Stevenson, Wong & Co. assisted Shenzhen Qianhai Financial Holdings Co., Ltd. to issue RMB1 billion credit enhanced bonds on HKEx (85714.hk)

Acting for Shenzhen Qianhai Financial Holdings Co., Ltd. (the “Issuer”) as the legal advisers as to Hong Kong laws for its CNY1,000,000,000 4.55 percent credit enhanced bonds with the benefit of an irrevocable standby letter of credit provided by China Development Bank Corporation. The joint global coordinators were Industrial and Commercial Bank of China (Asia) Limited and Hongkong and Shanghai Banking Corporation Limited. The joint lead managers and joint bookrunners were CITIC Securities International, CMB International, Guotai Junan International, Shanghai Pudong Development Bank Co., Ltd. (Hong Kong branch), Haitong International and BOC International.The net proceeds will be used by the Issuer as follows: 50 percent will be remitted into the PRC and used for equity investments in enterprises established in Qianhai Shenzhen-Hongkong Modern Service Industry Cooperation Zone of Shenzhen (“Qianhai”), and 50 percent will be injected into the Issuer’s Hong Kong subsidiary, Qianhai International Holdings Co., Ltd. The Issuer is the first financial investment service platform in Qianhai and is wholly-owned by the Authority of Qianhai Shenzhen-Hongkong Modern Service Industry Cooperation Zone of Shenzhen.

Please contact our Mr. Hank Lo for any enquiries or further information about this transaction.

The 12th Annual Asian Legal Business (ALB) China Law Awards 2015 was held on April 23, 2015 in Beijing which recognizes the excellence and outstanding achievements of China’s leading law firms and in-house legal teams as well as the top deals and dealmakers for the past year.

The awards night on April 23, 2015 was held at The Park Hyatt Hotel in Beijing and attracted CEOs, bankers and legal luminaries from the judiciary, domestic and multinational companies, law firms, and academe in China. At the award ceremony, AllBright Law Offices which is in association with SW won the prize for the Shanghai Law Firm of the Year. AllBright’s partner, Yang Bin, received the award on behalf of the firm and gave a thank you speech. The Annual ALB China Law Awards provides unparalleled networking opportunities, live entertainment and fine gourmet food, a must go to ceremony in every lawyer’s event calendar.

Cannot Sing Along!
Gold Typhoon Entertainment Limited v Legend World Asia Group Limited (Phonographic Performance (South East Asia) Limited as Third Party) HCA1931/2012 – Court of First Instance

The plaintiff, Gold Typhoon Entertainment Limited, is the owner of the copyrights of karaoke music videos (“KMVs”) of local popular songs in Hong Kong. The defendant is operating a karaoke pub known as Vegas Club in which karaoke music videos are performed.

From 2005 and until January 2008, the plaintiff authorized Phonographic Performance (South East Asia) Limited (“PPSEAL”) to grant on its behalf both the necessary K-Server licence and the required Public Performance licence (“PP licence”) of its KMVs to karaoke establishments.

Since January 2008, the plaintiff ceased to authorize PPSEAL to grant K-Server licence but continued authorizing PPSEAL to grant PP licence. Thereafter, the plaintiff authorized other licensing bodies, namely Music Link Limited (“Music Link”) and Music and Video Copyright Management (HK) Limited (“MVCM”), to grant its K-Server licence.

At present, the plaintiff does not authorize any licensing bodies for granting its K-Server licence.

In or about September 2009, the defendant obtained the K-Server licence of the plaintiff’s KMVs through Music Link. The defendant paid quarterly to Music Link a royalty fee of $3,500 per month for the K-Server licence.

Since 1 January 2010, as MVCM has replaced Music Link as the licensing body, the defendant obtained the K-Server licence from MVCM but the royalty fee has been increased to $5,100 per month. The K-Server licence granted by MVCM expired in January 2011 and there has since then been no renewal of the K-Server licence of the plaintiff’s KMVs to the defendant.

The plaintiff claimed that the defendant played the plaintiff’s KMV in its premises through a computer system without proper licence. The plaintiff also claimed that the defendant should obtain a K-Server licence for its business because a PP licence is not enough for reproducing KMVs through a computer system.

The defendant raised the following defences:
(1) The K-Server licence granted to the defendant in respect of the plaintiff’s KMVs is a permanent licence, covering also the payment of the monthly licence for KMV’s songs;
(2) The right to play the plaintiff’s KMVs by the defendant is covered by the PP licence obtained from PPSEAL;
(3) The plaintiff is put to strict proof of its ownership and subsistence of the copyrights of the relevant KMVs; and
(4) The plaintiff’s KMVs do not constitute “work” within the meaning of the Copyright Ordinance, Cap 528 (“CO”).

