle to receive the trade mark from Leaderway in Taiwan and, by so doing, the modus operandi was in such a way that Terrence Chang was trying to put the trade mark as far as possible out of the reach of the plaintiff company in Taiwan. 

41.Thus, in the end, I cannot say the defendant is a bona fide purchaser without notice of Dr Chang’s unlawful assignments.  They are not without notice; they are not bona fide; and, to my mind, they are not even a purchaser since there is no evidence of payment of this US$100,000 at all. 

42.In the end, I accept the plaintiff’s submission that the defendant entered into the assignment in April 2002 with the necessary knowledge of the wrongful acts of Dr Chang in relation to the original unlawful assignment and so it was under an obligation to return the same to the plaintiff.  The defendant falls squarely into the description of “constructive trustee on the basis of knowing receipt” in the case of El Ajou v. Dollar Land Holdings plc [1994] 2 All ER 685, wherein Hoffmann LJ, as he then was, said at page 700 :

“This is a claim to enforce a constructive trust on the basis of knowing receipt.  For this purpose the Plaintiff must show, first, the disposal of his assets in breach of fiduciary duty; secondly, the beneficial receipt by the Defendant of assets which are traceable as representing the assets of the Plaintiff; and, thirdly, knowledge on the part of the Defendant that the assets he received are traceable to a breach of fiduciary duty.”

Passing-off

43.The setup of the defendant was a setup trying to use the trade mark and the goodwill of Leadwell as goodwill in Leadwell was also assigned in the assignment from the plaintiff to Leaderway and in turn to the defendant. 

44.The plaintiff also sues on the second cause of action and that is passing-off the trade mark which is supposed to be used in the defendant’s machines to be produced.  Mr Wong submitted that this trade mark would be used as an instrument of fraud since it is not disputed by the defendant that the plaintiff has a reputation and goodwill in Hong Kong.  There is evidence before this court that there was an enormous sales volume of machinery in Hong Kong through its sole agent, one Protechnic Company Limited before the aforesaid assignment of Leaderway to the defendant. 

45.The plaintiff submitted that the defendant’s product would cause deception and confusion in the markets of Hong Kong.  In the words of its counsel Mr Wong, the plaintiff submitted that :

“Because of the exclusive goodwill and reputation of the Plaintiff has in the Trade Mark (not effectively denied by Li), any use by the Defendant thereof in Hong Kong, in particular in relation to machine tools, more particularly CNC machines, is most likely to cause deception and confusion.  The Plaintiff clearly has a good cause of action in passing off against any use by the Defendant of the trade mark in relation to machine tools.  The ‘classical trinity’ that make up a cause of action in passing off of, [1], reputation or goodwill, [2], misrepresentation, and [3] damage, are all unarguably present.”

These 3 ingredients or so-called classical trinity was defined in Consorzio del Prosciutto di Parma v. Marks and Spencer plc and others [1991] RPC 351 (C) 368-369. 

46.As I have said, the plaintiff’s goodwill, together with the trade mark was assigned in the assignments from Leaderway to the defendant.  Thus, eventually, if the plaintiff or anyone used the trade mark in Hong Kong, say, a purchaser purchased goods from the plaintiff company in Taiwan or elsewhere and shipped it into Hong Kong, or the plaintiff sold machines with this trade mark to a purchaser in Hong Kong, they would be sued by the defendants, i.e., both the vendor and the purchaser would be sued by the defendants in breach of trade mark and passing-off instead. 

47.In other words, the matter could be looked at from the tail-end.  Should the defendant be allowed to do so?  Should the defendant be allowed to sue this vendor and purchaser when, in the first place, Dr Chang got the trade mark unlawfully, attracting a conviction for which he is now serving a sentence of 18 months?  The answer must be “no”.  

48.Of course, the defendant at this stage would say it is not the time to decide and that the matter should go to trial.  But what is there to try in this obvious case.  I do not, in this case, for a moment consider that the defendant has any merit in its defence and it is clear to me that there is no triable issue at all from the papers before me.  I will therefore give judgment for the plaintiff. 

