Guccio Gucci S.P.A. v. Cosimo Ludolf Gucci and Others
Read the full judgment text of HCA 1582/2008 on BabelCite. This High Court CFI judgment was delivered on 31 July 2009.
1. By a Summons dated 25 August 2008 (“ Summons ”), the plaintiff applied, inter alia , for an injunction to restrain the 1 st to 4 th defendants from committing certain acts of trade mark infringement and passing off. The Summons originally came before Deputy Judge L. Chan, who adjourned the application, as it was obvious that hearing of the matter could not be completed within the time available (the Summons was initially marked for “15 minutes” only). The Summons was subsequently set down f
Cited by 13 cases
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HCA1582/2008 IN THE HIGH COURT OF THE HONG KONG SPECIAL ADMINISTRATIVE REGION COURT OF FIRST INSTANCE ACTION NO. 1582 OF 2008 ----------------------
---------------------- Before : Deputy High Court Judge H. Wong, SC in Chambers Dates of Hearing : 5–7 November and 9–11 December 2008 Date of Decision : 31 July 2009 ---------------------- DECISION ---------------------- APPLICATIONS 1.By a Summons dated 25 August 2008 (“Summons”), the plaintiff applied, inter alia, for an injunction to restrain the 1st to 4th defendants from committing certain acts of trade mark infringement and passing off. The Summons originally came before Deputy Judge L. Chan, who adjourned the application, as it was obvious that hearing of the matter could not be completed within the time available (the Summons was initially marked for “15 minutes” only). The Summons was subsequently set down for a 3-day hearing before me. The time, however, turned out to be grossly insufficient to complete the oral arguments, and the application was further adjourned part-heard for another hearing, which lasted another 3 days. 2.It is not surprising that the original time estimated for the application was insufficient. There were quite a number of trade marks to be considered. Seventeen bundles of documents were put before the court. I was referred to a large number of authorities, and counsel’s submissions, together with the authorities cited, occupied another 6 bundles. Ms Winnie Tam SC represented the plaintiff and Mr Colin Shipp represented the 1st and 2nd defendants. The submissions of counsel were wide-ranging and insightful, for which I am grateful. 3.Before the Summons came before me, the application against the 3rd and 4th defendants had already been disposed of. I was thus only concerned with the application against the 1st and 2nd defendants. 4.In this Decision, I shall only deal with those matters that are directly relevant or material to my decision. As pointed out above, the submissions made by counsel were wide-ranging and covered many points, including some peripheral matters which are not directly material to my decision. I have considered counsel’s submissions fully and I do not intend any disrespect to counsel by not dealing with these peripheral points. THE PLAINTIFF 5.About 88 years ago Mr Guccio Gucci started a small luggage store in Florence, Italy. After World War II, Mr Guccio Gucci started operating his business in the name of a limited company called Guccio Gucci S.r.l. This became, in due course (1982), Guccio Gucci S.p.A., the plaintiff in the present action. 6.From that humble beginning, the House of Gucci, more often simply referred to as “Gucci”, has grown over the decades into a world-renowned brand in the fashion and luxury goods business and as a designer label. According to the evidence before me, Intraband, a leading branding consultancy, has continuously listed “Gucci” as one of the top 100 brands of all industries in the world since 2001, when it first started its brand evaluation. In a survey commissioned and published by AC Nielsen in 2006, “Gucci” was listed as one of the world’s “Superbrands”. According to a global report on “Consumers and Designer Brands” dated April 2008, AC Nielsen reported that they “have seen a consistent upwards trend in Gucci’s brand perception which is congruent with their adspend figures. Thanks to strong, well-targeted campaigns and media strategy, Gucci is enjoying unparalleled brand health …”. One quarter of global consumers would prefer, according to AC Nielsen’s report, to buy “Gucci” products. 7.In a press release dated 27th February 2008, the Nielsen Company (holding company of AC Nielsen) described “Gucci” as “the world’s most coveted luxury brand according to a global luxury brands survey by the Nielsen Company.” Milward Brown Optimor, another brand consulting agency, also listed “Gucci” as one of the world’s top 100 brands in its 2008 branding report. Amongst various rankings, “Gucci” was ranked number 4 out of the “Top 10 with Highest Brand Contribution”. 8.Put before me by the plaintiff was a publication entitled “GUCCI BY GUCCI”, which was first published in 2006 on the 85th anniversary of the “birth” of the House of Gucci. Apart from documenting the 85 years of history of the Gucci brand, the book has a good collection of pictures showing dignitaries and celebrities wearing Gucci products and goods all over the world. Although Mr Shipp has sought to undermine the relevance of the publication by describing it as a piece of “self-glorification”, I think the images and pictures contained in the book are in many ways self-explanatory. I have no doubt in my mind that the evidence before me shows that “Gucci” is a world-renowned, prestigious and highly recognizable brand in the fashion and luxury goods business. In 2007, Intraband has estimated the Gucci brand as having a brand value of over HK$60 billion. 9.By the end of 2007, there were 233 directly operated “Gucci” stores in 60 countries, employing more than 6,500 employees. In that year, world wide sale of Gucci products exceeded 2 billion Euros (about HK$25 billion). 10.As far as Hong Kong is concerned, the first Gucci shop was opened in the Peninsula Hotel in 1974. Presently, there are 9 Gucci stores in Hong Kong, with its flagship store in the Landmark, Central. I have mentioned above that in 2007, worldwide revenue derived from the sale of Gucci products was in the region of HK$60 billion. In that year, sales in Hong Kong contributed about HK$1.7 billion. The plaintiff also spent substantially in advertising its products in Hong Kong. Advertising expenses in 2007 alone were estimated as HK$25 million. Another HK$12.3 million was spent in 2007 on PR expenses. 11.Despite its present success, the business of Gucci has had its ups and downs. There is no need for me to detail in this Decision the history of these ups and downs. Suffice to say this: until the 1980s, the Gucci business was run by the Gucci family. After World War II, there was a period of very rapid expansion of the Gucci business between the 1950s and the 1980s. However, following a spate of unfortunate events (which included some infamous incidents of murder, tax evasion, and criminal convictions that plagued certain members of the Gucci family), and intense family squabbles, by the late 1980s and early 1990s, the Gucci operation was in disarray. In 1988, 50% of the shares of the plaintiff was sold to a Bahrain-based investment company called InvestCorp. In September 1993, InvestCorp acquired the remaining shares of the plaintiff and members of the Gucci family ceased to have any interest in the Gucci business. InvestCorp set about to successfully rebuild the Gucci brand and business significantly improved in the course of the 1990s. InvestCorp subsequently sold its shares in the plaintiff. The present owner of the plaintiff is a French conglomerate, Pinault-Printemps-Reduoute (“PPR”). THE DEFENDANTS 12.The 1st defendant is one of the great grandsons of Mr Guccio Gucci. He is the son of Mr Roberto Gucci, whose father was Mr Aldo Gucci, one of the 3 sons of Mr Guccio Gucci. The 1st defendant had been involved in the Gucci business, when it was still run by the Gucci family. He was a member of the plaintiff’s board in 1987-88, and he left the plaintiff in 1989, leaving his last position as the plaintiff’s vice-president. 13.After InvestCorp had acquired the shares of the plaintiff from the Gucci family, Mr Roberto Gucci set up his business called the “House of Florence”, which designed and sold leather goods under the “House of Florence” brand. The 1st defendant became a partner of his father’s business, and was a member of the board of the company which marketed the “House of Florence” brand. According to the 1st defendant, his “role in the House of Florence has been to develop and modify the designs in collaboration with the pattern makers and thus realize prototypes using high quality materials and craftsmanship”. 14.The 1st defendant claims that during the time when he was involved in the Gucci business, he had personally designed many products for the “Gucci” Accessory Collection. The plaintiff disputed the 1st defendant’s alleged experience as a designer while working with it, but for the purpose of this Decision, it is not necessary for me to make any finding in that regard. Indeed, in an application for interlocutory injunction, it is not appropriate for the court to resolve factual disputes based on affidavit evidence. I note that the evidence produced by the 1st defendant to support his claim as a designer is sparse—he has produced a few drawings which he claims were made by him during the time when he was working for the plaintiff, and he claims that he had helped refine the Gucci crest which is still used by the plaintiff today. Other than this, there is little evidence of the 1st defendant’s experience, let alone reputation, as a designer. More importantly, there is no evidence, and the 1st defendant does not claim, to have any reputation in Hong Kong as a designer. Accordingly, whatever might have been his designing experience while working with the plaintiff, there is no evidence before me of his having any reputation as a designer in Hong Kong. This is a matter of some importance when I consider the allegations of infringement of trade marks and passing off later in this Decision. 15.The 2nd defendant is a company incorporated in Hong Kong and carries on a brand licensing business. According to the 2nd defendant, its associated company, one World Pride Industries Limited, used to be an exclusive distributor of GUCCI leather goods in China in the years between 1992 to 1995. Another associated company called ForonTimes International Ltd was alleged to be an exclusive distributor of Gucci timepieces in China until August 1997. The plaintiff however disputes this. 16.The 2nd defendant operates a website at www.foronltd.com. In its website, the 2nd defendant claims that it is a consulting company in licensing, franchising, brand management, image building and animation production. 