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Taiwan Fu Hsing Industrial Co Ltd v E. Bon Building Materials Co Ltd

Judgment Cited authorities 4 Cited in Precedent Map Related
Vincent
Judgment Date10 September 2008
CourtHigh Court (Hong Kong)
Judgement NumberHCMP185/2008
Subject MatterMiscellaneous Proceedings
HCA000849A/2004 TAIWAN FU HSING INDUSTRIAL CO LTD v. E. BON BUILDING MATERIALS CO LTD

HCA 849/2004

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

ACTION NO. 849 OF 2004

________________________

BETWEEN

TAIWAN FU HSING INDUSTRIAL COMPANY LIMITED Plaintiff
and
E. BON BUILDING MATERIALS COMPANY LIMITED Defendant

HCMP 185/2008

IN THE HIGH COURT OF THE

HONG KONG SPECIAL ADMINISTRATIVE REGION

COURT OF FIRST INSTANCE

MISCELLANEOUS PROCEEDINGS NO. 185 OF 2008

________________________

IN THE MATTER of Sections 53 and 57 of the Trade Marks Ordinance, Chapter 559 of the Laws of Hong Kong
and
IN THE MATTER of the Trade Mark Registration No. 03219 of 1999 “Leado” in Class 6 in the name of E. Bon Building Materials Company Limited a limited liability company incorporated under the laws of Hong Kong
and
IN THE MATTER of an application by Taiwan Fu Hsing Industrial Company Limited for a declaration of invalidity of the Trade Mark Registration No. 03219 of 1999 “Leado” in Class 6 and/or for rectification of the Register of Trade Marks in respect thereof

BETWEEN

TAIWAN FU HSING INDUSTRIAL COMPANY LIMITED Plaintiff
and
E. BON BUILDING MATERIALS COMPANY LIMITED Defendant

(Consolidated by Order of the Honourable Mr Justice Sakhrani
dated the 6th day of February 2008)

________________________

Before : Hon Sakhrani J in Court

Date of Hearing : 11-13 March, 28-30 July and 1 August 2008

Date of Judgment : 10 September 2008

________________________

J U D G M E N T

________________________

1. The plaintiff is a corporation organized and existing under the laws of the Republic of China with its principal place of business in Taiwan, Republic of China.

2. The plaintiff has for many years carried on business in, inter alia, the development, manufacture and export of, inter alia, door locks and door closer products for commercial and residential purposes.

3. The defendant is a company incorporated in Hong Kong. The defendant is a wholly owned subsidiary of E. Bon Holdings Limited a company listed on the Hong Kong Stock Exchange. The defendant supplies, inter alia, door ironmongery, bathroom accessories, door locks and door closers and has been trading in Hong Kong since about 1975. The defendant has also been manufacturing and importing metal door locks into Hong Kong and has been the agent for several overseas manufacturers.

4. These proceedings concern the rightful ownership of the Leado LD 勵多 trade mark (“the Leado trade mark”) registered in Hong Kong by the defendant under trade mark registration no. 03219 of 1999 (“the trade mark registration”) in Class 6 in respect of “locks, metallic pipes and tubes; door handles; level handles; hinges; unwrought and partly wrought common metals and their alloys; grab bars; towel bars; towel racks and goods of common metal not included in other classes; all included in Class 6”.

Background

5. By a written agreement between Leado Enterprises Co. Ltd, (“Leado Enterprises”) a Taiwanese company and the defendant dated 16 February 1989 Leado Enterprises appointed the defendant as the exclusive marketing agent in Hong Kong, Macau and the Mainland for one of Leado Enterprises’ products namely, the 1200 series door closer bearing the Leado trade mark on the terms and conditions contained therein for the period of 5 years which was renewable automatically for a further 5 years (“the distribution agreement”).

6. The distribution agreement was signed by John Yo for Leado Enterprises and Almond Tse for the defendant.

7. By a written agreement dated 20 October 1995 between the plaintiff and Leado Enterprises (“the 1995 agreement”) the plaintiff purchased from Leado Enterprises for the total sum of NT$72,068,328 Leado Enterprises’

“goods in stock, advance payments, transportation equipment, tools of trade, miscellaneous equipment, moulding equipment, machinery equipment, electronic equipment, goods for factory use, testing tools, testing equipment, trade marks, patent right, advance receipts etc.”

on the terms contained therein.

8. There can be no doubt that by the 1995 agreement the plaintiff acquired, inter alia, all trade marks and patent rights of Leado Enterprises.

