NEWSLETTER no.12 Hong Kong

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1 ITALIAN INTELLECTUAL PROPERTY RIGHTS DESK Italian Trade Commission Hong Kong NEWSLETTER no.12 Hong Kong November 2009

2 Foreword Newsletter no. 12 Hong Kong, November 2009 Welcome to the 12 th issue of the Newsletter of the IPR Desk in Hong Kong. In this issue, we have analysed and compared trade mark protection in Hong Kong and Mainland China. The first to use versus the first to file system represents two different camps. Additionally we have explored why it is important to register one s trade marks in Hong Kong apart from Mainland. We have also introduced in this issue various schemes initiated and adopted by the Hong Kong Customs in order to enhance the effectiveness in their law enforcement actions against piracy and counterfeiting activities. As for new trade mark case, we have reported on an infringement and passing off case involving the trade mark Belt Collins. The case illustrates why registering one s trade mark in Hong Kong is advantageous. Page 1

3 Finally, the Head of IPR Desk of ICE Hong Kong attended the World Intellectual Property Organization (WIPO) Regional Symposium on Management of Intellectual Capital, Intellectual Assets and Intellectual Property held in Hong Kong. This is the first time WIPO has organised an event on IPR management in the territory. International academics, experts and IPR offices exchanged views on this hot topic that is particularly essential to the SMEs. Graziano Severini Head of Intellectual Property Rights Desk Hong Kong Page 2

4 First to use v First to file - differences in trade mark protection in Mainland China and Hong Kong A major difference in trade mark protection in Hong Kong and Mainland China is that Hong Kong follows the first to use principle while Mainland China adopts the first to file system. First to use According to the first to use regime, trade marks that were first used in Hong Kong could be protected against late users under the common law action of passing off. In a passing off action, the right owner would be able to claim damages or be granted an injunction against the defendant. The right owner needs to prove (1) good will in the use of his mark; (2) misrepresentation on the part of the unauthorised user and (3) damages that have been/would have been caused by such misrepresentation. Many common law countries, including the United Kingdom, Malaysia and Singapore follow the first to use system. Nevertheless, passing off alone does not provide sufficient protection over a trade mark. Passing off prevents others from misrepresenting the right owner but, unlike registration of trade marks, it does not confer expressly an exclusive right to use the mark as for registered marks that could be assigned or licensed. Furthermore, a registered trade mark would provide a wider range of protection and is relatively easier to establish. A person commercially using a mark that is identical to or confusingly similar to a registered trade mark would be liable for the civil action of infringement. In a passing off action, merely using a confusingly similar mark would not suffice. The plaintiff needs to establish goodwill and misrepresentation which are often difficult to prove. Thus infringement action is often preferred over passing off action. First to file Under the first to file system in Mainland China, a party who first files an application for registration of a trade mark would have rights to use that mark over others. There is no common law remedy of passing off and only marks imitating unregistered marks that amount to Page 3

5 famous marks would not be registrable or usable. The threshold to reach famous marks is, however, very high and not easily granted especially in recent years. Unregistered marks are mainly protected under the Unfair Competition Law which, however, also only give protection to famous marks. Countries adopting a first to file system include Japan, Vietnam and Indonesia. Is it necessary to register trade marks in Hong Kong? Some businesses may target their market ultimately in the Mainland only. Nevertheless, Hong Kong is still the international cosmopolitan of China. For certain goods or services, particularly consumer goods such as fashion, jewellery and financial services, gaining a foothold in Hong Kong is certainly a symbol of prestige. Before one enters the market in Hong Kong, one should consider registering his brand as trade marks here. A registered trade mark owner has the exclusive right to use commercially the registered mark, for example by applying the mark on the products offered for sale and in marketing materials. In fact, registering trade marks in Hong Kong forms an important part of the IP strategy of SMEs in Asia and is a useful means to curb cross border counterfeiting activities. Advantages of registering a trade mark in Hong Kong are as follows: The criminal enforcement against faking is carried out by the Hong Kong Customs that is empowered to investigate, search and confiscate goods infringing trade marks. However, the Hong Kong Customs would only act upon a complaint concerning a mark registered in Hong Kong. This would not be ideal if illegal activities include re-export of faked goods concerning unregistered marks via Hong Kong. Infringement/counterfeiting activities recognise no borders. The use of a Hong Kong company bearing a name similar or the same to a famous brand name (the so-called shadow company ) to cover up their counterfeiting activities in the Mainland is not uncommon. Now that the Companies Ordinance is going to be amended to empower the Companies Registrar to change an infringing name of a company, registering one s trade mark in Hong Kong would help deter such pattern of infringement/counterfeiting activities. Page 4

