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HCA1582/2008
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF FIRST INSTANCE
ACTION NO. 1582 OF 2008
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| BETWEEN |
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GUCCIO GUCCI S.P.A. |
Plaintiff |
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and |
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COSIMO LUDOLF GUCCI |
1st Defendant |
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FORON COMPANY LIMITED |
2nd Defendant |
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K-FUNG (OPTICAL) TRADING COMPANY LIMITED |
3rd Defendant |
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WINFIL INDUSTRIAL COMPANY LIMITED |
4th Defendant |
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Before : Deputy High Court Judge H. Wong, SC in Chambers
Dates of Hearing : 5–7 November and 9–11 December 2008
Date of Decision : 31 July 2009
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DECISION
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APPLICATIONS
1. By a Summons dated 25 August 2008 (“Summons”), the plaintiff applied, inter alia, for an injunction to restrain the 1st to 4th defendants from committing certain acts of trade mark infringement and passing off. The Summons originally came before Deputy Judge L. Chan, who adjourned the application, as it was obvious that hearing of the matter could not be completed within the time available (the Summons was initially marked for “15 minutes” only). The Summons was subsequently set down for a 3-day hearing before me. The time, however, turned out to be grossly insufficient to complete the oral arguments, and the application was further adjourned part-heard for another hearing, which lasted another 3 days.
2. It is not surprising that the original time estimated for the application was insufficient. There were quite a number of trade marks to be considered. Seventeen bundles of documents were put before the court. I was referred to a large number of authorities, and counsel’s submissions, together with the authorities cited, occupied another 6 bundles. Ms Winnie Tam SC represented the plaintiff and Mr Colin Shipp represented the 1st and 2nd defendants. The submissions of counsel were wide-ranging and insightful, for which I am grateful.
3. Before the Summons came before me, the application against the 3rd and 4th defendants had already been disposed of. I was thus only concerned with the application against the 1st and 2nd defendants.
4. In this Decision, I shall only deal with those matters that are directly relevant or material to my decision. As pointed out above, the submissions made by counsel were wide-ranging and covered many points, including some peripheral matters which are not directly material to my decision. I have considered counsel’s submissions fully and I do not intend any disrespect to counsel by not dealing with these peripheral points.
THE PLAINTIFF
5. About 88 years ago Mr Guccio Gucci started a small luggage store in Florence, Italy. After World War II, Mr Guccio Gucci started operating his business in the name of a limited company called Guccio Gucci S.r.l. This became, in due course (1982), Guccio Gucci S.p.A., the plaintiff in the present action.
6. From that humble beginning, the House of Gucci, more often simply referred to as “Gucci”, has grown over the decades into a world-renowned brand in the fashion and luxury goods business and as a designer label. According to the evidence before me, Intraband, a leading branding consultancy, has continuously listed “Gucci” as one of the top 100 brands of all industries in the world since 2001, when it first started its brand evaluation. In a survey commissioned and published by AC Nielsen in 2006, “Gucci” was listed as one of the world’s “Superbrands”. According to a global report on “Consumers and Designer Brands” dated April 2008, AC Nielsen reported that they “have seen a consistent upwards trend in Gucci’s brand perception which is congruent with their adspend figures. Thanks to strong, well-targeted campaigns and media strategy, Gucci is enjoying unparalleled brand health …”. One quarter of global consumers would prefer, according to AC Nielsen’s report, to buy “Gucci” products.
7. In a press release dated 27th February 2008, the Nielsen Company (holding company of AC Nielsen) described “Gucci” as “the world’s most coveted luxury brand according to a global luxury brands survey by the Nielsen Company.” Milward Brown Optimor, another brand consulting agency, also listed “Gucci” as one of the world’s top 100 brands in its 2008 branding report. Amongst various rankings, “Gucci” was ranked number 4 out of the “Top 10 with Highest Brand Contribution”.
8. Put before me by the plaintiff was a publication entitled “GUCCI BY GUCCI”, which was first published in 2006 on the 85th anniversary of the “birth” of the House of Gucci. Apart from documenting the 85 years of history of the Gucci brand, the book has a good collection of pictures showing dignitaries and celebrities wearing Gucci products and goods all over the world. Although Mr Shipp has sought to undermine the relevance of the publication by describing it as a piece of “self-glorification”, I think the images and pictures contained in the book are in many ways self-explanatory. I have no doubt in my mind that the evidence before me shows that “Gucci” is a world-renowned, prestigious and highly recognizable brand in the fashion and luxury goods business. In 2007, Intraband has estimated the Gucci brand as having a brand value of over HK$60 billion.
