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Colonial Cases

The International Co. v. The Yue Yuen Cotton Spinning Co., 1897

[trade marks]


 

The International Co. v. The Yue Yuen Cotton Spinning Co.

Mixed Court, Shanghai
Weng and Scott, 22 October 1897
Source: North China Herald, 29 October, 1897


 

MIXED COURT.

Shanghai, 22nd October.

Before Mr. Weng, Magistrate, and Jas. Scott, Esq., Assessor.

THE INTERNATIONAL CO. v. THE YUE-YUEN COTTON SPINNING CO.

   This was an action for damages laid at Tls. 30,000 for alleged infringement of trade marks.

   Mr. H. P. Wilkinson appeared for the plaintiffs, and defendants were represented by Mr. W. V. Drummond.

   The petition of the plaintiffs is as follows:

   PETITION.

   [1.] The Plaintiffs are a British firm registered under the Laws of the Colony of Hongkong and at the times hereinafter mentioned a Cotton Manufacturing Company carrying on business at Shanghai in the Empire of China.

[2.] The Plaintiffs manufactured at Shanghai aforesaid and sold for profit large quantities of cotton yarn which they are accustomed to mark with a certain chop or label a copy of which chop or label is herewith annexed (a) in order to denote that they were manufactured by the Plaintiffs and to distinguish them from articles of the same kind manufactured by other persons or firms and the Plaintiffs enjoy great reputation with the public on account of the good quality of the said cotton yarn and make profits by the sale thereof.

[3.] The Defendants at various times between the twenty-third day of July 1897 and the filing of this petition wrongfully and fraudulently and without the consent of the Plaintiffs manufactured at Shanghai aforesaid quantities of cotton yarns and chopped or labelled them with labels (b) similar to the Plaintiffs' labels and in imitation of the said trade mark of the Plaintiffs and in order to cause it to be believed that the last mentioned cotton yarns were manufactured by the Plaintiffs and wrongfully and fraudulently sold the last mentioned cotton yarns as and for cotton yarns manufactured by the Plaintiffs.

[4.] By reason of the premises the Plaintiffs were prevented from selling quantities of the said cotton yarn manufactured by them and lost the profits which they would otherwise have gained by the sale thereof and have been injured in their reputation in their said business by reason of the said cotton yarns so manufactured and sold by the defendants being inferior in quality to that manufactured by the Plaintiffs.

The Plaintiffs therefore pray:

[1.] That the Defendants may be ordered to discontinue the use of the said trade mark chop or label complained of.*

[2.] That the Defendants may be decreed to deliver up to the Plaintiffs all the unused labels complained of in order to destroy them.

[3.] That the Defendants may be further ordered to pay to the Plaintiffs the sum of Tls. 30,000 as damages.

   Mr. Wilkinson said that the petition practically came to this, that the plaintiffs, having a certain chop on their goods, the defendants afterwards put goods on the market with a chop so nearly resembling the plaintiffs' that it lead purchasers astray, so that they bought cotton made by the defendants, while intending to buy that manufactured by the plaintiffs.

   Mr. Drummond said that he had not seen a copy of the petition until that moment, and he had a preliminary objection to make, and it would perhaps be to the interest of all parties if it were made at once. In the petition the plaintiffs said they were a company registered in Hongkong. In the second paragraph they stated that they manufactured cotton at Shanghai and sold for profit large quantities of yarn, which they were accustomed to mark with a certain mark. It was not mentioned in the petition, however, that they were entitled to the exclusive use of the chop or trade mark.  If they did not prove their exclusive right to such chop they had no case. To have the exclusive use of a trade mark made it a valuable property. It became a valuable property because the owner could prevent anyone from using it or one very nearly like it, but to get that valuable property in nearly every civilised country a person would have to do certain things.