6 Conclusion Hong Kong and Mainland China are two separate and independent jurisdictions. Having registered trade marks in both Hong Kong and Mainland would give maximum protection to Italian businesses. Special schemes of Hong Kong Customs in combating piracy and counterfeiting activities The Hong Kong Customs and Excise Department ( Customs ) is the enforcement authority in respect of violation of intellectual property rights in Hong Kong. In order to enhance the effectiveness of enforcement, the Customs has set up various schemes to promote cooperation with right owners and the public. Intellectual Property Right Protection Alliance ( IPRPA ) The IPRPA is established as a broad-based platform for fostering closer cooperation between the Customs and the IPR industry. It also serves to provide support for the No Fakes Pledge Scheme operated by the Intellectual Property Department of the local government ( IPD ) to promote the sale of genuine goods in Hong Kong. Right owners, their authorised agents, legal representatives or representative organizations are eligible to apply to the Customs for membership of the alliance. There are currently 50 members including famous brands like Gucci and Prada, international law firms and trade Page 5

7 organisations in the entertainment and software industries. Members are obliged to attend meetings of the alliance, exchange intelligence on counterfeiting activities, and report any criminal activities promptly. The alliance has also organised seminars in the past to educate law enforcement officers on how to distinguish fake from genuine products of certain brands. Fast Action Scheme The scheme is jointly launched by the Customs and the Hong Kong Brands Protection Alliance to expedite Customs actions in exhibitions. Under the scheme, a company which is already a member of a local trade association recognized by the alliance may join the alliance. The company may then provide the alliance with proof of ownership of trademark and copyright which would constitute the alliance database. The alliance would then pass the information to Customs. When suspected infringement activity is found during an exhibition, the Customs could use the database for verification and follow-up actions. This process is different from the normal reporting for record procedure and could expedite the enforcement process by saving the time needed to identify the right owners which usually takes up to 2 week s time. So far, there are about 50 trade associations under the scheme, most of them being local associations of various trades including furniture, jewellery, electronic goods and toy as well as SME business associations. Reward schemes There are two reward schemes administered by the Customs: 1. Reward scheme to combat illegal use of software in business This scheme is funded by the Business Software Alliance and reward money would be payable to a person providing information leading to a raid on a Hong Kong company/entity that is using unlicensed software. Upon seizure, the payment ranges from HK$5,000 to 10,000 and with conviction, additional payment of HK$5,000 to 40,000 would be payable. The amount payable depends on the number of computers involved. 2. Reward scheme to combat illegal photocopying of books T h i s s c he me is f u n d e d by t h e Ho n g K o ng Page 6

8 Reprographic Rights Licensing Society and reward money would be payable for efforts leading to the crackdown on illegal photocopying of book(s) published by publishers participating in the scheme and illegal activities not taken place at premises providing photocopying services openly to the public. The reward money payable ranges from HK$5,000 to 15,000 depending on the number of copying machines and illegal photocopies seized. training by the Customs to enhance their understanding of IPR laws. Youth Ambassador Against Internet Piracy The scheme is jointly implemented by the Customs and the IPD since Under the scheme, the Customs has recruited 11 local youth uniform organizations and their 200,000 members to help fighting illegal file-sharing activities on the Internet, particularly the use of BitTorrent software. Each organisation joining the scheme could logon the web page of IPRPA ( and report details of illegal BT file-sharing activities found on local discussion forums. After verifying the information received, the Customs would take any action appropriate and notify the relevant webmasters to delete the BT seeds. The members of the joining organisations are provided with Page 7

