Dr. Babor GmbH & Co. KG & another v Sante De Beaute Pte Ltd
| Jurisdiction | Singapore |
| Judge | Chan Seng Onn J |
| Judgment Date | 12 July 2018 |
| Neutral Citation | [2018] SGHC 159 |
| Plaintiff Counsel | Lim Jun Hao Alvin and Lee Su Yee Catherine (Dentons Rodyk & Davidson LLP) |
| Date | 12 July 2018 |
| Docket Number | Suit No 1335 of 2016 |
| Hearing Date | 31 October 2017,01 November 2017,05 February 2018 |
| Subject Matter | Groundless threat,Trade marks and trade names |
| Published date | 18 July 2018 |
| Defendant Counsel | Selvaraj Chidambaram (Apex Law LLC) instructed by Dhanwant Singh (S K Kumar Law Practice LLP) |
| Court | High Court (Singapore) |
| Citation | [2018] SGHC 159 |
| Year | 2018 |
The 1st plaintiff, Dr Babor GmbH & Co (“Dr Babor”), is a company incorporated under the laws of Germany. It is a manufacturer of skin and beauty care products (“Babor products”) with a worldwide presence. Dr Babor is the registered proprietor of the trade mark “BABOR”(“BABOR word mark”).1
His Bounty Associates Pte Ltd (“His Bounty”) is a Singapore incorporated company and the sole distributor of Babor products in Singapore. It is the 2nd plaintiff in relation to the claim and the defendant in the counterclaim.
Sante De Beaute Pte Ltd (“Sante”) is a Singapore incorporated company in the business of operating beauty salons offering hair, nails and beauty treatments. It is the defendant in relation to the claim and plaintiff in the counterclaim.
This suit was originally commenced by His Bounty and Dr Babor as a trade mark infringement and passing off action against Sante on 21 December 2016. In response, Sante filed a counterclaim against His Bounty for making groundless threats of trade mark infringement. The trade mark infringement and passing off claims against Sante were subsequently withdrawn. Following this withdrawal, Dr Babor ceased to be a party to the suit.
In an unusual turn of events, the corresponding groundless threat counterclaim was not withdrawn. Hence, the trial proceeded on the sole issue of whether His Bounty had made a groundless threat of trade mark infringement towards Sante and the applicable relief, if any.
The trial was heard over two days. Sante and His Bounty each called one witness to give evidence at trial: Ms Quek Szy Min (“Ms Quek”) for Sante and Ms Wong Tsi Yan (“Ms Wong”) for His Bounty. Ms Quek is the finance manager of Sante while Ms Wong is a director of His Bounty.
At the end of the trial, I reserved judgment. I now set out my decision.
Background to the disputeThe BABOR word mark is registered in Class 3 of the International Classification of Goods and Services in Singapore. The registration details are as follows:2
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His Bounty was initially registered as “His Bounty Associates” in 2004. It was subsequently incorporated in December 2009.3 Since 2004, His Bounty has been the sole distributor of Babor products in Singapore. Its most recent distributorship agreement with Dr Babor is dated 1 January 2015.4 The agreement remains in force until 31 December 2019.5
Babor products sold by His Bounty are categorized into two groups, “cabin size” products and “retail size” products. Cabin size products are purchased by His Bounty’s clients (typically beauty salons and spas) to use in the provision of their services. Retail size products are also purchased by His Bounty’s clients. However, these products will be resold to customers of these clients for home use.6
His Bounty’s business model involves entering into standard form Business Purchase Agreements (“BPAs”) with their various clients. Generally, these BPAs are signed on an individual outlet basis.7 This means that His Bounty generally contracts for the use and promotion of Babor products on an outlet-by-outlet basis, even if a client has more than one beauty salon or spa outlet. This is to ensure that there is no undue competition between clients that use or sell Babor products.8
Sante was incorporated in October 2015.9 As at 23 August 2016, Sante had leased five locations for the operation of their beauty salons. The outlets were as follows:
Sante also had a registered business address at Blk 155 Bukit Batok Street (“Bukit Batok office”). This location was not involved in the provision of salon services.11
On 23 August 2016, Eve Kerk (“Ms Kerk”) an employee of Sante, called Lawrence Seow (“Mr Seow”), a sales manager at His Bounty, to invite His Bounty to a meeting to discuss the possibility of a business relationship between Sante and His Bounty. Mr Seow accepted the invitation.
On 24 August 2016, the meeting between Sante and His Bounty was held at the Bukit Batok office.12 Mr Seow and Ms Wong attended the meeting on behalf of His Bounty. Mr Thomas Lee (“Mr Lee”), a business development manager at Sante, Ms Kerk and Ms Quek attended the meeting on behalf of Sante. Mr Seow and Ms Wong gave a sales presentation in relation to Babor products which was well received by the representatives from Sante.13 Sante then placed an order for $8,278.41 of Babor products. This order, was described as an order for cabin size Babor products.14 Pursuant to the order, Sante paid a $5,000 deposit.