17.I would also mention briefly the 3rd and 4th defendants as they are involved in some of the alleged acts of infringement and passing off. The 3rd defendant is a Hong Kong company and carries on business in Hong Kong as a wholesaler and manufacturer of optical products including eyewear. The 4th defendant is also a Hong Kong company and its business is in the manufacture and sale of optical products including spectacle frames, reading glasses and sunglasses. The registered office address of the 3rd defendant is the same as that of the 4th defendant. REGISTERED TRADE MARKS OF THE PLAINTIFF 18.The plaintiff markets a great variety of products and its product range includes fashion, bags, luggage, eyewear, footwear, timepieces and jewellery. As may be expected of a world-renowned brand like Gucci, the plaintiff has used a number of marks, signs and logos to distinguish its products and has registered many of such marks, signs and logos in many countries in respect of various kinds of goods and products. The evidence shows that the plaintiff has trade mark registrations in 177 jurisdictions, with over 6,500 trade mark registrations worldwide. A list of the plaintiff’s worldwide trade mark applications and registrations has been included in the plaintiff’s affidavit in support of the Summons, which I have read. 19.I am, however, only concerned in this case with the trade marks that are registered in Hong Kong. Ms Tam in her submissions has not relied on any trade mark that is registered overseas and I shall say no more about the trade marks that are registered by the plaintiff outside Hong Kong. As far as the trade marks registered in Hong Kong are concerned, the Statement of Claim and the Summons refer to more than 230 of them but it is clear that some of the trade marks referred to are not relevant (at least at this stage) in that they bear little resemblance, let alone being identical or confusingly similar, to the signs or marks which the 1st and 2nd defendants (collectively as the “defendants”) have allegedly used. Many of the trade marks are registered in respect of goods which are clearly different from, and bear no similarity to, the goods or products allegedly marketed by the defendants (see Annex A to the Statement of Claim and also the Summons). Mr Shipp in his submission criticised the plaintiff for failing to identify as to what sign used by the defendants has allegedly infringed which registered trade mark(s) of the plaintiff. He lamented what he described as the “unenviable task of trying to dig out what registered trade mark the plaintiff is relying on in respect of each alleged infringing act.” He submitted that such a task should not be placed on the shoulder of the court or the defendants. 20.There is some justification to Mr Shipp’s criticism. But one must not take the same too far. In my view, although the Statement of Claim could have been more precise and specific, and care could and should have been taken to avoid overloading the same by including references to marks which are not relevant, it cannot be said that the Statement of Claim has not sufficiently pleaded the plaintiff’s case. Paragraph 27 of the Statement of Claim has set out in table form the marks used or adopted by the defendants which are alleged to be identical and/or confusingly similar to the marks of the plaintiff, which are juxtaposed for comparison in the table. When the table in paragraph 27 is read with paragraphs 63 to 70 of the Statement of Claim, and the alleged wrongdoings of the defendants pleaded in paragraphs 28 to 45, it should be quite clear to the defendants what the case of the plaintiff is in relation to trade mark infringement. 21.Moreover, in the course of her reply submission at the adjourned hearing, Ms Tam offered to provide the court and Mr Shipp with a further “Trade Mark Table” that would summarise the alleged infringing signs or marks of the defendant against the corresponding marks of the plaintiff said to be infringed, at the same time identifying the particular acts of infringement and the goods in relation to which the signs or marks complained of were used by the defendant. The Trade Mark Table was subsequently provided by the plaintiff’s solicitors and Mr Shipp has had the opportunity, and did, respond to the same by written submissions. 22.The Trade Mark Table submitted by the plaintiff’s solicitors refers to about 50 registered trade marks only. This represents a drastic reduction of the number of trade marks set out in paragraph 1(a) and Annex A of the Summons. Ms Tam in her written submission stated that “in order to find a serious issue to be tried on trade mark infringement … [the plaintiff] recognizes that the Court should not be troubled with examining each and every registration, so the nearest ones are now picked for expedience”. I take this to mean that the trade marks referred to in the said Trade Mark Table are the closest that the plaintiff can get on the evidence in support of its case of trade mark infringement, and if the court is not satisfied that the same are sufficient to give rise to a serious issue to be tried, the other trade marks referred to in Annex A of the Summons would not be sufficient either. Accordingly, on the issue of trade mark infringement, I shall proceed on the basis of the trade marks referred to in the Trade Mark Table. 23.Annexed to this Decision is a table (the “Annexed Table”) which sets out the registered trade marks relied upon by the plaintiff (“plaintiff’s Trade Marks”), the relevant registration numbers, the signs or marks used by the defendants which are alleged to be infringing, and the goods covered by the relevant trade mark registrations that have been identified by the plaintiff as relevant to its claim. SIGNS AND MARKS USED BY THE defendants 24.The 1st defendant himself is the registered proprietor of the mark “COGU”, which is registered in Hong Kong under Trade Mark registration Nos. 300535248 and 300994564 for Class 9 and Classes 18 and 25 respectively. He is also the applicant of Hong Kong Trade Mark Application No. 301040390 for an “interlocking” mark in Classes 18 and 25. For a sample of this “interlocking” mark—see the mark designated as “D1’s Interlocking CG Mark” at p. 4 of the Annexed Table. 25.“COGU” is an amalgamation of the first syllables of “Cosimo” and “Gucci’, being the first and last name of the 1st defendant. I have mentioned before that the 1st defendant is a partner of his father’s business, which marketed goods under the “House of Florence” brand. The 1st defendant has also started his own business in Japan selling watches, fashion accessories and pet products under the brand name “COGU”. In or about mid-2008, the defendant decided to launch the COGU brand in Hong Kong. He did so by teaming up with the 2nd defendant, and licensed to the 2nd defendant as the head-licensor the use of the “COGU” mark. The 2nd defendant was a head-licensor as it was free to sub-license the use of the mark to other licensees. For example, the 3rd defendant was a sub-licensee of the 2nd defendant in respect of eyewear products (copy of a Merchandise License Agreement dated 24 October 2007 made between the 2nd defendant as the “Master Licensee” and the 3rd defendant as the “Licensee” has been produced in evidence, which I have studied). According to the 2nd defendant, it had also appointed another licensee for bag products. Apart from using the “COGU” mark, other signs and marks were also used by the defendants in the marketing of the 1st defendant’s products. The plaintiff complains that the signs and marks used by the defendants were identical or otherwise confusingly similar to various trade marks that have been registered by the plaintiff in Hong Kong. I have set out in the first column of the Annexed Table the signs and marks used by the defendants complained of by the plaintiff (collectively as the “alleged Infringing Marks”). 26.The circumstances in which the alleged Infringing Marks were used are briefly summarized in the paragraphs below. ADVERTISEMENTS 27.Two advertisements appeared in two local variety magazines, namely, the “Sudden Weekly” and “Oriental Daily” in early June 2008. Both advertisements featured eyewear products which were stated to be solely distributed in Hong Kong and Macau by the 3rd defendant, and a customer hotline was given in the advertisements. 28.The advertisement in the Oriental Daily featured a man wearing a pair of spectacles. On the arm of the spectacle, a pattern in the form of what I call “D1’s CG Monogram-1” (see p. 7 of the Annexed Table) was used. At the bottom of the advertisement appeared the word “COGU” in big capital letters. Below the word “COGU” is the word “ITALY” (in smaller fonts), and further underneath were the words “designed by COSIMO GUCCI”. 29.The advertisement in Sudden Weekly featured a woman wearing a pair of spectacles. Like the advertisement in Oriental Daily, the words “COGU” and “designed by COSIMO GUCCI” appeared at the bottom of the advertisement in similar manner. 30.I have also seen pictures (produced by the 2nd defendant in an affidavit of Miu Ka To) of some advertisements put up at bus stops. In these bus-stop advertisements, the “COGU” mark was shown prominently, and a photograph of the 1st defendant was displayed either next to or below the “COGU” mark, with the name “Cosimo Gucci” shown underneath the photograph. 2nd DEFENDANT’s WEBSITE 31.I have referred to the 2nd defendant’s website www.foronltd.com (“D2’s Website”) above. In that website various signs and marks were used as follows :
Press conference 32.On or about 21 July 2008, a press conference was held in Hong Kong to promote the COGU products. The press conference was jointly organised by the 1st and 2nd defendants. I note that the email (I have seen a sample which was sent to one Christy Ng of Hong Kong Tatler) sent to the press media by one Karley Communications Ltd (a company said to be responsible for carrying out the 2nd defendant’s promotional activities for “COGU” products) announcing the press conference merely described the 1st defendant as the great grandson of “Cuccio Gucci” [sic], creator of the world-renowned brand Gucci. The covering email did not even mention COGU at all. What was highlighted was the connection between the 1st defendant and Gucci—emphasis was given to the fact that the 1st defendant was the great grandson of the creator of the Gucci brand. In noting this, I have not overlooked that the press release attached to the email did mention COGU and the fact that the family business of Gucci had been acquired by “outsiders”. However, anyone reading the email without reading the attachment would necessarily form the impression that the press conference was connected with Gucci. One would have to read the contents of the mail attachment to find out that COGU was involved. 33.I have seen certain photographs taken at the press conference. There was a catwalk show with models wearing and carrying various COGU products (eyewear and bags) against a backdrop which displayed (apart from D1’s Interlocking CG Mark, placed to the “COGU” mark) the following words in a very prominent manner :
34.The press conference and catwalk show had generated a certain amount of press report. I have seen the newspaper clippings covering the event. From the newspaper clippings that I have seen, it would appear that the products worn or carried by models on that occasion carried various signs or marks. It was pleaded by the plaintiff that these signs or marks included “COSIMO GUCCI”, “COGU”, “COGU ITALY”, and D1’s Interlocking CG Mark. The pictures that I have seen, including those contained in the newspaper clippings, are not very clear in showing up the signs and marks used on the eyewear and the bags. I am therefore unable to see clearly what exactly were the marks used on the products displayed in the catwalk show. I do note that a lot of the media coverage that followed the press conference did make reference to the “Gucci connection”, and the fact that the COGU products were being marketed or promoted by the 1st defendant who was a member of the Gucci family and a descendant of the founder of the Gucci brand. Other promotional activities 35.In or around mid-July 2008, one Shirley Ngan, the marketing manager of the 2nd defendant, provided to an investigator engaged by the plaintiff a product leaflet. In the product leaflet, various timepieces and garment products were shown. However, the pictures are not very clear and I have some difficulties in seeing what exactly are the marks or signs used in the products shown. However, what is clear is that the product leaflet displayed the D1’s Interlocking CG Mark, the “COGU” mark, and the words “designed by Cosimo Gucci” in various places. A family tree of the Gucci family was included in the product leaflet, again showing Guccio Gucci as the head of the family tree, and the 1st defendant and his father are featured prominently in family tree. The “COGU” mark and D1’s Interlocking CG Mark was shown below the 1st defendant’s name in the family tree. Style Guide 36.Although not pleaded by the plaintiff in the Statement of Claim, the evidence filed by the 2nd and 3rd defendants in these proceedings disclosed the existence of a Style Guide—a kind of manual which contained detailed specifications of various marks and signs to be used on COGU products and provided by the 2nd defendant to its licensees, including the 3rd defendant, to follow. There are 2 versions of the Style Guide in the evidence—one version was produced by the 3rd defendant and a “more recent” version was produced by the 2nd defendant. There are some differences between the 2 versions, but for the purpose of my decision in this application, the differences do not matter. It is not entirely clear how the Style Guide was prepared. All that was said by the 2nd defendant in this regard was that “the 1st defendant instructed the 2nd defendant with regard to the type of brand image and design concept that was required for ‘COGU’ products. In turn, the 2nd defendant then presented the concept in material form, including a manual known as the Style Guide”. 