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 activity.
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 defendant.
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.