Tony Marterie & Associates v. H-d Michigan, Inc

HCMP 681/2007

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 681 OF 2007

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BETWEEN

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Before : Deputy High Court Judge L. Chan in Chambers

Date of Hearing : 19 September 2007

Date of Decision : 18 January 2008

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D E C I S I O N

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1.This is the appellant’s application for directions in an appeal from a decision of the Registrar of Trade Marks.  The appellant also seeks leave to adduce further evidence on appeal.  The appellant was the owner of the Trade Mark Registration No. 19880234 (“the Trade Mark”).  The Trade Mark was revoked by the Registrar under sub-section 52(2)(a) of the Trade Marks Ordinance on the application of the respondent.  This section provides:

“	(2)	The registration of a trade mark may be revoked on any of the following grounds, namely-
		(a)	that the trade mark has not been genuinely used in Hong Kong by the owner or with his consent, in relation to the goods or services for which it is registered, for a continuous period of at least 3 years, and there are no valid reasons for non-use (such as import restrictions on, or other governmental requirements for, goods or services protected by the trade mark).”

2.The hearing of the application for revocation was before Mr Frederick Wong for the Registrar.  The appellant at that hearing denied non-use of the Trade Mark.  It filed several statutory declarations to adduce evidence of use.  The main claim of use was the manufacture of garments bearing the Trade Mark for export from Hong Kong to the US and to be sold in the US, Canada and UK.  Purchase orders, invoices and bills of lading for such goods were produced.  Some photographs of sample trousers and shirts bearing the Trade Make were also exhibited. 

3.There was another claim of use of the Trade Mark by way of sale in Hong Kong of rejected garments allegedly with the Trade Mark still on them.  This claim was not relied on before the Registrar and I say no more about it.

4.The meaning of use of a trade mark in Hong Kong ong <Mong Hong for the purpose of sub-section 52(2)(a) is extended by sub-sections 52(3)(a) and (b) of the Ordinance.  They provide:

“	(3)	For the purposes of subsection (2)-
		(a)	use of a trade mark includes use in a form which differs in elements which do not alter the distinctive character of the trade mark in the form in which it was registered;
		(b)	use of a trade mark in Hong Kong includes applying the trade mark to goods or to the packaging of goods in Hong Kong solely for export purposes.”

The Registrar’s decision

5.Mr Wong in his decision dealt with the purchase orders, invoices and bills of lading for the purpose of sub-section 52(3)(a) and (b).  He said the Trade Mark was not printed in these documents.  At the top of the purchase orders was an entry for label.  It reads “BLAST LABEL”.  There was on a few purchase orders an entry which read “Ship Inst: BLAST CATALOG”.  Some other purchase orders had entries which read “Ship Inst: HANGER PACK USA”, “Ship Inst: UNITED STATES” and “Ship Inst: APPLESEEDS CATALOG (EARLY)”.  Since there was no suggestion as to what “Ship Inst” meant, Mr Wong did not find the entry “Ship Inst: BLAST CATALOG” shed any light as to whether the Trade Mark was used for the goods.  Since the Trade Mark was not illustrated on the purchase orders, he also did not find the entry “Label: BLAST LABEL” proved anything.

6.Mr Wong also did not agree that the use of the word “BLAST” amounted to use of the Mark.  The reason being that the other distinctive elements of the Mark like the broken line device and the geometrical shapes were not there.  He concluded that the mere use of the word “BLAST” did not constitute use of the Mark in a form which differed in elements which did not alter its distinctive character in the form in which it was registered. 

7.For the above reasons, he concluded that there was no evidence of use by the appellant within the meaning of sub-section 53(2)(a) of the Ordinance.

8.Regarding sub-section 52(3)(b), Mr Wong firstly held that the undated photographs of sample garments bearing the Trade Mark on their own could not show that the use was solely for export purposes.  Even when the photographs were considered with other evidence, the appellant was only able to show that the two sample garments bearing the Trade Mark had been manufactured in Hong Kong for the appellant and were for export purpose.  Mr Wong did not want to assume that the purchase orders, invoices and bills of lading as produced relate to goods actually bearing the Trade Mark for reasons already referred to above.  He regarded these documents as of little probative value.  He therefore held that the appellant also failed under section 52(3)(b).

