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International Hotel Investments Plc And Another v Jet Union Development Ltd And Another

Judgment Cited authorities 18 Cited in Precedent Map Related
Vincent
Judgment Date03 November 2015
Year2015
Judgement NumberHCA1941/2015
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA1941/2015 INTERNATIONAL HOTEL INVESTMENTS PLC AND ANOTHER v. JET UNION DEVELOPMENT LTD AND ANOTHER

HCA 1941/2015

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO 1941 OF 2015

____________

BETWEEN
INTERNATIONAL HOTEL INVESTMENTS PLC 1st Plaintiff
CHI LIMITED 2nd Plaintiff

and
JET UNION DEVELOPMENT LIMITED 1st Defendant
CORINTHIA BY THE SEA PROPERTY MANAGEMENT LIMITED 2nd Defendant

____________

Before: Hon Au-Yeung J in Chambers
Date of Hearing: 9 October 2015
Date of Decision: 3 November 2015

_____________

DECISION
_____________

Index Paragraph

A. INTRODUCTION 1
B. THE PARTIES 2
C. THE BACKGROUND 10
D. PRINCIPLES FOR GRANT OF INTERLOCUTORY INJUNCTION 18
E. THE PASSING OFF CLAIM 22
F. CLAIM UNDER TMO 96
G. SUMMARY ON SERIOUS ISSUES TO BE TRIED 117
H. INADEQUACY OF DAMAGES AS A REMEDY 119
J. BALANCE OF CONVENIENCE 123
K. CONCLUSION 129

A. INTRODUCTION

1. This is the plaintiffs’ application for an interlocutory injunction restraining the defendants from engaging in mass promotion of a residential development using the English name “Corinthia”. The plaintiffs rely on the tort of passing off and its claim under section 63 of the Trade Marks Ordinance, Cap 559 (“TMO”). The defendants oppose the application on virtually all fronts.

B. THE PARTIES

2. The plaintiffs own the “Corinthia” brand and operate the Corinthia Hotel chain. They also develop up-market residential and commercial properties in Europe, Russia and Africa. They have used the name Corinthia for their hotels, since 1962. Although P1 (a listed company) was only established in 2000, all the intellectual property associated with the Corinthia brand is now vested in P1. P1 has over 90 registered and pending trademarks worldwide.

3. According to their Annual Report & Financial Statements 2014, P1 owns and P2 manages the Corinthia Hotel in London, St. Petersburg, Budapest, Prague, Lisbon, Tripoli, St. George’s Bay Malta and Malta. P2 manages, among others, the Corinthia Palace Hotel and Spa, Corinthia Hotel Khartoum (both of which are not owned by P1).

4. Infinite Luxury Limited (“ILL”) has been engaged to market Corinthia Hotels in Hong Kong, Singapore and China.

5. D1 is the developer of a residential property development known as “Corinthia by the Sea” and “帝景灣”(“the Development”) currently under construction in Tseung Kwan O in Hong Kong. D2 is to be the manager of the Development under the deed of mutual covenant.

6. The defendants are beneficially owned by Sino Land Co Ltd (“Sino Land”) and K. Wah International Holdings Ltd (“K. Wah”), which are engaged in property development and hotel business. It is no exaggeration to say that Sino Land and K.Wah are household names in Hong Kong, especially to those who own or are interested in buying residential properties.

7. Sino Land was first founded in 1971 and has been listed on the Hong Kong Stock Exchange since 1981. It has completed 51 property developments in Hong Kong. “Sino”, “Sino Land”, “信和” and “” a white S logo in orange or black circle are registered trade marks of Sino Land. Since 1981, these registered marks have been used on Sino Land’s property developments, including construction sites in Hong Kong.

8. The K. Wah Group (of which K. Wah is part) was founded in 1955. K. Wah has been listed on the Hong Stock Exchange since 1987. Since 2000, K. Wah has, solely or jointly with other developers developed about 21 residential property developments.

9. The K. Wah Group trades under the trade names and trade marks of "K. WAH", "嘉華", the logo mark " " and the composite mark " ". K. Wah also trades under the mark " ". The logo marks " " and " " feature on and at K. Wah's property developments, including construction sites.

C. THE BACKGROUND

10. In June 2014, D1 registered the “Corinthia” mark and in November 2014, the “Corinthia by the Sea” mark, in classes 36 and 37 in Hong Kong.

11. On 13 January 2015, D1 held a widely publicized press conference (“the press conference”) to introduce the Development to the Hong Kong public under the Chinese name “ 帝景灣”, the English name “Corinthia By The Sea” (“the Mark”) and the logo (“the Logo”). There was extensive press coverage showing that the Development was jointly developed by Sino Land and K. Wah.

