Jun 18, 2026 | Starting with a complaint on “Scoop”: Rational Choices for SMEs Facing Trademark Infringement Lawsuits

Starting with a complaint on “Scoop”: Rational Choices for SMEs Facing Trademark Infringement Lawsuits

1. On February 4, 2026, “Scoop” reported a case that has drawn significant attention from SMEs. A group of complainants (who are also defendants) tipped off the program, claiming that they were sued for infringement and passing off by a registered trademark holder (the plaintiff), and now face massive legal costs. According to one complainant, the total compensation “could reach HK$15 million.” The program’s host, a “Scoop goddess,” attempted to interview the plaintiff. However, under the pressure of the show, the plaintiff appeared passive, and the episode ultimately aired without their response. Due to the absence of the plaintiff’s side of the story, viewers have no way of knowing the full truth behind the complaint.

2. Based solely on the complainants’ account, the plaintiff allegedly “preemptively registered” a trademark that was in use in Taiwan, successfully registered it in Hong Kong, and used it for many years, making the mark widely known in the territory. The complainants used the trademark without authorization to sell cat food and continued to do so even after receiving warnings, leading the plaintiff to sue them in the High Court. Most of the complainants chose to defend themselves and hired lawyers, but ultimately all lost their cases and were ordered to pay the plaintiff’s losses and legal costs.

Key Legal Principle: Hong Kong Adopts a “First-to-Use” Registration System

3. Here is a crucial legal point that the “Scoop” report did not explain in detail: Hong Kong’s trademark system actually follows a “first-to-use” principle. In other words, even if the plaintiff applied for registration later than the Taiwanese party, as long as the plaintiff can prove they were the first to genuinely use the trademark in Hong Kong, the validity of their registration is difficult to challenge. If the complainants simply argue that “the plaintiff preemptively registered a Taiwanese trademark,” that defense is likely legally untenable. Without first obtaining professional IP legal advice, mounting a defense will only increase legal costs further.

Practical Advice for SMEs and Business Owners:
How to Avoid Massive Compensation

4. Facing a similar trademark infringement lawsuit, how should an SME defendant protect itself? Here is the best course of action:

5. First, recognize the professional threshold of IP litigation. This is not an ordinary civil dispute; it must be handled by lawyers and barristers specializing in intellectual property. If you have no valid defense, do not fight to the end out of stubbornness. The earlier you settle with the plaintiff, the lower your legal costs. Many defendants regret ignoring the plaintiff’s “cease and desist letter” only after losing the case.

6. Second, do not rely on “common sense” or “hearsay” as a basis for your defense. The court only accepts concrete evidence. If you claim the plaintiff’s trademark is invalid, you need to provide evidence and file for cancellation of that trademark. But remember: a cancellation application is itself a legal proceeding. If you lose, you will also have to pay the opposing party’s associated legal costs.

7. Third, never expect the plaintiff to “slow down” or drop the case. Hoping for the opponent’s mercy or delay is unrealistic. Once litigation begins, the timeline and costs are beyond the defendant’s control.

8. Fourth, take every warning letter from the plaintiff seriously. This is the most critical step. Before formal litigation commences (i.e., during the “cease and desist letter” stage), the plaintiff’s legal costs are typically still relatively low. The author estimates that costs in the early stage (e.g., sending a lawyer’s letter and initial negotiations) are approximately only HK$30,000. Once the matter enters High Court proceedings, costs escalate exponentially, and sums of several hundred thousand or even over a million Hong Kong dollars are not uncommon.

9. Fifth, understand that the court has a fair costs assessment mechanism. The Hong Kong court uses a “taxation of costs” process to fairly calculate reasonable legal fees. A defendant should not assume, “Even if I lose, I probably won’t have to pay that much.” The court will not allow the losing party to act unreasonably.

Conclusion

10. The Hong Kong courts provide a fair mechanism for handling trademark infringement cases, protecting the rights of registered trademark holders while allowing defendants to mount genuinely evidence-based defenses. For SMEs facing infringement allegations, the most rational approach is not to resort to emotions or media trials, but to seek professional IP legal advice promptly, assess the risks, and make a pragmatic decision to settle or defend before costs spiral out of control. A HK$15 million compensation award often begins to accumulate from the very first step of refusing to admit fault. Remember: cutting your losses early is the true path to winning.