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Oriental Logistics Co Ltd v Oriental Logistics Group Ltd

Judgment Cited authorities 6 Cited in Precedent Map Related
Vincent
Judgment Date10 June 2009
Year2009
Judgement NumberHCA1804/2005
Subject MatterCivil Action
CourtHigh Court (Hong Kong)
HCA001804/2005 ORIENTAL LOGISTICS CO LTD v. ORIENTAL LOGISTICS GROUP LTD

HCA1804/2005

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 1804 OF 2005

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BETWEEN
ORIENTAL LOGISTICS COMPANY LIMITED Plaintiff
and
ORIENTAL LOGISTICS GROUP LIMITED Defendant

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Before : Hon Chu J in Court

Date of Hearing : 3, 4 and 7 November 2008

Date of Judgment : 10 June 2009

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J U D G M E N T

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1. This is a passing off action. The main issues are whether the plaintiff has proved sufficient goodwill in the words “Oriental Logistics”, whether there is any actionable misrepresentation by the defendant in using “Oriental Logistics” as its company name and whether the plaintiff has suffered or is likely to suffer any damage as a result of misrepresentation by the defendant.

2. Much of the facts in this case is not in dispute and can be simply put.

The plaintiff

3. The plaintiff is a Hong Kong company incorporated on 21 November 1996. Its name in English and Chinese are “Oriental Logistics Company Limited” and “東方儲運有限公司”.

4. The company was founded by Mr Lau Wai Kwong Gilbert, who previously had many years of experience working in large warehousing company. Mr Lau also engages actively in a number of public duties in Hong Kong and China, including acting as the president of the Hong Kong Logistics Association from 1997 to 1999. Mr Lau is one of the three plaintiff witnesses. The witness statement of Miss Margaret Lau, the plaintiff’s executive director, was agreed for admission. The third witness is Mr Wong Foo Wah, the president of the Hong Kong Logistics Association.

5. As its name suggests, the plaintiff is engaged in the provision of logistics services. It started as third party logistics provider of physical cargo distribution and public warehousing. By 1999, it had moved on to provide other services, including e-commerce logistics, third party warehousing, total logistics, inventory management and freight forwarding management through partnership with major shipping lines and air freight companies. The plaintiff, however, never issued bill of ladings in its own name.

6. The plaintiff is now part of a group of companies. The holding company is Oriental Logistics Holding Company Limited, incorporated in 2002. Apart from the plaintiff and the holding company, the group now has four Hong Kong companies, three of which were incorporated before 2003. The group also has three PRC companies incorporated in 2002, 2004 and 2005. Apart from one Hong Kong company called Eastern Investment Holdings Limited, all companies in the plaintiff’s group of companies have included in their English names the word “oriental”.

7. The plaintiff focuses mainly on the provision of industrial logistics services. Its clients include US Fortune 500 companies and well-known international corporations and brand names. The plaintiff prides itself in being able to provide one-stop full logistics services. It is common ground that logistics services or management is about the geographical repositioning of raw materials. According to the plaintiff’s expert, Mr Wong Foo Wah, who has been in the logistics trade for 30 years, integrated logistics services should comprise five stages, being warehousing, physical distribution (transportation), inventory management, freight forwarding and import/ export.

8. According to Mr Lau, the plaintiff has a fleet of 24 container trucks and lorries and six warehouses in Hong Kong. It has branch offices in Beijing, Shanghai, Guangzhou and Taiwan. It also has agents and warehouses in eight cities in China. The plaintiff, through alliance service agreements, is connected to a sea/ air freight worldwide forwarding network and is further in partnership with a number of companies engaged in logistics services, transportation and freight forwarding services. It provides services in Southeast Asia and also Europe and the USA.

9. Mr Lau says that the plaintiff is one of the few companies in Hong Kong that offers comprehensive and integrated third party logistics services. Most of the other logistics companies in Hong Kong, however, only focus on services for one or some of the five stages identified by Mr Wong.

10. It is Mr Lau’s evidence that the plaintiff had between its incorporation and 2007, spent about HK$ 1.44 million on advertising and promoting its business and promoting the business name of “Oriental Logistics”. The plaintiff’s annual business turnover had grown since its incorporation, from about HK$ 8 million in 1997 to over HK$ 66 million in the year ending 31 March 2004.