37.The Style Guide contains the specification of various signs or marks to be adopted by the licensees for use on the COGU products. This included, inter alia, the sign or mark “COGU”, “designed by Cosimo Gucci”, the D1’s Interlocking CG Mark, the D1’s horse-bit Pattern Mark, and the D1’s CG Monogram-2 (see, p. 7 of the Annexed Table). It is alleged by the defendants that the horse-bit Mark had subsequently been removed from the Style Guide, although it is not clear when that was done. Trap orders 38.On or about 24 June 2008, a pair of sunglasses was sold by the 4th defendant to an investigator engaged by the plaintiff. The sunglasses sold to the investigator bears the pattern (in the form of D1’s CG Monogram-1) and the mark “COGU” on the temple of the sunglasses. There was a card accompanying the sunglasses sold to the investigator. The pattern mark, namely, D1’s CG Monogram-1, was printed on the card, together with the “COGU” mark and the words “designed by COSIMO GUCCI”. 39.It was alleged by the plaintiff that a Mr Benjamin Chan had orally represented to the investigator that the brand “COGU” was in fact “GUCCI” and that the “COGU” sunglasses sold to him was the same as “GUCCI” products. It was alleged that Mr Chan referred to the “COGU” brand as “GUCCI COGU”. This allegation was however denied by the 3rd defendant. Indeed the 3rd defendant claimed that it had never authorised the 4th defendant to sell “COGU” eyewear and alleged that the pair of sunglasses sold to the investigator was a brand of eyewear called “Nagasaki”. This does not appear to me to be a credible story. The evidence shows that a day later, in an email sent by Mr Chan to the investigator, Mr Chan confirmed to the investigator that “COGU” was a brand of “GUCCI”. Faced with such documentary evidence, the 3rd defendant obviously had difficulty in explaining the email of Mr Chan. In an affirmation filed on behalf of the 3rd defendant, one Mr Cheng Kin Kwok could only say that he “did not understand” why Mr Chan would say such things in the said email to the investigator. 40.In these circumstances, the plaintiff claims that the defendants have wrongfully infringed its right as the proprietor of the plaintiff’s Trade Marks . Relying on essentially the same facts, the plaintiff further claims that the defendants have wrongfully passed off the COGU products as that of the plaintiff. The present action was accordingly commenced on 25 August 2008, followed by the issuance of the Summons for interlocutory injunctions as mentioned above. THE TEST OF AMERICAN CYANAMID 41.It is now well-settled that the American Cyanamid principles apply equally to applications for interim relief in trade mark and passing off cases (see, e.g. County Sound v Ocean Sound [1991] F.S.R. 367). However, in cases where it is clear that the outcome of an application for interim relief will in effect dispose of the entire action, or where it is clear that the consequence of the grant of an injunction is such that the defendant will have to abandon the alleged Infringing Marks permanently and there is no or little possibility of the action going to trial, the American Cyanamid principles may not be appropriate. In such cases, the court “may have to do the best it can to assess the merits and grant or refuse an injunction based on its conclusion” (see, NWL Ltd v Woods [1979] 1 W.L.R. 1294, Kerly’s Law of Trade Marks and Trade Names (14th ed.), 19-087 and the cases cited in footnote 37 therein). 42.In the present case, Mr Shipp has, in his 1st written submission filed before the hearing, sought to argue that the grant of an injunction would really mean an end of the defendant’s alleged Infringing Marks and argued that the plaintiff has to do better than merely showing a serious question to be tried. This argument was not pursued by Mr Shipp in his oral submissions made at the hearing. In my view, Mr Shipp was clearly right in not pursuing this argument. There is no evidence before the court to show that the present case is one whereby the grant of an injunction would in effect decide the whole action, or that it would effectively spell the end of the case for the defendant, so that there is no real possibility of a trial. In my view, the present case is one to which I should apply the ordinary American Cyanamid principles. 43.It follows that I should first consider whether there is a serious issue to be tried. If there is, I should proceed to consider whether the plaintiff would be adequately compensated by an award of damages if it should succeed at trial. If damages are adequate compensation and recoverable from the defendants, no interlocutory injunction should normally be granted. If its loss is irreparable and would not be sufficiently compensatable by an award of damages, I should consider the balance of convenience between the parties before deciding whether the grant of an interlocutory injunction is appropriate in this case. TRADE MARK INFRINGEMENT Trade Mark Ordinance (Cap. 559) 44.Section 14 of the Trade Mark Ordinance (“TMO”) provides that the owner of a registered trade mark has exclusive rights in the trade mark which are infringed by use of the trade mark in Hong Kong without his consent. The acts constituting infringement of a registered trade mark, if done without the consent of the owner, are specified in section 18 (infringement of registered trade mark) but are subject to, inter alia, the exceptions specified in section 19 (exceptions to infringement). 45.Section 18 of TMO provides, inter alia, as follows :
46.I will also set out section 19(1), (2) and (3)(a) of TMO, as they are also relevant to my consideration :
47.The TMO is modelled upon the U.K. Trade Marks Act 1994 subject to some slight modifications. The 1994 Act implemented the First Council Directive 89/104/EEC (the “1989 Directive”) adopted by the Council of the European Economic Communities on 21st December 1988 “to approximate the laws of the Member States [of the European Union] relating to trade marks”. The 1994 Act effected some significant legislative changes to the previous law based on the Trade Marks Act 1938 (which was repealed on 31st October 1994). As the TMO is modelled upon the 1994 Act, which in turn follows the 1989 Directive, decisions of the European Court of Justice (“ECJ”) on the interpretation of the 1989 Directive, made upon references by the courts of the Member States, are relevant and of assistance to the interpretation of the TMO. Infringement under section 18(1) 48.Section 18 provides for the conditions whereby the use of a “sign” may be considered as infringing a registered trade mark. There is no statutory definition of the word “sign”, but section 3 of TMO defines a “trade mark” by reference to a “sign”, namely, any sign which is capable of distinguishing the goods or services of one undertaking from those of other undertakings and which is capable of being represented graphically. In Philips v Remington [1998] R.P.C. 283 at 298, Jacob J (as he then was) held that a wide meaning should be given to the word “sign”. A “sign” is anything which can convey information. I do not understand counsel in this case to disagree on this. 49.The alleged Infringing Marks are clearly capable of conveying information. They are therefore signs within the meaning of section 18 of TMO. 50.There can be little doubt that on the facts of the present case, the alleged Infringing Marks were used by the defendants “in the course of trade or business”. In his submissions, Mr Shipp has not contended otherwise. 51.In considering whether there is infringement based on section 18(1) of TMO, I would need to consider if any of the alleged Infringing Marks is identical to any of the plaintiff’s Trade Marks. 52.In SA Societe LTJ Diffusion v Sadas Vertbaudet SA [2003] F.S.R. 34, the ECJ gave guidance as follows :
53.The guidance of the ECJ was criticised by Jacob LJ in Reed Executive PLC v Reed Business Information Ltd [2004] R.P.C. 40 as “opaque”. “On the one hand the criterion of identity ‘must be interpreted strictly.’ On the other the court is to allow for the ‘imperfect picture’ of that notional construct ‘the average consumer’. This latter is a concept more aptly related to the question of whether there is a likelihood of confusion between an accused sign and the registered mark, namely the Art. 5.1(b) question.” (see, Reed, [25], per Jacob LJ). 54.Be that as it may, it is tolerably clear from the judgment of the ECJ that a strict interpretation should be adopted in considering the question whether an alleged infringing sign is identical to a registered mark. Although the court is to allow for the “imperfect picture” of the average consumer (whenever I use the term “average customer” in this Decision, I am referring to one who is reasonably well-informed, reasonably observant and circumspect), it is only where the differences are truly minute and insignificant that they may be ignored (see, [50] of the Advocate General’s opinion at [2003] F.S.R. 1, cited in [29] of Jacob LJ’s judgment in the Reed case). As observed by Jacob LJ, “[a]s a matter of policy there is no reason to suppose that the [ECJ] meant to soften the edges of ‘strict identity’ very far. For even if a sign and mark are not identical for the purposes of Art. 5.1(a) if there is a likelihood of confusion it will be caught by Art. 5.1(b) … It would make no sense if, once such a mark were registered, a visually different but identical word device mark were treated as identical.” (see, Reed, at [27] and [30]). 55.I respectfully agree with Jacob LJ. In my view, what is required by section 18(1) of TMO is “strict identity”. There is clearly a difference between marks which are similar (or confusingly similar), and those which are identical. To construe section 18(1) flexibly so that it applies to signs and marks which are not “strictly identical” is to blur the distinction between section 18(1) and section 18(3). The distinction is important. Unlike the case of section 18(3), where section 18(1) is engaged, no proof of likelihood of confusion is required. In my view, it is only where the difference between the sign and the mark is so minute and so trivial as to be “wholly insignificant” that they are to be considered “identical” for the purpose of section 18(1). 56.I therefore look for strict identity between the alleged Infringing Marks and the plaintiff’s Trade Marks. Subject to the “added matter principle” discussed below, I see no such strict identity. “Added matter principle” 57.Ms Tam prays in aid of the so-called “added matter principle” in support of her submission that the word marks or signs (e.g. the words “designed by COSIMO GUCCI” or “COGU by COSIMO GUCCI”) used by the defendants are in fact identical with the word marks of the plaintiff. 58.Take for example the word sign “designed by COSIMO GUCCI”. Ms Tam submits that all the words before the word “Gucci” are added matters and are required by the added matter principle to be ignored. Once ignored, what remains of the word sign used by the defendants is the word “Gucci”, which is identical to the trade mark of the plaintiff. There is then an infringement under section 18(1). 59.Mr Shipp disagrees with Ms Tam and argues that the added matter principle has been discarded by modern jurisprudence and is not applicable to the present case. 60.It is necessary to begin by examining the ambit of the added matter principle. In Saville Perfumery Ltd v. June Perfect Ltd. and FW Woolworth Ltd. [1941] 58 R.P.C. 147 at 161, Sir Wilfred Greene MR put the principle as follows :
