Samsonite IP Holdings Sarl v An Sheng Trading Pte Ltd

• Jurisdiction: Singapore
• Judge: George Wei J
• Judgment Date: 06 February 2017
• Neutral Citation: [2017] SGHC 18
• Plaintiff Counsel: Nurul Asyikin Binte Mohamed Razali and Denise Loh Li Ping (Ella Cheong LLC)
• Date: 06 February 2017
• Docket Number: Suit No 779 of 2015 (Summons No 3175 of 2016)
• Hearing Date: 26 August 2016
• Subject Matter: Defence,Civil Procedure,Trade Marks and Trade Names,Exhaustion of rights defence,Summary judgment
• Year: 2017
• Defendant Counsel: Kris Chew Yee Fong (Zenith Law Corporation)
• Court: High Court (Singapore)
• Citation: [2017] SGHC 18
• Published date: 14 February 2017

George Wei J: Introduction

The phenomenon known as “parallel importation” is broadly concerned with situations where a third party, without the consent of the proprietor of an intellectual property right, imports the proprietor’s goods that are legitimately produced in Country A into Country B, to be distributed and sold “in parallel to” and in competition with identical goods sold through the proprietor’s authorised distribution networks in Country B.

Parallel imports are to be distinguished from counterfeit (infringing) goods. Parallel imports are genuine goods, in the sense that they originate from the proprietor or its licensee; conversely, counterfeit goods are not. Parallel imports are, in this way, essentially concerned with goods made and first released into the market by the owners or licensees of intellectual property rights. For the purposes of this decision, which concerns trade mark law, counterfeit goods are generally goods to which the trade mark has been applied without the consent of the proprietor or its licensee.

Parallel importation lies at the interface between competition and intellectual property law. On the one hand, it is argued that consumers benefit from parallel importation because of increased intra-brand competition, which leads to reduced prices. On the other hand, proprietors of intellectual property rights may have an understandable commercial desire to prevent parallel importations, in order to preserve and enhance the commercial value of their rights. Owners of intellectual property rights stress the “national” nature of intellectual property rights within the “global” market place, and emphasise the important role these national rights play in securing and protecting access to the individual markets. Conversely, parallel importers and consumers focus on the importance of competition, the fact that the goods are genuine, and the need for a principle of “exhaustion of rights” in the national and international marketplace. These are the background concerns which have arisen in the present suit.

In the present suit, the Plaintiff, a trade mark proprietor, sued the Defendant, a parallel importer, for trade mark infringement arising from the importation of a shipment of backpacks bearing the Plaintiff’s trade marks into Singapore. The Defendant raised the defence that the Plaintiff’s rights had been exhausted under s 29 of the Trade Marks Act (Cap 332, 2005 Rev Ed) (“TMA”). The Plaintiff then filed an application for summary determination under O 14 r 12 of the Rules of Court (Cap 322, R 5, 2014 Rev Ed) (“Rules of Court”) against the Defendant, essentially requesting for a determination of the scope of the defence. It also applied for summary judgment against the Defendant.

After hearing the parties, I reserved my judgment. I now deliver my decision on the application, beginning with the background facts.

Background facts

The Plaintiff, Samsonite IP Holdings Sarl (“Samsonite”), is a company incorporated in Luxembourg. It is the registered proprietor of various trademarks relating to the SAMSONITE brand (hereafter referred to collectively as the “SAMSONITE Marks”) around the world, including in Singapore and China. The SAMSONITE Marks comprise of the following words and symbols:

