New Line Productions, Inc. and Another v Aglow Video Pte Ltd and Others and Other Suits

Judgment Date06 July 2005
Date06 July 2005
Docket NumberSuits Nos 718 of 2003, 836 of 2003
CourtHigh Court (Singapore)
New Line Productions, Inc and another
Plaintiff
and
Aglow Video Pte Ltd and others and other suits
Defendant

[2005] SGHC 118

Tay Yong Kwang J

Suits Nos 718 of 2003, 836 of 2003 and 843 of 2003

High Court

Companies–Incorporation of companies–Lifting of corporate veil–Owner of copyright suing web of separately incorporated companies and their directors for copyright infringement–Whether directors were directing minds of companies–Whether court should lift corporate veil and make directors personally liable–Copyright–Damages–Defendants infringing copyright through web of separately incorporated companies and under guise of legitimate parallel imports–Whether court should award additional damages under s 119 (4) Copyright Act (Cap 63, 1999 Rev Ed)–Section 119 (4) Copyright Act (Cap 63, 1999 Rev Ed)–Copyright–Infringement–Defendants importing and selling cinematograph films in video format–Whether videos genuine parallel imports or pirated copies–Whether defendants infringing copyright in films–Sections 31, 33 Copyright Act (Cap 63, 1999 Rev Ed)

The first plaintiff owned the copyright to three films (“TTT”, “FD2” and “D&D”, respectively). The second plaintiff was the exclusive licensee in Singapore in respect of replication and sale of the three films in video format, including digital versatile disc (“DVD”) and video compact disc (“VCD”) formats.

An importer and wholesale distributor of cinematograph films (“Aglow”) had imported 3,000 TTT VCDs into Singapore and distributed them for sale through a number of companies and business entities carrying on business under the name and style “TS Group”. These 3,000 VCDs were said to have originated from an entity in Thailand which was sub-licensed to distribute them (“Mangpong”). However, Mangpong had notified the video trade that the TTT VCDs did not originate from it. The plaintiffs filed Suit No 718 of 2003 (“S 718/2003”) against Aglow and two companies under the TS Group (“TS Laser” and “TS Entertainment”, respectively) and obtained, inter alia, an interim injunction prohibiting the defendants from dealing with the infringing TTT VCDs.

Subsequently, the TS Group proceeded to obtain supplies of another 7,000 TTT VCDs through a general wholesale trader (“Speedy Video”). The plaintiffs then commenced Suit No 843 of 2003 (“S 843/2003”) against: (a) various companies under TS Group and their company secretary; (b) the principal directors and officers of TS Group (collectively, “the four directing minds”); (c) various other directors and shareholders of companies under TS Group; (d) two directors of Speedy Video (“Andy” and “Kelvin”, respectively); and (e) an entity which had acted as the central purchasing agent for all the members of the TS Group (“J&H Digital”).

Upon being informed that two video home system (“VHS”) videotapes, one of FD2 and the other of D&D, had been submitted for censorship, the plaintiffs also commenced Suit No 836 of 2003 (“S 836/2003”) against Aglow and its officers, which included a director of Aglow (“Zakir”), for copyright infringement, and obtained an injunction against them. In defence, Zakir testified that the 3,000 TTT VCDs and the VHS videotapes of FD2 and D&D were purchased from two other companies in Thailand (collectively “Rungreang”) which had informed Aglow that the VCDs and videotapes had been bought from Mangpong, and that Mangpong was licensed by the copyright owners to reproduce and distribute the films. He claimed they were therefore genuine parallel imports and not infringing copies.

The three actions were consolidated and tried together, with the plaintiffs seeking, inter alia, additional damages pursuant to s 119 (4) of the Copyright Act (Cap 63, 1999 Rev Ed) (“the Act”). They also sought to lift the corporate veil and make the directors and officers of the companies involved personally liable for the infringements. Various counterclaims by the defendants in each of the suits were also made.

Held, allowing plaintiffs' claim in S 718/2003, and allowing the plaintiffs' claims partially in S 836/2003 and S 843/2003:

(1) The evidence showed that Zakir knew or, at least, ought reasonably to have known that the TTT VCDs and the VHS videotapes of FD2 and D&D which he was importing had been made without the consent of the copyright owner. By importing them into Singapore for sale, he and Aglow infringed the first plaintiff's copyright and breached s 31 of the Act: at [94].

(2) Section 33 of the Act had been breached as the products in issue were not manufactured by Mangpong and this was within the knowledge of Aglow and TS Group, working in conjunction with Rungreang. The defence of innocent retailers dealing with what they believed to be genuine parallel imports failed: at [97].

(3) As regards to S 836/2003, there could be no doubt that Zakir was the alter ego of Aglow and that he was its directing mind. Accordingly, only Zakir was personally liable as a director of Aglow: at [106].

(4) As regards to S 843/2003, the companies in the TS Group were really little pieces of mosaic forming a complete mural, glued together by the four directing minds. In the circumstances, it would be entirely just to lift the corporate veils and regard the companies as the business vehicles of the four directing minds. The court's findings therefore applied to all the companies in TS Group. Since the TTT VCDs were infringing products, the entire TS Group was liable for having dealt with the products. J&H Digital was liable to the plaintiffs as it had imported the infringing products: at [98] and [99].

(5) TS Laser was liable to the plaintiffs as its name was used on all TS Group products and advertisements. TS Entertainment which was within TS Group and which had dealt with the TTT VCDs from Aglow was also liable. In the circumstances, all three defendants in S 718/2003 were liable to the plaintiffs: at [99] and [113].

(6) The four directing minds were the controlling mind and spirit of the TS Group, and were therefore personally liable for the infringing activities committed by the corporate defendants: at [107].

(7) In the light of all the connecting factors between Speedy Video and TS Group, there was no difficulty finding that Speedy Video was able to import from Rungreang the 7,000 TTT VCDs because it was merely another corporate vehicle of one, or some, or all of the four directing minds. It would be too much of a coincidence that all 7,000 sets were also sold to the TS Group outlets. Speedy Video was thus liable to the plaintiffs as well: at [100].

(8) In S 843/2003, apart from the four directing minds, the rest of the individual defendants were not liable to the plaintiffs. Although they were shown to be either part of or related to TS Group, the plaintiffs' submission that they could be deemed to have consented to the infringing activities of the defendant companies and therefore be held personally accountable was rejected. The law required more than that to impose personal liability: at [108] and [113].

(9) An award of additional damages under s 119 (4) of the Act was punitive in nature and should not translate into an extraordinary profit for the plaintiffs. Deplorable conduct on the part of the infringers would be a factor to consider in deciding whether to award such damages and in determining the appropriate amount. Aglow, TS Group and Rungreang had collaborated to bring in infringing products under the guise of legitimate parallel imports. TS Group abused the law relating to companies by creating a network of seemingly independent companies, thereby allowing it to circumvent any injunction served on any one of them. In view of these and other factors, additional damages were awarded against the defendants, who were found to be liable to the plaintiffs for infringing the copyright in the TTT VCDs. Such damages were not awarded to the plaintiffs in respect of the FD2 and D&D videotapes, as the infringement activity there was much narrower in scope and was stopped at a very early stage. An injunction was also granted against infringement of the copyright in the three films in issue: at [110] to [113].

(10) The counterclaims by Aglow in S 718/2003, Aglow, Zakir, and the other two defendants in S 836/2003, and Speedy Video, Andy and Kelvin in S 843/2003 were dismissed with costs: at [113].

Columbia Picture Industries v Robinson [1987] Ch 38; [1986] 3 WLR 542 (folld)

Ong Seow Pheng v Lotus Development Corp [1997] 2 SLR (R) 113; [1997] 3 SLR 137 (folld)

TV Media Pte Ltd v De Cruz Andrea Heidi [2004] 3 SLR (R) 543; [2004] 3 SLR 543 (folld)

Copyright Act (Cap 63, 1999 Rev Ed) ss 31, 33, 119 (4) (consd);ss 33 (1), 123, 136, 184, 201B (4)

Copyright (International Protection) Regulations (Cap 63, Rg 2, 2002 Rev Ed) reg 6

Wong Siew Hong and Teh Ee-Von (Infinitus Law Corporation) for the plaintiffs

Kirpal Singh (Kirpal & Associates) for the second and third defendants in S 718/2003 and the first to 30th and the 34th defendants in S 843/2003

Liaw Jin Poh (J P Liaw & Co) for the first defendant in S 718/2003, the defendants in S 836/2003 and the 31st to 33rd defendants in S 843/2003.

Tay Yong Kwang J

1 These actions concerned copyright infringement of three cinematograph films entitled “Lord of the Rings - The Two Towers” (“TTT”), “Final Destination 2” (“FD2”) and “Dumb and Dumberer - When Harry Met Floyd” (“D&D”).

The case for the plaintiffs

2 The first plaintiff, a company incorporated under US laws, is in the business of producing and distributing cinematograph films. It is the producer and owner of the copyright comprised in the said three films. TTT was first screened and published in the US in 2002 while FD2 and D&D were first screened and published in the US in 2003. The first plaintiff is a qualified person within the meaning of the Copyright Act (Cap 63, 1999 Rev Ed) (“the Act”). By virtue of s 184 of the said Act read with reg 6 of the Copyright (International...

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