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Italian Trade Commission

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Newsletter no. 6 – Hong Kong, May 2009Foreword

Welcome to the sixth issue of the Newsletter of the IPRs Desk in Hong Kong.

We have continued our report on the recent Civil Justice Reform. In this issue we focus on the points to note on the

new rules on case management. This marks a significant change in the attitude of the courts. As such parties and

practitioners should pay attention to the new litigation culture when considering their cases.

In respect of new IP cases, we have reported one revocation regarding the use of the Chinese mark of Dettol. There

are also two interesting patent cases. Octopus Cards v ODD.HK is a case of successfully revoking two short-term patents

involving circuit chip case and electronic purse in which the Court confirmed the tests for novelty and inventiveness of short-

term patents. In Abbott v Pharmareg Consulting Co. Ltd. and Yin’s Trading Co. Ltd., the Court granted an interlocutory

injunction in favour of the plaintiffs against the defendants in an infringement claim. The case provides useful reference for

application for interlocutory injunctions.

As to the series of comparing Hong Kong and Macao laws, we have introduced the design laws in both regions in

this issue. The similarities and differences between the laws in both jurisdictions are listed in a table for easy reference.

Finally we conclude this issue with news from the IP scene of Hong Kong last month including the results of the

Survey on Business Attitudes to Intellectual Property, invitation to practitioners to participate in the Survey on Filing of

Trademark Applications in the Mainland and the World Intellectual Property Day.

Dr. Graziano Severini

Head of Intellectual Property Rights Desk

Hong Kong

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Newsletter no. 6 – Hong Kong, May 2009

Civil Justice Reform – Case Management

As reported in the previous issue of our newsletter, the

underlying objectives of the Civil Justice Reform aim to

enhance cost-effectiveness of practice and procedure and to

ensure that a case is dealt with as expeditiously as possible to

achieve justice.

In order to realise the objectives under Order 1A of the

Rules of High Court, Order 1B vests the Court with express

power to actively manage the case so that it would not be party-

led. The Court now has the active power to make an order to

do the following:

a) Extend or shorten the time for compliance;

b) Adjourn or bring forward a hearing;

c) Require a party or a party’s legal representative to attend

the Court;

d) Stay the whole or part of any proceedings;

e) Consolidate proceedings; and

f) Exclude an issue from consideration.

Where appropriate, the Court could impose on their

order, a condition to pay a sum of money into court as security

for any sum payable by that party to any other party and specify

the consequences of failure to comply with the order or a

condition.

The Court may also make an order at is own motion (i.e.

without application from the parties) with or without a hearing.

In fact, before the Court has made any orders, parties

are required to set out issues to be decided at a very early

stage. According to Order 25, each party shall, within 28 days

after the pleadings in an action are deemed to be closed,

complete and exchange a questionnaire in the prescribed form.

The form of the comprehensive questionnaire is set out

in the Practice Direction. It requires confirmation from the

parties if they have any intention to settle, whether any

amendments would be made to the pleadings, any further and

better particulars would be requested and whether list of

evidence or witness has been filed. One thing to note is that

the questionnaire is in fact a declaration to be made by the

parties or their legal representatives and should therefore be

completed with great care.

After the questionnaire is completed, the Court may give

directions relating to the management of the case, fix the

timetable or fix a case management conference if it thinks fit.

The timetable fixed will consist of milestone dates which include

the date of a case management conference, a pre-trial review

or the trial itself. A milestone date will not be altered unless

there are exceptional circumstances justifying the variations.

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Newsletter no. 6 – Hong Kong, May 2009As for non-milestone dates, they could be altered by

means of a consent summons procured by the parties or, in the

absence of any agreement, the parties could apply for a Court

order to alter the date. A Court order, however, would not be

granted lightly. The Court would not order a change unless

there are sufficient grounds.

Recently, in the District Court where similar rules are

adopted, the Judge criticised harshly on the non-compliance of

the parties on the deadlines to adduce expert evidence reports

in a personal injury case (Ip Sau Lin v Hospital Authority

[DCEC584/2007]). The District Court was particularly annoyed

by the fact that the parties not only missed the relevant

deadlines but the Court was also not duly notified with the non-

compliance. The Judge opined that if the Court was kept in the

dark, the purpose of efficient and active case management

would not be achieved as the case would be party-led instead

of being actively managed by the Court. The Judge also

cautioned the parties that the Court could refuse extensions of

time in these circumstances.

Furthermore, the parties in that case had, at a direction

hearing, failed to adduce relevant supporting documents,

leaving the Court no choice but to adjourn the hearing. The

Judge warned that a wasted hearing may well be visited with

costs and other sanctions.

