Future Enterprises Pte Ltd v Tong Seng Produce Pte Ltd

• Judge: Judith Prakash J
• Judgment Date: 26 November 1997
• Neutral Citation: [1997] SGHC 310
• Date: 26 November 1997
• Subject Matter: Consumers' inability to distinguish between both products,Goodwill,Similarities in presentation of products and brand names,Whether likelihood of confusion sufficient for plaintiff to found action in passing off against defendant,Misrepresentation,Passing off,Proper test for comparison of confusingly similar names,Whether plaintiff proved that defendant's product likely to be confused for its product,Whether goodwill attached to plaintiff's product -Factors constituting goodwill,Relevant time to adjudge existence of plaintiff's goodwill in product,Tort,Defendant's product inspired by plaintiff's,Whether defendant misrepresented its product as that of plaintiff's,Whether plaintiff established sufficient reputation and goodwill in product to found action in passing off
• Docket Number: Suit No 1162 of 1996
• Published date: 11 July 2019
• Defendant Counsel: Sim Yong Chan (Sim Yong Chan & Co)
• Court: High Court (Singapore)
• Plaintiff Counsel: Wong Siew Hong and Teresa O'Connor (Chu Chan Gan & Ooi)

Judgment:

JUDITH PRAKASH J

Cur Adv Vult

The plaintiff and the defendant are well-established trading companies in Singapore. In 1994, a fateful year, both decided to venture into the `instant` beverage and food business. That decision led inevitably to both of them making the most popular of such products, the 3-in-1 instant coffee. The plaintiff now claims that the defendant has, since about March 1996, passed off or attempted to pass off the defendant`s brand of 3-in-1 instant coffee mix as and for the plaintiff`s coffee mix both in Singapore and elsewhere.

2.The defendant has defended the claim vigorously. It says that when it started to sell its product, `A MaxCoffee`, in Singapore in October 1995, the plaintiff`s `MacCoffee` had not acquired the reputation or goodwill necessary to allow the plaintiff to prosecute a passing off action. Secondly, it denies that the get-up of its product is so similar to that of the plaintiff that the defendant`s product can be confused with or passed off as the plaintiff`s.

3. Factual background

This account of the facts leading up to the action is taken substantially from the affidavits of evidence-in-chief filed by Mr Tan Wang Cheow, a director of the plaintiff company, and that of Mr Eng Yew Beng who is employed as sales manager by the defendant.

4.The plaintiff company was incorporated under the law of Singapore as a private limited company in 1982. According to the business profile obtainable from the Registry of Companies, the plaintiff is, principally, a wholesale trader (including an importer and exporter) and commission agent. In 1994, the plaintiff decided to branch out by developing a product range of 3-in-1 beverages that would appeal to consumers in emerging markets in the Asia Pacific region. Due to the small size of Singapore`s domestic market as well as the fact that it was already well-supplied with such products, the plaintiff decided that it would be more fruitful for it to focus initially on the relatively `virgin and underdeveloped` overseas markets.

5.The initial products were to be 3-in-1 coffee mix, tea mix and chocolate mix. The plaintiff had noted that the potential export market was particularly good for 3-in-1 coffee mix. The 3-in-1 product, by then well known in Singapore, is a serving size mixture of coffee, creamer and sugar packed in an individual foil sachet. All that is needed to complete the beverage is hot water. These sachets are sold in bulk packs of 20 to 50 sachets each and, as a convenience beverage, the 3-in-1 mix has proved to be popular for both domestic and office consumption.

6.After studying the trends in, and taste preferences of, the initial markets which it identified as those of Russia and Vietnam, the plaintiff decided that its product should bear an `American` style. The plaintiff wanted an image to convey the impression of a sophisticated, western, capitalistic `American` taste and it chose the trade mark and get-up for its product accordingly.

7.The plaintiff`s packaging started with a trade mark beginning with the prefix `MAC`. It considered `Mac` to be a way of addressing persons whose names were not known which was commonly used in western English speaking countries. Apart from the prefix `MAC` which was to be affixed to all the different products of the plaintiff in order to give them a common identity, the packaging also carried a design showing the American flag across the top corner and a logo depicting a stylised American eagle. In addition, the `MacCoffee` mark was coloured in a gradated brown colour which the plaintiff considered reminiscent of an American `western` style. Finally, the phrase `True American Taste` was printed prominently across the bottom of the packaging. All of these separate elements were designed to convey the American image and appeal which the plaintiff wished consumers to obtain.

8.After finalising the design, the plaintiff, on 28 December 1994, filed an application to register `MACCOFFEE & EAGLE DESIGN` in Class 30 in respect of `Instant coffee mix` at the Registry of Trade Marks. Since this trade mark was duly registered only on 10 May 1997, the plaintiff cannot, and do not, rely on it for the purpose of this action.

