Thousands of overseas manufacturers display their products for
potential buyers at exhibitions held in Hong Kong, and IP concerns
are never far from these events. Sometimes the goods are themselves
counterfeit; in other cases the displays spur the efforts of nimble
copycats. Only prompt action can prevent such infringing activities
from demolishing the rightful owner's new product line or even
whole business. The IP owner can pursue monetary compensation, but
infringing activities can continue while this legal procedure runs
its course. In addition, payment alone might be insufficient to put
a stop to the unlawful activity. However, non-monetary remedies
provided by Hong Kong law address these concerns.
Perhaps the most significant remedy is an injunction that
restrains the infringer (also the director if it is a limited
company) and its employees from continuing their unlawful
An injunction applicant should generally also apply for (1) a
delivery up order, which requires the infringers to surrender not
only infringing products but also things like packaging material,
moulds and tools; (2) a disclosure order to reveal the source of
the infringing products; (3) an enquiry as to the damages sustained
by the aggrieved party or an account of profits gained by the sale
of infringing products; and (4) an award of legal costs.
Because such remedies are only granted when a case concludes,
which, if contested, can be years away, applicants can seek a
temporary injunction to stop the infringing acts immediately. Such
an interlocutory injunction is granted to protect the interests of
aggrieved parties before the case is tried. A court will consider
granting interim relief (a short-term order) after it receives
proof of IP ownership and infringement as well as the
opponent's response. The resulting order is effective until the
interlocutory hearing is heard in full.
New rules on interest-bearing costs promote settlement and can
also help an aggrieved party to save time and expense. A recent
case demonstrates the advantage of accepting a plaintiff's
proposal on costs. The defendant refused the proposal, which
covered costs but did not include an order for enquiry of damages
or an account for profit. Upon conclusion of the case, the issue of
whether the defendant should be liable for a higher rate of tax
(which consists of punitive element due to his refusal of
settlement) was discussed. In its judgment for the plaintiff, the
court increased the award for legal costs by 10% because the
plaintiff achieved more favourable terms than those proposed to
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.
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This article enunciates the recent, much awaited, and landmark judgment delivered on September 16, 2016 by Hon'ble Delhi High Court throwing light on the important provisions of the Copyright Act, 1962.
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