Seiko Epson Corporation v Sepoms Technology Pte Ltd and Another

• Jurisdiction: Singapore
• Judge: Andrew Phang Boon Leong JA
• Judgment Date: 16 November 2007
• Neutral Citation: [2007] SGCA 52
• Docket Number: Civil Appeal No 19 of 2007
• Date: 16 November 2007
• Year: 2007
• Published date: 20 November 2007
• Plaintiff Counsel: Kang Choon Hwee Alban, Koh Chia Ling and Arthur Yap (Alban Tay Mahtani & de Silva)
• Citation: [2007] SGCA 52
• Defendant Counsel: Yeong Zee Kin and Lee So Kang (Rajah & Tann)
• Court: Court of Appeal (Singapore)
• Subject Matter: "Defence",Patents and Inventions,Defence of innocent infringement,"Liability",Whether defence of innocent infringement operating as defence to liability,Words and Phrases,Defence,Infringement,Liability for infringement,"Defence to Liability",Scope of defence of innocent infringement,Whether defence of innocent infringement could be raised after liability for patent infringement admitted

16 November 2007

Andrew Phang Boon Leong JA (delivering the grounds of decision of the court):

1 This was an appeal against the decision of the High Court judge (“the Judge”) upholding the decision of the assistant registrar (“the AR”), who rejected the application by Seiko Epson Corporation (“the appellant”) for directions that Sepoms Technology Pte Ltd and JAL Technology (S) Pte Ltd (“the respondents”) file a further account of profits for the period from 20 February 1998 to 30 September 2005 (see Seiko Epson Corp v Sepoms Technology Pte Ltd [2007] 3 SLR 225 (“GD”)).

2 The present appeal raised important issues of law and statutory interpretation in the context of s 69(1) of the Patents Act (Cap 221, 2005 Rev Ed) (“the Singapore Act”), which reads as follows:

Restrictions on relief for infringement

69.—(1) In proceedings for infringement of a patent, damages shall not be awarded and no order shall be made for an account of profits against a defendant who proves that at the date of the infringement he was not aware, and had no reasonable grounds for supposing, that the patent existed.

At the end of the hearing, we unanimously dismissed the appeal with costs and the usual consequential orders. We now give the detailed grounds for our decision.

The facts

3 The appellant is a company incorporated under the laws of Japan and has its principal place of business in Japan. The appellant’s primary business relates to the development, manufacture and sale of electronic consumer goods. In particular, the appellant develops, manufactures and sells Epson computer printers and Epson printer cartridges. It was, at all material times, the registered proprietor of Singapore Patent No SG 46602 (“the Patent”).

4 The respondents are companies incorporated under the laws of Singapore, with the same registered office in Singapore. The respondents’ primary businesses relate to the development, manufacture and sale of compatible and refillable printer cartridges for, inter alia, Epson printers.

5 On 5 October 2005, the appellant commenced an action against the respondents for a declaration that the latter had infringed the Patent and for, inter alia, an account of the profits derived by the respondents from the alleged infringement under ss 67(1)(e) and 67(1)(d), respectively, of the Singapore Act.

6 The respondents filed a defence and counterclaim on 27 December 2005 denying infringement on several grounds. The respondents also pleaded that, even if they had infringed the Patent, s 69(1) of the Singapore Act (“s 69(1)”), which sets out what is commonly known as the “defence of innocent infringement”, afforded them protection from any claim for damages or an account of profits. We pause here to note that the word “defence” may encompass not only the issue of liability, but also, where liability has been established, the issue of relief, in particular, the relief awardable. This is, in fact, a point that we will elaborate upon in greater detail below (at [17]–[18]).

7 On 16 March 2006, the respondents applied (via Summons No 1173 of 2006) to the High Court for a preliminary hearing on the defence of acquiescence. It was argued that the appellant had or was deemed to have acquiesced in the respondents’ dealings with the printer cartridges which constituted the alleged infringing products, and was thus estopped from suing the respondents. On 29 March 2006, Assistant Registrar Chung Yoon Joo dismissed the application. On 6 April 2006, the respondents filed a notice of appeal (Registrar’s Appeal No 112 of 2006) against the decision. On 17 April 2006, Kan Ting Chiu J dismissed the appeal.

8 On 3 May 2006, the respondents’ counsel informed the High Court at a pre-trial conference that the respondents would consent to judgment. On 2 August 2006, a consent judgement was entered before Tan Lee Meng J (“the Consent Judgment”). The declarations and orders in the Consent Judgment were as follows:

(a) The Patent was valid and had been infringed by the respondents.