The District Court case was heard in late March, a few

days before the Reform came into effect on 2 April.

Nevertheless, the judgment gives an important reference as to

the attitude of the Courts. In summary, active case

management will have the following impact on litigation:

Stricter deadlines

– although one could appeal for relief of sanctions, it

now appears that the Court would not allow delays

lightly.

Advanced preparation

– as the comprehensive questionnaire requires lots of

information and confirmations from the parties at the

very early stage, unmeritorious claims would have to be

discarded and evidence should be in place well in

advance.

Court-led case management

-It should be born in mind that the Court now plays a

very active role in case management and the parties

should always assist the Court and keep the Court

informed on the progress of the case in particularly non-

compliance of the Court’s order.

As quoted from the judgment: “disobeying court-

imposed case management directions and timetable without

good reason is not only breach of court order,… but is also a

serious subversion of the entire case management system

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Newsletter no. 6 – Hong Kong, May 2009Recent intellectual property cases

“滴露” (“Di Lu” in mandarin)(“Dettol”) [HCA2073/2008]

This is a High Court case of passing off between the

Reckitt & Coleman group and two Chinese individuals over the

unauthorised use of the marks of “滴露”, the Chinese name of

“Dettol”, a commercial liquid antiseptic.

The facts are simple: The plaintiffs have been using the

mark “滴露” on their disinfectant and cleansing products in

Hong Kong for decades. The 2nd defendant registered two

marks of the words “滴露” with the Hong Kong Trade Marks

Registrar in 2006 and 2007 and assigned the registered marks

to the 1st defendant. Both defendants later requested the

plaintiffs to pay HK$4 million for the registrations or else they

would seek injunction against the marketing of the plaintiffs’ the

products. The 1st defendant later proceeded to commence an

infringement action against the plaintiffs.

In this action, the plaintiffs seek remedy of passing off

against the defendants. In order to establish a case of passing

off, the plaintiffs have to show (1) they enjoy reputation and

goodwill in the mark; (2) the defendants have made

misrepresentation or threatened to make a misrepresentation

that their goods are related to the plaintiffs’ and (3) the plaintiffs

have suffered or likely to suffer damages due to the defendants’

misrepresentation.

In this case, the plaintiffs had no difficulty in proving their

use of the marks in Hong Kong. The Court of First Instance

also found that there had obviously been misrepresentation as

the defendants were aware of the plaintiffs’ reputation in the use

of the marks when they applied for registration and the use of

the marks by the defendants would be confusing to customers.

The Court also found that needless to say such

misrepresentation was likely to cause damages to the plaintiffs.

Eventually, the plaintiffs succeeded in establishing a

case of passing off. The Court ordered the registered marks to

be transferred to the plaintiffs and ordered that the plaintiffs

were entitled to costs on indemnity of HK$540,000. Costs on

indemnity basis means all reasonable costs would be awarded.

This is a more generous award and is usually ordered for cases

brought for improper purposes.

A major lesson of this case is that again, foreign

businesses should register their Chinese names as early as

possible, preferably before entering into the Chinese market.

Furthermore, it is interesting to note that the applications for

registration of such a famous mark by mere individuals were

accepted by the Registrar in the first place. Under these

circumstances, individual applicants should be required to

adduce proof that the marks are not applied for registration in

bad faith under section 11(5)(b) of the Trade Marks Ordinance.

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Newsletter no. 6 – Hong Kong, May 2009

The judgment obtained in this case is a summary

judgment. Application for a summary judgment by a

plaintiff in a case or claimant in a counterclaim of the case

is an expedite way to dispose of obviously unmeritorious

case. Such judgment would be granted if there is no

defence and the Court has to be satisfied that there is no

triable issue.

Octopus Cards Limited v ODD.HK Limited -

Revocation of short-term patents No. HK1086445 and

No. HK1086155 [HCMP 104/2007]

The plaintiff, Octopus Cards Limited, applied to

revoke two short-term patents, namely patent no.

HK1086445 (“chip case”) and patent no. HK1086155

(“electronic purse“) of the defendant on the grounds that

both patents lack novelty and inventive step.

The Court confirmed that the test for novelty should

follow the English case The General Tire & Rubber

Company v The Firestone Tyre and Rubber Company Ltd

[1972] RPC 457 . To determine if a patentee’s claim has

been anticipated by an earlier publication, comparison

should be made between the earlier publication (as interpreted

at the date of publication) and the patentee’s claims (as

interpreted as at the date of the publication of the patent). If the

earlier publication discloses the same device as construed by

the patentee’s claim, the patentee’s claim has been anticipated.

