Vivien Chan & Co - China
This article focuses on whether a trademark owner can submit a claim in Hong Kong based on trademark infringement and passing off against the owner of a website selling infringing goods in China. This case was brought before the Hong Kong Court of Appeal.
The plaintiff is a group of companies operating under the name Hugo Boss – the internationally well-known manufacturer and retailer of luxury clothing and accessories. It owns a number of registered trademarks in Hong Kong including HUGO, BOSS and ‘雨果博斯’ (Hugo Boss’s Chinese name).
The first defendant was a company registered in Hong Kong and held licences for the BOSCCO and BOSSSUNWEN trademarks in China for more than 10 years and owned roughly 400 shops in China. The second was a company director. The defendants did not own any registered trademarks in Hong Kong, but the first defendant had registered the mark BOSSSUNWEN (which is pronounced similarly to Hugo Boss’s Chinese name) in mainland China.
First, the plaintiff unsuccessfully attempted to terminate the defendant’s BOSSSUNWEN mark in mainland China. It then took action against the defendants in Hong Kong for trademark infringement and passing-off and obtained a judgment in default. The Court of First Instance refused to set aside the judgment in default against the first defendant on the basis that it had little prospect of success. However, the Court of First Instance imposed conditions for setting aside the default judgment for the second defendant.
The defendants lodged an appeal before the Court of Appeal, which held that the case could be successful as:
- some of the websites on which the plaintiff relied were not operated by the defendants or its licensee; and
- the website operated by the defendants’ licencees or related parties was not targeted at Hong Kong consumers. However, the defendants could claim that they were.
Test purchases delivered to Hong Kong were insufficient
In order to mount a claim based on trademark infringement and passing off against the defendants in Hong Kong, the plaintiff conducted test purchases from various websites including T-mall and Taobao, which were delivered to its lawyers in Hong Kong. However, there is no evidence to link the sellers of the BOSSUNWEN products to the defendants. Even if the products had originated from the defendants, the court observed that it did not suffice as it was legitimate for the defendants as the registered trademark owners in China to sell them in China. The court ruled that what was needed was evidence to show that the defendants had participated in or authorised sales to Hong Kong.
Websites not targeted at Hong Kong consumers
The court also examined the plaintiff’s claims that the infringing acts were conducted through various websites that claimed to be associated with them. The Court of Appeal ruled that the websites were not targeted at Hong Kong consumers, which would have given rise to liability for trademark infringement or passing off. The mere fact that the websites were accessible to persons in Hong Kong did not necessarily mean that they were targeted at such persons. The court took into consideration the following:
- texts on the websites were in simplified Chinese rather than traditional Chinese characters;
- the goods offered for sale on the website were priced in Renminbi yuan;
- the defendants own legitimate registered trademark rights in China over the marks used on these websites;
- the defendants and their licensees have a substantial network of shops selling goods under those marks in China;
- the lack of any operations of the defendants in Hong Kong; and
- the lack of evidence of the retail of goods manufactured by the defendants in Hong Kong.
The Court of Appeal’s decision provides solid guidance on the evidence required and factors to be considered when mounting a claim in Hong Kong against online infringing activities. Although the plaintiff was unsuccessful in its attempt to reverse the default judgment, it is possible that with the appropriate evidence, enforcing rights before the Hong Kong Court remains a good alternative option.