HP secures Commercial High Court ruling against Tech-Zone

Hewlett-Packard (Hong Kong) AP has won a landmark decision in a case against Tech Information Solutions Ltd., also known as ‘Tech-Zone,’ of Unity Plaza Colombo 4.   

The Commercial High Court of the Western Province held that Tech-Zone was acting according to unfair business practice in importing and selling HP computers and related products that are not suitable for the local market and moreover holding out to the general public that it was carrying out such acts on the authorisation of HP.  The action was filed by Tech Information Solutions Ltd., also known as ‘Tech-Zone’ under the provisions of the Intellectual Property Act No. 36 of 2003, seeking injunctive relief and damages from HP on the alleged basis that the same had published a newspaper advertisement which caused loss and damage to the business and reputation of Tech-Zone.

However it was shown that HP products are manufactured according to regional and/or geographical specifications and thus products sold in one region or geographical area are not envisaged to be sold in another.

According to the business practices of HP, the said division is necessary because it is practically impossible to stock parts and have technical support to cater to the entire gamut of products developed by HP’s extensive product line, the world over.

According to accepted HP business practices, customer care services in Sri Lanka are well adapted and geared to service products that are specifically envisaged for the Sri Lankan market and not for products that are imported into the country from different regions and/or geographical areas. Therefore, Tech-Zone in importing and selling HP computers and related products that are not envisaged for the Sri Lanka are doing acts which are damaging to the reputation of HP as well as its world-renowned brand name.

Tech-Zone claimed under Section 122(b) of the Intellectual Property Act that ‘Parallel Importation’ does not amount to an infringement of the registered owner’s right of trade mark, and the owner of the mark has no right to preclude a third party from using the mark in relation to goods lawfully manufactured, imported, offered for sale, provided such goods have not undergone any change.

HP, which was represented on the instructions of F.J. & G. De Saram by Avindra Rodrigo, Attorney-at-Law with Sadhini Navaratne, Attorney-at-Law, claimed and sought injunctive relief along with damages stating that Tech-Zone is guilty of importing/marketing/distributing/selling HP computers and related products that are: (a) Not envisaged for sale in the Sri Lankan market, and (b) Used and/or defective.

Further HP stated that Tech-Zone is falsely representing to the public that it is affiliated with Hewlett-Packard Personal Systems Group (HPPSG) and carrying out such acts with the authorisation of HP. HP contended that as it is the largest IT company in the world and has a world renowned reputation, the acts of Tech-Zone have caused and continue to cause irreparable and irremediable loss and damage to not only its Sri Lankan business affiliation but is also tarnishing the goodwill and reputation attached to the HP brand name.

In the circumstances, HP sought injunctive relief as well as damages from Tech-Zone in order to restrain the same from carrying out such acts as stated by HP which are damaging to the business reputation and goodwill of HP.

The order, given in favour of HP by Justice Mahinda Samayawardhena in the Commercial High Court of the Western Province, stated: “The Defendant (HP) is not guilty of unfair competition, but conversely the Plaintiff (Tech-Zone) is. Hence the interim injunction prayed for by the Plaintiff is refused and the interim injunctions prayed for by the Defendant are issued. The Defendant is entitled to costs of the inquiry.”

In view of the above, Tech-Zone is now restrained from importing/selling/distributing HP computers and related products that are not envisaged for the Sri Lankan market as well as from importing/selling/distributing HP computers and related products that are used and/or defective and are further restrained from holding out representing to the general public that it is carrying on such acts with the authorisation of HP.