Ng Chye Mong Pte Ltd v Public Prosecutor

• Jurisdiction: Singapore
• Judge: Chan Sek Keong JC
• Judgment Date: 29 February 1988
• Neutral Citation: [1988] SGHC 18
• Docket Number: Magistrate's Appeals Nos 124 and 197 of 1987
• Date: 29 February 1988
• Year: 1988
• Published date: 19 September 2003
• Plaintiff Counsel: Gavin Lightman QC and Richard Tan (Lee & Lee)
• Citation: [1988] SGHC 18
• Defendant Counsel: Lawrence Ang and Lee Sieu Kin (Deputy Public Prosecutor)
• Court: High Court (Singapore)
• Subject Matter: 'Counterfeit',Legislative history of s 69D of Trade Marks Act (Cap 206, 1970 Ed),Passing off,Whether need to prove contents of bottles not genuine,Function of trade mark,s 28 Penal Code (Cap 103, 1970 Ed),Trade Marks Act,Words and Phrases,ss 69D Trade Marks Act (Cap 206, 1970 Ed),ss 69A, 69B & 69D Trade Marks Act (Cap 206, 1970 Ed),Criminal Law,Meaning of 'counterfeit',Selling bottles of liquor with counterfeit trade mark,Statutory offences,Trade Marks and Trade Names,ss 69A, 69B Trade Marks Act (Cap 206, 1970 Ed)

Cur Adv Vult

The appellants were convicted in the magistrate`s court on 23 May 1987 on the following charge:

You, on or about 28 January 1985, at Intrans Distribution Services Pte Ltd, Inchape House, 450/452, Alexandra Road, Singapore did sell 17,246 bottles bearing the counterfeit trade marks of Hennessy XO Cognac to one Lim Kim Teck who is the representative of Riche Monde Pte Ltd and you have thereby committed an offence under s 69D of the Trade Marks Act (Cap 206) and punishable under s 69D(b) of the said Act.

The magistrate imposed the maximum fine of $2,000 and ordered that the said 17,246 bottles be forfeited for destruction.

The appellants have now appealed against the conviction and sentence.

Before I consider the grounds of appeal, it will be useful to set out the facts and events leading to the appellants being charged and convicted.

At all material times, Societe Jas Hennessy et Co (the Hennessy company) was the registered proprietor in Singapore of Trade Mark No 77727 (the Hennessy trade mark). The Hennessy trade mark consists of the word `Hennessy` with a picture on its left side of an arm carrying an axe enclosed in a square. On 28 January 1985, Riche Monde Pte Ltd (Riche Monde), the local distributors of Hennessy brandy and a subsidiary of the Hennessy company, purchased at the price of $1.88m from the appellants a large stock of `Hennessy XO Cognac` brandy which was then stored at the warehouse referred to in the charge. The stock of brandy consisted of large and small bottles packed in cardboard cartons.

Riche Monde took delivery of the goods but, before paying the purchase price, sought the assistance of the Hennessy company, who were producers of the brandy sold under the `Hennessy trade mark`, to verify the authenticity of the labels on the bottles. Each label had printed on it a mark almost identical with the `Hennessy` trade mark. Two experts (PW1 and PW6) were sent from France to examine the labels and the cardboard cartons. PW1 was an employee of the Hennessy company. He was in charge of the printing of labels containing the `Hennessy` trade mark. He was conversant with the quality of the labels used by the Hennessy company and labelling of Hennessy bottles since 1980. Over a period of five days, from 29 January 1985 to 2 February 1985, he examined all the labels. After a detailed analysis of the paper, the dye used and other features of the labels, he came to the conclusion that the labels on the 17,246 bottles were not the labels of the Hennessy company. To him, the trade mark on each of the said labels was therefore `counterfeit`. However, he was not asked to, and he did not, examine the contents of the bottles as he was not qualified to do so. He did not know whether the contents were genuine Hennessy XO brandy. However, he testified that the Hennessy company could have tested the brandy but that it had not done so. The Hennessy company did not sell Hennessy XO brandy in bulk to anyone for subsequent bottling, labelling or packaging, but only the finished product with the labels on.

PW6, who was an employee of the exclusive manufacturer/supplier of the corrugated cardboard used to make the cartons for the Hennessy company, examined the cartons and concluded that the cardboard was not produced by his employers.

On 6 February 1985, PW3, the managing director of Riche Monde, made a police report at the Queenstown Police Station that the company had bought a large stock of Hennessy Cognac brandy from the appellants and that `the majority of the stocks carried counterfeit trade marks and cartons. The counterfeit products are being returned to [the appellants].` On the same day, he rejected the 17,246 bottles and on 7 February 1985, the appellants gave a credit note to Riche Monde for the said 17,246 bottles and also a cheque for $1,450,246.87.

On 7 February 1985, the police seized all the 17,246 bottles under s 69D of the Trade Marks Act.