9 Recent trade mark case Belt Collins International (HK) Limited v Hong Kong Beier Gaolin Building Urbanism & Landscape Design Academy Limited trade mark infringement The plaintiff, Belt Collins, has a Chinese name 貝 爾 高 林 (sounding as bei er gao lin in Mandarin) which is a transliteration of their English name. The defendant, Beier Gaolin, also adopted the company name in Chinese including 貝 爾 高 林. The plaintiff has registered in Hong Kong its Chinese name 貝 爾 高 林 in respect of classes 37, 42 and 44 services related to building, construction and architecture. The defendant was accused of infringing the plaintiff s registered trade mark by using an identical mark in respect of identical services to that of the plaintiff. In response to the plaintiff s accusations, the defendant admitted to the fact of using an identical mark in respect of identical services. However, they put up a defence claiming that they had never provided such services in Hong Kong and their main business and services were provided in Mainland China, a different jurisdiction. The Court was not impressed with the defence. It was found that since the defendant had advertised their services via their website which could be reached by people of Hong Kong, the defendant had de facto offered their services in Hong Kong. As such, the defendant was found to be liable for infringing and passing off the plaintiff s registered trade mark 貝 爾 高 林 in Hong Kong. This case is a good illustration of the benefit of registering one s trade mark in Hong Kong. Although the infringement action is mainly in the mainland, it would still be caught in Hong Kong via their activities on the Internet. As many mainlanders have set up companies in Hong Kong and may also have transferred their assets to the territory, it would be useful to pursue the claim of infringement in Hong Kong. The remedy of infringement is applicable to registered marks only. For unregistered marks, the only remedy is passing off which requires more evidence in proving one s right, misrepresentation and damages (actual or likely). Another point to note is what if the defendant is only using the name bei er gao lin in Roman letters but not in Chinese characters. As the transliteration is not registered and the immediate impression is likely to be different, it would be more difficult to argue that a similar mark has been used. Page 8

10 News in Brief World Intellectual Property Organization (WIPO) Regional Symposium on Management of Intellectual Capital, Intellectual Assets and Intellectual Property On October 2009, the World Intellectual Property Organisation has organised, in cooperation with the Government of China and the Intellectual Property Department of the Hong Kong SAR Government, a regional symposium on Intellectual Capital Management ( ICM ) and Intellectual Asset Management ( IAM ). This Symposium is the first of its kind organised by WIPO in Hong Kong. Senior representatives from IP offices in 20 countries, government officials, business enterprises, IP-related organisations, legal professionals etc. have been invited to participate in the event. Topics of interests included identification, valuation and management of intellectual assets and comparison of IPR management in various parts of the region. To the small and medium-sized enterprises (SMEs), protecting their IPRs is particularly challenging as they often need to manage their IPRs with limited resources. A set of business tools known as the ICM and IAM have since then been developed to help businesses to recognise and organise their knowledge efficiently and to reduce or eliminate risks. The Regional Symposium invited expert speakers around the world to explain the principles behind these useful tools using case studies that illustrate how these tools could enhance SMEs ability in IPR management in the Asia Pacific Region. Speakers from Europe included Professor Göran Roos of Warwick University in the UK, Ms. Susanne Durst of University of Liechtenstein, Vaduz and Dr. Marien Van den Boom of INHOLLAND University, Netherland. Businesses in Asia also participated in the Regional Symposium, including Actcell Corporation in Japan and the Philips Group in China which shared with the audience experiences in protecting intellectual assets. Page 9

11 Desk italiano per la tutela dei Diritti di Proprietà Intellettuale HONG KONG ICE Italian Trade Commission 知 識 產 權 科 香 港 辦 事 處 意 大 利 商 務 專 員 公 署 Suite 4001, Central Plaza - 18 Harbour Road, Wanchai - Hong Kong Tel: Fax:

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