Sbe Licensing, Llc v. Hyde Lyndhurst Ltd t/a Hyde

HCA 1358/2011

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

HIGH COURT ACTION NO 1358 OF 2011

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BETWEEN

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Before : Deputy High Court Judge Carlson in Chambers

Dates of Hearing : 29 May 2012

Date of Judgment (Handed Down): 10 August 2012

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J U D G M E N T

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1.These are order 14 proceedings. The summons is to be found at A10/89. It seeks an injunction restraining the defendant from infringing the plaintiff’s registered trade mark No.301053701 by using, in the course of its business or trade the sign “Hyde Lounge” being a sign identical to the plaintiff’s Trade Mark, in respect of nightclubs, nightclub services, bar and restaurant services. Other additional and consequential relief is also sought by summary judgment which I do not propose to recite here. It is there to be read.

2.The plaintiff is part of the SBE Entertainment Group founded in Los Angeles, California in 2002.  It owns and operates high-end hotels, restaurants, nightclubs and real estate development.  It has operated nightclubs which it calls “Hyde Lounge” in the USA since 2002.  It is the registered owner in Hong Kong of the Trade Mark “Hyde Lounge”, this since 18 Feb 2008.  It has registered the Trade Mark in Hong Kong in order to :

(1) promote “Hyde Lounge” nightclubs in the USA;

(2) in anticipation of its expansion into the Hong Kong market, to promote its “Hyde Lounge” brand in Hong Kong; and

(3) to be used in respect of a “Hyde Lounge” nightclub to be opened in Hong Kong.  All of this appears in the 2^nd affirmation of Miss Nikki Mark, its Executive Vice‑President at paras 7-8 (A7/ 68-69).

3.By S18(1) of the Trade Mark Ordinance (Cap 559)

“ A person infringes registered trade mark if he uses in the course of trade or business a sign which is identical to the trade mark in relation to goods or services which are identical to those for which it is registered.”

4.The plaintiff alleges the following specific acts of an   infringement contrary to S18(1), which I gratefully take directly from Mr Hughes’ skeleton argument in support of the summons :

“(1) D’s operation since March 2010 of a nightclub, bar and restaurant in Hong Kong under and by reference to the name “HYDE LOUNGE” (“D’s Business”);

Amended SOC §7(a) [A2:25]

(2) D’s use since about March 2010 of the name “HYDE LOUNGE” in respect of the advertising, marketing and promotion of D’s Business;

Amended SOC §7(b) [A2:25]

(3) D’s operation since about March 2010 of a website linked to D’s registered <hyde.hk> and <hyde.com.hk> domain names (registered on 18 March 2010 and 16 September 2010 respectively) promoting D’s Business (“D’s Website”), which website uses the name “HYDE LOUNGE”;

Amended SOC §7(c) [A2:25]

Exhibits “NM-8” & “NM-9” [B16:439, 443, 446 & 449‑454]

(4) D’s use of the name “HYDE LOUNGE” in the menus used at D’s Business; and

Amended SOC §7(d) [A2:25]

Exhibit “NM-10” [B16:458]

(5) D’s use since about March 2010 of the words “HYDE LOUNGE” in order to direct Internet users and Internet search engines to D’s Website. 

Amended SOC §7(e) [A2:25]

Exhibit “GKLN-1” [B13:127]”

5.It should be made clear that the plaintiff is not seeking summary judgment under S18(3) of the Ordinance which relates to the “Use of confusingly similar signs in respect of identical or similar services...”.  This is directed to the sign “Hyde Bar & Lounge”.  I am, therefore, only concerned with the use of the sign “Hyde Lounge”.

6.Mr Hughes relies on the fact that the defendant has admitted each of the specific instances of infringement of the sign “Hyde Lounge”, and although the defendant has said that such instances of use must be construed as a reference to the room within the defendant’s premises which is referred to as “the lounge”, Mr Hughes submits that this approach is misconceived in its reliance on the old Trade Mark Ordinance (Cap 43) repealed in April 2003.

7.As to this, Mr Hughes’ submission proceeds in this way.  The defendant’s use of “Hyde Lounge”, is clearly use as a trademark and in order to establish infringement, the plaintiff simply needs to show that the defendant is using, in the course of trade or business a sign identical to the Trade Mark.  There is no need for the court to make a finding a fact as to whether the use by the defendant of the identical sign “Hyde Lounge” is or is not use as a trademark. (Emphasis added) (See British Sugar Plc v James Robertson & Sons Ltd [1996] RPC 281, 291). 

8.Mr Maurellet, on the defendant’s behalf, has approached this matter in a very broad or overall way which leads him to the submission that there is no need for an injunction on what is a very limited part of the dispute.  He submits that the correct way to proceed is to refuse the injunction, no summary judgment in this regard, and to direct a speedy trial.

