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CACV 191/2013
IN THE HIGH COURT OF THE
HONG KONG SPECIAL ADMINISTRATIVE REGION
COURT OF APPEAL
CIVIL APPEAL NO. 191 OF 2013
(ON APPEAL FROM HCA NO. 2210 OF 2011)
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BETWEEN
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TSIT WING (HONG KONG) COMPANY LIMITED |
1st Plaintiff |
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TSIT WING INTERNATIONAL COMPANY LIMITED |
2nd Plaintiff |
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TSIT WING COFFEE COMPANY LIMITED |
3rd Plaintiff |
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TW CAFÉ LIMITED |
4th Plaintiff |
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and |
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TWG TEA COMPANY PTE LTD |
1st Defendant |
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TWG TEA (HK) COMPANY LTD |
2nd Defendant |
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| Before : Hon Lam VP, Barma and McWalters JJA in Court |
| Dates of Hearing : 14 to 16 October 2014 |
| Date of Judgment : 3 December 2014 |
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JUDGMENT
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Hon Lam VP (giving the Judgment of the Court):
A. Background
1. Tsit Wing group of companies have carried on business in Hong Kong for a long time. In the early days since 1932, the proprietors of the business traded as an unincorporated firm. A company was first incorporated in 1955. The business has been trading principally as a wholesaler in the supply of coffee and tea products. Over the years, the business has grown substantially and diversified. In 2008, the group gave the following description to its corporate profile on its website:
“Tsit Wing International Holdings Limited is one of Hong Kong’s leading food and beverages supplier. From its beginning as a coffee, tea and grocery supplier to beverage and food services industry leader, Tsit Wing has expanded its business range to include coffee shops, distributing branded coffee and tea machines, and supplying instant beverage products to supermarkets.”
2. In 2011, Tsit Wing had a total gross sale figure of $393 million including $114 million odd sale of coffee and $111 million odd sale of tea.
3. The holding company of the group has been listed on the Singapore Stock Exchange since 2001. In 2006, the 2nd Plaintiff, a company in the Tsit Wing group, obtained registrations of 2 new sets of trade mark (which we shall collectively refer to as “the 2006 marks”):
(a) trade mark number 300655463 in respect of Class 29 and 30. The mark is as shown in Annex 1; and
(b) trade mark number 300635470 in respect of Class 29 and 30. The mark is as shown in Annex 2.
4. On 9 August 2013, there was a partial surrender in respect of trade mark number 300655470. On 13 February 2014, there was a partial surrender in respect of trade mark number 300635463. For present purposes, it is sufficient to note that the registrations are valid in respect of these goods: coffee, tea and sugar.
5. These new marks were adopted in conjunction with the celebration of the 75th anniversary of the group business in 2007. Before that, the logo used by the group was another mark as shown in Annex 3.
6. The Chief Executive Officer of the group introduced the 2006 marks in an interview published in the Oriental Daily Newspaper of 6 February 2006 which had been produced as exhibit D2 at the trial. In the interview, he also recounted the development of the group business since its commencement. That interview took place to commemorate the group being awarded with the honour of “Hong Kong Top Brand”. He explained about the concept behind the 2006 marks and described the three coloured circles in those marks as the three coloured coffee beans overlapping each other. TWG stands for Tsit Wing Group.
7. In 2009, the group adopted another new mark which has since been widely used in its promotional material as well as products, as shown in Annex 4.
8. However, the 2006 marks are still being used in stationery, invoices, annual reports, websites and products even though such use is, perhaps, not as prominent as the new mark in the product packaging and promotional items. In any event, there is no application to expunge the 2006 marks and they remain valid subject to the partial surrenders mentioned earlier.
9. The 1st Defendant is a Singaporean company. It changed its name to its present style in 2008. For it, TWG stands for The Wellness Group. It started to establish itself as a distinguished tea shop operator, at first operating four tea shops in Singapore, eventually operating tea boutiques and sale outlets internationally in London, New York, Tokyo, Kuala Lumpur and Bangkok. It also supplied tea to airlines and hotels.