9.According to Mr Tan, the plaintiff commenced marketing and selling its MAC products in August 1994. The initial sales were to Russia and other countries of the former Soviet Union, Vietnam, United Emirates and Pakistan. The products, especially MacCoffee, were immediately successful in these markets. In order to develop the export market for its MAC products, the plaintiff participated in various international food and beverage shows or exhibitions such as the `MOSFOOD `95` and `WORLD FOOD `95` exhibitions in Moscow and the `ANUGA `95` exhibition in Germany. The plaintiff continued its participation in foreign exhibitions in 1996, attending at least eight. It also took out space or advertised in various trade or food directories such as World Food `96 , Singapore Food and Beverage Directory and the Singapore Exporters `96/97 Directory .

10.Mr Tan asserted that by virtue of the constant and continued export of the MAC products by the plaintiff, the plaintiff had acquired a valuable and substantial goodwill in connection with each of these products in each of the markets to which it exports them, and in Singapore as well, especially in the export trade community. According to the plaintiff`s annual accounts, export sales of beverages in 1995 accounted for over $17m in gross income. Mr Tan said that approximately 90% of these sales would have been attributed to the MacCoffee brand. As for the year ended December 1996, the export sales figures rose to over $28m.

11.To develop brand recognition and goodwill, according to Mr Tan, the plaintiff expended considerable sums in promoting and publicising its MacCoffee and MAC range of products in emerging markets in the region as well as in Singapore in 1995, 1996 and 1997. He exhibited to his affidavit, copies of invoices, advertisements and other documents relating to the advertisement and promotion of MacCoffee in Russia, Vietnam, Myanmar, Kazakhstan and Bangladesh. As of May 1997 when Mr Tan`s affidavit was filed, the plaintiff`s export market included countries from the former Soviet Union, South East Asia, the Indian sub-continent, Eastern Europe, the Middle East and Europe.

12.The plaintiff commenced local distribution of products bearing the MAC prefix trade mark in Singapore in 1995. The initial sales related to MacNoodles which were carried by the NTUC chain of supermarkets. This product was advertised on television for approximately one month. A second distribution channel was set up in November 1995, whereby Kiam Seng & Co was appointed as the exclusive distributor for Ice MacCoffee. Mr Tan said that the distribution covered a large number of coffee shops, coffee stalls, minimarts, cafes and canteens. An invoice attached to Mr Tan`s affidavit shows that 600 cartons of Ice MacCoffee, which was a liquid beverage supplied in cans, were sold to Kiam Seng & Co on 14 November 1995.

13.In August 1996, the plaintiff appointed Triton Global Investments Pte Ltd as distributor within Singapore for MacCoffee, MacTea, MacChocolate, Mac Ice Lemon Tea and Mac Ice Can Milk Coffee. The distribution agreement was for a trial period of six months. It would be noted that the agreement included distribution rights for `Mac Ice Can Milk Coffee` although Mr Tan had earlier stated that the exclusive distributor for `Ice MacCoffee` was Kiam Seng & Co. Perhaps Kiam Seng & Co was given the rights to a slightly different product or perhaps the sale to Kiam Seng & Co was a one-off transaction rather than in a course of a distribution agreement.

14.In April 1996, according to Mr Tan, the plaintiff received information that the defendant were selling a 3-in-1 coffee mix product under the trade mark `MaxCoffee`. He considered that the defendant`s packaging bore specific similarities to the plaintiff`s product. The plaintiff took the view that the inspiration for the trade mark and the packaging design of the defendant`s product was derived from its own MacCoffee product and, on 26 April 1996, the plaintiff`s solicitors wrote to the defendant telling the latter to recall its product from the market and to cease all further manufacture, distribution and sale of it in Singapore and in the other markets in which MacCoffee was then sold. The defendant did not comply and the plaintiff accordingly commenced this action on 27 June 1996.

15.According to the plaintiff`s statement of claim, MacCoffee is sold in a bulk package containing 50 aluminium foil sachets of instant coffee mix for individual consumption. The package has a distinctive get-up as described in para 7 above. The plaintiff went on to allege that it had acquired significant and valuable goodwill in the name `MacCoffee` and the get-up and that the same had come to be associated exclusively with and be distinctive of the plaintiff`s instant coffee mix and no-one else`s by reason of extensive use as well as widespread and significant sales and advertising volume. To substantiate this assertion, the plaintiff stated that during the period from 1994 to June 1996, it had sold approximately 220 million sachets of MacCoffee for sales revenues of approximately US$16m.

16.The defendant`s main business lies in the import and sale of rice and sugar. In late 1993, it signed a lease with the Jurong Town Corporation for the rental of its present premises. It was a condition of the lease that the defendant manufacture or process food products on the premises. The defendant therefore decided to go into the business of manufacturing instant beverages as a side line.

17.Mr Eng Yew Beng joined the defendant in January 1994 as its sales manager in charge of the production and marketing of its new products. Some time in July 1994, the defendant started to manufacture and sell instant...