9.He has suggested two reasons why I should take this course.  The one that I have found the more compelling is that the plaintiff is not seeking an injunction or any relief at this stage under S18(3) relating to the defendant’s use of the sign “Hyde Bar & Lounge”, and that Mr Hughes has limited himself to his S18(1) claim by the defendant of the sign “Hyde Lounge”.

10.Mr Maurellet, submits that the use of sign “Hyde Lounge” is very insignificant in comparison to the defendant’s use of other signs for which the plaintiff claims infringement in the action.

11.He analyses the matter in this way.  “Hyde Lounge” is only 1 out of 10 signs which the plaintiff alleges infringement of in these proceedings.  The bulk of the defendant’s advertising on its premises and its web-site uses the sign “Hyde” and the corresponding logo and not the sign “Hyde Lounge”.  He draws attention to the fact that the plaintiff’s previous solicitors had admitted that “the only distinctive element of the defendant’s company and business name remains the mark “Hyde”.  (See letter dated 8 March 2011 [B13/124])

12.The high point of Mr Maurellet ‘s submission is at paras 7-8 of his skeleton which I can do no better than to set out in full here.

“7. It is difficult to see what purposes P’s application for summary judgment serve apart from purely tactical ones. In all likelihood, given P’s main complaint must be D’s use of the word “HYDE”, P will proceed its claims against D in relation to the use of the word “HYDE” regardless of the outcome of the present application. The present application for summary judgment over such a trival part of P’s claims delays matters and wastes costs. This is not consistent with the underlying objectives.

8. The factual basis of P’s claim for infringement of D’s use of the “HYDE” sign (under section 18(3)) inevitably overlaps with its Section 18(1) Claim for which it is seeking summary judgment. If the former claim will eventually go to trial the same factual and legal issues (such as revocation and/or invalidity) will be considered by the Court. It would be highly undesirable for the Section 18(1) Claim to be decided summarily and at the risk of inconsistent findings. All of the claims should be heard together in a speedy trial.”

13.I do not mind saying that when I read the papers, my first impression was that the defendant had set up and was operating a “knock‑off” of the plaintiff’s establishments in the USA when one has regard to the similarity of the signages and logo and the general feel of the place as I can best judge from the material’s placed before me, although it is right to say that this is not a passing off case.  Whilst this may not appear to be a helpful remark from the defendant’s point of view, it serves to demonstrate the apparent good sense and force of what Mr Maurellet has submitted, particularly, his reference to the fact that the plaintiff’s main complaint must be the prolific and prominent use by the defendant of the word “Hyde”.

14.Despite the obvious attractions about the apparent strength of the plaintiff’s case on infringement, and I say this knowing that I will not be the trial judge who will, of course, be able to make up his own mind way or the other, I am persuaded by Mr Maurellet ‘s submission which I have just set out in full.

15.I am not attracted by Mr Hughes’, piecemeal approach to the matter and there may well be dangers of inconsistent findings, if I were to go on and make the order that he has sought, only for the trial judge to find otherwise on the S18(3) point.

16.The grant of an injunction calls for the exercise of the judge’s discretion.  For my part, I am not persuaded that this is the occasion for such an order on a summary application.  The correct way to address the relief that is asked for by the plaintiff is to let the matter go to a “speedy trial” so that the trial judge can get an overall view of the evidence and what is going on.  

17.In addition to which, I am also attracted by the fact that Mr Maurellet has a perfectly serviceable counterclaim for revocation of the trade mark based on non-use.  This amounts to very much more than a tactical “try-on” in this regard. Mr Maurellet has mounted a very serious and detailed argument based on S52, for lack of genuine use within 3 years.  (See paras 26-38 of his skeleton). I do not propose to repeat these points here nor refer to the authorities which he has cited in support.  What I have decided is that there are genuinely triable issues which require a careful analysis the evidence and which, independently of my refusal to enter summary judgment for the injunction as a matter of discretion, provide grounds for refusing the application because these have shown a plainly arguable basis for defending the action overall.

18.Accordingly, the defendant will have unconditionally leave to defend the action.  I decline to grant Mr Hughes the injunction which he has sought.  I will also make an order nisi that the costs of the summons should be the defendant’s costs in the cause.  Finally, I direct a speedy trial of the action.  It seems to me this matter ought to be disposed of as soon as possible and the parties will now be required to take immediate steps to conclude the remaining interlocutory matters in readiness for a trial.

Sebastian Hughes, instructed by Laracy & Co. for the Plaintiff

Jose Maurellet and Jason Yu, instructed by Lister Lo Lui & Choy for the Defendant