For the first defence, the court found that there is no dispute that the K-Server licence would expire and it is undisputable that the defendant has had, upon the expiry of the K-Server licence previously granted to it, applied for and secured another term of the same licence. On the face of it, this is contrary to the suggestion that the K-Server licence is of a permanent nature. The argument that the fee paid by the defendant is for the downloading of new songs into the computer systems is rejected. Further, the defendant did not seek to uphold its rights under the permanent licence it has alleged, but immediately deleted all works of the plaintiff from its computer system. This conduct of the defendant is totally contradictory to what he suggested as the terms of the licence agreement.

The second defence was also rejected as whatever licence granted by PPSEAL to the defendant after 2008 should not cover the same rights as conferred under a K-Server licence.

For the third defence, the court found that as the defendant has been holding both K-Server licence and PP licence granted by the plaintiff’s licensing agents from September 2009 to January 2011, it has therefore been recognizing as the plaintiff’s intellectual property rights in the subject KMVs for many years. The defence was therefore rejected even if there were a number of technical defects in the plaintiff’s statutory declaration.

Lastly, the defendant relied on section 65 of the Copyright Ordinance, which says:-
“Notwithstanding section 23, copyright in a work is not infringed by the making of a transient and incidental copy which is technically required for the reviewing or listening of the work by a member of the public to whom a copy of the work is made available.”

Nevertheless, the defendant could not be a member of the public to whom a copy of the work is made available and therefore section 65 could not be applied.

A permanent injunction is then granted to the plaintiff. And as the conduct of the defendant does not amount to flagrant misconduct in that it has been consistently paying various royalty to licensing bodies in running its karaoke business. No additional damages was awarded to the plaintiff.

Please contact Mr. Angus Forsyth and Ms. Lai Lam for any enquiries or further information about this update.

Juicy Can or Juicy Can’t ?
ABG Juicy Couture, LLC. V Bella International Limited & Anor HCA1764/2008 – Court of First Instance

The plaintiff, ABG JUICY COUTURE, LLC., is the owner of a business which designs and markets contemporary casual apparel and fashion accessories primarily for young ladies, which promoted and used the word marks “JUICY” and “JUICY COUTURE” in U.S.A. since 1996 and were registered by the plaintiff in 2000. The marks were used alone or incorporated with some elements of design on the fashion products and related retail services. The plaintiff further claims that the fashion goods were marketed and promoted under the “JUICY COUTURE” brand as a US brand with emphasis on its origin on Los Angeles and/or California.

The defendants were corporate vehicles which have operated the BELLA Fashion Group (“BELLA”), which has operated a number of outlets in Hong Kong marketing and promoting ladies’ fashion wear bearing various trade marks incorporating “JUICY GIRL”.

The plaintiff claims that the defendants in selling their ladies fashion wear and accessories under or in the brand name of “JUICY GIRL” have infringed the plaintiff’s trade marks and passed off their retail business and goods.

The defendants argued that they had been using their “JUICY GIRL” trade mark either alone or in conjunction with other trade marks for ladies’ fashion wear in Hong Kong in mid 1998 through sales in BELLA (which is earlier than the alleged first use of the plaintiff’s trade marks in July 2010). They relied on section 19(4) of the Trade Marks Ordinance:-

“19. (4) A registered trade mark is not infringed by the use by any person in the course of trade or business in Hong Kong of an unregistered trade mark or other sign in relation to goods or services if the unregistered trade mark or other sign has been so used in Hong Kong by that person or a predecessor in title continuously from a date preceding the earlier of-
(a) the date of first use in Hong Kong of the trade mark which is registered; and
(b) the date of registration in Hong Kong of that trade mark.”

Although the plaintiff alleged that it has used the trade marks by way of advertisements of garments in a magazine published in the USA from 1996 to 1998, which was available in Hong Kong through subscription by public libraries or beauty salons, the court rejected the plaintiff’s argument and held that the use should not be considered as a “genuine use” under section 19(4)(a) of the Trade Mark Ordinance. Therefore, the defendants were entitled to rely on that defence.

However, even though the defendants were entitled to use the JUICY GIRL mark, they were not entitled to use the mark “JUICY” as that was one of the plaintiff’s registered trade marks. The court therefore found that the use of the word “JUICY” in stylized script in the defendant’s product catalogue is an infringement of the plaintiff’s trade mark.

The court then dealt with the passing-off claim.

Upon analysis of the evidences, the court found that Suen Lui, a key witness and the 3rd defendant in this case, must have a clear impression of the logo and mark of the “JUICY COURTURE” brand which was established in 2006 because he engaged a designer to produce different designs for the “JUICY GIRL” logo before December 2006.

