The New IP Specialist List Hong Kong Moves Ahead on IP Litigation!

On 6 May 2019, new Practice Direction 22.1 took effect creating an Intellectual Property (“IP”) Specialist List. The key feature of the new list is that all interlocutory applications and trials in IP cases will now be listed before the judge in charge of the IP List, Mr Justice David Lok, or other designated judges.

The new list is a very welcome development for IP litigation in Hong Kong which has seen very long delays for IP matters coming to trial - in at least one case the delay was seven years! In some recent cases, parties have been given trial dates in IP cases in late 2020 – more than 18 months after leave to set down for trial was granted. The new list should substantially reduce these delays and bring Hong Kong into line with other developed economies such as the UK, Japan, and Singapore which have all established specialised IP lists as well as allow Hong Kong to catch up with the Mainland of China where specialised IP courts and tribunals have been operating successfully for many years.

Speaking at the Business of IP Asia Forum in December 2018, Justice Lok, when he announced the planned establishment of the list, said that his goal would be for all cases to be tried within 18 months of filing. In his speech Justice Lok, quoting Lord Sumption in the UK Supreme Court (in Oracle America v M-Tech Data[2012] WLR 2026), acknowledged that “litigation devalues intellectual property rights”, by increasing the cost and delay associated the enforcement of IP rights. He said it would be his goal to ensure the efficient and cost effective handling of IP cases.

We now live in a fast moving world where the time to market and “shelf life” of products can be very short. “Innovation” is now the catchword for all governments and the Hong Kong government has a stated policy of making Hong Kong an “Innovation Hub”. Without robust and effective enforcement of IP rights holders can easily lose investments they have made in developing new products or services. On the other hand, the courts must also effectively protect small and medium size enterprises – the life blood of Hong Kong’s economy - from over-reach by rights holders seeking to block others with new ideas and products from entering the market by over-zealous enforcement of their IP rights. Quick substantive determination of whether a product infringes or not is in the interests of not only plaintiffs and defendants but the economy as whole.

The New Procedures

The list is established under RHC Order 72 that provides basic rules for the conduct of particular proceedings. The new Practice Direction 22.1 provides further details in relation to IP cases. It is expected that further practice directions will be issued and the new Practice Direction specifically provides that the judge in charge of the list may form a consultative committee of legal practitioners for “better regulation of the list.”

The Practice Direction provides that civil proceedings relating to IP matters may be filed in the Intellectual Property List. The originating process should be clearly marked “Intellectual Property List” with the prefix to the action number HCIP to be used. Practice Direction 24.1 has also been amended to provide for four descriptions of the nature of an IP Claim to be included on a writ. These are “Trade mark and/or passing off”, “Patent”, “Copyright and/or design registration” and “Intellectual Property (Miscellaneous)”.

The types of matters that may be filed in the list has been drawn widely. They include “traditional” IP actions such as passing off and actions under the Patents, Copyright, Registered Designs and Trade Marks Ordinances. In addition, a very broad range of possible claims including those relating to foreign intellectual property, trade secrets, domain names, know how and the licensing of IP rights may also be filed in the list.

The judge in charge of the list retains the discretion to transfer on his own motion a matter into or out of the list. Parties to IP actions which were already pending on 6 May 2019 may apply to the court to transfer a matter to the list. If both parties consent this can be done by a letter signed by both parties’ solicitors (or in the case of an unrepresented party, by the party). If one party does not consent to a transfer, an application should be made by letter to the judge in charge of the list with any response in opposition also to be by letter. All correspondence should be served on the other side. (This procedure is different to that in Order 72 Rule 5 which requires a summons be issued to apply to transfer a case.) The application will be dealt with on paper unless the judge otherwise directs.

Case Management Summons

Under the new Practice Direction, in actions begun by writ the parties are required to issue a case management summons before the judge in charge of the list within 28 days of close of pleadings. However, it should be noted that in appropriate cases, Order 72 Rule 8(1) allows for the case management summons to be issued in actions on specialist lists before pleadings are closed. The types of cases where it may be appropriate to issue a CMS early would include: (a) complex IP cases where a party wishes to obtain specific orders for the type of pleading to be used – such as, in a patent case, the use of claim charts to plead infringement and validity issue; (b) where special confidential treatment is requested for trade secrets; or (c) where a party wishes to seek directions for a particularly tight timetable.

Justice Lok in his December 2018 speech said that the parties can expect the court to give robust case management directions and as far as possible give, at least, indicative trial dates.

For cases begun by originating summons or originating motion, which for the most part will be appeals from the Trade Marks or Patents Registry, the case will be listed before the IP judge or another designated judge. The procedures in Practice Direction 5.8 will be applicable whereby the first hearing will be in chambers and the parties may dispose of that hearing by consent.

Interlocutory Applications

All interlocutory applications are required to be listed before the judge in charge of this list. As with other specialist lists, this should see a reduction in interlocutory applications. When parties know that an application will be dealt with by a specialist judge, who is also likely to be the trial judge, parties are far more likely avoid “speculative” applications as well as to agree to the disposal or meritorious applications by consent.

Practitioners should note that by operation of Order 72 Rule 2(3) and Order 32 Rule 11(1)(f) masters have no jurisdiction to deal with any interlocutory applications (including time summonses) on the intellectual property list unless specifically empowered by an order of a judge or provisions of a practice direction. Order 32 Rule 11(1)(f) provides that a master may not deal with any matter or proceeding required to be dealt with by a judge. Order 72 Rule 2(3) provides that only the judge in charge of the list (or under Order 72 Rule 2(4) another judge) may exercise powers in relation to cases on a specialist list. (See discussion regarding the Personal Injury List in Ng Wing Man v Everbest Port Services [2013] HKCFI 455; HCPI 780/2012 (21 March 2013))

Interlocutory Injunctions

Practice Direction 11.1 has also been amended to make provision for urgent interlocutory injunction applications in IP cases. In summary, applications for an ex-parte interlocutory injunction should, as far as possible, be made to the judge in charge of the IP list with the subsequent return date to be before the judge in charge of the list. If the judge in charge of the IP list or a designated judge is not available the Duty Judge should be contacted who will then direct how the application will proceed. The Duty Judge may hear the application herself or refer the mater to the IP Judge or another judge.

Inter-partes interlocutory injunction applications should, as far as possible, also be made returnable before the judge in charge of the list. The Clerk of the Court will need to be informed when listing an inter-partes summons that the case is an IP case and a request made for it to be heard by the IP judge or other designated judge.

Conclusion

The implementation of an IP list is a very welcome development for Hong Kong. Hong Kong had fallen way behind worldwide best practices for handling IP cases. The establishment of a specialist IP list will no doubt improve the handling of IP cases and ensure that Hong Kong achieves its goal of becoming an innovation hub. 

Jurisdictions: 

Barrister

Mr. Clark is a barrister (and former solicitor) practising in Hong Kong. His practice focuses primarily on intellectual property and related areas.  From September 2016, he has been appointed an Adjunct Professor of Law at the University of Hong Kong to teach the IP LLM course. Mr. Clark is General Editor and a co-author ofIntellectual Property Rights: Hong Kong SAR and the People’s Republic of China and author of Patent Litigation in China. He has also published a history of British and American extraterritoriality in China, Gunboat Justice