MONTRES ROLEX SA v. STELUX MANUFACTURING CO LTD AND ANOTHER

HCA001643/1981

IN THE HIGH COURT
1981, No. 1643

BETWEEN
MONTRES ROLEX S.A. Plaintiff
and
STELUX MANUFACTURING CO. LTD. 1st Defendant
STELUX TRADING (FAR EAST) LTD. 2nd Defendant

Coram: Zimmern, J.

Date of Judgment: 10th September, 1981.

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DECISION

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1. The plaintiff in this case is a manufacturer in Switzerland of Rolex watches. I do not think it can be disputed that its watchesare internationally accepted and known to be of high quality. The defendants are substantial companies incorporated in Hong Kongand are also known as manufacturers and distributors of watches under various brands, some also internationally known. For many yearsthe plaintiff has manufactured, and sold in many countries including Hong Kong a series of watches known as the Rolex Oyster Perpetual.They comprise of various models both for ladies and gentlemen. Their reputation is such that I do not have to describe them. Overthe course of years other watches manufacturers have manufactured and sold under their own brands watches which are not substantiallydifferent from the design of those manufactured by the plaintiff.

2. In 1978, the plaintiff was granted a Certificate of Registration of United Kingdom design No.985258 in respect of a design to a “watchand bracelet” and from this design it in the same year introduced two new models into the Rolex Oyster Perpetual series being No.17013and 17014. Each watch bears the legend “Registered Design” inscribe on the watch back case and these two new models were introducedand sold in Hong Kong in May 1978. The current retail price of the watch is $9,300 each. The defendants have also put in the marketwatches under their Titus mark which are of a design not substantially different from the plaintiff’s registered design and I saythis as a fact having seen and compared the various samples myself.

3. The plaintiff now applies to the court for an injunction to restrain the defendants from infringing its copy-rights in and the privilegeand rights conferred by the United Kingdom registration.

4. The writ with endorsement of claim endorsed thereon was issued on the 12th March 1981 and a summons for an inter partes injunctionwas issued on the 13th March 1981 and the matter came before Mr. Justice Penlington on the 3rd April 1981 who by consent adjournedthe application for new dates to be fixed in consultation with counsel. The application was restored before me on 1st September 1981,some 5½ months later. I am told that the cause of the adjournment was a massive affidavit affirmed by a Mr. Wong, managing directorof the 1st defendant company and a director of the 2nd. The plaintiff felt that the affidavit called for a reply and I shall returnto this later.

5. Before me the plaintiff’s application was contested.

6. By Mr. Wong’s affirmation the defendants challenges the validity of the plaintiff’s registration on various grounds but I do notthink I have to go into these with any particularity in as much as there is the fact of the registration and the grant of the certificateunder the Registration Design Act of 1949. Mr. Rogers for the defendants rightly conceded that there is a serious matter to be tried.The plaintiff says that if it were to succeed at the trial the injury done will be irreparable and damage an inadequate remedy. Theplaintiff’s watches as I have said are retailed at $9,300 and the defendants’ watches under the Titus brand at under $500. They areretail items and the models do not look substantially different and indeed they might even be offered for sale under adjoining countersin watch shops in Hong Kong. In these circumstances I find it difficult to see how the plaintiff’s damages can be assessed if theywere to succeed at the trial. Such injury cannot be properly atoned and I cannot accept Mr. Roger’s suggestion that it may be calculatedon the basis of the defendants’ sales of their infringing models on a royalty basis. On the other hand if an injunction were grantedand the defendants were to succeed at the trial their damages can be easily assessable and furthermore as the defendants’ modelscomplained of form no more than a small fraction of their business, I cannot envisage any substantial disruption in the defendants’business. The plaintiff is in the position to pay any damages which might be awarded against it on its cross-undertaking and Mr.Sakhrani for the plaintiff said that the plaintiff resides out of the jurisdiction and if the court were minded by that reason tofortify the undertaking as to damages by a payment in the court the plaintiff were prepared to do so on any sum reasonably assessed.The defendants did not suggest any sum nor indeed did they ask for such payment.

7. The defendants say they have been selling these watches since January 1980 and advertising them since later that year. By takingaction without even a letter before action in March 1981 the plaintiff has been guilty of unreasonable delay. The plaintiff statesthat they did not know of the defendants’ model until January 1981 when they took action almost immediately and now Mr. Rogers forthe defendant accepts that in this respect he cannot complain of delay. But he does complain that though the summons was issued inMarch 1981 up to now the Statement of Claim has not been filed or served and the adjournment herein has been delayed for so longthat the defendants have been led into thinking that the plaintiff had dropped its claim. It was this delay which bothered me inthis matter. Mr. Sakhrani explains it thus:-

Mr. Wong’s affidavit contains matters which could have led the court into believing that the parties had been negotiating in respectof these models in Switzerland for a long long time which might further lead the court into thinking if unanswered that there hadbeen an improper delay on its part in enforcing its rights. The plaintiff therefore had to obtain affidavits from persons in Switzerlandwho were negotiating on its behalf with the defendants including one Mr. Max Hool a director of Legal and Industrial Affairs to theFederation of Horlogere Suisse. I accept Mr. Sakhrani’s explanation for the delay in restoring the summons. The plaintiff has takenaction to enforce their claim and furthermore I have been told that there had been telephone conversations between solicitors forthe parties in regard to the delay in the filing and serving of the Statement of Claim. I do not think that that delay could amountto acquiescence by the plaintiff of the defendants’ conduct. Accordingly the plaintiff will have an order for the injunction in termssought. The plaintiff also claims various consequential orders for preservation and discovery. The defendants have by the affirmationof Mr. Wong exhibited figures all their sales up to then. They are substantial companies and I do not think a preservation orderis necessary but I do direct that the defendants file an affidavit updating the particulars they have supplied to the court up toto-date and also give particulars of the stock up-to-date of the models complained in their hands or in the hands of their agents.If the parties cannot agree on the form of the order liberty to apply.

8. Costs in the cause.

Representation:

A.H. Sakhrani (Deacons) for the Plaintiff.

A. Rogers (Johnson, Stokes & Master) for the Defendants.