On 14 October 1985, PW3 made a complaint under s 132(2) of the Criminal Procedure Code in regard to the 17,263 bottles and prayed for a summons to be issued against one Ng Khiok Hai under s 69D of the Trade Marks Act. The relevant part of his complaint stated that `the experts found that 17,263 bottles of Hennessy XO Cognac are affixed with counterfeit labels`. The said summons was issued by a magistrate on 19 November 1985.

On 6 January 1987, a detective sergeant made a similar complaint under s 132(2) of the Criminal Procedure Code for the purpose of obtaining a summons against the appellants. The relevant part of the complaint reiterated the findings of PWl and PW6 that the 17,246 bottles had `counterfeit` labels on them. The summons was issued on 16 February 1987.

Certain background evidence emerged at the trial which puts the complaint of Riche Monde in its proper perspective:

(a) Riche Monde had prior to 1985 bought genuine Hennessy brandy from the appellants in order to control the market, ie `to keep the official price from being disrupted`. In 1984 Riche Monde had bought a stock of Hennessy brandy from the appellants which was genuine Hennessy brandy even though the company had found `counterfeit` labels in one carton.

(b) Between 12 March 1985 and 19 April 1985, the solicitors for Riche Monde and for the appellants exchanged correspondence (exhs C to G), the effect of which was that the complaint of Riche Monde was that the trade marks on the 17,246 bottles were counterfeit trade marks.

In the course of the trial, counsel for the appellants made an application to the court that samples of the seized goods be sent for examination by experts to determine the genuineness of the contents. This application was rejected by the magistrate on the grounds that it was prematurely made (the prosecution not having closed its case) and also that the genuineness or otherwise of the contents of the bottles was wholly irrelevant to the issue whether the trade marks affixed to the bottle were counterfeit trade marks or not.

At the end of the prosecution`s case, defence counsel tendered a written submission, the gist of which was that the appellants had no case to answer on the following grounds:

(a) that a trade mark which was an unauthorized copy of a registered trade mark could not be a counterfeit if it was used for the purpose of trade or otherwise in relation to the goods of the registered proprietor;

(b) that the provenance or genuineness of the brandy was an essential ingredient of the offence contemplated by s 69D of the Trade Marks Act;

(c) that the prosecution had failed to establish that the contents of the seized bottles were not genuine Hennessy XO brandy.

The deputy public prosecutor submitted that s 69D created an offence of strict liability, the ingredients of which were (a) a sale of goods with (b) counterfeit trade marks affixed thereon, and that the genuineness of the goods was irrelevant. The expert evidence showed that the trade marks and the labels on the bottles were not those of the Hennessy company.

The magistrate accepted the deputy public prosecutor`s submission on the law and called for the defence. The appellants elected to remain silent and were convicted. In mitigation, defence counsel asserted that the brandy in the bottles was genuine. The appellants were fined $2,000, being the maximum fine imposed by the law.

The prosecution applied for the forfeiture of the 17,246 bottles under s 385 of the Criminal Procedure Code. Defence counsel submitted that the proper order should be that the bottles be returned to the appellants with the labels removed since their contents was not an issue. He offered to make available to the court a report that the contents of the bottles were brandy. The magistrate made no ruling on this offer but, after considering the submission of both parties, ordered the forfeiture and destruction of the 17,246 bottles and their contents.

I now refer to the grounds of decision of the magistrate on the law. Section 69D of the Trade Marks Act provides as follows:

Any person who imports, sells or exposes or has in his possession for sale or any purpose of trade or manufacture any goods or things with a counterfeit trade mark affixed to or impressed upon the same or to or upon any case, package or other receptacle in which such goods are contained, shall, unless he proves that -

(a) having taken all reasonable precaution against committing an offence under this section, he had, at the time of the commission of the alleged offence, no reason to suspect the genuineness of the mark and on demand made by or on behalf of the prosecution, he gave all the information in his power with respect to the persons from whom he obtained such goods or things; or

(b) otherwise he had acted innocently, be guilty of an offence and shall be liable on conviction to imprisonment for a term not exceeding one year or to a fine not exceeding two thousand dollars or to both.

The magistrate referred to the definition of a `trade mark` in s 2 of the Act but did not relate its meaning to s 69D. In interpreting the meaning of `counterfeit`, the magistrate relied on s 69B of the Act as a guidance to the meaning of that word. As s 69B cannot be properly understood except in its application to s 69A, I will reproduce both sections below:

A Any person who counterfeits any trade mark used by any other person shall be guilty of an offence and shall be liable on conviction to imprisonment for a term not exceeding two years or to a fine not exceeding five thousand dollars or to both.

B(1) A person shall be deemed to counterfeit a trade mark who either -

(a) without the consent of the proprietor of the trade mark makes that trade mark or a mark so nearly resembling that trade mark as to be calculated to deceive; or

(b) falsifies any genuine trade mark whether by alteration, addition, effacement or otherwise.

(2) In any prosecution for counterfeiting a trade...