9. By the end of 2007, there were 233 directly operated “Gucci” stores in 60 countries, employing more than 6,500 employees. In that year, world wide sale of Gucci products exceeded 2 billion Euros (about HK$25 billion).
10. As far as Hong Kong is concerned, the first Gucci shop was opened in the Peninsula Hotel in 1974. Presently, there are 9 Gucci stores in Hong Kong, with its flagship store in the Landmark, Central. I have mentioned above that in 2007, worldwide revenue derived from the sale of Gucci products was in the region of HK$60 billion. In that year, sales in Hong Kong contributed about HK$1.7 billion. The plaintiff also spent substantially in advertising its products in Hong Kong. Advertising expenses in 2007 alone were estimated as HK$25 million. Another HK$12.3 million was spent in 2007 on PR expenses.
11. Despite its present success, the business of Gucci has had its ups and downs. There is no need for me to detail in this Decision the history of these ups and downs. Suffice to say this: until the 1980s, the Gucci business was run by the Gucci family. After World War II, there was a period of very rapid expansion of the Gucci business between the 1950s and the 1980s. However, following a spate of unfortunate events (which included some infamous incidents of murder, tax evasion, and criminal convictions that plagued certain members of the Gucci family), and intense family squabbles, by the late 1980s and early 1990s, the Gucci operation was in disarray. In 1988, 50% of the shares of the plaintiff was sold to a Bahrain-based investment company called InvestCorp. In September 1993, InvestCorp acquired the remaining shares of the plaintiff and members of the Gucci family ceased to have any interest in the Gucci business. InvestCorp set about to successfully rebuild the Gucci brand and business significantly improved in the course of the 1990s. InvestCorp subsequently sold its shares in the plaintiff. The present owner of the plaintiff is a French conglomerate, Pinault-Printemps-Reduoute (“PPR”).
THE DEFENDANTS
12. The 1st defendant is one of the great grandsons of Mr Guccio Gucci. He is the son of Mr Roberto Gucci, whose father was Mr Aldo Gucci, one of the 3 sons of Mr Guccio Gucci. The 1st defendant had been involved in the Gucci business, when it was still run by the Gucci family. He was a member of the plaintiff’s board in 1987-88, and he left the plaintiff in 1989, leaving his last position as the plaintiff’s vice-president.
13. After InvestCorp had acquired the shares of the plaintiff from the Gucci family, Mr Roberto Gucci set up his business called the “House of Florence”, which designed and sold leather goods under the “House of Florence” brand. The 1st defendant became a partner of his father’s business, and was a member of the board of the company which marketed the “House of Florence” brand. According to the 1st defendant, his “role in the House of Florence has been to develop and modify the designs in collaboration with the pattern makers and thus realize prototypes using high quality materials and craftsmanship”.
14. The 1st defendant claims that during the time when he was involved in the Gucci business, he had personally designed many products for the “Gucci” Accessory Collection. The plaintiff disputed the 1st defendant’s alleged experience as a designer while working with it, but for the purpose of this Decision, it is not necessary for me to make any finding in that regard. Indeed, in an application for interlocutory injunction, it is not appropriate for the court to resolve factual disputes based on affidavit evidence. I note that the evidence produced by the 1st defendant to support his claim as a designer is sparse—he has produced a few drawings which he claims were made by him during the time when he was working for the plaintiff, and he claims that he had helped refine the Gucci crest which is still used by the plaintiff today. Other than this, there is little evidence of the 1st defendant’s experience, let alone reputation, as a designer. More importantly, there is no evidence, and the 1st defendant does not claim, to have any reputation in Hong Kong as a designer. Accordingly, whatever might have been his designing experience while working with the plaintiff, there is no evidence before me of his having any reputation as a designer in Hong Kong. This is a matter of some importance when I consider the allegations of infringement of trade marks and passing off later in this Decision.
15. The 2nd defendant is a company incorporated in...
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