9.Mr Wong further held that even if there was proper evidence of the use of the Trade Mark on the goods, such evidence was scanty and did not show where the goods with the Trade Mark would go after their export.  The appellant therefore failed to establish genuine use of the Trade Mark as opposed to its internal use.

The new evidence

10.The appellant wants to adduce further evidence on appeal.  It has provided a draft affidavit by one Tony Marterie.  The appellant says that the draft affidavit is to explain and exhibit a “BLAST CATALOG”.  The items therein include some items that correspond to the samples shown in the photographs produced before the Registrar.  It further seeks to explain the purchase orders, invoices and bills of lading which have been filed regarding the application of the Trade Mark to these documents.  It also seeks leave to produce further documents for the same purpose and to exhibit photographs, design sheets and the originals of the items in the catalogue.

11.The draft affidavit itself says that its purposes are to provide clearer copies of the photographs already produced at the hearing before the Registrar, to identify the sample garments shown in the photographs and referred to in the purchase orders, invoices and bills of lading by a catalogue and samples, and to clarify and explain the use of the Trade Mark within the meaning of section 52(3)(a) on the items shown in the photographs and the purchase orders, invoices and bills of lading.

12.In particular, the appellant wants to provide colour photographs to replace the black and white photographs produced to the Registrar.  It also seeks to produce sample garments of the same style as those shown in the photographs.  They are of style model nos. IQM 40 and IQM 76.  These samples are of a different size because those shown in the photographs cannot be located anymore. 

13.Secondly, the appellant wants to produce a Spring 2003 Blast Catalogue which shows a number of Blast styles including denim shorts of model no. ING 84 and denim jackets of model no. ING 33.  The appellant also wants to produce colour photographs and actual garments of these two styles bearing the Trade Mark and the words “made in Hong Kong” and photographs of garments of other style numbers bearing the Trade Mark. 

14.For each garment style including style model numbers IQM 40, IQM 76, ING 33 and ING 84, the appellant also wants to produce a design sheet and a specification sheet which contain a drawing of the garment style, its model number and the label to be placed on the garment.  These design and specification sheets were sent to the appellant’s Hong Kong agent for use in manufacturing garments. 

15.After a factory had been chosen, the Hong Kong agent would issue a purchase order to the factory.  The purchase order would have the model number stated in it.  The appellant also seeks to produce some sample purchase orders issued to factories in Hong Kong and they include purchase orders for model nos. IQM 40, IQM 76, ING 33 and ING 84.  The purchase orders indicate that these garments were manufactured in Hong Kong factories. 

16.After the garments had been manufactured in Hong Kong, the factories would pack the garments inside containers and issue packing lists.  The appellant also seeks to produce the packing lists issued by the Hong Kong Factories for garments of model nos. IQM 40, IQM 76, ING 33 and ING 84 and their shipping orders and/or invoices relating to their shipments.

17.The documentation refers to garments of differ style model numbers and the photographs depict the garments bearing the style numbers and the Trade Mark.  I cannot tell at this stage if the new evidence can or cannot demonstrate the appellant’s genuine use of the Trade Mark in Hong Kongong KongHong  for the purpose of section 52(2)(a) of the Ordinance.  They, however, certainly appear to be relevant to this issue.

The Law

18.This court has a discretion to receive further evidence on appeal under O.55 r. 7(2) of the Rules of the High Court.  The rule provides:

“

(2)

The Court shall have power to receive further evidence on questions of fact, and the evidence may be given in such manner as the Court may direct either by oral examination in Court, by affidavit, by deposition taken before an examiner or in some other manner.”

19.Mr Shipp for the respondent has referred me to Hunt-Wesson Inc.’s Trade Mark Application (Swiss Miss) [1996] RPC 233 where Laddie J set out some factors relevant to the exercise of the Court’s discretion on admitting new evidence on appeal.  The learned Judge said at p.241, line 51 to page 242, line 24:

“	…  In my view the more appropriate course to adopt now is to look at all the circumstances, including those factors set out in Ladd v Marshall and to decide whether on the particular facts the undoubted power of the court to admit fresh evidence should be exercised in favour of doing so.  With this in mind it seems to me that in any case the following matters (and there may well be others) are likely to be relevant:
	1.	Whether the evidence could have been filed earlier and, if so, how much earlier.
	2.	If it could have been, what explanation for the late filing has been offered to explain the delay.
	3.	The nature of the mark.
	4.	The nature of the objections to it.
	5.	The potential significance of the new evidence.
	6.	Whether or not the other side will be significantly prejudiced by the admission of the evidence in a way which cannot be compensated, e.g. by an order for costs.
	7.	The desirability of avoiding multiplicity of proceedings.
	8.	The public interest in not admitting onto the register invalid marks.”

