Abg Juicy Couture, Llc. v. Bella International Ltd t/a Juicy Girl and Others

HCA 1764/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1764 OF 2008

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D E C I S I O N   O N   C O S T S

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1.In my judgment handed down on 8 September 2014, I made a costs order nisi that the defendants do pay the plaintiff 90% of the costs of this action. The plaintiff by a letter dated 11^th September, 2014 requested for variation of the order nisi by providing for a certificate of two counsel for the plaintiff. The defendants by a letter of the 3^rd defendant dated 17^th September, 2014 opposed the plaintiff’s application. The defendants submitted that a junior counsel was enough to advance the plaintiff’s case. The defendants by the same letter also asked for variation of the order nisi to no order as to costs or that the defendant should pay the plaintiff 10% of the plaintiff’s costs of the action. The plaintiff replied by a letter dated 3^rd October, 2014 opposing the defendants’ application. The defendants replied by a letter of the 3^rd defendant dated 19November, 2014.

2.Regarding the question of certificate for two counsel, the defendants set out their grounds of opposition in the letter of the 3^rd defendant dated 17 September.  They said that the plaintiff had only succeeded in passing-off but not in infringement of trade mark.  Furthermore, the plaintiff had lost some issues like the defendants’ shooting of photographs in California for making catalogues.  The plaintiff should not get costs for the time spent on such issues.  Furthermore, a lot of things only happened after the commencement of the trial.  The plaintiff’s solicitors were also very experienced in intellectual properties. The issues in which the plaintiff had succeeded were also not complicated either on the facts or the law.  The defendants therefore submitted that only one junior counsel would be enough to represent the plaintiff.

3.I note that the defendants had been represented by two counsel throughout the proceedings until just before the start of the trial when they became unrepresented.  Their pleadings were all settled by counsel.  They had fought hard on almost every point in the interlocutory matters.  There are also a lot of facts and some law to deal with.  There was no reason to require the plaintiff to drop one of their counsel just before the trial upon knowing that the defendants would be unrepresented.  The defendants’ written opening was also settled by senior and junior counsel.  Their final submissions were also prepared with the help of counsel. 

4.Regarding the defendants’ arguments that the plaintiff had only succeeded in passing-off but not in infringement of trade mark, that matter is taken care of by my ordering only 90% of the costs against the defendants.  I do not think that the plaintiff’s failure in one of the claims should reflect on the reasonableness or otherwise for it to engage two counsel.  The plaintiff’s loss of some issues can also not impinge on the justification for engaging two counsel.  That is a matter for consideration of whether the plaintiff should be penalized on the extent of the costs recoverable or whether it should be ordered to pay some costs despite succeeding in the passing-off claim.  The plaintiff’s solicitors may be experienced in intellectual properties, but that is not a decisive factor on whether it was reasonable for the plaintiff to engage two counsel to conduct the trial.  The defendants also submitted that the issues in which the plaintiff had succeeded were also not complicated either on the facts or the law. 

5.I disagree that the issues in which the plaintiff had succeeded were not complicated either on the facts or the law.  I think the way that the defendants had conducted their case at the trial had delayed the progress of the trial and made it unnecessarily difficult for the plaintiff to prove its case.  The defendants have failed to make timely and comprehensive discovery but made discovery in batches despite the plaintiff’s repeated requests.  The bulk of previous orders for marks and tags, which were essential for the defendants’ defence of first use in the infringement of trade marks claim, were only produced shortly before the trial.  They also tried to put in documentary evidence on turnovers of fashion products of the “Juicy Girl” brand for previous years when the trial was in progress when such evidence was obvious relevant and had been in their possession long before the commencement of the action.

6.I think in the circumstances and despite the plaintiff’s solicitors being experienced in intellectual properties, the matter is still difficult and complicated enough to warrant the engagement of two counsel.  I should have ordered a certificate for two counsel in favour of the plaintiff.  I do so now with a further costs order nisi that the defendants do pay the plaintiff the costs of this application.

7.I ordered the defendants to pay the plaintiff only 90% of the costs of the action because the defendants have succeeded in the issue of section 19(4) of the Trade Marks Ordinance, Cap. 559.  The determination of the issue of section 19(4) of the Ordinance in effect determined the issue of one of the trade marks “Juicy Girl”.  The defendants’ now ask for variation that there be no order as to costs or that they should only be required to pay 10% of the plaintiff‘s costs.  They have put up one and the same set of reasons that I have referred to above for opposing the certificate for two counsel and for this application for variation. 

8.The plaintiff opposes the application.  The plaintiff submitted that despite it only succeeded in the claim of passing-off and not the claim of infringement of trade marks, the evidence for proving both claims are largely the same.  The evidence that is exclusively for the infringement claim is the circulation of the Seventeen magazine in Hong Kong.  The costs for proving this matter is minimal.  The focus of the trial was on the likelihood of confusion or deception arising from the defendants’ use of the plaintiff’s trade marks, indicia and get up.  The defendants’ case of first use was by producing pervious for marks and tags and the evidence of the sales lady Ms Au Yeung.  I have also excluded the witness statement of Ms Au Yeung as it was not prepared as it purportedly to have been.  I have also referred to unsatisfactory discovery above.  These things should not have happened as the defendants were legally advised right from the start of the action. 

9.I agree with the plaintiff’s submissions.

10.I would also refer to the Elgindata principles as stated by Nourse LJ in Re Elgindata (No 2) [1992] 1 WLR 1207 at p 1214 that:

(i) Costs are in the discretion of the court.

(ii) They should follow the event, except when it appears to the court that in the circumstances of the case some other order should be made.

(iii) The general rule does not cease to apply simply because the successful party raises issues or makes allegations on which he fails, but where that has caused a significant increase in the length or costs of the proceedings he may be deprived of the whole or a part of his costs.

(iv) Where the successful party raises issues or makes allegations improperly or unreasonably, the court may not only deprive him of his costs but may order him to pay the whole or a part of the unsuccessful party’s costs.

11.I do not think the plaintiff has raised any issue or made any allegation improperly or unreasonably which may require any order to be made pursuant to principle (iv).  I also do not think that the issues that the plaintiff have lost have caused a significant increase in the length or costs of the proceedings.  Those few issues like shooting photos in California and using bus and taxi wrap advertising did not take up much time.

12.I am also of the view that the defendants have lost the case very substantially as their only success is in defending the right to use “Juicy Girl” in a way that does not pass-off the plaintiff’s get up and design. 

13.Looking at the matter in the round, I do not think there is any basis for me to reduce the defendants’ costs burden from the 90% in the costs order nisi.  I therefore dismiss the defendants’ application for variation with a further costs order nisi that the defendants do pay the plaintiff the costs of this application.

Written submissions by Baker & McKenzie, for the plaintiff

Written submissions by the 3rd defendant, in person