Trade Mark No	Trade Mark	Class	Specification
T9800905G		9	Bags adapted for photographic, video, telephone apparatus and instruments; binoculars and binocular cases; bags adapted for equipment; bags adapted for carrying computers.
T0601901H		9	Electronic calculator type currency convertors; eyeglasses and eyeglass cases; bags adapted for photographic, video, audio, electronic and computer equipment; cases adapted for telephones; binoculars and cases adapted for binoculars; cases adapted for calculators; luggage alarms; electronic calculators for converting currency; electrical current convertor adapter apparatus, all for sale in kit form; electrical current convertors; electrical plug adapter apparatus, all for sale in kit form; electric clothing steamers, electric clothing steam irons; neck and shoulder straps for photographic and video equipment; tripods for photographic and video equipment, travel electric clothing irons.
T0601902F		16	Document portfolios, writing instruments, diaries [printed matter], agendas [printed matter], pencils, pens [writing instruments], check book holders, notebook cases, pocket calendars, desk sets [office requisites].
T0815865A		18	Luggage, suitcases; travelling bags; bags for toiletry kits, messenger bags, weekend bags, garment bags, duffle bags, wheeled duffle bags, totes, wheeled totes, beauty cases (not fitted), backpacks, school bags, sports bags, other than adapted (shaped) to contain specific sports apparatus; business cases [leather cases], shoulder bags, briefcases, pilots' bags, key holders, key cases, coin holders, credit card holders, wallets, purses, billfolds, portfolios (other than stationery), umbrellas.
T0601904B		18	Luggage, billfolds, leather wallets, key cases, business card cases made of leather, coin purses, handbags, purses, organizers for bags and suitcases, all being bags; tote bags, backpacks, umbrellas, money holders [pocket wallets], belt bags for holding money; men's bags and cases for shaving kits; cosmetic bags [not fitted]; traveling cases for lingerie and shoes; jewellery organizers in the nature of bags; collapsible shopping bags; passport clutch bags; toiletry bags; luggage straps; luggage tags; luggage strap shoulder protectors, briefcases; backpacks and handbags including school book bags and book bags.
T9800906E		18	Luggage; garment bags; business cases; duffle bags; bags; umbrellas; trunks; travelling bags; attaché cases; back packs; billfolds; credit card cases; key cases; tote bags; purses; handbags; wallets; waist bags; neck money holders; holster money holders; empty shaving kits for men; cases for cosmetic articles; empty toiletry cases; passport holders; luggage straps; luggage taps.
T7152282I		18	Trunks, suitcases, travelling bags and the like, all being goods included in Class 18.
T7357154A		18	Trunks, suitcases, travelling bags, knapsacks, rucksacks; bags and articles made from leather or from imitation leather, all included in Class 18.
T0601908E		35	Retail stores featuring luggage and travel accessories.

The Plaintiff and its related companies have been designing, manufacturing and selling bags, backpacks, luggage and travel accessories under the SAMSONITE name and brand for years.¹ The intellectual property policy of the Samsonite group of companies is such that its subsidiary operating in a specific country or territory is allowed to use the SAMSONITE Marks only in that country or designated territory. In accordance with this policy, the Plaintiff granted to its subsidiary located in China, Samsonite International Trade (Ningbo) Co, Ltd (“Samsonite China”), a licence to use the SAMSONITE Marks only in China.²

The Defendant, An Sheng Trading Pte Ltd, is a company incorporated in Singapore.

On 1 July 2015, the Plaintiff’s solicitors received a Notice of Detention of Goods from the Singapore Customs, stating that a shipment comprising of 2,328 backpacks bearing the SAMSONITE Marks had been imported into Singapore. The backpacks were duly detained by the Singapore Customs. I shall refer to this shipment of backpacks as “the Detained Backpacks”. The Defendant was subsequently identified as the importer of the Detained Backpacks.

The Plaintiff was authorised by the Singapore Customs to conduct an inspection of two samples of the Detained Backpacks. Its inspection confirmed that the Detained Backpacks included two models covered under a co-branding agreement between Samsonite China and Lenovo PC HK Ltd (“Lenovo”).³ Lenovo is a manufacturer and distributor of computers and laptops.

Under the terms of the co-branding agreement, Samsonite China was to manufacture and supply specific models of computer cases and backpacks to Lenovo (“the co-branded backpacks”). The co-branded backpacks manufactured by Samsonite China specifically for the co-branding agreement was required to bear at least one of the SAMSONITE Marks as well as the LENOVO trade mark. The LENOVO mark was either stitched to the inside of the backpack, or printed on a hand tag tied to the co-branded backpack.

Under the terms of the co-branding agreement it was provided, inter alia, that in consideration for the supply of the co-branded backpacks, Lenovo will give away for free the co-branded backpacks in conjunction with the sale of certain models of LENOVO laptops, exclusively in China. I note that the parties accepted during the hearing that neither the Plaintiff nor Samsonite China received direct remuneration or consideration for the manufacture and supply of the co-branded backpacks.

Lenovo and its retailers and distributors were prohibited from selling or otherwise disposing of the co-branded backpacks independently from the sale of a LENOVO laptop in China. Lenovo was also obliged to ensure that its China-based distributors and retailers complied with the terms of the co-branding agreement.⁴ To be clear, there is no assertion in the material before me that the LENOVO laptops would bear a SAMSONITE trade mark.

The Plaintiff and Samsonite China also took steps to prevent the unauthorised sale of the co-branded backpacks. For instance, they conducted market surveillance of such unauthorised sales. Additionally, Samsonite China worked with Lenovo to enforce the terms of the co-branding agreement.⁵

It was undisputed during the hearing before me that the Defendant came to acquire the Detained Backpacks in the following manner. The Detained Backpacks were first manufactured by Samsonite China and supplied to...