Lau Wing Mou (A Firm) v. Lo Kong and Another

CACV000183/1991

Headnote :

The plaintiff's case not being strong and the circumstances being unexceptional, no interlocutory mandatory injunction was appropriate

Coram: Sir Derek Cons Ag CJ, Kempster JA & Bokhary J

Dates of hearing: 26 & 27 May 1992

Date of handing down of judgment: 9 June   1992

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J U D G M E N T

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Bokhary J:

1. This is an appeal by the defendants against an Order of Deputy Judge Jones dated November 22, 1991, whereby he granted both mandatory and prohibitory interlocutory injunctive relief against them.

2. The plaintiff firm's claim is brought in copyright infringement and passing off.

3. It is - and since commencing business in 1985 has been - a retailer of tea leaves, ginseng and dried seafood.

4. That business is carried on at two shops. One is in Hunghom. The other is in Tsuen Wan. The one in Hunghom was opened in July 1989 as the successor to another shop in that district which the plaintiff firm had operated from 1985 up to June 1989. The one in Tsuen Wan was opened in June 1990.

5. It was in that month, June 1990, that the 1st defendant entered the plaintiff firm's employ. He was taken on as its sales manager at the Tsuen Wan shop.

6. Shortly afterwards, he was transferred to its Hunghom shop as the sales manager there.

7. On June 1, 1991, he left its employ. By the end of that month or the beginning of the next, the 2nd defendant, a firm in which he is a partner, opened a ginseng and dried seafood shop on a corner about 50 yards away from and diagonally opposite to the plaintiff firm's Hunghom shop, which also occupies a corner.

8. To follow the case advanced on behalf of the plaintiff firm, it is necessary to go back to 1989, when the plaintiff firm moved from its original shop in Hunghom to its present one there.

9. The fitting out and decoration of the plaintiff firm's present Hunghom shop was done pursuant to certain drawings and specifications prepared by a geomancer. The copyright in those drawings and specifications were, we should mention, assigned by the geomancer to the plaintiff firm on June 12, 1989.

10. The Tsuen Wan shop was also fitted out and decorated pursuant to those drawings and specifications.

11. What those drawings and specifications call for are signboards with gold letters against a red background and red fixtures and fittings including terraced display counters of that colour. One finds those features in both of the plaintiff firm's shops. And the defendant firm incorporated them in its shop as well, although it did not use red to quite the same extent. For example, it chose yellow for its awning while the plaintiff firm had chosen red.

12. Essentially, those features are the matters relied on in copyright infringement.

13. They, together with another matter, are also relied on in passing off. The other matter is the use by the defendant firm of wrapping said to be confusingly similar to that used by the plaintiff firm.

14. The learned Deputy Judge's views on these matters can be gathered from three passages in his judgment. The first is this one:-

"In comparing the plaintiff's design drawings at exhibit L.2 with the photographs and plan of the defendants' premises at L.7 and L.8 I conclude that there is a marked similarity overall. It is the overall similarity which is the important factor and in this regard I particularly note the terraced display counters, which the defence has not adequately dealt with."

This is the second:-

"It is the red signboard and the predominant red colour in the defendants' fixtures which I find to be fundamental to the possible infringement of the plaintiff's rights. This is the case whether the copyright or the passing-off action is considered, as I also find sufficient similarity to warrant relief on the latter basis, granted the plaintiff's established business reputation."

And this is the third:

"I have yet to make an order as to paragraph 3 of the amended summons, concerning the plastic wrappings. Insofar as these may have infringed the plaintiff's rights, this can only be in conjunction with the similarity of the decor of the two businesses. The mandatory injunction will serve to remove any connection between the decor and the plastic wrappings and the latter do not warrant protection on their own. In the event paragraph 3 of the summons is dismissed."

15. The orders which the learned Deputy Judge went on to make are these:-

"(1) The 1st and 2nd Defendants do so alter the existing decoration of Shop 99K(1), Ground Floor, Dock Street, Whampoa Estate, Hunghom, Kowloon as to eliminate the red colour of the signboard and of the plastic fittings of the display drawers in the said Shop;

(2) An Injunction be granted restraining the 1st and 2nd Defendants by themselves or their servants or agents or otherwise from howsoever copying and/or reproducing any or any substantial part of the designs drawings and specifications (including colour scheme and decor) prepared by Mr. Lee Kwok Chu and exhibited as 'L-2' in the Affirmation of Lau King Fai filed on 3rd August 1991 until further order; and

(3) The costs of this application be to the Plaintiff."

16. In our judgment, this appeal, which is against all three of those orders, must be allowed in whole so as to set aside all three of them.

17. Conducting his case with commendable realism, Mr Pow for the plaintiff firm conceded that he did not have a strong case on either copyright infringement or passing off, although he was, in his submission, in a better position on the former than on the latter.

18. As far as passing off is concerned, the present case is hardly one which can be said to give rise to a serious question to be tried in the absence of the usual evidence of actual deception or confusion. No such evidence has been filed.

19. And as far as copyright infringement is concerned, let us assume without deciding that there is a serious question to be tried.

20. Even on that assumption, neither the mandatory injunction nor the prohibitory one can be sustained.

21. We will deal with the mandatory injunction first. Megarry J was doing no more and no less than stating the general approach of the courts when he said in Shepherd Homes v. Sandham [1971] 1 Ch.340 at p.351G that in normal cases the court must before granting a mandatory injunction feel a "high degree of assurance" that at the trial it will appear that the injunction was rightly granted. That such requirement is confined to normal cases - which is in any event what Megarry J said in terms - has been illustrated in subsequent cases such as Films Rover v. Cannon Film Sales [1987] 1 WLR 670 before Hoffman J and Leisure Data v. Bell [1988] FSR 367 in the Court of Appeal. We feel no such "high degree of assurance" on the basis of the evidence so far adduced by the plaintiff firm. It may be that its ideas have been adopted; but three-dimensional copying is far from established to our non expert eyes (which, by reason of section 9(8) of the Copyright Act 1956, are the eyes through which to look at the matter).

22. Those cases are of course themselves exceptional cases. In the 1987 case a mandatory injunction was needed to maintain the value of the subject matter of the dispute. And in the 1988 case refusing a mandatory injunction would have involved - as Hoffman J pointed out (at p.686A-B) - "a substantial risk of a special kind of injustice" as such refusal might have enabled "a party to achieve a commercial objective by a calculated disregard of the basic principle of a civil society that 'men perform their covenants made'."

23. There is nothing about the present case which takes it out of the normal run of cases.

24. As far as the prohibitory injunction is concerned, the learned Deputy Judge said that it "would probably protect [the plaintiff firm] from any attempt by the defendants to open another shop but as to the defendants' present shop it affords no protection whatsoever." However, there is no suggestion - let alone any evidence - that either defendant has any intention of opening any other shop. So there is no foundation for the making of the prohibitory injunction either.

25. We had assumed that the defendant firm had obtained a stay of the mandatory injunction pending appeal. But it emerged towards the end of the argument before us that the learned Deputy Judge had refused such a stay, that none had been sought from this court, and that the defendant firm has in fact complied with it by changing the red to brown. To that extent the appeal is academic. Nevertheless, the defendant firm is entitled to pursue the appeal. There is the question of costs.

26. We allow the appeal, set aside the whole of the learned Deputy Judge's Order and make an order nisi awarding the defendants their costs here and below.

Representation:

Mr Anderson Chow (instructed by Messrs Peter C. Wong, Chow & Hui Bon Hoa) for the  appellants/defendants.

Mr Jason Pow (instructed by Messrs John Ip & Co.) for the respondent/plaintiff.