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Hong Kong Stationery Manufacturing Co. Ltd v World Wide Stationery Manufacturing Co. Ltd. And Others

Judgment Cited authorities 8 Cited in Precedent Map Related
Vincent
Judgment Date25 October 1991
Subject MatterCivil Action
Judgement NumberHCA434/1990
CourtHigh Court (Hong Kong)
HCA000434/1990 HONG KONG STATIONERY MANUFACTURING CO. LTD v. WORLD WIDE STATIONERY MANUFACTURING CO. LTD. AND OTHERS

HCA000434/1990

1990, No. A434

IN THE SUPREME COURT OF HONG KONG

HIGH COURT

____________

BETWEEN

HONG KONG STATIONERY MANUFACTURING CO. LTD Plaintiff
AND
WORLD WIDE STATIONERY MANUFACTURING CO. LTD. 1st Defendant
CHENG HUNG YU 2nd Defendant
HING TAT METAL WORKS 3rd Defendant

______________

Coram: The Honourable Mr. Justice Mayo in Chambers

Dates of Hearing: 8 - 11, 14 - 15 and 17 October 1991

Date of Delivery of Judgment: 25 October 1991

___________

JUDGMENT

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1. This is a contested Order 14 application. The plaintiffs are seeking partial relief in respect of the matters they claim in the Statement of Claim. The hearing lasted 7 days.

2. At the commencement of the hearing Mr. Rogers for the defendants submitted that it was clear from the amount of the material which was before me and the complexity of some of the issues which would be ventilated that it was manifest that the defendants should be given leave to defend the proceedings. Initially I was sympathetic to this view. I now realize that this view of the matter was superficial.

3. The Statement of Claim runs to 29 pages. The plaintiffs are the manufacturers of stationery including a metal binding mechanism for the use on files. The 1st defendant is a competitor to them in the same line of business. The 2nd defendant was a former employee of the plaintiff. He has an interest in the 1st defendant. The 3rd defendant is the manufacturer of a piece of machinery which is used to make the metal binding mechanism which is used on files.

4. It is common ground that the 2nd defendant who is a qualified Engineer was largely instrumental in designing the plaintiffs' machine for making the metal binders while he was in their employment.

5. The plaintiffs claim that the machine drawings which were prepared by the 2nd defendant for the 3rd defendant infringed the plaintiff's copyright in their drawings and also claim a breach of confidential information on the part of the 2nd defendant and a breach of his contract of employment with them.

6. At the time of the commencement of the proceedings the plaintiffs obtained an Anton Pillar injunction. The main basis for obtaining this was their contention that the operation of the machine was secret and that they would be placed at an unfair disadvantage if the 1st defendant were permitted to make metal binders using the machine in competition with them.

7. At the return of the inter parties summons the defendants did not choose to contest the injunction. As Mr. Rogers put it they decided to contest the issue at the trial. In my view the defendants cannot in any way be criticized for this decision.

8. However, Mr. Rogers argued that as the plaintiffs' interests were protected until trial by this injunction this of itself was a good reason for not giving the plaintiffs the partial relief they were seeking under Order 14. Nothing would be achieved by entering a partial judgment against the defendants.

9. Mr. Liao who was representing the plaintiffs disagreed. He argued that there was very clear authority in the White Book in support of the proposition that where it was apparent that a defendant did not have an arguable defence to any part of a claim, a plaintiff was entitled to judgment in respect of that part. I have no doubt concerning the correctness of this contention.

10. The Order 14 was confined to the plaintiffs copyright claim in resepct of 32 of the 170 drawings involved in this litigation. There was no claim to Order 14 judgment in respect of the other causes of action.

11. It may be helpful at this stage to attempt to deal with the main complaints which are made by Mr. Rogers in connection with this application.

12. Perhaps the strongest objection he makes is that if the relevant issues are considered on the 32 drawings at this hearing rather than at trial his clients would have insufficient opportunity of contesting the originality of the drawings or the fact that there had been any infringement of the plaintiffs' copyight.

13. In particular it was wholly unsatisfactory that the plaintiffs should be allowed to place any reliance upon the presumptions contained in s.9 of the Copyright Ordinance C.39. He argued that this section had been repealed by the Bill of Rights Ordinance.

14. I would like to say at this stage that both Counsel presented excellent and very helpful submissions on the Bill of Rights and whether it had the effect of repealing s.9 aforesaid. Mr. Liao however made it clear that his submission constituted a fall back position as it was his contention that the plaintiffs could succeed in this application without placing any reliance upon s.9.

15. As an initial step I propose considering whether this contention is correct.

16. On the evidence lying before me, is it possible for the plaintiffs to succeed without the benefit of s.9?

17. Mr. Liao argued that on the available evidence the issue of originality had hardly even been raised.

18. The paragraph in the 2nd defendant's affirmation dealing with this topic was para. 16:

"I am advised by my legal adviser and verily believe that the plaintiff is also seeking a declaration that it owns the copyright in all the drawings in exhibit "WKC-15". To a greater or lesser degree, all the drawings depict parts or features which have been taken from earlier machines, specifications of parts, standards or other reference materials in the same way as the drawings in "CHY-9". I am advised by my legal advisers and verily believe that the issues of originality and infringement in respect of any particular drawing can only be fairly and properly determined in the same hearing. The question of infringement of the other drawings will be strenuously contested at trial."

19. I agree with Mr. Liao that this is only a very general and vague statement. It does not condescend to any particularity. I do however consider that it is incumbent upon me to also consider the observations which were made by 2nd defendant on each of the contested drawings. It would seem to me though that even if I do take cognisance of all these observations, the defendants case is not advanced much further.

20. The 2nd defendant was in a uniquely privileged position to give evidence concerning the originality of the plaintiffs' drawings as they were prepared by him. With the exception of in a few cases making reference to the use of standard parts in the plaintiffs' drawings there is overall in my view an ominous silence on the question of originality.

21. One of the questions which immediately arises is whether the defendants have had a sufficient opportunity to ventilate this issue having regard to the fact that this is an Order 14 application. I think they have.

22. It is apparent in Elram v. Fluid Power [1984] FSR 151 and Shippams v. Princes-Buitoni [1983] FSR 427 that further particulars were sought and both these cases proceeded as Order 14 applications.

23. Had the defendants wished to seek further information on the subject of originality they would have been entitled to receive it. The fact is though that they never asked and this being the case I consider it to be fair to limit myself to the evidence lying before me.

24. Although the circumstances considered by the Court of Appeal in Murjani v. Bank of India [1990] 1 HKLR 586 were very different to those before me, I do consider that I can derive assistance from the judgment of Hunter J.A. It is evident from this that an evidential burden shifts to a defendant in Order 14 proceedings to demonstrate on the balance of probabilities that he has a good defence. A general statement along the lines of paragraph 16 is insufficient in my view to comprehensively raise the issue of originality.

25. I accept however that where there has been specific reference to standard parts as part of the commentary made by 2nd defendant on the drawings this suffices to frame an issue. Mr. Liao conceeded that there was...

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