Whether the patentee’s claim is new is a question of fact. It is

possible that the languages used are different but the same

device is resulted as the patentee and the prior inventor may

have approached the same device from different starting points.

Therefore, despite the different use of languages, if carrying out

the directions in the prior inventor’s publication will inevitably

amount to infringement of the patentee’s claim should the

patent be valid, the patent’s claim would not be considered

novel.

As to the test whether a patent involves an inventive step,

the Court adopted the test in the English case Pozzoli SpA v

BDMO SA[2007] FSR37. First of all, the notional “person

skilled in the art” and the relevant common general knowledge

of that person should be identified. Next, the inventive concept

of the claim in question should be identified or construed. The

inventive concept so identified or construed should then be

compared with the matter cited as forming part of the “state of

the art” to see if any differences between them exist. Finally,

one has to ask whether such differences are obvious to the

person skilled in the art who has no knowledge of the alleged

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Newsletter no. 6 – Hong Kong, May 2009invention as claimed or whether those differences constitute

steps that needs any degree of invention. If such differences

are obvious to the person skilled in the art, no inventive steps

would be considered being involved,

The plaintiff has adduced evidence of prior inventions

including those that are patented or unpatented of very similar

nature. It is not surprised that in applying the tests, the Court

found that both patents lacked novelty and were obvious as the

patents in question were relatively simple devices and the

claims drafted were wide in scope.

It is the correct strategy adopted by the plaintiff to initiate

the revocation proceedings. Otherwise, there will be risk that

the plaintiff’s products could infringe the patents in question.

The Octopus Cards Limited operates the well-known

Octopus cards in Hong Kong, a contact-less smart card that

could be used to pass over a reader to ride on almost every

train, bus or ferry, for retail transactions and parking. The card

could also be used to access schools, office buildings and

housing estates. According to the statistics of the company at

http://www.octopuscards.com, over 19 million Octopus cards

are now in circulation with 95% of the population aged between

16 to 65 possessing the card. Additionally, over 10 million

transactions are processed by the Octopus cards per day,

valued at HK$85 million.

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Abbott GMBH and Abbot Laboratories Limited v Pharmareg

Consulting Co. Ltd. and Yin’s Trading Co. Ltd.

[HCA166/2009]

The remedy of injunction against infringing activities is

often found to be useful in protecting intellectual property rights

and preventing further damages from infringers.

The plaintiffs in this case applied for an interim injunction

to prevent the defendants from manufacturing, putting into

market, using or importing the infringing products before trial.

Their patent (No. HK1006002) concerned covers the use

of a chemical compound commonly known as Sibutramine in

the making of medicines for treating obesity. The defendants

have imported and distributed products with the active

ingredient Sibutramine and were claimed by the plaintiffs as

having infringed their patent.

The Court confirmed that the plaintiffs need not prove “at

least a high likelihood of success at trial”. It would suffice if the

plaintiff could show “at least good prospects of success at trial”.

Having considered the evidence, the Court was convinced that

the products obtained by means of the process protected by the

patent had been imported, possessed and then put on the

market in Hong Kong. As such the Court was satisfied that the

plaintiffs were highly likely to succeed in establishing

infringement at trial.

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Newsletter no. 6 – Hong Kong, May 2009Another issue discussed was whether damages would be

adequate for the loss of the plaintiffs. Here the patent involved

would expire in November 2009. The plaintiffs testified that

upon expiration of a drug patent, other manufacturers and

distributors would launch their much cheaper generic equivalent

of the drug. To meet competition, the patent holder would

usually launch a lower-priced equivalent of their patented drug

about 6 months prior to expiry. However, as the defendants

were selling infringing drugs in 2008, the plaintiffs were forced

to bring forward the launch to mid-2008 and suffered

considerable losses. The Court was satisfied that unless the

defendants were restrained, they would be able to build up a

position of strength in the market during the remaining term of

the patent and had an edge over the plaintiffs after expiry. On

this basis, the Court found that the damage to the plaintiffs was

incapable of assessment and damages would not be an

adequate remedy. The interlocutory injunction was granted

against the defendants.

The Court dismissed the defendants’ argument that

there had been delay on the plaintiffs’ part in applying for the

injunction as it had been shown that the plaintiffs were only able

to obtain sufficient evidence at a later date.■

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Newsletter no. 6 – Hong Kong, May 2009

Design Laws of Macao Special Administrative Region

The registration of industrial models and designs in

Macao is governed by the Industrial Property Code.

In general, the industrial model and design registration

is a “first to file” system.