   The learned counsel then went on to describe what had to be done in such cases to obtain the exclusive right to trade marks in England. In continuing, he said that the question arose as to whether the plaintiffs' chop had been registered in China in such a manner as would give them the right to bring an action against anyone for infringement. Before any other point was gone into it would be best for all parties if Mr. Wilkinson would state whether the plaintiffs' trade mark had been so registered as to give them the exclusive right to it.

   If it had, then the Court could go on to the question whether the one trade mark was similar to the other. The plaintiffs were registered in Hongkong as a company, but the registration of a company and the registration of a trade mark were two entirely different things.  Even proof of registration in Hongkong would not be sufficient, and he (Mr. Drummond) maintained that nothing but Chinese law could be admitted in that Court. A trade mark upon goods manufactured in a country outside China, properly registered in that country, was quite a different thing from one in which both goods and trade mark were manufactured in China.  With all the mills and factories that were coming into existence in Shanghai and in China generally, it was a very important question whether proper laws and regulations governing the manufacturing industry and protecting trade-marks should be formulated.

   Some discussion here ensued between the learned counsel and Mr. Scott on the subject of the Chinese laws governing such cases. The latter said that there was only one law in China, and that was the criminal law. As regarded commercial law, no such thing existed.

   Mr. Drummond said he was informed that there was in China some method of registering trade-marks as between Chinese and Chinese. He believed the Chihsien was the proper official to apply to. Whether that would apply to foreign chops was an open question and he took it that it had not been done in the present instance.

   The magistrate said that the Chihsien did issue a proclamation of that kind giving permission for application to be made for the registration of trade-marks, but only in cases where there had been a dispute as to ownership, or where an infraction was complained of.

   Mr. Scott concurred.

   Mr. Wilkinson said the defendants objected because in the first instance he had not alleged in his petition that the plaintiffs had the exclusive right to the chop in question, or had registered it in China. He had not done so because registration of chops in China as far as her knew did not exist. The proclamations referred to by Mr. Drummond were, he thought, in the nature of a judgment in a suit brought by one man against another in a similar case to the present one, - that is for infringement of trade mark.  He (the learned counsel) had never heard and he thought that no one else had ever heard of a chop being registered in China before it was used. 

   The plaintiffs manufactured a certain class of goods to which was affixed a certain chop, and the defendants, contrary to Chinese custom, used a chop so similar to theirs as to lead purchasers astray. This was the plaintiffs' cause of action.

   The general custom of any civilised country recognised a property in a man's name and his chops, so to speak, just as much as in his coat. Because in England there had been special regulations embodying that customary law, that was no reason for an argument raised in China which had got no special regulations. The question of a firm's property in chops had already been raised in China and decided. In Tientsin it had been dealt with in a criminal matter and the person who had used a chop used by a foreign hong there was fined and imprisoned, quite apart of course from any question of registration in China, which was non-existent. 

   The chop concerned was called the "Indian Heads." The argument which had been advanced for the defendants would upset every chop in China. As far as registration of this particular chop was concerned, in this case they had registered it at the only place possible, i.e., in Hongkong. But this question of registration of chops was quite a side issue, for suppose a chop was registered in Hongkong or in England, how was the Chinaman to know it? His (M r. Wilkinson's) reason for objecting to this argument was because it was an argument laying down that because foreigners here happen to manufacture goods in China where they cannot register trade-marks they had no rights at all.

   The magistrate asked when the defendants had first begun to use their chop.

   Mr. Drummond said that defendants admitted they had made their chop in January of this year, and that it had been used in the 5th moon.

   Mr. Wilkinson - We say they were not used until the 6th moon.

   Mr. Drummond asked that the Court be adjourned for the purpose of considering the question whether the plaintiffs' right to the chop was an exclusive one. If it were decided that they had that right, then the case could be gone into, but if not, then the case was at an end.

   The magistrate reserved his decision on this point, and the Court then rose for the day.

Published by Centre for Comparative Law, History and Governance at Macquarie Law School