10. In 2011, the 1st Defendant planned to enter into the market in Hong Kong by opening a tea salon here. The 2nd Defendant was incorporated as a wholly owned subsidiary of an associated company of the 1st Defendant, OSIM-TWG Tea (North Asia) Pte Ltd. According to the findings by Deputy Judge Saunders [“the Judge”] (which are not challenged in this appeal), the Defendants did so with full knowledge of the Plaintiffs’ 2006 marks. Witnesses for the Defendants gave evidence that they had informed the Plaintiffs of their intention to operate a tea salon at IFC Mall in Hong Kong and tried to negotiate for a global co-existence agreement with the Plaintiffs. Such evidence was rejected by the Judge who found that the Defendants took a deliberate risk in opening the tea salon here without the consent of the Plaintiffs. The Judge also found that the Plaintiff only learnt of such intention on the part of the Defendants in mid-October 2011.
11. The IFC tea salon of the 2nd Defendant commenced business on 8 December 2011. Two of the signs adopted by the Defendants were as follows:
(a) The cartouche mark as shown in Annex 5; and
(b) The balloon mark as shown in Annex 6.
12. Mr Liao SC (appearing for the Defendants together with Mr Shipp) placed before us a bundle of photographs (extracted from the hearing bundles) to demonstrate the context in which the signs were being used. Those photographs show:
(a) In the décor of the tea salon, the cartouche mark was extensively used: multiple shelves lined with canisters are built into the sides of the wall in the restaurant area and behind the retail sales counter inside the tea salon. Each canister features the cartouche mark printed on the front. Wooden signs displayed near the glass entrance to the tea salon and above the retail sales counter also prominently feature the cartouche mark. Because of the prominence of the letters “TWG” in the cartouche mark, the effect created is that from a distance, a patron of the tea salon and potential customers walking past the salon would notice this to be its identity;
(b) In the packaging of the Defendants’ products, the cartouche mark is ubiquitously present in most of its retail products ranging from box packaging, glass jars, tin packaging and each individual tea bag. A number of specialty tea retail products do not contain the cartouche mark. Instead, the letters “TWG” are featured inside a stylised ribbon printed on the bottom of the packaging in small font. The letters “TWG” were also used individually or together with other features in some products: e.g. appearing as part of a “tea-pot logo” in exhibit P9-3 and on its own in the canister for Pu-erh tea. A simplified version of cartouche mark (again the letters “TWG” are the prominent feature in such version) is also used as repeating pattern across the wrapping paper and is also clearly printed on other packaging and wrapping materials including paper bags, ribbons, and tape;
(c) In the restaurant table setting, the simplified version of the cartouche mark is engraved or printed on the utensils, tea cups, saucers, cloth napkins, and various other tea ware set on the restaurant tables. The utensils and tea ware are plain in colour and style, allowing the mark to be clearly visible and noticeable to customers Such version of the cartouche mark also features prominently as a repeating pattern across the cover of the “tea book” and the full version of the cartouche mark is also printed clearly at the top of the front page of the “tea book” and retail price list that is provided to customers in the restaurant area; and
(d) The staff serving at the restaurant wear a white tie with thecartouche mark.
13. Mr Platts-Mills QC (appearing for the Plaintiffs together with Ms Tam SC and Mr Wong) drew our attention to some of the exhibits (P9-2; P9-3 and P9-7) to illustrate how the signs were being used in the packaging of the Defendants’ tea products. Counsel also attached to his submissions an Annex A setting out the Plaintiffs’ case on the infringing signs of the Defendants. As it is apparent from Annex A, the signs of the Defendants were not confined to the cartouche marks and the balloon marks. There were extensive uses of the sign “TWG”, “TWG Tea” and the cartouche marks without the French words which the Plaintiffs complained about.
14. On 23 December 2011, the 1st and 2nd Plaintiffs issued the writ in this action, suing the Defendants for infringement of trademarks and passing off. The case was tried before Deputy Judge Saunders in 2013 and on 24 July 2013 the Judge gave judgment in favour of the Plaintiffs
15. The Judge summarized the two main lines of defence at paragraphs 4 and 5. At paragraph 71 of the judgment, the Judge recorded that the s 19(3)(a) of the Trade Marks Ordinance Cap 559 [“TMO”] point was abandoned. In this appeal, all the submissions of Mr Liao related to the other line of defence: the marks of the Plaintiffs and the signs of the Defendants were neither identical nor similar. The Judge rejected that defence and found that the dominant features of both the Plaintiffs’ marks and the Defendants’ signs were the letters “TWG”. He further found that orally and aurally, they would be referred to, and heard, identically. He accepted the submission of the Plaintiffs that TWG was the only pronounceable part of their marks and the letters occupied a central position...
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