[Submissions re terms of order]

49.Thus, this court ordered that :

(1)	A permanent injunction is hereby granted to restrain the defendant whether acting by itself, its directors, officers, servants, agents, nominees, representatives, subsidiaries or other related companies or any of them or otherwise howsoever from doing the following acts or any of them:
	(a)	passing-off, attempting to pass off, causing, enabling or assisting others to pass off any business or products, in particular computerised numerical control machines, lathes, planers and drilling machines, not those of or connected or associated with the plaintiff, as and for the business or products of or connected or associated with the plaintiff:
		(i)	by using in connection therewith the name or mark “LEADWELL” or any name or mark containing the name or mark “LEADWELL” or any name or mark confusingly similar thereto or any colourable imitation thereof;
		(ii)	by using the name or mark “LEADWELL” or any name or mark containing the name or mark “LEADWELL” or any name or mark confusingly similar thereto or any colourable imitation thereof in relation to or in connection with any of its activities or the activities of its directors, officers, servants, agents, nominees, representatives, subsidiaries or other related companies or any of them or otherwise howsoever;
		(iii)	by misrepresenting orally or in writing that any of its products, business or activities or the products, business or activities of its directors, officers, servants, agents, nominees, representatives, subsidiaries or other related companies or any of them or otherwise howsoever is or are related or otherwise connected or associated with the plaintiff;
		(iv)	or by any other means whatsoever;
	(b)	except to comply with the order referred to in paragraph 2(a) below, and whether in Hong Kong or elsewhere, using, exploiting, selling, leasing, charging, pledging, transferring, disposing of or otherwise howsoever dealing in or with or attempting or offering to do the aforesaid, any of the trade marks referred to in the Schedule to the Writ of Summons herein (“the Registered Marks”) or the registrations thereof or any right to use or exploit any such trade marks or registrations.
(2)	(a)	The defendant do on or before on or before 7 December 2005 assign to the plaintiff its registrations of the registered marks and to execute all necessary documents; and on or before 23 December 2005 to take all necessary steps to effect and complete all such assignments and the due registrations of all such assignments in favour of the plaintiff as the registered proprietor thereof in each of the relevant trade marks office or registry at which each of the Registered Marks is registered; and
	(b)	All reasonable expenses, fees and disbursements incurred by the plaintiff in relation to any of the acts done or to be done under paragraph 2(a) above be paid by the defendant to the plaintiff within 14 days of the service of a bill or bills for such expenses, fees and disbursements by the solicitors for the plaintiff on the defendant at its registered office pursuant to Order 65, rule 5 of the Rules of the High Court, Cap. 4.
(3)	The defendant do deliver up upon oath of all products in particular computerised numerical control machines, lathes, planes and drilling machines, all copies of brochures, articles, papers, materials and things in the possession, power, custody and/or control of the defendant the continued retention, use or disposal of which by the defendant will offend against the foregoing injunctions or any of them, wherever the same is situated.
(4)	The plaintiff be entitled to elect between an enquiry as to damages and an account of profits within 21 days hereof, and upon such election there be an inquiry by a Master of High Court as to what damages the plaintiff has suffered by reason of the defendant’s acts of passing-off or an account of profits made by the defendant through such acts.
(5)	The plaintiff be entitled to elect between an enquiry as to damages and/or equitable compensation and an account of profits within 21 days after the defendant’s full compliance with paragraph 2 hereinabove, and upon such election there be an inquiry as to what damages the plaintiff has suffered by reason of the defendant’s receipt and holding of the registrations of the Registered Marks or an account of profits made by the defendant through such acts.
(6)	There be an order for discovery upon oath of all matters relating to the above.
(7)	The defendant do pay to the plaintiff all such sums which are found due to the plaintiff upon taking of the enquiry or account provided for in paragraphs 4 and 5 hereinabove together with such interest thereon as the Court shall deem just pursuant to section 48 of the High Court Ordinance, Cap. 4 or under its equitable jurisdiction.
(8)	Costs of this action including the costs of and incidental to this application be paid by the defendant to the plaintiff, to be taxed if not agreed.

Mr Stewart K. M. Wong, instructed by Messrs Deacons, for the Plaintiff

Mr Patrick Szeto, instructed by Messrs Michael Li & Co., for the Defendant