Effective Cure To Infringements Of Intellectual Property Rights In Hong Kong: Interlocutory Injunction

The Hong Kong Toys and Games Fair is the second largest toy fair in Asia. In 2007, it was held in early January at the Hong Kong Convention and Exhibition Centre with over hundreds of exhibitors participating. One of the exhibitors, COG Limited, which is a reputable designer and manufacturer of educational toy experiments ("the Exhibitor"), noticed one of the other exhibitors in the Fair, Eastcolight (Hong Kong) Limited ("the Infringer"), had exhibited a series of products that were virtually or visually similar to one of their series. The similarities are so significant that some customers mistakenly identified the Infringer’s products as manufactured by the Exhibitor or misconceived that they were identical to those sold by the Exhibitor.

The Exhibitor sought an interlocutory injunction order from the High Court of Hong Kong to stop the Infringer from infringing the Exhibitor’s copyright and passing off the Exhibitor’s products. So what is an interlocutory injunction and how to apply for one?

According to Section 21L of the High Court Ordinance of the Laws of Hong Kong, the Court can grant an injunction in cases which it appears to the Court that it is "just and convenient" to do so. To prove the same, the applicant has to convince the Court that the following principles laid down in the landmark case American Cynamid v Ethicon Ltd. are satisfied :-

1. There is a serious issue to be tried – the applicant should show there is a real prospect of obtaining a permanent injunction when the case goes to trial. The Court will generally require the applicant to show that his case is likely to be a successful one.
2. Award for damages is not adequate – the applicant should show liquidated damages cannot compensate the harm done on the applicant. In practice, that is to show that the damages sustained is irreparable.
3. Balance of convenience – the applicant should establish that he is likely to suffer more hardship than the respondent.

To apply for an interlocutory injunction, the applicant has to adduce evidence to the Court by affidavit. Hearing of the application will be fixed before a Judge in open court. If the respondent contests the application, the hearing will be adjourned to a further date for arguments. At this juncture, it is essential to convince the Court to grant an interim interlocutory injunction until the date of argument since the interval might be lengthy.

In general, it takes about 2 to 3 weeks’ time to prepare for the application subject to the complexity of the case.

However, if the applicant is exposed to imminent risk caused by the infringing activities where an injunction order has to be obtained immediately, an ex parte application (i.e. in absence of the respondent) can be made before a duty Judge by appointment. In such an application, the applicant has to show that any delay would cause the applicant injustice, or where the respondent would take action having the effect of negating the injunction.

Among others, the applicant can also seek the following orders :-

1. Delivery Up Order – the Court will order the respondent to deliver all infringing products, moulds, tools, dies, casts, plates silkscreens, photographs, negatives, drawings, packagings, boxes, labels, and other articles or materials for making the infringing products.
2. Disclosure Order – the respondent will be ordered to disclose the identity of supplier of the infringing products as well as to whom the infringing products has been sold.
3. Anton Piller (search and seize) order – the plaintiff’s solicitors will be allowed to enter the defendant’s premises to search for infringing products and relevant documents.

By virtue of these orders, the applicant can defeat the infringing activities by tracking the operation of the whole syndicate from manufacturers to retailers.

To ensure a successful application, it is essential to engage a legal advisor who is specialised in intellectual property matters and capable of assembling all evidence required neatly, and of course, possess the know-how to avoid pitfalls.

Engaging an investigator to gather evidence of the infringing activities is also important. Legal advisor should timely supervise and review the whole investigation to ensure only useful materials are obtained in order to save costs and time.

Last but not least, due and proper registration of intellectual property rights like trademark, registered design and patent is critical. Many applicants suffer the nightmare of being challenged the validity of their registrations in their application for interlocutory injunction.

If you wish to know more about the application of interlocutory injunction and intellectual property litigation or have any query regarding how to commence or contest legal proceedings in Hong Kong, experienced lawyers in our Litigation and Dispute Resolution Department will be happy to assist you.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.