61.After the 1994 Act had come into effect, the English courts continued to apply the principle in applying the 1994 Act. Thus, Jacob J (as he then was) in the case of Origins Natural Resources Inc. v Origin Clothing Ltd [1995] F.S.R. 280 at 284 held that section 10 of the 1994 Act (the U.K. counterpart of section 18 of TMO) “requires the court to assume the mark of the plaintiff is used in a normal and fair manner in relation to goods for which it is registered and then to assess a likelihood of confusion in relation to the way the defendant uses its mark, discounting added matter or circumstances”. It should be noted that this case was actually a section 10(2) case as the sign complained of was not identical with the registered trade mark. 62.In British Sugar PLC v. James Robertson & Sons Ltd [1996] R.P.C. 281, Jacob J held that the rule as stated by Greene MR in Saville Perfumery is the same under the 1994 Act (at p. 293). There the plaintiff was the registered proprietor of the mark “TREAT” for dessert sauces and syrups. The defendant launched a sweet spread labelled “Robertson’s Toffee Treat”. Applying the added matter principle the learned judge held that the first two words in “Robertson’s Toffee Treat” were added matter and should be discounted, so that the defendant’s sign was to be treated as identical to the plaintiff’s mark (at p. 294). 63.In Decon Laboratories Ltd v Fred Baker Scientific Ltd [2001] R.P.C. 17, the claimant was the proprietor of a range of trade marks all of which included the mark “Decon”. The defendants sold products under a range of marks which also included the mark “Decon”. However, save for the inclusion of the word “Decon”, none of the defendant’s composite marks were identical with any of the composite marks used by the claimant. The defendant’s principal product was “Decon-Ahol” while the claimant’s principal product was “Decon 90”. Relying on Saville Perfumery and British Sugar, Pumfrey J held that the claimant’s marks and the defendants’ signs were identical and there was infringement under section 10(1) of the 1994 Act. The learned judge explained his view as follows (see [9] of the judgment) :
64.It will be seen from the passage cited above that Pumfrey J’s conclusion is based on his view that the suffixes to the word “Decon” as used in the defendants’ signs were of no trade mark significance at all—the suffixes merely referred to the nature and quality of the goods and could not distinguish the goods from those of the registered proprietor. For that reason, the suffixes should be ignored and the defendants’ signs were identical with the claimants’ marks. 65.In Aktiebolaget Volvo v. Heritage (Leicester) Limited [2000] F.S.R. 253, the claimants owned various registered trade marks including the word “Volvo” registered in respect of the maintenance and repair of vehicles. The defendant put up signs at the entrance of his garage and also on its letterhead which read “Independent Volvo Specialist”, with the words “independent” and “specialist” in much smaller lettering than the word “Volvo”. It was held by Rattee J. that the words “independent” and “specialist” should be ignored, and the defendant’s sign is identical with the plaintiff’s registered trade marks. At p. 259 of his judgment, the learned judge held :
66.With respect to Rattee J., I am of the view that so formulated, the principle has been stated too widely. It seems to me that in a case where it is alleged that the defendant’s sign is identical with the plaintiff’s mark, it is necessary firstly to identify what precisely is the sign of the defendant to be compared with the plaintiff’s mark (see, Reed, [33]). Section 18(1) requires the alleged infringing sign to be compared with the registered mark and no such comparison could be made without first identifying what exactly is the defendant’s sign. In a case where additional words or materials are used by the defendant together with the word mark of the plaintiff, it is necessary to determine whether the additional words or materials form part of the sign of the defendant. Using the same word identical to the plaintiff’s word mark, in my view, does not per se constitute infringement, prima facie or otherwise. One must look at the whole context in which the words are used before deciding what constitutes the defendant’s sign. Once the defendant’s sign has been identified, it can then be compared with the plaintiff’s mark to see if the two are identical (section 18(1)) or confusingly similar (section 18(3)). And it is at this stage that the added matter principle comes in. If the defendant’s sign that has been identified is found to be identical to the plaintiff’s mark, the defendant cannot rely on matters outside the offending sign to escape liability for trade mark infringement (matters outside the offending sign may, however, be sufficient to enable the defendant to escape liability for passing off : see, for example, Julius Samaan Ltd v Tetrosyl Ltd [2006] F.S.R. 42). 67.In many cases what is the defendant’s sign should be obvious and the elements that constitute the sign can be discerned easily. There may however be more difficult cases. If, for example, the defendant uses a word that is identical to a word mark of the plaintiff, but adds additional words or materials to it, it would be necessary to see if the additional words or materials form an integral part of the sign. Whether the additional words or materials form an integral part of the sign would depend on the context—e.g. if they are presented in such a way that they are not in the same field of vision as the word or words that are identical to the plaintiff’s marks, or in such small print that makes them difficult to discern, or in such form or context that makes the additional words or materials totally devoid of any trade mark significance, the additional words or materials may not form part of the sign and can be ignored. A good example is the Volvo case before Rattee J., where the words “independent” and “specialist” on the two sides were in much smaller lettering than the word mark “Volvo” in the middle. Moreover, in the context in which the sign was used, the words “independent” and “specialist” are clearly of no trade mark significance at all—they are not words that serve to qualify the word “Volvo”, nor are they words that purport to perform the function of distinguishing the goods or service concerned, in the way a trade mark is. They are words that are purely descriptive in nature, and are of no trade mark significance at all. Rattee J. was thus clearly correct in ignoring the additional words, although the way he formulated the principle at p. 259 of his judgment was, in my view, too broad. In taking that view, I am aware that in the case of O2 Holdings Ltd v. Hutchison 3G Ltd [2006] EWHC 534 and [2006] R.P.C. 29, eminent U.K. counsel conceded at first instance that the formulation of Rattee J was correct (see, [111] of the judgment of Lewison J). 68.A similar example may be found in the case of Bayerische Motorenwerke AG v. Deenik [1999] E.C.R. I-905, where the words complained of were “BMW specialist”, “Specialised in BMWs” and “Repairs and maintenance of BMWs”. The ECJ proceeded on the basis that the defendant’s sign was just BMW. As Jacob LJ explained in the Reed case, the ECJ proceeded on the basis that the other words in context were wholly devoid of trade mark significance (see, Reed, [34]). 69.The case of BP Amoco Plc v John Kelly Ltd. [2002] F.S.R. 5, cited to me by Ms Tam is, in my view, consistent with what I set out above. There the plaintiff sued for, inter alia, infringement of trade mark, relying on their trade mark registrations that gave it the exclusive right to use the colour green as the brand identifier of service stations in U.K. The defendant also operated roadside filling stations, which featured the same colour green as that of the plaintiff. However, while the plaintiff’s stations bore the logo “BP”, the defendant’s stations bore the logo “TOP”. However, as found by the court, a motorist driving at speed would not be able to see the defendant’s logo, and might be attracted by the green coloring to pull over to buy petrol. By the time he had slowed down, and realised that it was not a BP station, he would be inclined to continue his manoeuvre and buy petrol from the defendant. The Court of Appeal of Northern Ireland, relying on a chain of cases that affirmed the “added matter principle”, held the plaintiff to succeed in its claim for infringement. In my view, the judgment of the Court of Appeal of Northern Ireland is perfectly consistent with what I said above. On the facts, the logo of the defendant was not part of the sign in that it could not be seen by motorists driving at speed, and they would be misled by the defendant’s sign (i.e. the use of the colour green on its canopy, signage etc.) into thinking that it was a BP station. The added material, namely, the logo “TOP” was not part of the sign and was thus rightly ignored for the purpose of trade mark infringement. 70.Similarly, the judgment of Kitchin J in Julius Samaan (supra), also cited by Ms Tam, is fully consistent with what I said above. In that case, the learned judge when considering trade mark infringement ignored the additional materials contained in the packaging of the allegedly infringing product. He, however, did not ignore the additional trade mark materials on the product itself (including in particular a “roundel” on the tub of a tree-shaped sign). I think the reason was clear: the learned judge clearly took the view that the additional materials on the product formed part of the defendant’s sign to be compared with the plaintiff’s mark. The additional materials on the packaging did not form part of the sign as the packaging could only be seen at the point of sale and did not distinguish the product itself—thus lacking any trade mark significance. As the learned judge observed, an average consumer seeing one of the defendant’s products hanging in a vehicle without the distinguishing material on the packaging was likely to be confused by what he saw (see, [57] of the judgment of Kitchin J). 71.On the other hand, there certainly are cases where the additional words and materials, when looked at in context, do form an integral part of the defendant’s sign, and cannot be discounted as having no trade mark significance at all. The ECJ envisaged this in the LJT Diffusion case. Referring to the ECJ decision, Jacob LJ remarked in Reed (see, [26]) :
I respectfully agree. 72.Applying the above to the word marks used by the defendant in the present case, I cannot accept Ms Tam’s submissions that the added matter principle requires me to treat the word marks of the defendant as identical to the “GUCCI” mark of the plaintiff. Take, for example, the expression “COGU by COSIMO GUCCI”. The word “COGU” and “COSIMO” in this expression are words that have no ordinary meaning in English. They are not descriptive words. An average consumer understanding English seeing such an expression used on a product would see that “COGU” is some kind of a name—although it might be a name totally unknown to him. He would also see that the word “Cosimo” is a part of the name “Cosimo Gucci”. In my judgment, just as “Harry” qualifies “Potter” (see Reed, at [26], cited above), “Cosimo” qualifies “Gucci” in the context of the expression in question. That is so notwithstanding that Harry Potter is a famous name, and Cosimo Gucci might be totally unknown in Hong Kong. The fact that “Cosimo Gucci” as a name has no acquired distinctiveness in Hong Kong may be highly relevant when one comes to consider likelihood of confusion under section 18(3) (dealt with below). That, however, is a different question altogether. 73.In the Reed case, Jacob LJ had the occasion of considering whether the defendant’s sign “REED BUSINESS INFORMATION” is identical to the plaintiff’s registered mark “REED”. At [37]–[40] of his lordship’s judgment, Jacob LJ pertinently said :
