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Sun Microsystems Inc v Lai Sun Hotels International Ltd [2000] HKLRD 616

Sun Microsystems is famous on its sale of computer hardware, software, network servers and accessories. It also provides services to businesses helping them to provide business on the Internet. In short, it is a network and Internet solutions service providers.

The Defendant belongs to a group of companies which involves mainly in the hotel industry. The Defendant acquired substantial interests in the TV business called HKATV.com Limited in 2000. It later changed its name to eSun Holdings Limited and used the domain name eSun.com for its media and entertainment business online.

Sun Microsystem commenced proceedings against the Defendant and applied for an interlocutory injunction against the Defendant retraining the Defendant from use of the domain name eSun.com.

Held by Deputy Judge Gill:

Interlocutory injunction was refused. According to the Court, for all its size and strength in the market place as a supplier of computer hardware, software and solutions, Sun Microsystems is not a provider of content in the fields of media and entertainment. And that is precisely what, and the sum total of what Lai Sun, the Defendant is proposing to be involved in. The Court therefore concluded that a prospective future customer of Lai Sun's proposed activity in media and entertainment operating under its intended name is most unlikely to be under the misapprehension he is enjoying the benefit of a Sun Microsystems' production.

Hong Kong Domain Name Adminstration (.com.hk, .net.hk, .org.hk, .edu.hk, .gov.hk)

Hong Kong's regional top level domain name .hk began to be under the management of Hong Kong Domain Name Limited on 1st June 2001. Starting from the same day, the new registration and dispute resolution policies took effect regarding the use and registration of Hong Kong's domain name of .hk. Presently, the Hong Kong International Arbitration Centre is the only provider accredited for carrying out the role as an arbitrator in the relevant Dispute Resolution Policy. The Rules have been set out in its Domain Name Dispute Supplemental Rules.

Trend of E-Commerce and Conflict

Prior to the wide adoption of e-business, companies have traded terrestially on their own different territories without conflict even using the same trade name or brand. Companies do not have conflict on use of the same trade name or brand in the same territory if they each engages in distinctive trades and hence there is no confusion among the customers.

E-Business on the Internet has brought to changes because for a brand, one .com is available for registration. Different trades or trades in different territories may find themselves very much interested in getting registration of their own trade name or brand as a domain name, for e-business development or for avoiding dilution of their goodwill. Meanwhile, a group of people has found that collecting domain names can be a very good source of fortune. They are the so-called cybersquatters who have registered famous brands, trade marks or trade names with the intention purely to dispose of for huge profits. Hong Kong does not have an anti-cybersquatting specific legislation. Disputes would therefore have to be resolved according to the legal framework of trade mark and passing-off or probably defamation.

IP Address and Domain Name Server

The Internet is an open computer network. It links up individual computers used by people at their homes or offices. Web-sites are hosted by Internet Service Provider (ISP) identifiable by their Internet Protocol Addresses (IP address).

To obtain access to a web-site, a user has to type on the browser's provided space the IP Address. Since IP Addresses are a series of digits, not easy to be remembered, a user can type its English spelt equivalent and upon pressing the 'ENTER' button, it passes through the Domain Name Service (DNS) name server and gets access to the web-site. This happens without the notice of the user.

Amendments to the Copyright Ordinance

In early 1999, the HKSAR Government consulted the public on additional legal tools to combat intellectual property rights infringements. One of the proposals that gained public support was to combat corporate copyright piracy activities by criminalizing the use of infringing products, for example, pirated computer software, in business. According to an unofficial estimate, about 50% of all computer software used in business is pirated. According to the Government, such an excessive degree of violation of intellectual property rights has significantly affected the legitimate interests of copyright owners, discouraged innovation and investments, and tarnished the international image of Hong Kong.

The Copyright Ordinance was amended to implement the proposal. The amendments took effect from 1 April 2001.

To address the public concern that the amendments had hampered the dissemination of information in enterprises as well as teaching activities in schools, the Legislative Council passed the Copyright (Suspension of Amendments) Ordinance 2001 in June 2001.

As a result, the criminal provisions in the recently amended Copyright Ordinance will continue to apply, with a slightly narrowed scope, to computer software, movies, television dramas and music recordings. For copyright works other than these four categories, the criminal provisions will revert to the position before the amendments took effect.

Committal to Prison

If an injunction order is breached, the Plaintiff may apply to the court to commit (i.e. send) the party to prison. This is called committal proceedings. The Plaintiff has to show that the Defendnat has deliberately breached the injunction. The injunction order must have been personally served on the Defendant before the Plaintiff can apply for committal.

Anton Piller Order (Civil Search Order)

A Plaintiff may be able to obtain an injunction to against a Defendant allowing the Plaintiff to enter the Defendant's premises such as residence or office to search it and take documents or any other real objects which serve evidential value in the Plaintiff's claim against the Defendant. For example, this may include matters like pirated copies of CDs, master copy of the work for duplication, duplicator like CD copiers, printing equipment for fake packaging.

As in the case of Mareva Injunction, such application is normally done ex-parte i.e. made in secret without the Defendant's knowing. Mareva Injunction and Anto Piller Orders are very difficult to obtain. Orders will only be given to cases having good proof on relevant points. These orders are normally executed by the Plaintiff's legal representatives i.e. solicitors who are skilled on carrying out the terms of the orders into effect.

No force can be applied on the Defendant when executing the order. In case the Defendant refuses to allow the execution of the order e.g. refuse to allow the Plaintiff's entry into the premises, the Plaintiff should go back to court and apply for the Defendant's committal to prison.

Mareva Injunction ('Freezing" Assets)

If a Plaintiff has reasons to prove to the Court that the Defendant is about to remove valuable property or money out of Hong Kong in order to avoid the Plaintiff's claim, the Plaintiff can apply to the court to prohibit him from doing so. This is called a "Mareva Injunction" which means to have the property being 'frozen'. Such application normally takes place without notifying the Defendant i.e. so called ex-parte application.

Mareva Injunctions, Anton Piller Order and Committal to Prison

Injunctions have to be applied for in the High Court. Injunctions are common in enforcing intellectual property rights such as copyrights, and trade marks infringements. In many cases, the Court requires the Plaintiff to undertake to the court that he will pay the Defendant's costs and damages if the case turns out that the Plaintiff did not have a good reason to apply or he eventually fail in the proceedings. Therefore, great care has to be taken when considering whether such kind of application should be made.

Injunctions may contained a "Penal Notice". A penal notice serves the purpose of warning the Defendant that he has to observe and comply with the order of injunction and that failure to do so can amount to contempt of the Court and possibly result in imprisonment.

Meta tags

Meta tags are words embedded in the HTML files of a web-page. It is not visible on a web page. It becomes visible on clicking the 'view source' of the program menu of Netcape, the browser. It is likewise in the case of Microsoft's Internet Explorer,. Meta tags contain data by way of keywords which enable search engines to "locate" the documents on the Internet through certain search engines. Use of appropriate keywords would enable easy search and hence location of a web-site. Some keywords are more famous such as MP3, music, sex. The most often quoted case is decided in the US. It is Playboy Enterprise Inc. v Calvin Designer Label, involving the Defendant's use of the word 'playboy' as keyword in the meta-tag. It was held by the Court that it amounted to an infringement of Playboy's trade mark and injunction was therefore granted. Hong Kong does not have any case directly related to the use of meta tags. It is not so clear as to what the Court's attitude would be if similar case happens in Hong Kong.

The following is an example: