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San-x Co. Ltd. v Tai Pan Bread & Cakes Co. Ltd. And Another

Judgment Cited authorities 6 Cited in Precedent Map Related
Vincent
Judgment Date30 October 2002
Subject MatterCivil Appeal
Judgement NumberCACV219/2002
CourtCourt of Appeal (Hong Kong)
CACV000219/2002 SAN-X CO. LTD. v. TAI PAN BREAD & CAKES CO. LTD. AND ANOTHER

CACV000219/2002

CACV 219/2002

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF APPEAL

CIVIL APPEAL NO. 219 OF 2002

(ON APPEAL FROM HCA 78 OF 2002)

______________

BETWEEN
SAN-X COMPANY LIMITED Plaintiff
AND
TAI PAN BREAD & CAKES COMPANY LIMITED 1st Defendant

TANG KWOK LAY also known as JOHNNY TANG

2nd Defendant

______________

Coram: Hon Mayo VP and Chung J in Court

Date of Hearing: 17 October 2002

Date of Judgment: 30 October 2002

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J U D G M E N T

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Hon Mayo VP (giving the judgment of the Court):

1. This is an appeal from a judgment of Deputy High Court Judge Reyes SC who heard two summonses. The first was a summons issued by the plaintiff for an interim injunction to restrain the 1st defendant from infringing their copyright and passing off their goods as those of the plaintiff and the second a summons issued by the 1st and 2nd defendants seeking security for their costs in the sum of $520,000.

2. The Judge granted the injunction and the 1st defendant appeals against this.

3. The plaintiff is a Japanese company which invents, owns and exploits rights in cartoon figures.

4. The cartoons which are the subject matter of these proceedings are what are known as "bread" or "bun" figures which are referred to as "Kogepan characters".

5. There are four principal Kogepan characters: (1) Kogepan, (2) Overbaked Kogepan, (3) Kireipan; and (4) Ichigopan.

6. The plaintiff has entered into licence agreements with a number of third parties to use these characters in a wide range of merchandise.

7. The plaintiff has appointed an agent R.M. Enterprises Ltd. (RM) to licence third parties in Hong Kong to use the plaintiff's characters.

8. The 1st defendant is an established Hong Kong bakery company and the 2nd defendant is its general manager.

9. RM and the 1st defendant entered into negotiations for a licence to be granted to the 1st defendant. These negotiations did not lead to a successful conclusion and no licence was ever granted to the 1st defendant.

10. The 1st defendant did however as a result of these negotiations have access to a quantity of the plaintiff's Kogepan drawings and materials.

11. The 1st defendant is now marketing five "bread" characters in relation to the sale of their range of cookies. These are called Almond, Sesame, Honey, Croissant and Baguette.

12. It is the 1st defendant's case that these characters were created by Mr Lo Ping-shu one of their employees and the main issue which has to be determined in this litigation is whether the 1st defendant's characters infringe the plaintiff's copyright and whether the sale of these characters amounts to a passing off of the plaintiff's rights.

13. According to Mr Lo he created the characters adopted by the 1st defendant independent of any of the plaintiff's materials.

14. In the first ground of appeal complaint is made that the Judge erred in finding that there was a serious question to be tried in respect of the allegation by the plaintiff that their copyright had been infringed.

15. More particularly, having regard to the simplicity of the copyright works the Judge had failed to make a satisfactory comparison between the 1st defendant's "bread buddy" characters and the copyright works and appreciate that any common features that may exist between them had to constitute a substantial aspect of the Kogepan characters.

16. What is apparent from the judgment is that the Judge followed the approach laid down by Lord Millett in Designers Guild Ltd v Russell Williams Textiles Ltd [2001] FSR 113. He then set out the main features of the cases being advanced by the respective parties and came to the conclusion that there was indeed a serious question to be tried.

17. In coming to this conclusion the Judge very properly bore in mind the provisional nature of the application he was entertaining and the fact that it would necessarily be at the trial that a final determination would be made as to whether the plaintiff's copyright had been infringed.

18. The main complaint which was made by Ms Eu SC who represented the 1st defendant was that the plaintiff had presented its case on the basis of amalgamating together all of the various characteristics of their cartoon characters and then claimed that if any of the defendants' bread buddy characters displayed any of these characteristics this constituted an infringement of their copyright.

19. She developed this theme by referring us to a schedule she had prepared which compared the similarities between each of the plaintiff's characters and each of the defendants' which had been identified by the Judge. She also identified a number of what she contended were significant differences in the comparison which the Judge had failed to refer to in his judgment.

20. It is an important aspect of this appeal to determine whether the approach which is adopted by Ms Eu is the correct way to consider this matter.

21. The answer to this question can be found by analysing the principles which were laid down by Lord Millett at p. 124 of Designers Guild:

"37. It must be borne in mind that this is an action for infringement of copyright. It is not an action for passing-off. The gist of an action for passing off is deceptive resemblance. The defendant is charged with deceiving the public into taking his goods as and for the goods of the plaintiff. A visual comparison of the competing articles is often all that is required. If the overall impression is that 'they just do not look sufficiently similar' then the action will fail.

38 An action for infringement of artistic copyright, however, is very different. It is not concerned with the appearance of the defendant's work but with its derivation. The copyright owner does not complain that the defendant's work resembles his, his complaint is that the defendant has copied all or a substantial part of the copyright work. The reproduction may be exact or it may introduce deliberate variations - involving altered copying or colourable imitation as it is sometimes called. Even where the copying is exact, the defendant may incorporate the copied features into a larger work much and perhaps most of which is original or derived from other sources. But while the copied features must be a substantial part of the copyright work, they need not form a substantial part of the defendant's work: see Warwick Film Productions Ltd v. Eisinger [1969] Ch. 508. Thus the overall appearance of the defendant's work may be very different from the copyright work, but it does not follow that the defendant's work does not infringe the plaintiff's copyright.

39 The first step in an action for infringement of artistic copyright is to identify those features of the defendant's design which the plaintiff alleges have been copied from the copyright work. The court undertakes a visual comparison of the two designs, noting the similarities and the differences. The purpose of the examination is not to see whether the overall appearance of the two designs is similar, but to judge whether the particular similarities relied on are sufficiently close, numerous or extensive to be more likely to be the result of copying than of coincidence. It is at this stage that similarities may be disregarded because they are commonplace, unoriginal, or consist of general ideas. If the plaintiff demonstrates sufficient similarity, not in the works as a whole but in the features which he alleges have been copied, and establishes that the defendant had prior access to the copyright work, the burden passes to the defendant to satisfy the judge that, despite the similarities, they did not result from copying.

40 Even at this stage, therefore, the inquiry is directed to the similarities rather than the differences. This is not to say that the differences are unimportant. They may indicate an independent source and so rebut any inference of copying, but differences in the overall appearance of the two works due to the presence of features of the defendant's work about which no complaint is made are not material. In the present case the disposition of the flowers and (except in one instance) the colourways of the defendants' design are very different from those of the plaintiffs' design. They were not taken from the copyright work, and the plaintiffs make no complaint in respect of them. They make a significant difference to the overall appearance of the design, but this is not material where the complaint is of infringement of copyright and not passing off.

41 Once the judge has found that the defendants' design incorporates features taken from the copyright work, the question is whether what has been taken constitutes all or a substantial part of the copyright work. This is a matter of impression, for whether the part taken is substantial must be determined by its quality rather than its quantity. It depends upon its importance to the copyright work. It does not depend upon its importance to the defendants' work, as I have already pointed out. The...

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