Lee Yuen Housewares Co Ltd v. Hui Chung Hing Timy

DCCJ 1149/2007

IN THE DISTRICT COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

CIVIL ACTION NO. 1149 OF 2007

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BETWEEN

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Coram : Deputy District Judge K. Lo in Chambers (open to public)

Date of Hearing : 19^th November 2007

Date of Judgment : 19^th November 2007

Date of Handing down Reasons for Judgment : 28^th November 2007

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REASONS FOR JUDGMENT

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1.This is an application for summary judgment by the Plaintiff. The judgment was given by this Court on the date of hearing. I now give my reasons.

BACKGROUND

2.The Defendant was an ex-employee of the Plaintiff and was said to have, during his employment with the Plaintiff, set up a competing business I.C.P. Company (愛斯比產品開發公司)(“I.C.P.”) and had infringed copyright of certain photos of the Plaintiff whilst marketing for the new business.

3.The Plaintiff started the present action on 9^th March 2007 and claimed against the Defendant for copyright infringement and breach of duty owed to the Plaintiff. 

4.On 9^th October 2007, the Plaintiff also seeked for summary judgment for:

(1)	That the Defendant, whether acting by himself, his servants, agents or any of them or otherwise howsoever be restrained and an injunction is hereby granted permanently restraining the Defendant from infringing the Plaintiff’s copyright subsisting in any of the Copyright Works as exhibited in Schedule I attached to the Statement of Claim filed on 9 March 2007; and/or causing, instigating, procuring, assisting, counseling, directing, enabling, encouraging or conspiring with others to do the aforesaid acts.
(2)	That the Defendant do within 7 days of the personal service of this Order upon him, deliver up to the Plaintiff’s solicitors for free disposal by the Plaintiff all documents, photographs and/or negatives, whether in hard copies or in soft copies, which are in the  possession, custody, power or control of the Defendant, the continued reproduction, retention, use, disposal, distribution or supply of which and/or otherwise howsoever dealing in or with which by the Defendant would offend against the foregoing injunction.
(3)	That the Defendant do, within 10 days of the personal service of this Order upon him, make and file an affidavit/affirmation and serve a copy thereof on the Plaintiff’s solicitors verifying that he has complied with paragraph (2) hereof and that he no longer has in his possession, power, custody or control of any of the items required to be delivered up under Paragraph (2) hereof.
(4)	That the Defendant do, within 14 days of the personal service of this Order upon him, make and file an affidavit/affirmation and serve a copy thereof on the Plaintiff’s solicitors setting forth:-
	(a)	the names and addresses of all persons, firms or companies:-
		(i)	to whom the Defendant has sold, distributed and/or supplied; and
		(ii)	from whom the Defendant has purchased and/or obtained supplies of;
		the photographs, negatives and/or documents (whether in hard copies or in soft copies) which infringe the Plaintiff’s copyright referred to in Paragraph (1) hereof, together with the full details of the respective dates of such acts and the quantities and consideration involved and do disclose in the said affidavit/affirmation the exact whereabouts of any person, firm or company known or believed by the Defendant to be in possession of any of the infringing photographs, negatives and/or documents, and further do exhibit to such affidavit or affirmation copies of all documents relevant to the aforesaid;
	(b)	all the contracts entered into by I.C.P. relating to any household, kitchenware and tableware products, including but not limited to digital timers or other related products, up to the day when the Defendant left the employment of the Plaintiff; and further disclose and exhibit all documents relating thereto;
	(c)	the names and addresses of all persons, firms or companies with whom the Defendant had been in contact during his course of his employment with the Plaintiff, with a view to supplying them with, soliciting orders for, or otherwise dealing in or exploiting any household, kitchenware and tableware products, including but not limited to digital timers or other related products, both for the benefit and/or business of the Plaintiff or for the benefit and/or business of any party (parties) other than the Plaintiff, in particular I.C.P., together with full particulars of such contacts including but not limited to the date of the contact and contents of any discussion; and further disclose and exhibit all documents relating thereto; and
	(d)	all the designs (together with the particulars including the date of creation) made by the Defendant when he was under the employment of the Plaintiff (up to 31 October 2006) and which the Defendant had not accounted to the Plaintiff, including but not limited to those the Defendant alleged to have created during his own private time.
(5)	That the Plaintiff be at liberty to elect between an inquiry as to damages (including additional damages) and an account of profits within 21 days after the Defendant has fully complied with the previous paragraph and upon such election, there be an inquiry as to what damages (including additional damages, if any) have been suffered by the Plaintiff by reason of the Defendant’s acts complained of in this Action or an account of profits made by the Defendant through such acts.
(6)	The Defendant do pay to the Plaintiff all such sums (including interests) which are found due to the Plaintiff upon the taking of the inquiry or account provided for in Paragraph (5) hereof.
(7)	That the Plaintiff be at liberty to use any of the affidavits/affirmations, documents, articles, materials or information obtained in accordance with or as a result of this Order in any manner that should be required for the protection or better 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.
(8)	That the Defendant do forthwith pay to the Plaintiff the costs of and incidental to this Action, including the costs of and incidental to this application, such costs to be taxed, if not agreed.

5.After the taking out of the present application, and few days before the call over hearing of the same, the Defendant had conceded to orders prayed under paragraphs 2, 3, 4, 5, 6 and 8.

6.The Defendant is not agreeable to the injunction order sought for under paragraph 1 nor the right by the Plaintiff to use the information etc. obtained under paragraph 4 which in effect is a Norwich Pharmacal order for the purpose of other proceedings (other than the present action).

7.These are the only issues to be resolved at this hearing.