74.Similar consideration applies to the expression “designed by COSIMO GUCCI”. Even assuming that it is permissible to ignore the words “designed by” as being purely descriptive, in my view it is not permissible to ignore the word “COSIMO”. Visually the words “COSIMO GUCCI” are displayed in the same uppercase form and typescripts. Conceptually the words are presented as one name. The word “COSIMO” cannot go unnoticed by the average consumer as being part of a name. It is unrealistic and wholly artificial to ignore one part of the name, and take the remaining part only as the sign of the defendant. The name “COSIMO GUCCI” as a whole must be taken as constituting the defendant’s sign. Such a sign is not identical to the plaintiff’s mark “GUCCI”. 75.In these circumstances, in my judgment none of the defendant’s word signs or word marks are identical to the plaintiff’s “GUCCI” mark. I do not consider that there is any serious issue to be tried for infringement under section 18(1). Infringement under section 18(3) 76.As I am of the view that none of the alleged Infringing Marks are identical to the plaintiff’s Trade Marks, there can be no infringement under section 18(2). 77.I turn now to consider section 18(3). As there is no doubt that the alleged Infringing Marks are used by the defendants in the course of trade or business, what requires to be considered is whether there is a serious issue to be tried on the following :
78.At this stage, all I need to be satisfied (before proceeding further to consider the exercise of my discretion) is that there is a serious question to be tried. Principles to be applied 79.The question of similarity between the alleged offending signs and the registered trade marks is closely related to the question of likelihood of confusion. In this regard, I would gratefully adopt the summary of basic principles set out by Kitchin J in his judgment in the case of Julius Samaan (at [51]) :
80.Principles (i) and (j) above may need some explanation. The ECJ in Sabel (at [10]) alluded to 3 types of association as follows :
81.It is only the first 2 types of association, i.e. those which give rise to a likelihood of either direct or indirect confusion, that are sufficient for the purpose of infringement. Mere association which the public might make between 2 trade marks as a result of their analogous semantic content is not in itself a sufficient ground for concluding that there is a likelihood of confusion (see, Sabel at [26]). 82.As Lewison J explained in the O2 case mentioned above (at [125]) :
83.With these principles in mind, I will now examine the alleged Infringing Marks and the goods in relation to which they were used, and consider whether there is a likelihood of confusion in the sense mentioned above, always bearing in mind that at this stage I am only concerned with a serious question to be tried. Hence the views that I express below on liability of infringement are expressed in the context of my consideration of the requirement of a serious question to be tried. These views are necessarily based only on the affidavit evidence presently before me. “COGU” 84.As pointed out above, the 1st defendant is the proprietor of the “COGU” trade mark. Section 19(2) of TMO expressly provides that a registered trade mark is not infringed by the use of another registered trade mark in relation to goods for which the latter is registered. This is subject to section 53(9) of TMO, which provides that where the registration of a trade mark is declared invalid under section 53 to any extent, the registration shall to that extent be deemed never to have been made. There is no evidence before me that the 1st defendant’s registrations have been declared invalid. 85.Hence use of the “COGU” mark alone by the 1st defendant in relation to goods for which it was registered is not an infringement. The “COGU” mark is registered under Classes 9, 18 and 25, which cover, inter alia, eyeglasses, leather goods, trunks and travelling bags, and clothing. 86.In any event I cannot see any similarity, whether visual, aural or conceptual, between the “COGU” mark and the “GUCCI” mark. Visually and aurally, the two marks are vastly different. Ms Tam submits that the typescripts and fonts used for the “COGU” mark are confusingly similar and the shape of the letter C is “remarkably close” to the letter G in the “GUCCI” mark. I cannot agree. Whatever typescripts are used for the “COGU” mark, the overall visual impression of the mark is very different from the “GUCCI” mark. Nor can I see any conceptual similarity between the two marks that could be noticed by an average consumer. Given that the 1st defendant and his name has no reputation in Hong Kong, there is no reason to think that an average consumer seeing the “COGU” mark will imagine that it is a combination of the first two letters of the first and last name of the 1st defendant, and somehow infer from that combination an association with “GUCCI”. That seems to me to be very far-fetched. 87.What I said above, however, only applies to cases where the “COGU” mark is used alone. Where that mark is used together with other words (e.g. “COGU designed by COSIMO GUCCI”, or “COGU by COSIMO GUCCI”), the position may be very different. “COSIMO GUCCI” and “designed by COSIMO GUCCI” 88.“Cosimo Gucci” is, of course, a name. It is in fact the name of the 1st defendant. But it is a name that has no reputation in Hong Kong, whether as the name of a brand, the name of a person, or as the name of a designer. I think it is fair to say that until the 1st defendant started to launch his business in Hong Kong in mid-2008, his name was wholly unknown in Hong Kong. As a name, “Cosimo Gucci” has no reputation to an average consumer in Hong Kong. 89.“Gucci”, on the other hand, is widely known in Hong Kong as the brand name. When the word is used as a mark on the plaintiff’s products, including the goods in relation to which the plaintiff has trade mark registrations, the mark is distinctive as a mark of origin—it distinguishes the goods as originating from the plaintiff. It is not necessary that the average consumer knows the name of the plaintiff, that it is an Italian company, or that it is presently owned and controlled by PPR etc. The average consumer may not know any of these—and none of these is unnecessary for the “GUCCI” mark to be a mark of origin. When the average consumer sees the mark used on the goods, he would recognise it as a mark that indicates the goods as originating from an undertaking responsible for the quality and design of the goods, which makes them distinguishable from goods originating from other undertakings. Put simply, the average consumer would recognise the “GUCCI” mark as a mark identifying a Gucci product. 90.“GUCCI” as a mark is, in my view, a very strong mark. The word “Gucci” has no ordinary meaning in English. The word does not describe the nature or function of the goods. The mark’s unique visual and aural effect no doubt gives the mark its “inherent” distinctiveness, and the long and extensive use of the mark in association with a great variety of products marketed by the plaintiff has given the mark an “acquired” distinctiveness which is exceptionally strong. As the brand name “Gucci” became more and more famous over the decades, the acquired distinctiveness of the “GUCCI” mark became stronger and stronger. The Gucci brand is now almost a household name in the luxury goods market, and on the evidence before me, it is extremely well-known both internationally and in Hong Kong. In these circumstances I have no hesitation in holding that there is at least a serious question to be tried that “GUCCI” as a brand name and as a trade mark is strongly distinctive of the plaintiff’s products. 91.In this regard, I agree with the following remarks made by Sir Nicholas Browne Wilkinson VC (as he then was) in his decision Guccio Gucci SpA v. Paolo Gucci ([1991] F.S.R. 89), where the learned judge said this in relation to the “GUCCI” mark :
Although these words were spoken by the Vice Chancellor on the evidence then before him, what he said is equally applicable to the case before me and what I have seen from the evidence also supports this observation. 92.The fact that the “GUCCI” mark is not descriptive of the nature or function of particular goods enables its distinctiveness to be applied to a broad range of products of very different nature. The mark is capable of being applied not only to goods which it is originally associated with, but also to completely new products and products of new design. So strong is the mark of “GUCCI” that when the same is used in a new product, or a product with a wholly new design, customers will naturally assume that the new product or new design to which the mark is applied originates from Gucci. Such an “extension” of the branding effect may take place both horizontally and vertically—horizontally when the mark is applied to other products of a different nature from those to which the mark originally applies, or vertically when the mark is applied to another line of goods of the same nature but intended to appeal to a different market, for example, a younger line, or a second male or female line. On the evidence before me, such vertical extension is quite common with famous brands—some examples are “RL by RALPH LAUREN”, “POLO by RALPH LAUREN”, “SEE by CHLOE” and “MARC by MARC JACOBS”. 93.That use of a well-known and highly distinctive mark may lead customers to assume that a new product or a new design originates from the same owner or proprietor of the mark, does not cease to apply merely because another word or name also appears in the new product or the new design. The significance of the other word or name depends on the circumstances. Where the other word or name is otherwise unknown as a mark of origin, customers will naturally associate the same with the mark that is well known to them, and will be led to believe that the other name or word is used merely to indicate that the product belongs to a secondary or extension line of the same brand. On the other hand, where the other name or word is itself famous or highly distinctive, customers may assume that the product is related both to that name and the mark—as in the cases of co-branding. So the “American Express Cathay Pacific Credit Card” will naturally be taken by the public as a credit card jointly promoted and marketed by “American Express” and “Cathay Pacific”, both of which are well-known brand names. Similarly, “ADIDAS by STELLA McCARTNEY” will be understood as a product of co-branding when Adidas and Stella McCartney are each established names in themselves. 