12. The promotion campaign of the Development began in June 2015. It included operation of the website at www.corinthiabythesea.hk ("the Website"), opening of a Sales Office, and various forms of advertisement on newspaper, TV spots, buses and lightboxes in the MTR (“the mass advertising”).

13. Section 73(3)(a) of the Residential Properties (First-hand Sales) Ordinance, Cap 621 (“Cap 621”), provides that the holding company of the vendor must be stated in advertisements. The copyright notice on the Website refers to the copyright being owned by Sino Land. All the advertisements bore the Mark and the Logo together with the marks of Sino Land and K.Wah in a conspicuous manner.

14. Further, the Mark has been used on both the exterior of the Development (under construction) and in the Sales Office, including a building model showing use of the Logo. At the construction site of the Development, the buildings under construction are covered in green fabric, whilst large banners showing the Mark and the Logo, alongside the names and marks of Sino Land and K.Wah, have been displayed since March 2015.

15. The first date of sales was on 17 June 2015 at the Sales Office.

16. Seven months after the press conference, on 25 August 2015, the writ and this injunction summons were taken out.

17. The plaintiffs sue the defendants in passing off and infringement of Corinthia’s trade marks. The mass advertising at roadside hoardings, MTR stations, buses etc has the alleged effect of damaging the exclusive and up-market reputation of luxurious hotels and residential developments under the “Corinthia” brand. The plaintiffs seek to restrain the defendants from using the English name “Corinthia”.

D. PRINCIPLES FOR GRANT OF INTERLOCUTORY INJUNCTION

18. The principles in American Cyanamid are not in dispute. The court must be satisfied (1) that there are serious issues to be tried; (2) that damages are not an adequate remedy; and (3) that on the balance of convenience, it is just and convenient to grant the injunction.

19. There shall not be trial on affidavits and the court should not resolve difficult questions of law and fact in an application for interlocutory relief. However, if the court can come to a view on the relative strength of the parties' cases on the credible evidence then it could do so: Series 5 Software Ltd. v. Philip Clarke & ors [1996] FSR 273 at 286, Laddie J.

20. In trade mark and passing off cases, it is hard to avoid assessing the strength of each party’s case since it has a bearing on the extent of damage the plaintiff may suffer and the balance of convenience. The weaker its case, the lesser the risk of substantial damage to the plaintiff pending trial: The Financial Times Ltd v Evening Standard Co [1991] FSR 7 at 10-11.

21. The fundamental principle is that the Court will take whichever course that appears to carry the lower risk of injustice if it should turn out that it is wrong. This “fundamental” principle is the source of the guidelines that have evolved for the determination of interlocutory injunctions (included are, of course, the American Cyanamid guidelines) and therefore, in the application of any guidelines, sight must not be lost of this principle. See Music Advance Ltd v Incorporated Owners of Argyle Centre Phase I [2010] 2 HKLRD 1041, §12(d), Ma J (as he then was).

E. THE PASSING OFF CLAIM

22. The elements for passing off are the classic trinity of goodwill, misrepresentation and damage: Reckitt & Colman Products Ltd v Borden Inc (No.3) [1990] RPC 341 per Lord Oliver of Aylmerton at 406, better known as the Jif Lemon case.

E1. Relevant date

23. The relevant date for considering whether there has been passing off and whether the plaintiffs had the necessary goodwill is the date of commencement of the conduct complained of: Cadbury-Schweppes Pty Ltd & ors v The Pub Squash Co Pty Ltd[1981] RPC 429 at 494, line 27. This was 18 June 2014, the date of the defendants’ application of registration of the mark “The Corinthia” in Hong Kong (§21 soc).

E2. Goodwill, not just reputation

24. It is arguable that Hong Kong recognizes international goodwill: Kabushiki Kaisha Yakult Honshsa v Yakudo Group Holdings Ltd [2002] 3 HKLRD 595, at §15, Deputy Judge Lam (as he then was).

25. What the plaintiffs have to prove is “not a reputation in his brand name or get-up but a goodwill or reputation attached to the goods or services which he supplies by association with the identifying name or get-up”: Harrods Limited v Harrodian School Limited [1996] R.P.C. 697 at 711, per Millett LJ.

26. It is not sufficient to prove mere reputation. Goodwill is territorial. The plaintiff needs to have customers within Hong Kong although it does not have to have any presence here: Starbucks (HK) Ltd v British Sky Broadcasting Group PLC [2015] E.T.M.R. 31, UK Supreme Court.

27. In Starbucks, the issue was whether a claimant in a passing off claim was required to establish that it has a business with customers within the jurisdiction, or whether it was sufficient for it to establish only that it possessed a reputation among a significant section of the public within the jurisdiction. Lord Neuberger held (at §52) as follows:

“The claimant must show that it has a...

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