Both the Court of First Instance (as a result of its inherent jurisdiction under the common law and under statutory enactment under the High Court Ordinance) and the District Court (as a result of specific statutory empowerment under the District Court Ordinance) have power to grant permanent or interlocutory injunctions. (For further discussion on interlocutory injunctions, see answer to Question 10.) The IPR statutes, beyond confirming that injunctions form part of the remedies available for infringement, add no guidance as to the criteria for their use. Accordingly the following description is based upon the criteria set out in the Rules of the High Court and judicial precedent.
Injunctions are discretionary in nature. They may be “mandatory” or “prohibitory”. Generally an aggrieved right holder will apply initially for an interlocutory injunction. (For further details see answer to Question 10.) However, an impecunious plaintiff cannot be deprived of his right to seek a permanent injunction by reason of not having first applied for an interlocutory injunction by reason of not being able to give an undertaking as to damages.
An application for the grant of an injunction may be made by any party to a cause or matter before or after the trial of the cause or matter, whether or not a claim for the injunction was included in that party’s writ, originating summons, counterclaim or third party notice as the case may be.
The Court may make an interlocutory injunction permanent, or grant a permanent injunction on application therefor, where the plaintiff has established infringement and obtained a judgment against the defendant.
Any breach of an injunction is regarded as a contempt of court.
Damages including recovery of profits and expenses, including attorney's fees
As a general rule, a successful party is entitled to his costs. This is understood to mean a party’s reasonable costs which, if not agreed, shall be those which a costs taxing master of the court deems reasonable. This applies in all IP infringement actions, save where specifically modified by statute referred to in paragraphs 8-11 below.
Under the common law, the courts in Hong Kong, China have an inherent power to award damages and costs in the event of a successful action brought either as a breach of a fiduciary relationship or breach of a contract of employment for the disclosure of confidential information or of a trade secret. Similar common law principles apply to an action for “passing off”.
Under the Copyright Ordinance, damages would normally be awarded to a successful plaintiff (i.e. copyright owner, or rights owner in a performer’s economic rights or owner of fixation rights) for infringement of copyright. There is provision to award additional damages (“exemplary damages”) as justice may require having regard to the circumstances of the case, and in particular to the flagrancy of the infringement; any benefit accruing to the defendant by reason of the infringement; and the reliability of the defendant’s business records.
There is an express statutory saving however that if it is shown that at the time of the infringement the defendant did not know, and had no reason to believe, that copyright subsisted in the work to which the action relates, the plaintiff is not entitled to damages against him. This saving does not affect any other remedy. Thus the plaintiff would still be entitled to an account of profits and costs and an injunction, if necessary.
Where “copy protected” copies (for definition and full discussion see paragraph 4 of the reply to Question 2 above) are issued to the public by or with the licence of a copyright owner, the performer has the same rights and remedies as the copyright owner has in relation to damages against the persons detailed at paragraph 4 of the reply to Question 2 above.
Infringement of a registered patent or a registered design is actionable by the proprietor, and among the remedies available are damages or an account of profits, but not both. However, neither damages nor an account of profit can be awarded against a defendant who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent or the registered design, as the case may be, existed. The fact that words such as “patent” or “patented” or “registered” have been applied to the product do not of themselves give rise to reasonable grounds for supposing that the patent existed unless accompanied by the registration number.
An exclusive licensee may only be awarded damages in respect of his own losses.
The aforesaid rules do not affect the right to recover costs by a successful party. Some statutory modifications need to be noted however. A proprietor of a patent found partially valid by a court, cannot recover damages nor costs for the valid part unless he is able also to prove that the specification for the patent was framed in good faith and with reasonable skill and knowledge.
Where proceedings are taken under either the Patents Ordinance or the Registered Designs Ordinance by an exclusive licensee, the right holder shall be made a party to the proceedings. However, where he is joined as a defendant, the proprietor shall not be liable for any costs and expenses unless he enters an appearance and if he takes part in the proceedings. A similar provision applies to an action brought by one co-owner, who must add the other co-owner(s) as a party.
There are no statutory restrictions in respect of actions for infringement under the Trade Marks Ordinance, which are accordingly governed by general common law principles. The proprietor must choose whether his action will seek damages for infringement or an account of profits, along with any other relief which is appropriate.
Costs cannot be awarded against a proprietor of a trade mark who is called upon by a registered user to take action against infringement but fails to do so and is accordingly joined as a defendant (see paragraph 1 of the reply to Question 2 above), unless he takes part in the proceedings. Costs cannot be awarded by the Registrar of Trade Marks against any party on an appeal to him against a refusal of the proprietor of a certification trade mark to certify goods or services or to authorise the use of the trade mark.
The Layout-design (Topography) of Integrated Circuits Ordinance empowers the seeking of any remedy for infringement, as are available in respect to any other property rights including damages, accounts or otherwise. There is however a power to award exemplary damages taking into consideration the flagrancy of the infringement and any benefit accruing to the defendant by
reason of the infringement.