94.This brings me to the marks “COSIMO GUCCI” and “designed by COSIMO GUCCI”. I have held that when an average customer sees these marks, the word “Cosimo” will not be unnoticed and to someone who understands English, it will be seen as part of a name. However, this does not mean that “Cosimo” has as much distinctive character as the word “Gucci” in the marks concerned. Indeed, as I pointed out above, “Cosimo Gucci” as a name is unknown in Hong Kong. What is well-known in Hong Kong is the name “Gucci”. When the word “Cosimo” is used together with “Gucci” in a word sign on goods (particularly on goods of the types which are also marketed by the plaintiff), to an average customer who sees such a word sign, the dominant element of the sign is clearly the word “Gucci”. In my view, it is likely that the average customer seeing such a sign would come away thinking that the goods are related to Gucci. When “Cosimo” is unknown and “Gucci” is so widely known, the overall impression of the average customer is likely to be dominated by the leading element of the mark, namely, “Gucci”. Visually, aurally and conceptually, “Gucci” is the dominant element of the sign. 95.When the words “COSIMO GUCCI” are used, either alone or following the words “designed by”, it is likely that the public would take the goods on which the words are used as goods originating from Gucci. Mr Shipp argues that the words “designed by COSIMO GUCCI” is merely a descriptive statement informing customers that the goods upon which the words are used are designed by the 1st defendant. I do not agree. Mr Shipp’s argument may have some force if the 1st defendant has a reputation as a designer in Hong Kong. That is however not the case here. An average customer would not have heard of the 1st defendant at all as a designer (whatever designing experience he might have when he worked with the plaintiff). In my view, given the anonymity of the 1st defendant as a designer, and the strong distinctiveness of the Gucci mark, it is most unlikely that the average customer will come away thinking that the goods are the products of an independent designer having nothing to do with Gucci. On the contrary, he is likely to think that Gucci is behind the design of the goods (and the designer is related to it), and that the goods are connected with, or originated from, or otherwise endorsed by Gucci. 96.I am fortified in my view above by the decision of the Office for Harmonization in the Internal Market (Trade Marks and Designs) (“OHIM”) in a contested European Community Trade Mark application relating to the mark “JENNIFER DESIGNED BY JENNIFER GUCCI” (with the words “DESIGNED BY JENNIFER GUCCI” in smaller print appearing immediately underneath the word “JENNIFER”, and enclosed within a rectangular frame). In that application (see, OHIM Decision no. 208/2005 dated 28th January 2005 on Opposition no. B520025) the OHIM decided that the word “GUCCI” was the dominant element of the mark, and given the exceptional distinctiveness of the Gucci mark, the incorporation of the word “GUCCI” as part of the mark to be registered would lead to a likelihood of confusion. This is because the presence of the dominant element “GUCCI” would lead :
97.The above applies even if the words are used together with an innocuous mark such as “COGU”. The presence of the mark “COGU” will not remove the likelihood of confusion that I mentioned above. Although “COGU” as a sign or mark is not infringing in itself, it does not have such acquired distinctiveness as a mark to have the effect of eliminating the confusion generated by the other offending words. “COGU” as a brand and as a mark has no or little reputation in Hong Kong. When the word “COGU” is present with the other words, as in the composite mark “COGU by COSIMO GUCCI”, or “COGU designed by COSIMO GUCCI”, in my judgment the likelihood of confusion remains. Indeed it is not unlikely that the presence of such an otherwise unknown mark would reinforce the confusion of the average customer, who might be led to believe that Gucci is introducing a second or extension line named “COGU”. 98.As mentioned above, the sign “COSIMO GUCCI” was used by the defendants in the bus-stop advertisements. It was also used in relation to handbags and eyewear. The sign “designed by COSIMO GUCCI” has been used on luggage shown on D2’s Website, and also on advertisements in relation to eyewear and spectacles. The composite mark “COGU by COSIMO GUCCI” has been used on D2’s Website in relation to timepieces, bags and luggage. “COGU designed by COSIMO GUCCI” has appeared in the defendants’ advertisements on eyewear, in the Style Guide, on the print card accompanying the eyewear products, and also the guarantee card of such products. These are products which are the same as the goods in respect of which the plaintiff has registered the word marks “GUCCI”. 99.For completeness’ sake, I would mention that Mr Shipp also relies on the own name defence under section 19(3) of TMO, although he has not pursued the same at the hearing with much vigor. The defence, if established, could only avail the 1st defendant, and not the 2nd defendant. Section 19(3) provides that a registered trade mark is not infringed by the use by a person of his own name provided that the use is in accordance with honest practices in industrial or commercial matters. What constitutes “honest practices” has recently been explained by the ECJ in the case of Gillette Co. v. LA-Laboratories OY [2005] F.S.R. 37. According to the ECJ, the condition of honest practices constitutes in substance the expression of a duty to act fairly in relation to the legitimate interests of the trade mark owner (at [41] and [49]). “Use of a trade mark will not be in accordance with honest practices in industrial and commercial matters if, for example, it is done in such a manner as to give the impression that there is a commercial connection between the third party and the trade mark owner, or it affects the value of the trade mark by taking unfair advantage of its distinctive character or repute” (at [49], see also the Julius Samaan case at [87] to [88]). 100.As pointed out above, in my judgment the use of the word signs complained of would indeed give the impression that there is a commercial connection between the 1st defendant and the plaintiff. There is also, in my view, a serious question to be tried that the use of the word signs by the 1st defendant is a use which takes unfair advantage of the distinctive character or repute of the Gucci mark and affects the value of it. In this connection, in considering the question of unfairness, I take into account the fact that the 1st defendant has no reputation as a designer in Hong Kong and there is no apparent commercial reason why he would want to use the words “designed by COSIMO GUCCI” to describe his goods if the intention was not to take unfair advantage of the distinctive character or repute of the Gucci mark. There is no evidence that the 1st defendant actually designed any of the goods involved in the present case. The only evidence put before me by the 2nd defendant in this regard only shows that the 1st defendant had been involved in giving approval to the designs made by the sub-licensees. 101.I would add this. A defendant who has used his own name which is confusingly similar to the plaintiff’s registered trade mark cannot escape liability for infringement by simply pointing to some steps that he might have taken to avoid confusion by the public, if the steps that are taken are either unlikely to be successful or are otherwise insufficient to prevent confusion. He has a duty to eliminate such confusion by taking effective steps which make it perfectly clear to the public that there is no connection between him and the proprietor of the mark (see, Boswell-Wilkie Circus v. Brian Boswell Circus [1986] F.S.R. 479). In the present case, it might be said that the defendants have taken some steps to explain to the public that the Gucci family is no longer associated with the plaintiff, and that the COGU brand is not a brand related to Gucci. For example, the 1st defendant might point to his speech made at the press conference, or the article in D2’s Website that explained the history of Gucci family and the acquisition of Gucci by outsiders. References may also be made to the contents of the guarantee card, or even the press release mentioned above. These materials, if they had been read carefully, might have gone some way to explaining to the reader that the 1st defendant and his family are no longer associated with the plaintiff and that the COGU brand marketed by the defendants is not connected with Gucci. There is however no evidence to show that the contents of these materials are made available to the general public, or are widely known to them and to the average consumer, or that they have been, or would have been, successful in eliminating the confusion that is likely to be caused by the confusingly similar signs used by the defendants. 102.In these circumstances, I hold that, in relation to the word signs mentioned above, there is a serious issue to be tried for infringement under section 18(3). D1’s horse-bit Mark and D1’s horse-bit Pattern Mark 103.The horse-bit mark is one of the leading insignia of the plaintiff and has been used by the plaintiff for many years and on a variety of products. I note, for example, that in a book written by Sara Gay Forden, “The House of Gucci”, the horse-bit mark was featured on the book cover. As can be seen from the Annexed Tables, the horse-bit marks registered by the plaintiff in Hong Kong are of different shapes and designs, but for marks of this type, it is the idea of the marks, namely the concept of a horse-bit that is of particular importance. An average customer may not have a perfect memory of the precise shape of the horse-bit marks used by the plaintiff, but he would remember the horse-bit concept that characterises the marks and which distinguishes the Gucci products. 104.I have looked at D1’s horse-bit mark and D1’s horse-bit Pattern Mark carefully, and note how they were used on the luggages and bags as shown on D2’s Website. While there may be some visual differences between them and the plaintiff’s devices (sufficient to make them not identical), the conceptual similarity between the marks is great, and when the horse-bits are used as a pattern mark, the visual similarity becomes much more striking (see, p. 3 of the Annexed Table). In my view, it is likely that an average customer may be misled by the horse-bit marks used by the defendants into thinking that the goods on which the marks are applied originate from the plaintiff. I also reject the suggestion of Mr Shipp that the horse-bit marks were not used by the defendants as trade marks. They clearly were. 105.In his affidavit evidence, the 1st defendant claimed that the horse-bit patterns used on the luggage products as shown on D2’s Website were not authorised by him, and that the luggage products bearing the horse-bit pattern were never sold or intended to be sold in Hong Kong. I have found this allegation unconvincing. I note that the D1’s horse-bit Pattern Mark was in fact one of the standard pattern marks stipulated in the Style Guide. According to the 2nd defendant, the Style Guide was prepared by it based on the instructions of the 1st defendant. It is difficult to see how the Style Guide could have come to be prepared without the instructions, approval and close involvement of the 1st defendant, as the Style Guide is in effect a manual stipulating the detailed specifications of the marks and signs of the COGU products. If the 1st defendant never intended to use the horse-bit patterns on goods sold in Hong Kong, it is difficult to see why he would include the D1’s horse-bit Pattern Mark in the Style Guide. By including the same in the Style Guide, the horse-bit pattern device was certainly not intended to be used merely decoratively on the products. 106.The goods on which the defendants used the horse-bit marks are the same as those covered by the plaintiff’s registrations. With regard to these horse-bit marks, I hold that there is a serious question to be tried on infringement under section 18(3). D1’s Interlocking CG Mark 107.As can be seen from the Annexed Table, that plaintiff has registered a number of interlocking marks that are constituted by two letter G interlocking with each other in various manner. 