What can you do when your own creation, e.g. your mark / logo, invention and/or design, is misappropriated by someone?

This article intends to share with you some practical tips that an IP owner should take note of in enforcing one’s IP rights in the Hong Kong courts:-

1. Be prepared: Collection of evidence and record-keeping

• Professional investigators are usually instructed to carry out test purchases and on-site investigation to collect evidence.  Audio / video / photos records of the test purchases can be very helpful and are generally admissible in the Hong Kong Courts.
• Documentary evidence, such as receipts, purchase orders, name cards and product catalogues and flyers etc, should be obtained during the test purchases and kept safely for use in the future legal proceedings. Copies of documents are sufficient unless their authenticity is challenged.
• It is important to conduct pre-action asset search to ascertain whether the infringer has sufficient funds and assets to satisfy the judgment and to pay for your legal costs, in order to avoid a paper judgment.
• Original design drawings and/or prototypes and/or electronic files must be well retained as the proof of first use / proof of copyright works.
• In order to demonstrate your goodwill in your business and the substantive use of your marks and brands of your products, newspaper articles and promotion materials related to your products should be kept in order.

2. Interim measures to halt the Infringement

• Time is of essence, in particular, when you intend to apply for an interim injunction against the infringer to immediately stop the infringing activities pending final determination of the liability of the infringer.
• Anton Piller order gives you the right to search the infringers’ premises and seize evidence there without any prior warning so as to prevent the possible loss of important evidence.
• Mareva injunction restrains the infringers from dissipating their funds, properties and/or other assets beyond Hong Kong, e.g. by freezing their bank accounts or prohibiting the sale of any real estates in Hong Kong.
• All the above orders can be applied for and obtained within a short period of time and even without notice of the Defendant. However, costs for these interlocutory injunctions at the High Court are relatively costly.

3. Settlement is always an option

• Settlement should always be regarded as an ongoing issue and to be considered by both parties even during the intense litigation. It is never too late to initiate a settlement dialogue.
• Statistics reveal that most IP disputes in Hong Kong are resolved out of court.
• It is a common practice that the court will encourage the litigants to first attempt mediation before and/or during litigation.  The court may impose sanction on costs against the party who unreasonably refuses or fails to explore the possibility of settlement through mediation.
• For IP mediation, parties do not only focus on monetary compensation but other resolutions, such as undertakings, apology, transfer of IP rights and/or future collaboration.

4. What are you going to get from litigation?

• In all IP cases, permanent injunction, disclosure order, deliver-up order and costs are common relief to be sought.
• The court will first determine the liability and assess damages at a subsequent hearing.
• Damages assessment in IP disputes involve appraisal of loss of business and loss of reputation, or alternatively account for profits, to be chosen by the winning Plaintiff.
• Generally, it takes 2 to 3 years to conclude a case after full trial.
• Failure to comply with the judgment or the court order amounts to contempt of court which may result in a fine or imprisonment. This is a strong pull factor for due and timely compliance of court orders.

Authors :  Alan Chiu, Managing Partner

                  Felicia Lo, Associate

Date       :   8 August 2017