A statutory defence is provided to a person who commercially exploits a protected layout-design to prove that he did not know and had no reasonable grounds to know, when he acquired the layout-design, that a protected layout-design (topography) was incorporated. Such a person, after being made aware of the protected right, may continue to commercially exploit the protected layout-design, but must then pay the qualified owner the royalty that would be payable under a freely negotiated licence for the layout-design. This saving only applies to a person who commences commercial exploitation prior to being made aware of the protected rights of the qualified owner.
Under the Plant Varieties Protection Ordinance there is statutory provision that, a court, in awarding damages, including exemplary damages, or in granting other relief for infringement, shall take into consideration any loss suffered or likely to be suffered by the grantee as a result of the infringement; and, any profits or other benefit derived by any other person from that infringement; and the flagrancy of the infringement.
Where, in any proceedings under the Plant Varieties Protection Ordinance it is proved or admitted that an infringement occurred, but proved by the defendant that, at the time of the infringement, he was not aware and had no reasonable grounds for supposing it that it was an infringement, the plaintiff is not entitled to any damages, but shall instead be entitled to an account of profits and any other relief.
Destruction or other disposal of infringing goods and materials/implements for their production
Because of the extended criminal provisions for infringement in Hong Kong, China, as detailed in answer to Questions 21 et seq, and because of the willingness of the Commissioner of Customs & Excise to bring criminal proceedings against alleged infringers, the civil remedies for infringement are used less frequently than in other jurisdictions. Accordingly, it would benefit the reader to bear in mind the criminal equivalent provisions when reading the civil provisions detailed below.
Under the common law, the court has an inherent right to make orders for delivery up for the destruction, or for the erasure of the marks, of any goods already marked with the spurious mark and in the possession or control of the defendant, as well as of deceptive labels, advertising material and implements which may come into being as a result of actions brought for trade mark infringement, and for “passing off”. Generally, however, the statutory powers provided in the various IP statutes form the basis for this class of relief.
Under the Copyright Ordinance, the owner of the copyright in a work may apply to the court for an order, against a person having possession, custody or control of
- an infringing copy of the work for the purposes of trade or business; or
- an article specifically designed or adapted for the making of infringing copies of a particular copyright work, which he knows or has reason to believe has been or is to be used to make infringing copies; or
- an infringing fixation of a performance for the purposes of trade or business,
that the copy, or article or fixation be delivered up to him or any other person as the court may direct.
The time limit for bringing such an application is six years from the date when the copy or article was made unless the owner was prevented by disability, fraud or concealment from discovering the facts. The Court should not make an order for delivery up unless it also makes an order for disposal.
An application is therefore automatically also made for an order that the infringing copy or article or fixation, ordered to be delivered up, be forfeited to the copyright owner or destroyed. Before making an order, the court must consider whether other remedies available are adequate to compensate the owner. Should no order be made, the person who delivered up the alleged infringing copy or article or fixation, is entitled to its return.
Where “copy protected” copies of either (i) a copyright work; or (ii) an unfixed performance; or (iii) copies of a fixation of a performance, are issued to the public by or with the licence of a copyright owner, the performer or the person having fixation rights in the performance has the same rights and remedies as the copyright owner has in relation to the remedies of delivery up and disposal as are detailed above against a person who, with the requisite state of mind, does any of the acts detailed in paragraph 4 of the reply to Question 2 above.
There is statutory power under the Patents Ordinance for a proprietor of a patent to apply to the court for an order requiring the defendant to deliver up or destroy any patented product in relation to which the patent is infringed or any article in which the product is inextricably comprised. No other statutory guidance is provided.
The registered owner of a design may apply to the court for an order, against a person having possession, custody or control in the course of a business of
- infringing articles; or
- anything specifically designed or adapted for the making of infringing articles, knowing or believing that the thing has been or is to be used to make infringing articles,
that the articles or things be delivered up to him or any other person as the court may direct. An application must be made within 6 years from the date the articles or things were made. Where the court makes such an order, it will also make an order as to forfeiture or destruction.
The qualified owner of a layout-design (topography) may apply to the court for an order, against a person having possession, custody or control
- for commercial exploitation purposes of an integrated circuit in which a protected layout-design (topography) is incorporated; or
- anything specifically designed or adapted for making integrated circuits to a particular layout-design (topography) knowing or having reason to believe that it has been or is to be used to make an integrated circuit in which a protected layout-design (topography) is incorporated,
that the integrated circuit or the thing referred to in the above paragraph be delivered up to him or any other person as the court may direct. Such an order shall not be made 6 years after the integrated circuit was made. A court shall not make such an order unless it appears there are grounds for an order for forfeiture or destruction.
Any other remedies
An infringement of moral rights and of a performer’s non-economic rights in copyright litigation is actionable as a breach of a statutory duty owed to the person entitled to the rights.
In certain circumstances of declared extreme emergency (defined as being necessary in the public interest to maintain supplies and services essential to the life of the community), the Government may make use of a patented invention or of a registered design as it considers necessary or expedient in relation to the emergency, including an infringing use. In such circumstances, the proprietor or registered owner, as the case may be, shall be paid by the Government compensation for loss resulting from him not being awarded a contract to supply the patented product or articles to which the design is applied.