20.I am further referred to a passage in another decision by Laddie J in Dualit Ltd v Rowlett Catering Appliances Ltd [1999] FSR 865 at 870:

“

…  But proceedings before the Registry are not a dry run to test out the evidence to see which parts can be criticised so that the evidence can then be perfected for the purpose of the proper run before the High Court.  It is important for parties to realise that the function of the Registry is to examine applications and to consider oppositions, and that they must put before the Registry the material which is to be relied upon in support of their cases.

In my view, it is just as important that it is brought home to litigants that they must put the best evidence available to them before the Registry as it is to ensure that the appeal is a fair resolution of the dispute between the parties.  It appears to me, therefore, that it is still necessary for the court to consider the issue of how important the evidence is, whether it could have been put in earlier and why it was not and the weight that evidence is likely to have at the appeal.”

21.Mr Wheare for the appellant also submits that the restrictive approach set out in Ladd v Marshall [1954] 1 WLR 1489 should not apply as this is not an appeal to the Court of Appeal.  He has also referred to Miss Swiss,Julian Higgins’ Trade Mark Application [2000] RPC 321, Club Europe Trade Mark [2000] RPC 329 at 338 and Elle Trade Marks FSR [1997] 529.  Sir Richard Scott, VC said in Club Europe at p.338, line 39 to line 44:

“

I agree that the restrictive principles expressed in Ladd v. Marshall do not apply where the question is whether on a trade mark appeal to which Ord.55 r. 7(2) applies new evidence should be admitted.  I agree also that the matters referred to by Laddie J. are those that in most cases will be the important ones.  I would caution, however, against any attempt to confine the statutory discretion within a straitjacket.”

22.Mr Wheare further argues that the further evidence is very significant and necessary to support the appeal.  He stresses that this is the only opportunity for the appellant to ventilate its case.  However, the only explanation he gave for the delay in presenting the further evidence is the poor preparation by those representing the appellant before the Registrar.

23.Mr Shipp for the respondent argues that there have already been several rounds of evidence before the Registrar and there is no proper explanation for the delay as different legal advice is not a good ground.  There is also no question of multiplicity of proceedings.  He also submits that if such evidence should be admitted, the prejudice to be suffered by the respondent cannot be compensated with costs.  He also says that the allegations of use of the Trade Mark are contained in documents made in 2003 and the respondent cannot now investigate and rebut the statements that the garments were made in Hong Kong.  However, he did not elaborate on what would be the difficulties.

Decision

24.I agree that the more restrictive approach of Ladd v Marshall is not applicable to this type of application.  However, the discretion to admit further evidence must be exercised with care, otherwise the hearing before the Registrar would become a dry run.

25.In this case, Mr Frederick Wong did comment in his decision that there was scanty evidence of the Trade Mark having been actually applied to goods or the packaging of goods in Hong Kong.  He also said that the purchase orders, invoices and bills of lading were exhibited in a rather disarray manner.  In the light of the pertinence of the further evidence and that this is the last chance for the appellant to put it case in order, I would, despite the strong grounds advanced by Mr. Shipp, exercise my discretion to admit an affidavit by Mr Tony Marterie in the same form as the draft which has been produced to this court and served on the respondent.  I also grant leave to the respondent to file and serve an affidavit or affidavits in response within 28 days.  I further make an order nisi that the appellant do pay the respondent the costs of the application to adduce further evidence on appeal. 

26.In addition, I also make the directions as proposed in para. 1.3 of the appellant’s skeleton submissions with the necessary adaptation to reflect the above orders.  I also make an order nisi that the costs of the application for directions, save already ordered above, be in the cause of the appeal.

Mr Henry Wheare, of Messrs Lovells, for the Appellant

Mr Colin Shipp, instructed by Messrs So, Keung, Yip & Sin, for the Respondent