The registration of industrial model or design shall be

limited to creations whose appearance represents a product in

whole or in part by virtue of such characteristics as lines,

contours, colours, forms, textures and/or the materials used in

the product itself and /or its ornamentation. A product shall be

considered as any industrial or crafted article, including the

components for assembling a complex product, the packing,

graphic symbols and typographic characters but excluding

computer programs.

Registrable industrial models and designs must be

novel and unique. Novelty means that identical industrial model

and design has not been published anywhere before application

or priority date. An industrial model and design is regarded as

published if it has been shown in an exhibition, used in the

commercial sector or if the design is well-known to the public.

Uniqueness means that the global impression of it on the

informed users differs from the global impression caused by any

industrial model or design published prior to the application or

priority date.

The registration does not protect the visual

characteristics that result exclusively from its technical function

or designs of a component which cannot use or form a product

by itself.

Registration confers on the registrant the exclusive right

to use the model or design and to prohibit its use by third

parties without consent. The use includes the sale of, import,

export or use of a product into which that industrial model or

design is incorporated as well as the storage of that product.

Registration may be cancelled in Macao when the

industrial model or design uses a distinctive sign that is

prohibited to use, when it constitutes an unauthorised use of

copyright work or when it constitutes improper use of elements

in a badge or emblem protected under the Paris Convention.

In Hong Kong, a registered design protects features of

shape, configuration, pattern or ornament applied to an article

by any industrial process. It also excludes visible features that

are dictated solely by the function which the article has to

perform or internal features that would not be visible during

normal use of the designed article. Also novelty is required for

registrability. Novelty means that the same design has not

been registered in a prior application or a design that has not

been published anywhere before the application date.

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Newsletter no. 6 – Hong Kong, May 2009

In addition, a design is not registrable in respect of an

article if the appearance of the article is not material, i.e. if

aesthetic considerations are not normally taken into account to

a material extent by persons acquiring or using articles of that

description. A design that is contrary to public order or morality

is also not registrable. As in Macao, computer programs are

also expressly excluded for registered designs in Hong Kong.

In Hong Kong, registration confers on the owner the

exclusive right to make in Hong Kong or import into Hong Kong,

for sale or hire, or for use for the purpose of trade or business or

to sell, hire or offer for sale in Hong Kong any article in respect

of which the design is registered and to which that design or a

design not substantially different from it has been applied.

The remedy of design infringement in Hong Kong is

civil only including injunction and claim for damages.

Falsification of register and false representation that a design is

registered would be criminal. Falsification of the register would

be liable to an offence subject to imprisonment of 2 years and a

fine. As for the offence of false representation of a design, only

a fine would be imposed.

Unlike Hong Kong, infringement of designs may

constitute a criminal offence in Macao. The unauthorised

reproduction of products incorporating whole or part of a

registered industrial model and design, exploitation of a

registered design or model or importing or distributing such

products would be punishable by imprisonment of up to 2 years

or by a fine. Also as in the case of patent, anyone who obtains

a registered industrial model and design in bad faith shall be

liable to imprisonment of up to 6 months or a fine. An

administrative fine of 20,000 to 500,000 patacas shall also be

imposed on one who claims to be the owner of an industrial

design or model without that right belonging to him or on one

who, being the owner of the design or model, uses it for

products different from those protected by the corresponding

title.

Attached on the next page is a table that compares the

design registration system in Macao and Hong Kong. ■

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Newsletter n. 13 - Seoul, April 2009Macao Hong Kong

Duration of protection Renewable for periods of 5 years up to a maximum 25 years from the date of application .

Renewable for periods of 5 years and to a maximum 25 years from the date of application.

Agent For non Macao residents or body corporate, they may have to appoint a Macao resident/body corporate/IP agent as a proxy.

An address for service in Hong Kong is required. As such, foreign entities that have no local branches or subsidiaries will need to appoint a local agent.

Priority Application filed within 6 months after the first application in any Paris Convention or WTO member could claim the right of priority. Priority must be claimed when application is filed.

Application filed within 6 months after the first application in any Paris Convention or WTO member could claim the right of priority. Priority must be claimed when application is filed.

Application process Both formality and substantial examinations would be carried out.

Only formality examination would be carried out.

Fees MOP1,000 per application for registration. HK$785 on filing application for registration of a single design plus HK$155 of advertisement fee per design.

Appeal of registration decisions

The applicant could appeal to the Court of First Instance within 1 month from the publication of notice of refusal or granting.

The applicant could appeal a decision or order of the Registrar to the Court of First Instance of the High Court of Hong Kong.

Opposition period A notice of application will be published after 12 months from the application or priority date. In the period between the publication date and the grant date, any third party may raise an opposition against the application.

