IP protection in Hong Kong, with infringement case example

Hong Kong maintains a robust, sophisticated and effective system for intellectual property (IP) protection. Being a signatory to various international agreements and conventions related to IP protection, Hong Kong has been ensuring compliance with evolving international norms pertaining to the protection of IP rights.

A comprehensive set of IP laws has been established to meet the most stringent global standards, which effectively protects the lawful interests of investors, businesses and creators, ensuring their rights are safeguarded and positioning Hong Kong at the forefront of IP advancement and preservation. This encompasses the protection of patents, copyright, trademarks, designs, plant varieties, and layout design of integrated circuits. Below is a brief overview on the main IP rights protection offered in Hong Kong.

Trademarks

When a mark is registered in accordance with the Trade Marks Ordinance (TMO), it is recognised as a registered trademark. This grants the owner the rights and protection conferred by the TMO. Arrangements are being made for the implementation of the Madrid Protocol in Hong Kong, which will enable the owner to concurrently seek protection for the trademark in multiple jurisdictions, including Hong Kong.

The Trade Descriptions Ordinance further prohibits forged trademarks in respect of goods provided in the course of trade or business, and enables the rights owner to seek assistance from the Hong Kong Customs & Excise Department for taking criminal sanctions against the infringing activities.

Even if the mark is not registered, the owner of the unregistered trademark may still enjoy protection through the common law action of passing off. To establish a passing-off claim, the owner of the trademark needs to demonstrate significant goodwill associated with the trademark, misrepresentation and damage.

Patents

Under the existing Patents Ordinance, two categories of patents can be granted in Hong Kong:

1. A standard patent; and
2. A short-term patent. “Standard patent” offers a maximum protection term of 20 years.

Application for a standard patent can be made via the new “original grant patent” route, where substantive examination of the invention is conducted by the Hong Kong Patents Registry, or via the “re-registration” route, where the application will be made on the basis of a corresponding patent application for the same invention previously filed with a designated patent office. Alternatively, if protection is desired for inventions or improvements with short commercial life cycles, a short-term patent grants protection for a maximum period of eight years.

Copyright

Copyright is an inherent entitlement that comes into effect on the creation of a work and is protected by the Copyright Ordinance. Unlike patents and trademarks, which require registration for protection, copyright in Hong Kong does not necessitate formal registration to be safeguarded under the law of the region.

Registered designs

The laws in Hong Kong also offer protection to the appearance of a product or an article through registered designs under the Registered Designs Ordinance. To acquire a valid registration, the design must meet the criteria of novelty, individual character and industrial applicability for manufacturing articles. The validity of a design can be challenged in the event that its novel features lack impact, it predominantly resembles a commonplace design, or it is a minor variation within its respective industry.

Enforcement options

Hong Kong has a highly developed and comprehensive legal and administrative framework for enforcement of IP rights.

Civil enforcement. A more cost-effective way for enforcing IP rights in Hong Kong would be to write to the infringer demanding that they cease the infringing activity, and request for an undertaking that they will not continue the infringing activity in the future.

If sufficient evidence of infringement is available, court proceedings may be commenced in the High Court of Hong Kong. Since 2019, the High Court has set up a specialist list on IP cases. Specialist Judges will be assigned to handle these cases, enhancing the management of IP cases and facilitating the resolution of IP disputes.

Enforcement through customs. Apart from taking civil actions, individuals or entities can file complaints with customs. Customs is the only governmental department entrusted with criminal sanctions against copyright and trademark infringement in Hong Kong.

On receiving a complaint, customs will assess its merits and request supporting evidence to substantiate the complaint to evaluate whether or not to proceed with the matter and potentially initiate criminal prosecution. Customs possesses wide-ranging authority for conducting searches and seizures, and may also collaborate with foreign enforcement agencies and copyright holders in their efforts to combat infringement.

Case update: the 9¾ Cafe case

A recent case in Hong Kong demonstrating the protection and enforcement of IP rights through civil enforcement would be the 9¾ Cafe case.

Case summary

On 8 August 2023, the High Court found that a local Harry Potter-themed cafe infringed the copyright and trademarks of Warner Bros. Entertainment, the entertainment giant that owns the copyright to the Harry Potter film series including the characters, names and related indicia within, and all Harry Potter-related trademarks in Hong Kong.

The dispute revolved around a local Harry Potter-themed cafe named “9¾ Cafe”. The interior of the restaurant is marked by a half-disappearing trolley and owl cage, resembling the 9¾ platform in the Harry Potter movies, and decorated with lookalike movie props such as the sorting hat. The restaurant also sells food and drinks with names that are registered trademarks of Warner Bros (such as “Hagrid” and “Quidditch” in Chinese) on the menu.

According to local media reports, Warner Bros filed an action with the High Court in 2019 against the owner of the 9¾ cafe and its directors. Warner Bros’ claims were succinctly for passing off, trademark infringement and copyright infringement.

In allowing all three claims of Warner Bros, the High Court recognised that Harry Potter is a world-famous movie franchise, and found that the use of the names, elements and graphics, etc., taken from the movies caused confusion to the public that the cafe was authorised or endorsed by Warner Bros.

Given the cafe has never obtained a licence or consent from Warner Bros to use its trademarks and copyright works, the High Court ruled that the defendants acted in bad faith in using the trademarked properties and copyright of Warner Bros without authorisation.

In that context, the High Court ordered the defendants to immediately cease use of the copyright or trademarked properties of Warner Bros, including the names of the characters and places in the cafe’s name, decorations and menu, etc. (i.e. an injunction order). Further, Warner Bros was entitled to an account of profits, and the cafe’s registered trademark, which consists of the name “9¾ Cafe”, was liable to be revoked.

Implications and Insights

The High Court’s decision reinforces the idea that while freedom of expression and fair trade practices should not be stifled, it is important to respect IP rights and not free-ride and profit from the success and reputation of others.

This case serves as a helpful reminder of the key issues and legal principles surrounding themed restaurants and the implications for IP infringement in Hong Kong.

To the rights owner

Every original film or drama comes with various IP rights that can be protected not only nationally but also worldwide. To ensure that the IP rights are protected, efforts should be made in obtaining registrations of the relevant IP rights, and in maintaining evidence pertaining to ownership and use of the IP rights.

Where a party succeeds in claims for copyright infringement, trademark infringement and/or passing off, several remedies and reliefs are open to it, including but not limited to economic compensation for damages or alternatively an account of profits, and an injunction order prohibiting the infringing party from registering or using the relevant trademarks (including any variations or similar marks), and restraining the reproduction or display of the relevant copyright works (as a whole in part) in any material form.

To investors and businesses

As one would note from the 9¾ Cafe case, steep consequences may follow if businesses use IP without authorisation from the legitimate rights holder. Considerations must therefore be given to different IP when taking inspiration from movies, dramas and animation.

1. Copyright. Taking up of an idea or concept from a movie does not in itself infringe copyright, however, if elements from it are replicated or if there is substantial copying, such acts would potentially be liable for copyright infringement.
2. Trademark. The unauthorised use of names and logos registered as a trademark in Hong Kong, or something confusingly similar to that, may constitute an act of trademark infringement.
3. Rights under the common law action of passing off. Even if the names or logos are not registered in Hong Kong, unauthorised use would still risk liability for a passing-off claim if it harms or causes damage to the goodwill of the rights owner.

Conclusion

Hong Kong’s commitment to the protection of IP rights is a cornerstone of its reputation as a global business and innovation hub. Through a robust legal framework, efficient administrative systems, and comprehensive enforcement measures, the city provides a conducive environment for creators, entrepreneurs and investors to thrive.

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