108.What however is clear to me is that the D1’s Interlocking CG Mark is completely different from the plaintiff’s interlocking marks both visually in form and shape and conceptually in the way in which the interlocking is constituted. D1’s Interlocking CG Mark consists of two letters C and G, interlocked in a special way and in a slanting manner which is wholly different from the plaintiff’s interlocking marks. Even allowing for imperfect memory and the fact that the average customer would not be comparing the marks side by side “in the arid atmosphere of a court in which everything is gone over ad nauseum” (borrowing the words of Sir Nicholas Browne Wilkinson VC in the Paolo Gucci case), I still do not think that there is any possibility that a reasonably observant and circumspect customer could be confused by the interlocking mark used by the defendants to think that goods bearing such a mark comes from Gucci. 109.It might be said that there is a conceptual similarity between the marks as both involve the interlocking of two English alphabets. I think there is a danger in defining the concept behind a mark so broadly. Merely because the plaintiff’s registered marks employ 2 interlocking letters does not mean that it has a monopoly over the concept of 2 interlocking letters. The concept of interlocking letters is too broad for monopoly of this type. Much, I think, would depend on how the interlocking is done in the plaintiff’s marks and it is the overall impression that an average customer would have that is determinative. In this case, I do not think that the impression of the interlocking letters constituting the mark used by the defendants in any way resembles the impression that an average customer has over the plaintiff’s interlocking marks. They are very different in shape, form and in the way the letters interlock. There is no likelihood of confusion. 110.I hold that there is no serious question to be tried on this interlocking mark. D1’s 3 stripes Mark 111.The plaintiff’s three stripes mark is constituted by a stripe of red between 2 stripes of green. As has been pointed out by Ms Tam, there is no evidence of any other party having registered any three stripes marks in Hong Kong. Evidence has been put before me showing the three stripes webbing marks having been used by the plaintiff on products of many different kinds. On the evidence, I am satisfied that the 3 stripes marks are distinctive of the plaintiff’s goods. 112.D1’s 3 stripes Mark employs different colours (red-white-green) but is nonetheless visually similar and conceptually identical to the plaintiff’s registered mark. Both webbing marks are constituted by 3 stripes of contrasting colours with no space in between. Two of the colours (i.e. red and green) used in D1’s 3 stripes Mark are also used in the plaintiff’s registered mark. An average customer with an imperfect memory of colour combinations (as many of us are) would have difficulty distinguishing the webbing mark used by the defendants from that used by the plaintiff unless the two are put side by side for comparison. 113.The defendants have put in evidence to show that there are products in the market which employ webbing devices of similar design and argue that there is no exclusivity in the plaintiff’s use of its three stripes mark. I do not find this an attractive argument. Firstly, the plaintiff does not need to prove exclusive use for the purpose of showing a serious issue to be tried on trade mark infringement—registration gives the owner the right to exclusive use. Secondly, I find the quality of the evidence put forward by the defendants in this regard to be poor. As Ms Tam aptly puts it, the evidence relied on consists of “pages of photographs of unknown sources and taken from unknown places by unknown people”. It is also not clear whether the webbings which appear on the other goods have any trade mark significance. Webbings used as mere decorations and not as marks of origin are, of course, very different. Only the latter use can give rise to claims of infringement. 114.What has caused me to pause is the fact that on the evidence the defendants have only used the D1’s 3 stripes Mark on pet products—bags and dogs carriers etc. From the pictures that I have seen, some of the bags and dogs carriers appear to be made of leather, but it is not entirely clear. The plaintiff has registered its three stripes mark under Classes 18 (leather goods, trunks, travelling bags, handbags, and shoulder bags) and 25 (clothing). Pet products are not specifically mentioned in the specification of goods for these classes. I have hesitated whether the goods in relation to which the defendants used the D1’s 3 stripes Mark are goods identical or similar to the goods in relation to which the plaintiff’s mark is registered. 115.In the end I accept Ms Tam’s submission that the goods specified under Class 18 includes trunks and bags. I am persuaded by her submission that “whether the bags [or trunks, if I may add] are used for carrying pets, tennis racquets, golf clubs or computers, they do not cease to be bags [or trunks] to be used by fashion conscious people who care how they look when toting the bag [or carrying the trunk]”. I agree with her that looking at the matter objectively, the bags or trunks are of the type “made to look good on the type of people who would buy designer bags for carrying things in their hands so that they would look stylish and fashionable”. In my view, it is certainly very arguable that these bags or carriers used to carry pets are bags or trunks within the meaning of the specifications under Class 18, or are similar goods. 116.I hold that for this mark as well, there is a serious issue to be tried under section 18(3). D1’s CG Monogram-1 and D1’s CG Monogram-2 117.I am satisfied on the evidence that the pattern marks of the plaintiff, shown on p. 7 of the Annexed Table, are distinctive of the plaintiff’s products. The evidence shows that the monograms are very commonly used in the plaintiff’s products, including in particular sunglasses, spectacles and eyewear. 118.In my judgment, there clearly is a serious issue to be tried for infringement based on the use of the monograms by the defendants. The monograms have been used on the spectacle frames (as used on the advertisements and also on the actual goods in the trap orders). They are included in the Style Guide. They are also used in the print card accompanying the spectacles, and also in the interior of the packaging and cases in relation to spectacles and sunglasses (I have looked at the real exhibits myself). 119.In the Style Guide, the pattern mark takes the form of D1’s CG Monogram-2. The actual sample eyewear sold by the defendants, however, bears a monogram which omits the little “o” and “u” in D1’s CG Monogram-2 and takes the form of D1’s CG Monogram-1. For the latter, the pattern is constituted by the use of the letters C and G facing each other, with the letter G upside down. The plaintiff’s monograms are constituted by the use of two letter G facing each other, with one of the letter G also upside down. If the monograms are magnified and compared side by side, it could be seen that the letters used in the plaintiff’s monogram are more rounded, while the letters used in the defendant’s monogram are more square-shaped. But the average customer would not look at these monograms magnified many times and make comparisons side by side. When looked at in their natural scale on the actual products, the visual differences are small and the similarities are striking. In my view, there is clearly a serious issue to be tried on the likelihood of confusion caused by the defendant’s use of D1’s CG Monogram-1 and D1’s CG Monogram-2. D1’s G Mark 120.On the evidence, the plaintiff’s “G Marks” (as shown on p. 8 of the Annexed Table), which are registered in Hong Kong under Class 18 and 25, have been used extensively on its bag products and leather goods but not any pet products. I am satisfied on the evidence that the plaintiff’s G Marks are distinctive of the plaintiff’s products on which the same are used. 121.On the other hand, the evidence shows that the defendants have only used the D1’s G Mark on pet products such as dog carriers and pet bags. I have mentioned above that I have had some hesitation on whether the goods are identical or similar to the goods specified under Class 18 and 25 for which the plaintiff’s marks are registered. 122.For reasons mentioned above in relation to the three stripes marks, I have come to the view that it is arguable that the goods are identical or similar goods. 123.D1’s G Mark clearly bears a conceptual similarity to that of the plaintiff’s marks, in that both are based on the alphabet G. The defendants’ mark is visually different from the plaintiff’s mark when examined side by side, but such visual differences may not be noted by the average customer who does not have an opportunity of conducting such a close comparison. 124.It is not clear why the defendants would want to use a mark based on the letter G (instead of say, the letter C). Unlike the case of Gucci, the letter G has no obvious relation to COGU. No explanation has been given by the defendants in their evidence as to why they sought to use a “G” mark on COGU products. In the absence of an explanation, the court may legitimately draw the inference that D1’s G Mark was deliberately adopted by the defendants with a view to causing confusion as to association with Gucci, particularly when the same is used with other marks or signs that are confusing in themselves. 125.As the pictures on D2’s Website shows, D1’s G Mark is used in conjunction with the three stripes webbing device. I have already held that there is a serious question to be tried that D1’s 3 stripes Mark is likely to confuse. When D1’s G Mark is used in conjunction with D1’s 3 stripes Mark, it only adds to the likelihood of confusion. 126.I therefore hold that, in respect of D1’s G Mark, there is a serious issue to be tried for infringement under section 18(3). PASSING OFF Principles to be applied 127.The principles are well known. They are well summarised by Lord Oliver in the case of Reckitt & Colman Products Ltd v Borden Inc & Ors [1990] R.P.C. 341 at 406, as follows :
128.To establish the tort of passing off, it is not necessary to prove an actual intent to deceive. However, if intent to deceive is proved, it is a short step to proving that the intent has been successful. The court will not say that the defendant will not succeed in deceiving when he is straining every nerve to do so: see, Slazenger v. Feltham [1889] 6 R.P.C 531 at 538. 129.While a true statement of pedigree, or of past business connection, is not a misrepresentation; equivocal or excessively conspicuous use of the claimant’s name or indicia may be held to be calculated to deceive. Such excessive use of the claimant’s name or indicia may amount to a deceptive suggestion that a connection continues to exist between the claimant’s goods or business and those of the defendant, and may be restrained by the court (see, Wadlow on the law of Passing Off, 3rd edition, 5-34, Henderson v. Monroe [1905] 7 SC 636, and Asprey & Garrard v. WRA (Guns) Ltd and Asprey [2002] F.S.R. 31). Goodwill or reputation 130.To meet the requirement of a serious question to be tried, I consider that there is more than sufficient evidence to show that the plaintiff has a strong reputation or goodwill which is attached to the “Gucci” name and the plaintiff’s Trade Marks. I have mentioned above the sales volume of the plaintiff, the advertising and PR expenses spent by the plaintiff in promoting and advertising its products, the scale of operations of the plaintiff both worldwide and in Hong Kong, the listings of independent branding consultancies, survey findings of AC Neilson and the Neilson Company, and also other materials that I have read which show quite clearly that the Gucci name is exceptionally well known, and the marks (including in particular the plaintiff’s Trade Marks ) used by the plaintiff on its range of products are distinctive of the goods as originating from the plaintiff. 