Ref: CB1/BC/17/98

Members present :

Hon Margaret NG (Chairman)
Hon Kenneth TING Woo-shou, JP
Hon HUI Cheung-ching
Hon CHAN Kam-lam
Hon Mrs Sophie LEUNG LAU Yau-fun, JP
Hon SIN Chung-kai
Hon FUNG Chi-kin

Members absent :

Hon Albert HO Chun-yan
Hon Mrs Selina CHOW LIANG Shuk-yee, JP
Hon MA Fung-kwok
Hon James TO Kun-sun

Public officers attending :

Miss CHEUNG Siu-hing
Deputy Secretary for Trade and Industry

Mr Peter CHEUNG
Acting Director of Intellectual Property

Mr Ray Perera
Assistant Director of Intellectual Property

Mr Johann WONG
Acting Principal Assistant Secretary for Trade and Industry

Clerk in attendance :

Miss Odelia LEUNG
Chief Assistant Secretary (1)1

Staff in attendance :

Miss Anita HO
Assistant Legal Adviser 2

Mr Andy LAU
Senior Assistant Secretary (1)6

I Election of Chairman

Mr Kenneth TING, who had the highest precedence in the Council among members of the Bills Committee, presided at the election of Chairman. He invited nominations for the chairmanship.

2. Miss Margaret NG was nominated by Mrs Sophie LEUNG LAU Yau-fun and seconded by Mr SIN Chung-kai. Miss Margaret NG accepted the nomination.

3. There being no other nomination, Miss Margaret NG was declared Chairman of the Bills Committee. Miss NG then took the chair.

4. Members agreed to elect a Deputy Chairman at the next meeting.

5. The Chairman urged members to sound out their primary concerns on the Bill at an early stage so that sufficient time could be set aside for discussion with a view to completing the scrutiny work before the end of the 1999/2000 LegCo session.

II Meeting with the Administration

General introduction of the Bill

6. At the invitation of the Chairman, the Deputy Secretary for Trade and Industry said that Hong Kong had provided an independent registration system for the protection of trade marks since 1873. The Trade Marks Ordinance (Cap. 43) set out the criteria and procedures for the registration and maintenance of trade marks. The Trade Marks Ordinance had remained largely unchanged since its enactment in 1955. With the evolvement of international practice in the protection of intellectual property rights over this period, the Administration considered it necessary to modernize Hong Kong's trade marks laws.

7. With the aid of a computer, the Assistant Director of Intellectual Property (AD/IP) briefed members on the background for modernizing the trade mark law, the consultation conducted, the objectives and the main features of the Bill. AD/IP explained that the Agreement on Trade-related Aspects of Intellectual Property Rights of the World Trade Organization was concluded in 1995 and set out the minimum standards for protection of intellectual property. To ensure that these standards were met, the present Trade Marks Ordinance had to be modernized. Development of trade marks laws in other common law systems also provided an impetus for Hong Kong to reform its law. The philosophies behind the reform were to reduce red-tape, enable easier registration of marks, increase the range of signs that could be registered as trademarks, enhance transparency of the registration process and provide a higher standard of protection, taking into account prevailing international developments. He said that the Bill also touched on other issues like exhaustion of rights and comparative advertising.

(Post meeting note : A set of material presented by the Administration was tabled and circulated to members after the meeting vide LC Paper No. CB(1) 1778/98-99).

International exhaustion

8. Explaining the concept of "international exhaustion", AD/IP advised that it was closely related to the notion of parallel imports which referred to the import of genuine goods into Hong Kong by somebody other than an authorized distributor. For example, if an owner put a piece of goods on the Indonesian market and the goods was subsequently brought into Hong Kong by somebody in Indonesia, the question was whether the owner's right to stop people bringing the goods into Hong Kong had been exhausted or did he still have any form of residual rights. As far as trade marks were concerned, the question would be whether a registered trade mark was infringed by the use of the trade mark in relation to goods which had been put on the market anywhere in the world under that trade mark by the owner or with his consent.

Comparative advertising

9. To illustrate the meaning of comparative advertising, AD/IP said that assuming a telephone company, Company A, claimed that its telephone charges were lower than those charged by Company B selling identical services, the advertisement placed by Company A would be regarded as comparative advertising if it set out a list of its superior services and invited purchasers to compare its price advantages with Company B.

Internet domain names

10. Mr SIN Chung-kai enquired whether suitable provisions had been included in the Bill to take into account the rapid development of Internet. The Acting Director of Intellectual Property (Atg DIP) noted the member's concern about the registration of Internet domain names. He advised that this was outside the scope of the Bill the primary purpose of which was to modernize the Hong Kong's trade marks laws. There was development internationally concerning registration of Internet domain names since early this year. The World Intellectual Property Organization (WIPO) was considering setting up an international organization to regulate registration of Internet domain names by administrative means. The thinking was that registration of an Internet domain name would be rejected administratively if its purpose was to inhibit the registration of a well-known commercial establishment. Since this was only a preliminary idea under discussion by WIPO, the Administration considered it inappropriate to include it in the Bill at the present stage.

Trade Marks Rules

11. At the invitation of the Chairman, Atg DIP briefly explained the major provisions in each part of the Bill. Members noted that drafting of the Trade Marks Rules would shortly be completed and the Administration would later provide the draft Rules to the Bills Committee for consideration.

Further information required

12. To facilitate scrutiny of the Bill, members requested the Administration to provide the following information:

1. the names of organizations/individuals who had been consulted on the draft Bill; their major concerns; and whether and how these concerns had been addressed in the provisions of the Bill;

2. a comparison of the major provisions of the existing Trade Marks Ordinance and the Bill together with the reasons for major changes;

3. a comparison of the major differences of the second draft Bill and the Bill; and

4. a comparison of the major features of the Bill and the trade marks laws in other jurisdictions, such as in the United States, the United Kingdom, Australia and New Zealand.

13. In response to Mrs Sophie LEUNG, Atg DIP said that the rights conferred to a registered trade mark were localized. A trade marks registered in Hong Kong would need to be registered in the Mainland in order to enjoy the rights conferred under the Mainland trade marks registration system. The Administration noted members' concern on the Mainland trade marks system and trade marks laws and would provide an information paper at a later stage if necessary.

Consultation

14. Members noted that the Administration had consulted more than 40 organizations on the draft Bill on two occasions in 1997 and 1998, including major trade marks owners, users in the relevant sectors, the legal profession and academic bodies. Members agreed that the consultees be invited to make written submissions on the Bill. Members would decide at a later stage whether some organizations should be invited to present their views before the Bills Committee.

Meeting schedule

15. Members agreed that the next two meetings of the Bills Committee would be held as follows:

1. 13 September 1999 at 4:30 pm; and
   
2. 27 September 1999 at 4:30 pm.

III. Any other business

16. There being no other business, the meeting ended at 5:30 pm.

Legislative Council Secretariat
31 August 1999