ISSUES

Should injunction be granted as per paragraph 1 of the summons dated 9/10/2007?

8.The Defendant is agreeable to give an undertaking in terms of paragraph 1 of the summons but the Defendant objects to the grant of an injunction order. He has so indicated few days before the call over of the hearing of the present application.

9.The Defendant contended that it is trite law that a consent order made on such an undertaking and an injunction are, in effect, the same thing.  The Defendant says the remedy for breach of an undertaking is the same as for breach of the injunction.  He says there is no need for the Court to grant an injunction order.

10.In this case the Plaintiff commenced the present action on 9^th March 2007.  The Defendant had since then filed acknowledgment of service of writ of summons and defence.

11.It was only on 23^rd October 2007, i.e. 2 days before the hearing of the summons on 25^th October 2007 after Defendant has received and read the affidavit of Chung Kwok Biu of the Plaintiff, that the Defendant via their solicitors agreed to give an undertaking in terms of paragraph 1.

12.As at the date of hearing, the Defendant has not yet given such an undertaking.

13.Counsel for the Plaintiff referred me to the case of Kenny Food Manufacturing Company Ltd. v. Lee Tak Fuk Trading Company Ltd. trading as Ka Fook Discount Store (a firm) HCA 3352/2006.

14.In that case, Deputy High Court Judge Whaley said:

“	The fact nevertheless remains that to date the defendant, albeit willing to give the amended undertaking, has not in fact given any undertaking.  I note that the learned author of Kerly’s Law of Trademarks and Tradenames, 12th Ed., in discussing the appropriateness of granting injunctive relief, states that where the defendant makes an offer to give an undertaking, the plaintiff is entitled to move the court for an order embodying the offer, and to the costs even if the costs are not offered.  Furthermore:
	“	If an actual infringement is shown to have occurred, that is usually sufficient and the plaintiff is not bound to wait until it has been frequently repeated, or until warning has been given and been disregarded, for ‘the life of a trademark depends upon the promptitude with which it is vindicated’”. (page 318)
	I also bear in mind the failure of the defendant to provide information to the plaintiff about its sales of the products in question to JK Foods, until confronted with the facts by the plaintiff, gleaned from its own investigations.  In my view, it will be appropriate in all the circumstances to grant the plaintiff the injunction it seeks to restrain the defendant from passing-off its products as those of the plaintiff, and I accordingly grant a restraining order in terms of paragraph 2 of the summons”.

15.Similarly in this case, the Defendant has only offered to give the undertaking shortly before the call over hearing of the present O.14 application.

16.It is well settled principle as pronounced in the case of E.W. Savory Limited v. The World of Golf Limited [1914] Ch 566, that

“	A plaintiff whose copyright is infringed has a right to an order of the Court restraining the infringement, and is not prevented from exercising his rights by an offer of the infringer before action that he will promise not to do it again and will pay such damages as may be agreed upon.”

17.In the Colgate Palmolive Ltd. and Anor. v. Markwell Finance Ltd. and Anor. [1990] RPC 198, it was said:

“	It was a well-settled principle that, in respect of property rights such as patent, copyright, etc., a person whose right had been infringed was entitled to come to court to have his right pronounced upon and vindicated and to an injunction against the infringer.”

18.There is no special reason in this case not to grant an injunction.

19.I have no hesitation to make an order as per paragraph 1 of the summons.

(2)  Should leave be given to the Plaintiff to use the documents, affidavits, information etc. obtained as a result of discovering orders made herein for protection of the rights of the Plaintiff in Hong Kong or elsewhere?

20.The Defendant argues that proposed order under paragraph 7 is oppressive and unreasonable, that general leave to the Plaintiff to use the information and documents anywhere in the world are also too wide.

21.The Defendant further alleges that order under paragraph 7 was not pleaded in the Statement of Claim and further that the Plaintiff failed to explain the basis for seeking such relief.

22.Lastly, he argues that the prayer for order under paragraph 7 is premature before any disclosure under paragraph 4.  However, he fails to address this Court as to possible prejudice to his client had such order been made and it later revealed that there was no names disclosed under paragraph 4.

23.The Defendant here has conceded to orders under paragraph 4, which in effect is a Norwich Pharmacal Order.  I do not see really how the discovery exercise would be effective and worthwhile if the Plaintiff is not given leave to use the information obtained for protection of his rights in Hong Kong or anywhere in the world.  There is no justification for any geographical demarcation in the right of the Plaintiff to use the information in further protection of his rights.

24.Although the order under paragraph 7 is not pleaded in the Statement of Claim, surely this is part of the order consequential to the discovery exercise.

25.I do not find the order oppressive or unreasonable.

26.In fact, as Mr. Justice Waung said in the case of Hoberman Designs, Inc. v. Lien Tai Trading Company Ltd. HCA 7501/99, ‘The Court can mould the relief and the orders that it was prepared to give.’  In the Hoberman case, the Plaintiff, like the Plaintiff in the present case, seeked for orders not originally prayed for, in O.14 application.

27.Clearly, orders under paragraph 4 and paragraph 7 are sought for the purposes of protecting the Plaintiff’s rights from being further infringed and for facilitating the inquiry as to the damages.

28.Accordingly, I also grant order as per paragraph 7 of the Summons.

29.The Defendant has conceded to payment of costs under paragraph 8 of the Summons.

30.I will also give Certificate for Counsel in this case.

Representation:

Mr. Philips B.F. Wong, instructed by Messrs. Chan, Tang & Kwok, for the Plaintiff

Mr. Victor Y.W. Luk, instructed by Messrs. K.B. Chau & Co., for the Defendant