THEME : Judicial Protection of Intellectual Property Rights in Hong Kong

1. Mainland, Hong Kong SAR and Macau SAR Intellectual Property Symposium 2003China Intellectual Property Training Center, Beijing THEME : Judicial Protection of Intellectual Property Rights in Hong Kong ~ By C. K. Kwong ~Sit Fung Kwong & Shumhttp://www.sfks.com.hk

2. I. Brief Outline of the Present Judicial Procedures A. Civil Procedures Cease and Desist Letter  demands: - an undertaking not to infringe - delivery up - disclosure of past dealings - payment of damages - contribution of legal costs

3.  Less due diligence before action to save costs Legal Action in the Civil Court  writ  Statement of Claim”  Ex-parte Injunction  Anton Piller K G v. Manufacturing Process Ltd. [1976] CH.55 (CA)

4.  Interlocutory Injunction American Cyanamid v. Ethicon  Defence  Reply  Other interlocutory applications - further & better particulars, interrogatories, security for costs  Summons for Directions - evidence - trial  Summary judgment

5. Costs  hourly rates (barrister) HK$2,500 per hour from a reasonably competent junior counsel to HK$8,000 per hour for a Senior Counsel  Solicitors hourly rate ranges from HK$1,000 to HK$4,500  Usually costs recoverable is approximately 60% to 70% of actual amount spent  Difficult to estimate costs. It depends on how aggressive will the litigation be conducted by the parties.

6. B. Criminal Procedures and Remedies  Copyright Ordinance  Trade Descriptions Ordinance  Judicial Trend

7. II Reform on Civil Procedure Rules Consultation Paper  “Civil Justice Reform : Interim Report and Consultative Paper” November 2001  report on other relevant jurisdictions, review the Hong Kong situation

8.  formulate proposals for reform  The Woolf reforms in England used as a frame work  Aim to address problems of expense, delay, complexity and inequality in resources  New system be just, fair, efficient, user friendly, economical and practical  80 proposals put forward

9. Common Complaints  Too expensive  Too slow  Lack of equality  Too uncertain  Too complicated  Misuse of adversarial system  Take up disproportionate judicial resources

10. Themes for possible reforms  Proportionality  Re-defining procedural requirements  Encouraging earlier settlement  Limiting interlocutory application  Giving court greater case management  Minimising hearings  Introducing costs transparency  Exploring use of voluntary ADR

11. Comments from Lord Woolf himself  The idea of proportionality. More complex procedures for more complex case. Small disputes should have simple, cheap and speedy procedure  go to the court only as a last resort  No. of cases dropped by one-third  Court only encourage alternative dispute resolution but cannot order it

12.  Problems include - Balancing between certainty and flexibility - Controlling costs while encouraging lawyers to incur expenses before litigation starts I.e. “front loading” - inconsistencies in the application of the broad powers  won’t degenerate into a trial by expert instead of trial by judge  principles would be applicable in Hong Kong

13. The Hong Kong Law Society’s Position  The Chief Justice’s Working Party looked at the system from the top down. The Law Society looked at it from bottom up  The Woolf Reform is not a panacea to the costs and delay problems  Keep the existing rules Acknowledged that litigation in Hong Kong is costly and time consuming. That could be due to other reasons  Proposed that pleadings should be “enhanced”

14.  Positive and substantive grounds of defence should be put forward  The wide ambit of Peruvian Guano test should apply in discovery of documents  There are pros and cons with active case management by the court  Different judges making different and inconsistent decisions is even worse

15. The Intellectual Property Practitioner’s View Point  Need to be more efficient and less expensive  Generally, the reforms should be supported  The following proposals are useful - adoption of pre-action protocols - favours specialisation

16. - pleadings to be verified - offer for settlement at any stage - case management, time tabling and milestones - Special List - limited discovery  Compulsory mediation may not be practical for counterfeiters  In other infringement cases, mediation may be useful where IP specialist are available

17.  Summary assessment of costs may be adopted providedit does not replace a detailed cost analysis in appropriate cases  Court should have control on the scope and use of expert evidence  A Code of Conduct for expert witnesses should be introduced  Welcome solicitors and barristers (i) to disclose to their clients basis of their charges (ii) to provide best estimates

18.  A new set of rules rather than piecemeal amendments  Essential to have -adequate judicial and court resources -training programmes to familiarise judges and other court staff with reforms, development of computerised system to perform case-flow management, resource allocation and management statistic function

19. The Working Party is to provide their final report by the end of this year

20. ~ Thank You ~