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Asian litigation

Landmark IP case

The Privy Council restored Rogers J's decision in Canon Kabushiki Kaisha v Green Cartridge Co (HK) which the Court of Appeal overturned, as reported in this column in May 1995 and September 1996.

British Leyland Motor v Armstrong Patents[1986] AC 577 held that the owner's right to repair a car enabled a spare parts manufacturer to make parts in infringement of the plaintiff's copyright. The issue in this appeal was whether the scope of the spare parts exception extended to the manufacture of cartridges, thus entitling Green Cartridge to infringe Canon's copyright. The Board treated the matter with caution and was reluctant to extend the exception.

The Board held that:

  • Green Cartridge could not use the defence of repair to bring the case within the spare parts exception in British Leyland. When a photocopier had run out of toner, a cartridge had to be replaced and at that stage nothing in the photocopier required 'repair'. The situation is similar to a car that has run out of petrol, it only needs to be refuelled, not repaired.
  • The concept of a purchaser having an implied licence to keep an article in repair was not applicable because it was not the purchaser who infringed the copyright but a third party spare parts manufacturer.
  • The British Leyland spare parts exception "could not be regarded as truly founded upon any principle of the law of contract or property. It was an expression of what the House perceived as overriding public policy, namely the need to prevent a manufacturer from using copyright in order to control the aftermarket in spare parts."
  • On the market competition aspect of the matter, the present case differed from British Leyland in that "the features of unfairness and abuse of monopoly power ... could not be said to be plainly and obviously present in this case".

In British Leyland, the cost of a replacement exhaust was relatively small in comparison with the other running costs of a vehicle. In this case, however, a purchaser was likely to have assessed the 'lifetime costing' of cartridges before he purchased a photocopier since the cost of cartridges was relatively important as a proportion of the lifetime cost of the photocopier.

Competition in the aftermarket already existed between Canon and the refillers. One could not assume Canon was abusing a monopoly position, when there was no evidence to show Canon even held such a position by reason of its intellectual property rights.

Failure to appear before court

Parties who fail to appear before the court on the date fixed for an appeal risk their applications to court being dismissed, notwithstanding the parties' consent to an adjournment of the hearing. This was considered by the Court of Appeal in Wong Man Hung v Haruna[1997] 2 HKC 71.

The parties consented to adjourn an appeal hearing sine die with liberty to restore and filed a consent summons accordingly. The appellant's solicitors had corresponded by faxes to the Registrar regarding the reasons for the parties' application for an adjournment. The appellant's solicitor appeared out of courtesy at the hearing.

The Court dismissed the appeal for want of prosecution and held that:

  • An appellant should be ready to proceed with his appeal once it had been set down. Because the appellant in the present case neither appeared, in person or by counsel, nor gave any explanation as to his absence, the appeal was dismissed.
  • The courts refused to consider the facsimile correspondences because courts "do not engage in hearings and argument by correspondence by means of facsimile".
  • Parties' consent was only one of the factors that the Court would consider when adjournment was sought. The consent itself was insufficient to justify an adjournment, bearing in mind that an adjournment would result in more waiting times and extended court lists.

Similarly, the appellant in Ford v China Light & Power & Anor [1997] 2 HKC 14 did not appear at an appeal hearing before the Court of Appeal. The appellant in this case did file his written submissions in support of his case. The Court of Appeal held that it had no jurisdiction to hear the appeal in the circumstances.

The Privy Council held that the Court of Appeal was wrong in holding that "they had no power to consider the written submissions of the appellant", because nothing in the law banned an appellant from presenting his or her case in writing. Further, the failure by an appellant to appear at a hearing does not take away the jurisdiction of the Court. It was held that the Court of Appeal had committed a fundamental breach of natural justice.

Ada Fung
Stephenson Harwood & Lo
Hong Kong

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