Reebok International Ltd v Royal Corporation and Another Action

• Judgment Date: 14 October 1991
• Date: 14 October 1991
• Docket Number: Suits Nos 1685 and 1388 of 1988
• Court: High Court (Singapore)

Reebok International Ltd

Plaintiff

and

Royal Corp and another action

Defendant

[1991] SGHC 148

Chan Sek Keong J

Suits Nos 1685 and 1388 of 1988

High Court

Civil Procedure–Anton Piller orders–Trade mark infringement–Whether infringing articles seized under Anton Piller order may be used as evidence in foreign civil proceedings against same defendant–Special circumstances under which the court would exercise its discretion to allow the use of seized infringing articles in foreign civil and criminal proceedings against third parties–Civil Procedure–Anton Piller orders–Discovery–Riddick principle–Implied undertaking not to use information obtained for collateral or improper purpose–Court's discretion to release or modify undertaking in special or exceptional circumstances

The plaintiff (“Reebok”) sued the defendant (“Royal”) for infringing its trade mark “REEBOK” by importing into Singapore shoes bearing the trade mark but which were not of Reebok's manufacture or origin. An Anton Piller order in favour of the plaintiffs was issued by the court and executed, resulting in some 35,832 pairs of shoes in four different models and all bearing the name “REEBOK” being taken into the custody of Reebok's solicitors for safe custody. By an order of court, a random sample of the seized shoes (“the said shoes”) was selected to be preserved until trial while the balance was to be destroyed.

While Reebok's action against Royal was pending, Reebok took out an interlocutory application for the following orders: (a) that it be at liberty to send ten pairs of each of the four models of the said shoes to Japan, Taiwan and the USA where Reebok was currently involved in pending legal proceedings, for the purpose of using them as evidence in those foreign proceedings; and (b) that for that purpose, Reebok's solicitors be released from their undertaking in the Anton Piller order to keep safe the shoes taken into their custody.

Reebok's counsel argued that para 7 of the Anton Piller order expressly allowed Reebok to “use any affidavit, affirmation, information, articles, materials or documents obtained … for the protection or further protection of their rights … in Singapore or elsewhere”. Alternatively, the court had the power to allow samples of the shoes to be used in foreign proceedings, both civil and criminal, against Royal as well as third parties to protect Reebok's interest, and that the court should exercise the power in favour of Reebok. Royal's counsel argued that para 7 of the order was limited to the protection of Reebok's rights in Singapore. Royal's counsel further submitted that the court had no jurisdiction to grant Reebok's application and that as a matter of discretion the court should not grant this application as: (a) there were no special circumstances to justify the exercise of the court's discretion; (b) there was a multiplicity of actions on the same subject matter, as Reebok's proceedings against Royal in Japan and the USA were founded on Royal's dealings with the said shoes, which might lead to different courts arriving at different decisions; and (c) there was injustice to Royal by reason of the multiplicity of proceedings.

Held, dismissing the application (except for that part relating to the criminal proceedings in Taiwan, which was adjourned):

(1) Royal's counsel's interpretation of para 7 was contrary to the express terms of that paragraph. In any event, para 7 of the Anton Piller order was not intended to allow Reebok to send abroad, without leave of the court, the said shoes or any of them to be used in foreign courts as evidence of infringement of the trade mark “REEBOK” by Royal or any other party. Reebok's solicitors' express undertaking to keep safe the shoes without qualification meant that they could not release the shoes into someone else's custody. This immediately qualified the ambit of para 7. Furthermore, the other parts of the Anton Piller order referred to the said shoes specifically as “shoes” and “goods” and not as articles or materials, which were the expressions used in para 7: at [11].

(2) In the general discovery proceeding where the parties are compelled to disclose material documents to each other, the governing principle (the 'Riddick principle') is that the discovering party may not use the information so obtained against the other party for a collateral or improper purpose,ie for any purpose other than the further pursuing of the action in which the discovery is given. This undertaking from the discovering party may be express or, in the absence of an express term to this effect, it will be implied by the law. The rationale for this undertaking is to encourage full and frank disclosure in court proceedings in the interest of administration of justice. However, the Riddick principle is not an absolute principle. The court has a discretion to release or modify the undertaking (whether express or implied) in special circumstances and where the release or modification will not occasion injustice to the person giving discovery. What are exceptional circumstances depends on the facts of each case. An overriding public interest would be an exceptional circumstance: at [15], [16] and [18].

(3) The Anton Piller form of discovery is a different species from general discovery. The primary purpose of the Anton Piller order is to preserve the evidence of infringing acts which may otherwise be destroyed, removed or concealed. The secondary purpose is to obtain information with a view to taking proceedings against third parties involved in the infringing acts. Therefore, in discovery by means of an Anton Piller order, the public interest in encouraging frank and full disclosure is not as dominant as in general discovery proceedings. In reality, it is largely absent as the defendant is compelled to obey the order of court or be in contempt of court. However, this difference between the Anton Piller form of discovery and the ordinary form of general discovery is not, in itself, a strong factor on which the court would exercise release or modify the implied undertaking: at [20] and [21].

(4) The court has a dispensing power in relation to the implied undertaking. This power, in relation to civil foreign proceedings between the same parties whether or not the cause of action was the same or otherwise, cannot be less than its power in relation to other actions between the same parties within the same jurisdiction. How it is to be exercised depends on the circumstances of each case. In relation to the civil proceedings against Royal in Japan, Reebok did not show any exceptional circumstances which justified the release or modification of the implied undertaking or the express undertaking given by Reebok's solicitors. On the contrary, the evidence showed that the undertaking should be preserved. It was desirable that the issue of infringement be decided by the same court and not by different courts, and it was also unjust to Royal that it be made to defend two other sets of claims based on the same cause of action: at [32]and [40].

(5) It is established law that Anton Piller information obtained against a party may be used in civil proceedings against third parties within or outside the jurisdiction. In respect of Reebok's civil proceedings against third parties (the alleged manufacturers of the said shoes) in Taiwan, it had not produced satisfactory evidence that the proceedings concerned the said shoes. In respect of Reebok's civil proceedings against third parties (eg the alleged sellers of the said shoes) in the USA, it had not produced any documentary evidence to show the basis of its claim against such third parties: at [34] and [40].

(6) With respect to criminal proceedings against third parties in foreign jurisdictions, the discovering party is subject to the implied undertaking as regards the use of such information against third parties in foreign jurisdictions. The Anton Piller order is granted in the exercise of the court's equitable jurisdiction which originated from the need to administer justice based on conscience and fairness. The court should have regard to the potential penal consequences that might befall the third party if such information was allowed to be used against him. The nature of the offence and severity of the penal sanctions to be imposed on him might be entirely out of proportion to the need to protect the economic interests of the discovering party. The court would not be prepared to allow such information to be used against a third party in criminal proceedings abroad if, for example, the punishment for an offence involving an infringement of intellectual property rights may be imprisonment for life, or worse, or some other form of cruel or unusual punishment. As regards the criminal proceedings in Taiwan against third parties (ie the alleged manufacturers of the said shoes), these considerations did not apply as Reebok had adduced evidence to show that the maximum punishment for an infringement of trade mark rights in Taiwan was a maximum fine of NT$150,000 and/or imprisonment or detention for a term not exceeding five years. Therefore, there was no objection in principle against Reebok using ten pairs of each of the four models of the said shoes as evidence in the Taiwanese proceedings, provided that there was documentary evidence to show that they concerned the said shoes: at [36], [37], [40] and [41].

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