11. Over the years, the plaintiff had also received various awards and recognitions in connection with its business performance and management quality. It had also promoted the study of logistics in Hong Kong by sponsoring scholarships and academic exchanges at vocational institute and universities.

12. Both Mr Lau and Mr Wong say that the plaintiff is an established and reputable logistics service provider in Hong Kong.

The defendant

13. The defendant was incorporated in Hong Kong on 3 March 2004. Its English and Chinese names are “Oriental Logistics Group Limited” and “超捷國際物流有限公司”.

14. The defendant is a subsidiary of a Taiwan company called Oriental Logistics Group Limited (超捷國際物流股份有限公司) (“OLG”). OLG was incorporated in Taiwan in March 2000 and before changing to its present name in 2005, it was known as Oriental Logistics Company Limited (超捷國際有限公司). The majority shareholder of OLG is Mr Tsou Yun Lien who has been in logistics business since 1987 and has held responsible positions with various logistics and freight forwarding trade organizations in Taiwan. He is the only witness called by the defendant.

15. OLG is a Taiwan based logistics company. It has branches or subsidiaries in Taichung and Kaoshoung in Taiwan, Shanghai, Xiamen, Fouzhou and Shenzhen (since 2006) in China and also Hong Kong (i.e. the defendant). The core business of OLG is international freight forwarding services with the majority of its customers being based in Taiwan, mainland China and Hong Kong.

16. According to Mr Tsou, OLG was initially named “Oriental Logistics Company Limited” because the word “oriental” means and refers to the East and East Asia region and signifies that OLG is founded and based in the East and East Asia. These are also the areas on which OLG focuses its logistics services. As for the words “Logistics Company Limited”, they were chosen to reflect that the nature of the company business is in logistics services and is a company limited by shares. OLG was subsequently renamed “Oriental Logistics Group Limited” to reflect the development and the expanded scale of the company.

17. The two words “超捷” in the Chinese name of OLG carry the meanings of “going beyond” (or surpassing) and “speed and victory”. Mr Tsou explained that they were chosen to reflect the company’s aim to surpass its past and to provide speedy and convenient logistics services for its customers.

18. Mr Tsou’s evidence shows that before the incorporation of the defendant, OLG was already engaged in transportation and delivery of cargoes to Hong Kong. The relevant bills of lading were all issued in the name of OLG and carried its trademark. The decision to set up the defendant in 2004 was to provide end-to-end services to the customers of OLG and to handle the business in Hong Kong through a subsidiary. Accordingly, it was decided that the defendant was to have the same Chinese and English names as well as the same mark as OLG, which already enjoyed a certain level of popularity in Hong Kong. And as OLG was then in the process of changing its English name, the defendant adopted the new English name of Oriental Logistics Group Limited.

19. The incorporation of the defendant was arranged by an accounting and secretarial company. Mr Tsou’s evidence is that neither he nor OLG was aware of the existence of the plaintiff at the time the defendant was set up and named. When cross-examined, he accepted that they did not ask for a search to be done as they had entrusted the work to the accountant and relied on his professional expertise and advice.

20. The defendant’s logo, which is also the trademark of OLG and used by the other group companies, is registered as a trademark in Hong Kong on 8 February 2005, with a date of priority of 27 July 2004. The evidence of Mr Tsou is that the mark is always used together with the Chinese and English names of the defendant or of OLG on the business documentation (such as invoices, bills of lading or other shipping documents) and advertisements and promotion materials.

21. Since incorporation in Hong Kong, the core business of the defendant is the provision of ocean freight and airfreight forwarding services. It is registered with the Hong Kong Marine Department and the freight forwarding liaison team of Hong Kong airlines. The defendant advertises regularly in the Hong Kong Shipping Gazette (published weekly), which is a key trade magazine and also shipping newspapers. Within the first year of its incorporation, the defendant had a business turnover of over HK$ 47 million. Most of the customers at the time were from Taiwan. Since then, the defendant’s clientele had developed and expanded.

22. In cross-examination, Mr Tsou stated that since about 2006 or 2007, the defendant also offers transportation services for its sea freight-forwarding customers. At about the same time, the defendant also started to offer warehousing services to provide temporary and short-term storage service to its freight-forwarding customers.

The dispute

23. In July 2004, it came to the attention of the plaintiff that in an online directory known as “Hong Kong...

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