Any person may apply to the Registrar to revoke a registration on the ground of public order or morality and any person wishing to oppose such application should file, a notice of opposition. Any person may also apply to the High Court to revoke a registered design on the ground that the design was not new or was not registrable.

Relationship with copyright

The effects of registration shall not prejudice the protection conferred by copyright law from the creation of the industrial model or design.

After 25 years from the year in which articles incorporating a registered design are first marketed, the artistic work from which the design is derived from may be copied without infringing copyright.

Languages Chinese or Portuguese Chinese or English

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Newsletter no. 6 – Hong Kong, May 2009

News in Brief

Survey on Business Attitudes to Intellectual Property

The Intellectual Property Department of the Hong Kong

Government (“IPD”) has recently released the results of the

Survey on Business Attitudes to Intellectual Property.

It is reported that a total of 1,001 business

establishments responded in the survey of which more than

92.1% were aware that IPRs included copyright, trademarks

and patents, 93.7% considered it necessary to protect IPRs in

Hong Kong’s business environment and 98.3% considered that

IP was a company’s valuable asset.

Furthermore, the majority (84.5%) of the business

establishments considered that the economic benefits of IPR

protection would help enhance the development of local

creative industries, 77.6% considered that IPR could create

business opportunity and wealth and 72.3% considered that

IPRs contributed to the overall development of Hong Kong’s

economy.

Additionally more than 52% of establishments shared

the view that the most serious consequence for a company

which infringed others’ IP was “criminal liability” which was

significantly higher than the 13.3% in 2006.

However, only 49.5% of the respondents were aware of

the new criminal liability that directors/partners might incur if

their companies possessed pirated software for business use

which was only introduced in 2008.

Also, 72.6% of the business establishments were not

aware that there were licensing schemes operated on behalf of

copyright owners which authorised copying of local newspaper

articles and books for use in business.

About 65% of the business establishments were also

not aware that registering a business or company name was

different from registering a trade mark. The misconception that

the use of a company name is equivalent in having a registered

trade mark reduces the effectiveness of trade mark protection

for the business establishments.

Also, 45.7% of the respondents were not aware that

they had to apply for separate registration of trade mark, patent

or design in the Mainland and in Hong Kong to gain protection

in both places. The unique situation of “one country two

systems” should be emphasised to avoid loss of protection due

to negligence to register their rights in the relevant jurisdictions.

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Newsletter no. 6 – Hong Kong, May 2009Survey on Filing of Trademark Applications in the Mainland

In April, the IPD has invited the legal practitioners of the

Law Society of Hong Kong to participate in a survey on the filing

of trademark applications in the Mainland.

This is joint efforts of the IPD of Hong Kong and the

Trademark Office of the State Administration for Industry and

Commerce (“TMO, SAIC”) in Beijing under the Mainland Hong

Kong Closer Economic Partnership Arrangement (CEPA). A

Trademark Working Co-ordination Group has been jointly

established under CEPA to institutionalise a regular

communication mechanism to strengthen exchanges and co-

operation in areas such as trademark registration and

trademark protection.

The survey targeted on law firms and asks for any

difficulties encountered in pre-application enquiry services,

layout of the application forms, the modes of filing (paper or

online), filing procedures, on-line search functions, the time

taken to examine and register marks as well as the handling of

oppositions and appeals of the decisions of the authority.

World Intellectual Property Day – 26 April

The World Intellectual Property Organisation (“WIPO”) has

set 26 April annually as the World Intellectual Property Day.

This provides a good opportunity for promoting the

importance of protecting intellectual property worldwide.

In the past, the IPD has organised activities such as

concerts or games day to strengthen public education and

enhancing awareness of the importance in upholding

intellectual property rights.

This year, the IPD is launching, on the World Intellectual

Property Day, a new “Mainland and Hong Kong Trademark

Column” in the websites of IPD and the TMO/SAIC (Chinese

version only) in Mainland. The new column provides

information on the opening up of trademark agency services in

the Mainland under CEPA and trademark registration systems

and related information of the Mainland and Hong Kong. The

website of IPD is www.ipd.gov.hk and the website of TMO/SAIC

is http://sbj.saic.gov.cn/.

The IPD is also distributing bookmarks in celebration of

the World Intellectual Property Day as part of their public

education programme. The bookmark is downloadable from

IPD’s website. ■

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Italian Trade Commission

Intellectual Property Rights Desk – Hong KongSuite 4001, Central Plaza18 Harbour Road, WanchaiHong KongTel: 852-2846 6500Fax: 852-2868 4779Email: iprdesk.hongkong@ice.it