131.Mr Shipp has complained that there is no breakdown of the sales figures in respect of the use of each mark. That is so, but I do not consider it realistic for the plaintiff to provide evidence of such breakdown. The products sold by the plaintiff often carry 2 or more marks and it is not realistic to expect breakdown sales figures specific to each mark. In any event, I have no doubt that quite apart from the sales figures, the evidence before me establishes, at the very least, a serious issue to be tried that the plaintiff has a strong reputation and/or goodwill in respect of the name “Gucci” and the plaintiff’s Trade Marks, which are distinctive of the plaintiff’s goods. 132.Apart from the “Gucci” name and the plaintiff’s Trade Marks (which are registered), the plaintiff has also relied on its “bamboo design” for the purpose of passing off. The “bamboo design” is not a registered mark but it appears from the evidence that for many decades the plaintiff has been using the bamboo material on its products—some examples that I have seen including watch bangles, shoe buckles, handbag straps and handles, and even bamboo patterns on bags. What is however clear to me is that it is not possible to say that there is a particular bamboo “get-up” or design to which reputation or goodwill is attached. While bamboo materials are commonly used in the plaintiff’s products, there is no particular form of design, device, mark or get-up that the plaintiff can point to other than the material used which is bamboo. In these circumstances, I am quite unable to find that there is a serious question to be tried for a passing off claim based on the so-called “bamboo design”. I think the term “bamboo design” can only be used loosely to refer to anything that is made of bamboo and used in the plaintiff’s products. That obviously is not sufficient to give the plaintiff a monopoly over the use of the bamboo material and Ms Tam has not contended for such a monopoly. Indeed in one of her written submissions filed after the oral hearing, she indicates that the plaintiff “is content not to pursue an interlocutory injunction to cover this element [referring to the “bamboo design”]”. I consider that this concession is wise, and I will say no more on the bamboo design. Misrepresentation 133.In the light of my conclusion above (in relation to trade mark infringement) on the question of likelihood of confusion caused by some (but not all) of the alleged Infringing Marks used by the defendant, I do not need to deal with this question again in extenso in relation to passing off. For those signs or marks the use of which would give rise a likelihood of confusion (more precisely, give rise to a serious question to be tried of such likelihood of confusion), my conclusion applies equally to the passing off claim. For easy reference, I shall refer to those signs or marks (i.e. those I have held above as likely to result in confusion) as “the offending marks”. 134.There are other matters which may add to the likelihood of confusion and relevant to the claim for passing off—e.g. the way in which the press conference was conducted (I have, for example, referred to the backdrop of the stage which featured the words “Cosimo Gucci” prominently), the extensive references to the Gucci family tree in the ways I described above, the way the covering mail was presented to the press when they were invited to the press conference etc. Ms Tam submits that these matters show that the defendants have made excessive references to the Gucci’s name and the plaintiff’s marks and indicia, which were calculated to deceive. I see the force of her submissions. However, there is no need for me to deal with these matters in detail (and prolong an already lengthy decision), as I am satisfied, even without these additional matters, that there is a serious question to be tried for passing off arising from the use of the offending marks. 135.I would also mention that the plaintiff has put before me evidence of actual confusion. There is evidence of some bloggers expressing confusion (on whether COGU was another line of Gucci) in an internet discussion forum. I have not put much weight on such evidence. The quality of the evidence is less than cogent—it is not known, for example, who these bloggers were other than their usernames, nor is it known what exactly were the circumstances which led to the alleged confusion of the bloggers. The defendants have drawn my attention to another blogger who was apparently not confused—again I place little weight on that. Neither do I find the evidence concerning the alleged confusion by one Christy Ng, the senior editor of Hong Kong Tatler, helpful in proving actual confusion. Of all the journalists who had received the mail invitation to the press conference, she was apparently the only one who was confused. Why that is so is not clear to me. 136.It is well-settled that evidence of actual confusion is not a precondition of a finding of misrepresentation. If the court is otherwise satisfied of the probability of deception, actual deception need not be proved: see, Kerly’s Law of Trade Marks and Trade Names (14th ed.), 15-204, Iron-Ox v. Co-operative Wholesale Society [1907] 24 R.P.C. 425 at 430, Delavelle v. Stanley [1943] 60 R.P.C. 103, and the Asprey case (supra) at [38]. In the present case, even without the evidence of actual confusion, I am satisfied that there is a likelihood of confusion in respect of the use of the offending marks. 137.It is also not necessary, for the reasons above, for me to decide whether there is actual intent to deceive (more precisely, whether there is a serious issue to be tried of such intent). Proof of such intent is not necessary for passing off. My conclusion on the likelihood of confusion makes it unnecessary for me to deal with that matter. Own name defence in passing off 138.I have already dealt with the own name defence in the context of trade mark infringement. As regards the availability of the defence in passing off, I need only refer to what Romer J. said in the case of Joseph Rodgers & Sons Ltd v. W.N. Rodgers & Co. [1924] 41 R.P.C. 277 at 291, as follows :
139.This part of Romer J.’s judgment was approved by the House of Lords in Parker-Knoll Ltd v. Knoll International Ltd [1962] R.P.C. 265. As pointed out by Jacob LJ in the Reed case (at [109]-[110]), it is now “well-settled that it is no defence to passing off that the defendant has or had no intention to deceive. It is also settled that there is only a very limited own name defence … Thus the English law of passing off abounds with cases where people have been prevented from using their own names. This particularly happens when a scion of some well-known family business has sought to cash in on his name at the expense of that business”, citing the Paolo Gucci case, the Asprey case and Alfred Dunhill Ltd v. Sunoptic SA [1979] F.S.R. 337. 140.In the present case, we are concerned with passing off of goods, for which, if Romer J. is right, the “own name defence” is no defence at all. 141.In these circumstances, I hold that there is a serious question to be tried for passing off arising from the defendants’ use of the offending marks. I also hold that there is a serious question to be tried for passing off arising from the defendant’s use of the Gucci name. There is no need for me to deal with the passing off of the Gucci name separately, as the same considerations are involved. DAMAGES NOT AN ADEQUATE REMEDY 142.It is clear to me that if I refuse to grant the interlocutory injunction, and the plaintiff wins at trial, damages will not be an adequate remedy. The damage caused by trade mark infringement consists in the erosion of the exclusivity and distinctiveness of the marks, which I am sure is very valuable to the plaintiff but damages for such erosion is difficult to assess. Damage to goodwill is the most important loss suffered by a victim of passing off and it is rare that damages would be an adequate remedy for such damage, which is difficult to quantify (see Marlborough Motors v. Marlborough Motor Co., unreported, 19 May 1986, Falconer J and Sodastream Ltd v. Thorn Cascade Co. Ltd and another [1982] R.P.C. 459 at 471). 143.Apart from the erosion of the exclusivity of the plaintiff’s Trade Marks, and the damage to its goodwill, which is irreparable harm, there is also the possibility that custom will be lost if an injunction is not granted. Again, damages for such loss is notoriously difficult to quantify, particularly when goods are sold in retail outlets, and it is hard to prove what amount of the loss of custom or drop in sales is caused by the defendants’ acts of infringement or passing off. 144.In these circumstances, I have no hesitation in concluding that damages will not be an adequate remedy to the plaintiff if no injunction is granted and it succeeds at trial. BALANCE OF CONVENIENCE 145.It seems to me that the balance of convenience is strongly in favour of the plaintiff. 146.As pointed out above, the 1st defendant’s mode of doing business in Hong Kong is not to sell goods directly, but to appoint a licensee (the 2nd defendant) who in turn would appoint sub-licensees to manufacture and market products under the brand name “COGU” and using the marks and signs authorised by the 1st defendant. There is no evidence at all on how an injunction may affect the business of the 1st defendant. The 1st defendant has not put in any evidence on how, for example, his collection of royalty income from his licensee or sub-licensees would be affected by an injunction. All I have in terms of evidence from the 1st defendant in this regard is a bare allegation in his affidavit that he would be “deprived of an incalculable amount of royalty income from the Hong Kong licensees”. Neither has the 2nd defendant submitted any evidence on how his business may be affected by an injunction. 147.I would have thought that any loss that may be suffered by the defendants if an injunction is granted would be small compared with the loss that may be suffered by the plaintiff if an injunction is refused. The 1st defendant has only come to the Hong Kong market recently. The harm that may be suffered by the defendants in holding off marketing of their products in a manner which may offend the injunction is likely to be limited. In any event, the defendants would be free to continue to use the “COGU” mark and D1’s Interlocking CG Mark, and to continue to license them, without offending the terms of the injunction. As regards the horse-bit mark, the 1st defendant has filed evidence to the effect that he had never authorised the use of the horse-bit mark, and that the luggage products bearing the horse-bit mark appearing on D2’s Website were not sold or intended to be sold in Hong Kong. 148.I also take into account the fact that the plaintiff is a very substantial company (as evidenced by its very substantial sales turnover and the estimated value of its brand name alone is enormous), and there is little risk of its not being able to meet any award of damages that may be made against it. On the other hand there is no evidence of the defendants’ financial position and their ability to honor a substantial award of damages. 149.In all the circumstances of the case, I am of the view that the balance of convenience weighs heavily in favour of the plaintiff. ORDER TO BE MADE 150.I am therefore minded to grant an interlocutory injunction. Ms Tam and Mr Shipp have both indicated that they would like to make further submissions on the terms of the order in the event that I am minded to grant an injunction. Accordingly, I would give liberty to the parties to file written submissions on the terms of the injunction order. They may also make submissions on costs, if they so wish. The further submissions should be made within 14 days from today.
Ms Winnie Tam SC, instructed by Messrs Deacons, for the Plaintiff Mr Colin Shipp, instructed by Messrs Anthony Evans & Co., for the 1st and 2nd Defendants |
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