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Biozeal, Llc And Another v Nature’s Story Co Ltd And Another

Judgment Cited authorities 10 Cited in Precedent Map Related
Vincent
Judgment Date09 December 2021
Neutral Citation[2021] HKCFI 3725
Judgement NumberHCIP34/2021
Citation[2022] 1 HKLRD 191
Year2021
Subject MatterIntellectual Property Case
CourtCourt of First Instance (Hong Kong)
HCIP34A/2021 BIOZEAL, LLC AND ANOTHER v. NATURE’S STORY CO LTD AND ANOTHER

HCIP 34/2021

[2021] HKCFI 3725

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

INTELLECTUAL PROPERTY PROCEEDINGS NO. 34 OF 2021

_____________

BETWEEN
BIOZEAL, LLC 1st Plaintiff
MURRAY COLIN CLARKE 2nd Plaintiff
and
NATURE’S STORY COMPANY LIMITED 1st Defendant
PELICAN HILLS COMPANY LIMITED 2nd Defendant

_____________

Before: Hon Lok J in Chambers

Dates of Written Submissions: 29 October, 12 & 17 November 2021

Date of Decisions: 9 December 2021

____________________

DECISIONS

____________________

1. This is the Defendants’ application for: (i) leave to appeal against my decision to grant interlocutory injunctions (“the Injunctions”) against the Defendants (“the Leave Application”); and (2) stay of execution of the Injunctions pending the application for leave to appeal and the appeal (“the Stay Application”). The Reasons (“the Reasons”) for my earlier order to grant the Injunctions (“the Order”) was handed down by me on 20 October 2021. For the purpose of these Decisions, I would adopt the same abbreviations I used in the Reasons.

2. The application for the Injunctions (“the Injunctions Application”) was first taken out by the Plaintiffs on 5 July 2021. By another application dated 8 July 2021, the Defendants applied to stay the present proceedings in favour of arbitration proceedings (“the Arbitration Application”) which they expressly told this court that they intended to commence.

3. Both the Injunctions Application and the Arbitration Application came before me on 9 July 2021. Directions were given for the filing of the affidavit evidence for both applications. In the following two months, the parties had filed extensive evidence in relation to both applications, including expert evidence on California law in relation to the Arbitration Application. Shortly before the substantive hearing of both applications on 28 September 2021 (“the Substantive Hearing”), the Defendants abandoned the Arbitration Application and took out the Forum Application instead. No issue had been taken by the Defendants on jurisdiction ground. In the Substantive Hearing, I myself raised the jurisdiction issue as to whether the Hong Kong courts have the power to grant interlocutory injunctions with extra-territorial effect in respect infringement of intellectual property rights. After the Plaintiffs had referred me to authorities such as The Law of Passing-Off, Unfair Competition by Misrepresentation by Wadlow[1] to show that the common law is treating passing-off differently from other intellectual property rights on this particular issue, the Defendants accepted the position without raising any counter arguments.

4. Now the Defendants are seeking to appeal against the Order for the granting of the Injunctions. In supporting the application, Ms Tam, SC, who did not appear before me in the Substantive Hearing and is the third senior counsel appearing for the Defendants in these proceedings, submits more than 37 pages of submissions and 35 authorities. A substantial part of the arguments relate to jurisdiction issue which have not been canvassed before me in the Substantive Hearing. Needless to say, most of the authorities had not been referred to me in the Substantive Hearing.

5. Delay in litigation devalues intellectual property rights, in particular in modern world when commercial merchandise may not enjoy long product cycle. That is why interlocutory injunction application plays an important role in IP litigations, and the court has to examine all the circumstances in such kind of application to decide what should be best way to protect the rights of the parties pending the final determination of the dispute. The parties are expected to put forward all the evidence and arguments to support their respective cases so that the court can make the right decision usually on an urgent basis. The practice of putting forward a half-baked case in the first hearing, then appealing against the first instance decision and applying for stay of execution with a view to further delay the granting of interim relief should not therefore be encouraged.