9. Both before and after the 1995 agreement the defendant was marketing and selling products bearing the Leado trade mark in Hong Kong. Under the distribution agreement the defendant first sold door closers of the 1200 series bearing the Leado trade mark in 1989. Later on the defendant also sold door closers of other series including 980 series and 730 series bearing the Leado trade mark.

10. After the execution of the 1995 agreement John Yo, the founder and managing director of Leado Enterprises and the person who created the Leado trade mark, worked for the plaintiff until 1997. He left the plaintiff on or about 31 December 1997. After that he incorporated in Taiwan another company, Leado Door Controls Ltd, which is his present company in Taiwan dealing in the manufacture and distribution of door closers and exit devices under a trade mark other than the Leado trade mark.

11. It is common ground that even after the 1995 agreement the defendant remained the plaintiff’s sole distribution agent of door closers bearing the Leado trade mark in Hong Kong until termination in 2001.

12. On 14 May 1998 without prior notice to the plaintiff, the defendant applied for registration of the Leado trade mark in Hong Kong at the Trade Marks Registry. The trade mark registration was granted on 16 March 1999.

13. Also without prior notice to the plaintiff, the defendant applied on 11 November 1998 for registration of the Leado trade mark in the Mainland and this was subsequently granted.

14. According to the agreed chronology, on 16 September 1999 the plaintiff applied to register the Leado trade mark in the Mainland. On 5 November 1999 the plaintiff’s trade mark agent in the Mainland informed the plaintiff of the rejection of the application due to the defendant’s registration of the Leado trade mark. The plaintiff conducted a trade mark search in Hong Kong and discovered that the defendant had registered the Leado trade mark in Hong Kong. It is not disputed that the applications for registration of the Leado trade mark in the Mainland and Hong Kong were made by the defendant without the plaintiff’s knowledge or consent.

15. After the discovery by the plaintiff of the defendant’s registration of the Leado trade mark, the plaintiff instructed solicitors Messrs P. C. Woo who made a demand by letter dated 30 November 1999 to the defendant to assign the right of the Leado trade mark to the plaintiff.

16. By letter dated 10 December 1999 Messrs Shea & Co for the defendant in reply informed Messrs P. C. Woo that the plaintiff and the defendant had reached a settlement regarding the Leado trade mark.

17. By letter dated 10 December 1999 which was faxed from Max Lo of the plaintiff to Henry Tse of the defendant and copied to Joseph Chu of the plaintiff, the plaintiff put on record the contents of the telephone conversation that Max Lo had with Henry Tse the previous day. The said letter stated :

“Dear Henry,

Thanks for your call yesterday concerning the “LEADO” trade mark register in Hong Kong & China issue.

We also thanks for your kind consideration by register the “LEADO” immediately to protect our right when you aware that the China made imitation product might hurt our market & growth. Anyhow, you knew that we own this trade mark for years & it’s surprised to learn that you already took action on that without prior notice us.

We also appreciate that E-Bon is willing to transfer the “LEADO” trade mark, both in Hong Kong & China, back to us. We are willing to pay the expense occurred during registration of “LEADO” trade mark and cost for the transfer process from E-Bon to Taiwan Fu Hsing. Please provide invoice for our reference. Should you have any other proposal, please also advise. We do believe this could be easily solved based on our long-term relationship ……………………………………………”

18. By letter faxed on 16 December 1999 from Simon Shum of the defendant to Joseph Chu of the plaintiff, the defendant confirmed that it was going to transfer the Leado trade mark to the plaintiff. The reason given by the defendant for having registered the Leado trade mark was stated as follows :

“ Nobody concerns the market of Leado in Hong Kong as much as we do. Once the urgency of imitation products, we immediately apply the Trade mark but wonder that the Leado trade mark has not yet been registered by you despite of you claim the mark own by you in Taiwan for years. Due to some misunderstanding of annual sponsorship and its urgency, the Trade mark has been registered at that time here.

For the registration of Trade mark in China, we are now rejected by a similar name “Leader”. This Trade mark is still in processing. Do you want us to transfer also this Trade mark at this processing stage or after our completion of the Trade mark registration? We look forward to receiving your reply to finalize the transfer.”

19. By letter dated 23 December 1999 faxed to the plaintiff the defendant sent its invoice for the expenses involved in the registration of the trade marks in Hong Kong and the Mainland and also informed the plaintiff of the charges for the assignment of the trade mark. The plaintiff was prepared to and had agreed to pay the defendant the expenses incurred in the registration of the Leado trade mark by the defendant and the cost of the assignment to the plaintiff.

20. As the defendant had not yet received the assignment of the trade mark for its execution from the plaintiff, by letter dated 14 January 2000 faxed to the plaintiff, the...

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