Bosch Corporation v Wiedson International (S) Pte Ltd

• Jurisdiction: Singapore
• Judgment Date: 16 April 2015
• Date: 16 April 2015
• Docket Number: Suit No 845 of 2006 (Taking of Accounts No 1 of 2014) and Suit No 133 of 2011 (Taking of Accounts No 2 of 2014)
• Court: High Court (Singapore)

Bosch Corp

Plaintiff

and

Wiedson International (S) Pte Ltd and others and another suit

Defendant

[2015] SGHC 105

Tay Yong Kwang J

Suit No 845 of 2006 (Taking of Accounts No 1 of 2014) and Suit No 133 of 2011 (Taking of Accounts No 2 of 2014)

High Court

Damages—Assessment—Account of profits—Incomplete documentation—Whether pro forma invoices should be counted as revenue—Whether profits should be extrapolated from available documentation to reported revenue

In 2006, Bosch Corporation (‘Bosch’) received information that Wiedson International (S) Pte Ltd (‘Wiedson’) was trading in goods which infringed Bosch's trade marks. Based on reports by private investigators, Bosch lodged a complaint before a magistrate, who then issued a search warrant. Pursuant to this warrant, Wiedson's premises were raided by the Intellectual Property Rights Branch (‘IPRB’) of the Criminal Investigation Department (‘the Raid’). The IPRB seized goods suspected to be the subject of offences under the Trade Marks Act (Cap 332, 2005 Rev Ed), comprising thousands of nozzles, nozzle caps and seals, plungers, plunger seals, packaging. They also seized a few hundred documents (‘the Seized Documents’).

Bosch commenced both criminal proceedings (pursuant to a fiat from the Public Prosecutor) and a civil action for trade mark infringement. Wiedson stayed the civil action pending the outcome of the criminal proceedings. Wiedson promised to enter into a settlement agreement in the civil action if certain steps were taken in the criminal proceedings. Bosch would, inter alia, withdraw some charges and refrain from submitting on sentence whereas Wiedson would plead guilty to the proceeded charges, compensate Bosch and publish a public apology out of ‘true contrition’. As a result of these steps, the District Court fined Wiedson only $1,000 per charge.

The defendants eventually did not sign the settlement agreement after the criminal proceedings concluded, and Bosch revived the civil action. Among other things, the assistant registrar struck out the defendants' defence and entered interlocutory judgment for Bosch on the basis that the defence disclosed no reasonable defence. This decision was eventually affirmed by the Court of Appeal, save that they allowed the defendants to defend para 9 of the plaintiff's statement of claim, which concerns claims of counterfeiting. The defendants were thus liable for infringing Bosch's trade mark by selling the infringing products from 2000 to 2006. Bosch accordingly elected to claim an account of profits from Wiedson for this period.

The main complications in assessing profits were that the Seized Documents which were seized in the Raid only accounted for about 10% of Wiedson's reported revenue for 2006, and were selected by the IPRB officers in a targeted (and not random) fashion.

The facts for the second suit, Suit No 133 of 2011, were identical in all material respects, except for the plaintiff and trade mark involved.

Held, assessing profits at $275,000 for Suit No 845 of 2006 and at $65,000 for Suit No 133 of 2011:

(1) Pro forma invoices should be excluded from the computation of revenue attributable to infringing sales. A pro forma invoice was insufficient to prove that a sale had in fact occurred; it was plausible that a business labelled a quotation as a pro forma invoice instead. Additionally, if a commercial invoice corresponded to a pro forma invoice, the inclusion of a pro forma invoice would lead to double counting: at [20] .

(2) Certain items with generic codes should be excluded from the computation of revenue attributable to infringing sales, except where Wiedson had pasted the plaintiff's marks over them: at [22] .

(3) The sales in the Seized Documents should be extrapolated to Wiedson's reported revenue for the same period. Wiedson's approach (of assuming that the Seized Documents reflected all of Wiedson's infringing sales) should be rejected. Since the Seized Documents represented only about 10% of Wiedson's sales, Wiedson's approach would have grossly underestimated profits attributable to infringing sales. Further, Wiedson's approach was based on representations which were not made to the plaintiffs until a late stage. It was true that the extrapolation approach assumed that the proportion of infringing sales in the Seized Documents was not materially different from the proportion of overall infringing sales. However, as the Raid was conducted in a targeted and not random fashion, any overstatement of profits could be compensated in two ways. First, the percentage of infringing sales could be calculated and applied on a per year basis, instead of an aggregate basis. This confined the effect of outliers, and reduced the profits from infringing sales. Second, a further 50% margin of error could be applied in favour of the defendants: at [26] to [29] .

(4) For Suit 845/2006 and Suit 133/2011, the total revenue from infringing sales (after extrapolation) was $2,200,000 and $520,000 respectively. Applying a 50% margin of error and a further 25.0% net profit margin (as agreed by the parties), the net profits attributable to infringing sales were $275,000 and $65,000 respectively: at [37] and [38] .

Bosch Corp (Japan) v Wiedson International (S) Pte Ltd [2013] 2 SLR 700 (refd)

Bugatti Gmb H v Shine Forever Men Pty Ltd (No 2) [2014] FCA 171 (folld)

General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1975] 1 WLR 819 (refd)

Liquideng Farm Supplies Pty Ltd v Liquid Engineering 2003 Pty Ltd [2009] FCAFC 7 (refd)

Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd [2011] SGHC 268 (refd)

Vivid Entertainment LLC v Digital Sinema Australia Pty Ltd (No 3) [2007] FMCA 748 (folld)

Wiedson International (S) Pte Ltd v Bosch Corp (Japan) Civil Appeal No 152 of 2012 (refd)

Trade Marks Act (Cap 332, 2005 Rev Ed) s 31 (2) (c)

Ng Chee Weng, Raymund A Anthony and Wiyatno Gerald Mursjid (Gateway Law Corporation) for the plaintiff in Suit 845/2006 and the plaintiffs in Suit 133/2011

Suresh s/o Damodara (Damodara Hazra LLP) for the defendants in Suit 845/2006 and the defendants in Suit 133/2011.

Tay Yong Kwang J

1 This case concerned the taking of account of profits in two suits, namely Suit 845 of 2006 (‘S 845/2006’) and Suit 133 of 2011 (‘S 133/2011’). This is the second judgment issued in respect of these twosuits (see [6] below) The plaintiffs in both suits (‘Bosch’ and ‘Denso’ respectively) are the registered proprietors of certain trade marks. The defendants in both cases are the same. The first defendant (‘Wiedson’) is a company which is alleged to have traded in counterfeit goods which infringed the plaintiffs' trade marks. The second defendant, Yap Kim Yok (‘Yap’), is the managing director and a shareholder of Wiedson, while the third defendant, Gan Yeok Chuan (‘Gan’), is an executive and shareholder of Wiedson.

Background facts

2 The history for both suits is protracted. I need only set out the material facts for S 845/2006...