6. Despite these observations about the conduct of the case by the Defendants, the court should still consider carefully the arguments put forward by the Defendants in support of the Leave Application, in particular those on jurisdiction issues. The appellate court is obliged to entertain challenges of jurisdiction on appeal.[2] After all, it is the merits of the intended appeal that count.

7. The Defendants have made it clear that they will only seek to appeal against the Injunctions in so far as they relate to the mark “童年時光”, i.e.the Chinese Mark.

PRINCIPLES GOVERNING LEAVE TO APPEAL APPLICATIONS

8. For the purpose of the Leave Application, the following legal principles are relevant.

9. Leave to appeal will only be granted if the appeal has a reasonable prospect of success, viz. the prospect of success must be more than fanciful though without having to be probable. This is only a threshold. The court has a discretion to refuse leave even if such threshold is met.[3] The court can also grant leave to appeal if there is some other reason in the interests of justice that the appeal should be heard.[4]

10. The granting of an interlocutory injunction is a matter of discretion. It is not enough that members of the appellate court would have exercised the discretion differently had they been the primary judge.[5]

11. The English Court of Appeal has also stressed that the appellate court does not exist to provide a second bite at each interim cherry in the sense that it is open to parties, having failed in front of the first instance judge, simply to start again and have a de novo hearing in the hope that they will succeed in front of the appellate court. The court also reiterated that particularly in the field of interim injunctions, it is primarily the trial judge who is appointed to decide whether or not an injunction should be granted. There is a heavy burden on the appellant to show that the first instance judge has erred in principle, and that in exercising their discretion there is either an error of principle or that they exercised their discretion in a way which no reasonable judge properly directing themselves as to the relevant considerations could have exercised it.[6]

12. Repeating the arguments that had been made before without demonstrating how and why the judge went wrong is of little assistance and does not begin to make out a case that the judge’s conclusion is plainly wrong.[7]

13. Where a party omitted to take a point at trial and then seeks to raise it on appeal, they will be barred from doing so unless there is no reasonable possibility that the state of the evidence relevant to the point would have been materially more favourable to the other side if the point had been taken at trial. The foundational imperative of the “state of the evidence bar” is fairness.[8]

14. Similarly, in the context of an appeal in relation to interlocutory applications, whilst the appellate court has power to entertain new points in such an appeal, it is clearly and firmly established that new points which are fact sensitive or otherwise affect the course of evidence or conduct of the case at the hearing below should not be allowed. Though this principle is usually applied in situations where the new points necessitate further evidence to be adduced, it is not confined to such scenarios. Very often, the raising of new point by one party may lead to the other party raising counter arguments and the consideration of such counter arguments may involve factual assessment in a different light from that undertaken by the court below. Sometimes, it may involve a different weighing of factors in the exercise of discretion. Alternatively, the other party may embark on a different course of forensic conduct if the new point were taken earlier. The appellate court, in considering whether the new point would be entertained, is entitled to take these matters into account in order to avoid unfairness to the other party.[9]

15. Generally, a new point which is fact and evidence sensitive and for other reasons affecting the conduct of the case below by the other side should not be entertained on appeal. It is not simply a matter of admitting new evidence in order to support the additional ground of appeal. The more fundamental question is whether the additional ground can be entertained in the light of the deliberate choice of those acting for the appellant not to rely on that ground below.[10]

16. The Ladd v Marshall principles governing admission of new evidence on appeal are trite and I do not intend to repeat the same here. It is right to say that the application for leave to adduce new evidence cannot be entertained until after leave to appeal has been granted, but the court is entitled to take into account the likelihood of the intended appellant in satisfying the high threshold test in considering the prospect of success of the appeal.

GROUNDS FOR APPEAL

17. I then consider the various grounds of appeal advanced by the Defendants.

(i) Ground based on non-justiciability of validity of foreign trade marks

18. The first ground of appeal is that the court has no subject matter jurisdiction. Since the Plaintiffs’ passing-off claim involves challenging the validity of a foreign trade mark, the court should have held that the claim is non-justiciable. The Defendants are relying on the Moçambique rule that the court should not claim jurisdiction to adjudicate upon matters which, under generally accepted principles of private international law, are within the peculiar province and competence of another jurisdiction.[11]

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