Tsit Wing (Hong Kong) Co Ltd and Another v. Twg Tea Company Pte Ltd and Another

HCA 2210/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 2210 OF 2011

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Before: Hon Yam J in Chambers

Date of Hearing: 30 January 2012

Date of Judgment: 30 January 2012

Date of Handing Down Reasons for Judgment: 14 February 2012

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REASONS FOR JUDGMENT

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1.The plaintiffs’ case is that their predecessor, Tsit Wing Coffee Co., Ltd, have 80 years’ of carrying on business in Hong Kong relating to tea and coffee at all levels, with substantial goodwill in Hong Kong. Since 1956, they have been using the TW Marks and since 1994, plaintiffs have been operating cafes and restaurants in Hong Kong, under and by reference to the TW service mark. Thereafter they have registered their Trade Marks, TWG (with 2 overlapping double circles) “TWG Trade Mark No 1” and TWG Trade Mark No 2, (with a big circle enclosing Mark 1), and the 2 marks are collectively called the plaintiffs’ TWG Trade Marks; and “TW Coffee Concept” (“the plaintiffs’ Registered TW Mark”).

2.Thus the plaintiffs say they have substantial goodwill in Hong Kong in:

(1) the plaintiffs’ registered TWG Marks under classes 29 and 30;

(2) the plaintiffs’ registered “TW Mark” in class 43;

(3) the names of and make “Tsit Wing”, “TW” and their variations (collectively “the TW Marks”);

(4) “TWG” and its variations (collectively, the “TWG Marks”) and;

(5) “TW” (collectively the TW service mark).

3.In early 2011, the 1^st defendant approached the plaintiffs to seek their agreement to co‑exist in South Korea.  On 30 March 2011, the parties entered into a co‑existance agreement in South Korea.  Thus, the defendants have been aware of the plaintiffs’ registered Trade Marks.

4.However, without the plaintiffs’ knowledge, the 1^st defendant filed Trade Mark Application for the mark “TWG” which is oval shape in classes 21, 30 and 43 and the circular mark in classes 30 (described by the plaintiffs as the infringing TWG Marks 1 and 2 respectively.)

5.In mid October 2011, the plaintiffs first became aware that the defendant were preparing to open a café in question in IFC Mall at the end of 2011 or early 2012.  The plaintiffs immediately sought legal advice.

6.On 2 November 2011, the defendants first approached the plaintiffs to seek to reach an agreement for use of the plaintiffs’ trade marks in Hong Kong.  On 5 November, the management team of the defendants flew from Singapore to Hong Kong for a meeting for settlement negotiation with the management of the plaintiffs until 22 November 2011.  However, no agreement could be reached.

7.On 23 November 2011, a cease‑and‑desist letter was sent by the plaintiffs’ solicitors to the defendants.  The defendants solicitors’ letter of reply was sent to the plaintiffs solicitors on 30 November 2011.

8.On 8 December 2011, the defendant’s café is opend.

9.(1) on 12 December 2011 the 1^st defendant filed 2 applications with the Trade Marks Registry to revoke the 2^nd plaintiff’s Trade Mark 1 in class 30 and the plaintiff’s “Trade Mark 2” inclass 30;

(2) on 14 December 2011, the Trade Mark Registry refused to process the aforesaid 2 revocation applications by the1^st defendant; and

(3) on 15 December 2011, the 1^st defendant withdrew the said revocation applications but refilled 2 revocation applications against the same trade mark registrations of the 2^nd plaintiff.

10.On 23 December 2011, the plaintiffs solicitor filed and served the writ of summons herein and applied by summons for the interlocutory injunction restraining the defendants to use their aforesaid infringing marks.

11.On the evidence presented from the respective parties, the plaintiffs have for some time established their goodwill and reputation in using their marks in Hong Kong.

12.(1) On the other hand the defendants said they have reputation and goodwill in Hong Kong.  They relied on various media reviews around the world.  The plaintiffs submitted that the 1^st defendant’s alleged international reputation is illusory.

(2) Further, they said since 2008, the 1^st defendant tea salons have been featured in Hong Kong media including Eastern Weekly, Sing Tai Daily and Eastern Daily. However they were not sales of goods and services in Hong Kong. The plaintiffs submitted that reputation, like the business itself, even in a single locality, takes time to build. The defendant’s marketing efforts have only generated attention for a very limited time prior to December 2011.

(3) The 1^st defendant also relied on their teas being served on all first and business class Singapore Airlines lounges and flights since July 2009. But this was in a very limited geograplical area in a restricted zone in Hong Kong.

(4) The plaintiffs therefore have a good arguable case that the defendants have no goodwill and reputation before they opened their tea salon in IFC in December 2011.

13.Upon perusal of the papers before me and hearing arguments of counsel, and by looking at the 2 sets of respective marks of the plaintiffs on one side and the defendants’ marks on the other side, I accept that the plaintiffs have a reasonably good and arguable case of the defendants infringing the plaintiffs’ trade marks, goodwill and reputation and in passing off.

14.(1) The plaintiffs also has a good arguable case of the defendants’ infringement under section 18(3) of the Trade Mark Ordinance.  The defendants’ infringing marks are confusingly similar to the plaintiffs’ registered marks.

(2) The plaintiffs also has a good arguable case of infringement under section 18(4) of the TMO in relation to the plaintiffs’ registered “TWG Marks”. This section provides that a person infringes a registered trade mark if the trade mark is a “well‑known mark” and “the use of the sign, being without due cause, takes unfair advantage of, or is detrimental to, the distinctive character, or repute of the trade mark.” This section applies whether or not the goods or services in question are identical or similar.

15.Further the 2 sets of marks the plaintiffs and the defendants used are in identical and similar goods and similar services.  Thus, the plaintiffs have a reasonably good and arguable case on likelihood of confusion.

16.In sum, there are serious issues to be tried on both trade marks infringement and passing‑off.

Balance of convenience

17.The balance of convenience is in favour of the plaintiffs in granting the injunction for the following reasons:‑

(1) The defendants have been aware of the plaintiffs’ registered Trade Marks since at least early 2011 leading to the signing of the co‑existance agreement in South Korea (though no shop of the defendants have been opened there yet).

(2) The defendants tried to negotiate with the plaintiffs for an agreement to use the plaintiffs’ marks but failed in November 2011.

(3) Thereafter the defendants tried to change the status quo by launching their café on 8 December 2011, in spite of the cease‑and‑desist letter of the plaintiffs’ solicitors.

(4) “On a ‘use of name’ case it will be rare that damages will be an adequate remedy.”[1]

(5) The interim injunction simply means the defendants cannot use the 2 infringing marks and therefore it will surely delay their usage for sometime. It does not mean they will have to close their tea and coffee salon. Their damages are more calculable.

(6) Whereas the damages that will be suffered by the plaintiffs are quite incalculable if they are proved to be right at the trial.

Conclusion

18.For the aforesaid reasons, I have granted the interlocutory injunction on terms subsequently agreed between the parties with the plaintiffs’ costs in the cause.

Ms Winnie Tam, SC and Mr Lam Chin Ching Gary, instructed by Messrs Deacons, for the 1^st and 2^nd Plaintiffs.

Mr Andrew Liao, SC and Mr Colin Andrew Shipp, instructed by Messrs Clifford Chance, for 1^st and 2^nd Defendants.