The court further found that the defendants have modified the design for the words “JUICY GIRL” so that the words used the same Gothic font type as used by the plaintiff, and it is more likely than not that Mr. Suen should have instructed the designer to incorporate the crown design and Gothic font as found in the Plaintiff’s trade marks in designing the “JUICY GIRL” logo.

Therefore, it was held that the defendants were trying to pass-off the JUICY GIRL brand as an associated brand of “JUICY COUTURE”. The use of domain names ending with “.us” is also considered to pass-off the websites as domiciled in the US.

The court granted an injunction to restrain the defendant from using the “JUICY GIRL” marks and designs and ordered the defendant to take all necessary steps to cancel the domain name registration of “juicylicious.us”.

Coffee and Tea – WHOSE???
Tsit Wing (Hong Kong) Company Limited & Anor v TWG Tea Company PTE Ltd & Anor CACV 191/2013 – Court of Appeal

The plaintiffs were part of “Tsit Wing Group”, a large and famous Hong Kong coffee and tea manufacturer, supplier, distributor and retailer, which owned the trade marks “TW” and “TWG” registered in Hong Kong in 2006 and used them over a number of fast food chains, tea houses, hotels and cafes and western restaurants. The plaintiffs also supplied products directly to corporate end-users such as banks, accounting firms and law firms and sold its products in supermarkets and convenience stores.

The defendants were part of “The Wellness Group”, which manufactured luxury tea and operated international tea boutiques/counters and salons, including a tea salon set up in the IFC Mall in Hong Kong. The defendant’s Hong Kong registered trade mark of “1837 TWG Tea” co-existed with the plaintiff’s mark in Taiwan, Singapore and China.

In the present appeal from the Court of First Instance, the Court of Appeal decided on whether it should uphold the decision of the Court of First Instance, which granted a permanent injunction restraining the defendant from using its own registered trade marks.

The court first of all stated that as the Judge’s assessment on similarity and likelihood of confusion are on the application of the law to the facts of the case, the appellate court should not reverse the Judge’s decision unless he has erred in principle.

In assessing the likelihood of confusion arising from the use of a sign the court must consider the matter from the perspective of the average consumer of the goods or services in question and must take into account all the circumstances of that use that are likely to operate in that average consumer’s mind in considering the sign and the impression it is likely to make on him. The sign is not to be considered stripped of its usage context.

The court would also consider as relevant context the circumstances in which the defendant used its sign, and take a global assessment of the likelihood of confusion which considers the interdependence between the relevant factors. The notional and fair use of the marks should be used as a reference point in conducting the global assessment, which should not be replaced exclusively with the actual uses of a plaintiff’s mark.

Therefore, the court held that even if the colours of the defendant’s marks are different from the plaintiff’s marks as used, it does not follow that there is no likelihood of confusion as there are other similarities between them.

The court then held that “TWG” was a “distinctive” element in the plaintiff’s marks which indicates the origin of the goods. Although the three beans on the plaintiff’s marks could be regarded as a significant feature, the absence of this feature in the defendant’s marks cannot substantially remove the likelihood of confusion.

The court further found that the defendants wished their tea salon and tea and associated products to be known as “TWG” service and products, as there were extensive uses of other signs in which the letters “TWG” appeared prominently. An average customer would describe the identity of the tea salon or products by reference to the pronounceable part of the defendants’ marks.

The court therefore concluded that the Court of First Instance was correct in giving judgment to the plaintiffs and the injunction was upheld.

On 4 December 2014, an insurance agent was sentenced to jail for 4 weeks for a contravention of section 50B(1)(c)(i) under the Personal Data (Privacy) Ordinance, Cap. 486 of the Laws of Hong Kong (“PDPO”). Under the said provision, a person commits an offence if he makes a statement to the Privacy Commissioner (“Commissioner”) which he knows is false or does not believe to be true or knowingly mislead the Commissioner, and is liable for a maximum fine of HK$10,000 and 6 months’ imprisonment.

The case followed a complaint lodged by an individual to the Office of the Commissioner claiming that the insurance agent had obtained her personal data through unfair means. During the investigation, the insurance agent falsely represented to the Commissioner that he had been assigned to work with the complainant when he was employed by his then employer which was denied by the employer. The insurance agent was convicted for the contravention of the said section 50B(1)(c)(i) of PDPO.

In addition to the above, other non-compliances of the PDPO may also lead to a prison sanction, such as:

1. Section 35C – use of personal data in direct marketing without taking specified action;
2. Section 35E – use of personal data for direct marketing without consent;
3. Section 50A – contravention of enforcement notice issued by the Commissioner; and
4. Section 64 – disclosure of personal data obtained without consent from data users with an intent to make a gain or to cause loss to the data subject or causing psychological harm to the data subject.

Given the first individual being sentenced to jail under PDPO, public and institutions should be more aware of the use of personal data and ensure compliance with the provisions in PDPO at all times.