Between 26 August 2016 and 5 September 2016, Sante made further orders for Babor products, some of which were retail size and some of which were cabin size.15 The total price for all the Babor products that were purchased by Sante, including the initial order, came up to $26,187.23.
The purchase of the Babor products was a precursor to a long term business relationship which His Bounty and Sante had hoped to formalise. Hence, there were negotiations between the parties on the signing of one or several BPAs.16
Unfortunately, the negotiations hit a snag. Sante had concerns regarding the terms of the BPA and wished to negotiate the BPA before executing it. Sante therefore countermanded one of its cheques that went towards payment of the $26,187.23 owed to His Bounty, pending the successful negotiation of the terms of the BPA.17 His Bounty discovered that the cheque was countermanded on 9 September 2016. It was unhappy with Sante’s conduct. Ms Wong and Mr Seow hence entered the Bukit Batok office on 13 September 2016 to demand payment or alternatively retrieve the Babor products that had been delivered.18 Ms Quek called the police to the scene. The representatives from His Bounty did not succeed in their efforts to retrieve the Babor products. As a result of this incident, the relationship between the parties rapidly deteriorated and no BPAs were signed.
The outstanding sums for the purchase of the $26,187.23 worth of Babor products was eventually paid up on 13 October 2016.19
Sometime around late September 2016, while the dispute over the purchase of the Babor products was ongoing, Ms Wong received word that Sante was printing and distributing business brochures, pamphlets, posters, name cards and other materials (which will be referred to collectively as the “Allegedly Infringing Articles”) which contained Dr Babor’s intellectual property to promote its business at the Clementi and Holland Drive outlets.20 As a result, His Bounty engaged CDIC Consultants LLP (“CDIC”) to conduct an investigation on the matter. An investigation report (“Investigation Report”) was completed on 9 October 2016.21 The Investigation Report alleged that intellectual property infringement had occurred at the Clementi and Holland Drive outlets.
Soon after receiving the report, Ms Wong contacted Dr Babor’s Asia Pacific Area Manager, Madeleine Genzsch (“Ms Genzsch”), to discuss the findings of the report. Ms Wong also requested a letter of authority (“Letter of Authority”) purporting to authorise His Bounty “to pursue any unauthorised use of Dr Babor’s Intellectual Property Rights in Singapore”. Prior to this, His Bounty was already in possession of a Letter of Authority, which was valid up till 31 December 2019.22 However, Ms Wong wanted to have a fresh copy of the Letter of Authority.23
Ms Wong met Ms Genzsch in Taiwan on 10 and 11 November 2016. Ms Genzsch passed a fresh copy of the Letter of Authority to Ms Wong in person.24 After returning to Singapore on 12 November 2016, Ms Wong passed the Letter of Authority to His Bounty’s solicitors.
On 14 November 2016, His Bounty’s solicitors wrote a letter of demand to Sante (“Letter of Demand”) alleging trade mark infringement and passing off in relation to the Allegedly Infringing Articles.25 The Investigation Report was enclosed with the Letter of Demand.
Between 23 November 2016 to 16 December 2016, representatives from Sante, His Bounty and Dr Babor engaged in email correspondence relating to the Letter of Demand. In a particular email sent on 16 December 2016 at 10.40pm (“16 December email”), Ms Genzsch appeared to express appreciation for Sante’s promotional efforts.26
On 21 December 2016, the writ of summons and statement of claim in respect of trade mark infringement and passing off was filed.27 Dr Babor was named as the 1st plaintiff and His Bounty as the 2nd plaintiff.
On 20 January 2017, Sante filed the defence, as well as the counterclaim in groundless threat against His Bounty.28 The contents of the Letter of Demand formed the primary basis for Sante’s allegation of groundless threat. 29
On 11 March, Dr Babor and His Bounty withdrew the trade mark infringement and passing off claim, and Dr Babor ceased to be a party to the suit. However, Sante refused to withdraw the counterclaim. As a result of these events, the trial proceeded only on the basis of resolving the counterclaim in groundless threat. The parties dispute the reasons for the withdrawal of the infringement and passing off claim, as well as the reasons for refusing to withdraw the counterclaim. However, these disputes are immaterial to the resolution of this suit.
Having set out the background, I now turn to consider the elements of groundless threat.
The elements of groundless threat of trade mark...To continue reading
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Star Trolls: Attack Of The Clones
...from the threats or that it was appropriate for the court to grant the reliefs. In Dr Babor Gmbh & Co Kg v Sante De Beaute Pte Ltd [2018] 5 SLR 928, the Singapore High Court applied this principle in the context of groundless threats of trademark infringement proceedings, on the basis t......