(b) The respondents, whether by themselves, their directors, officers, servants, agents or any of them or otherwise howsoever, were restrained from making, disposing of, offering to dispose of, keeping for disposal or otherwise, using and/or importing ink cartridges under the trade mark “SEPOMS” in respect of 43 model numbers (which were set out), and were restrained from directing, procuring, instigating, causing, enabling or assisting others to do so.

(c) There was to be an account of profits by the respondents.

(d) The respondents were to pay the appellant interest at the rate of 6% per annum on the accounted sum from the date of the writ of summons to the date of judgment.

(e) The respondents were to deliver up forthwith to the appellant (or destroy, such destruction to be verified on oath) all articles in relation to which the Patent had been infringed.

(f) The respondents were to pay the appellant the costs of the suit, which were to be taxed if not agreed.

(g) The counterclaim was to be withdrawn, with the costs of the counterclaim (to be agreed or taxed) to be paid by the respondents to the appellant.

(h) The parties had liberty to apply.

9 On 30 October 2006, in compliance with order (c) of the Consent Judgment, the respondents filed an account of profits for the period from 1 October 2005 to 31 July 2006. The respondents subsequently filed an affidavit of evidence-in-chief (“the AEIC”) wherein one of their directors, Chou Kuo Shing alias Chu Kok Sein, deposed that the respondents had first acquired knowledge of the Patent on 7 October 2005 when they were served with the appellant’s statement of claim. Prior to that, the respondents, it was averred, had not been aware either that the Patent existed or that they were infringing it.

10 The appellant was dissatisfied with the contents of the respondents’ account and filed a notice of objection to the account on the ground that it did not cover the entire period of infringement, which, in the appellant’s view, commenced from 20 February 1998 (the date of publication of the Patent). The appellant also filed a notice of objection to the contents of the AEIC on the ground that the evidence deposed was irrelevant for the account of profits hearing.

11 On 21 November 2006, the appellant applied to the High Court (via Summons No 5337 of 2006) for an order that the respondents file a further account for the period from 20 February 1998 to 30 September 2005. The respondents resisted the application on the basis that s 69(1) allowed for a restriction of the period for which an account was to be rendered (the “accounting period”), and the question as to the exact accounting period was to be determined during the account of profits hearing proper.

12 As stated at [1] above, the application was dismissed by the AR, whose decision was upheld by the Judge. The appellant subsequently appealed against the decision of the Judge, which led to the appeal that was before this court.

The issues

13 The issues raised by the appellant in its submissions were as follows:

(a) whether the defence of innocent infringement as set out in s 69(1) operated as a defence to liability or merely as a restriction on the relief awardable; and

(b) if s 69(1) operated as a defence to liability, whether the respondents were estopped from raising s 69(1) at the account of profits hearing by virtue of the Consent Judgment, which made the issue of liability res judicata.

The appellant argued that, on a true interpretation, s 69(1) operated as a defence to liability, and, as the Consent Judgment was final on the issue of liability, the respondents were estopped from raising s 69(1) at the account of profits hearing (which was concerned with the relief awardable rather than liability). The respondents, on the other hand, argued that they were not estopped from raising s 69(1) as, on a true interpretation, s 69(1) merely operated to restrict the relief awardable.

14 Whether or not s 69(1) operated as a defence to liability (or merely related to the relief awardable) was clearly the decisive issue in this appeal. In this regard, we came to the conclusion that s 69(1) was, on a true interpretation, a restriction on the relief awardable, and not a defence to liability.

15 In arriving at our decision, we were of the view that the nuances underlying the concept of a “defence to liability” in the context of patent infringement should be explored at the outset. As observed in Emjay Enterprises Pte Ltd v Skylift Consolidator (Pte) Ltd [2006] 2 SLR 268 (“Emjay”) (at [1]):

The line between theory and practice is often a fine one and, in any event, one ought never to gainsay the role that rigorous theoretical analysis can – and does, in fact – play in ensuring a more nuanced development of the law as set in its broader practical canvass.

The concept of a “defence to liability”

16 Both parties did not make submissions on the concept of a “defence to liability”. Indeed, while this is an oft-used expression, it has attracted little theoretical analysis by the Judiciary and academics alike. However, especially in relation to cases such as the present, a proper understanding of the concept and the elements which it comprises (in particular, the various senses or conceptions thereof) is vital to a clear understanding (and resolution) of the substantive issues before the court. We therefore considered, at the outset, the concept of a “defence to liability”, commencing with an analysis of the terms “defence” and “liability” in the context of patent infringement.

The concept of a “defence”

17 The theoretical concept of a “defence”, in the context of civil matters, has a broad compass and can manifest itself in a number of forms or senses. In David M Walker, The Oxford Companion to Law (Clarendon Press, 1980), for example, a “defence” from the civil perspective is defined (at p 346) as follows:

In civil matters a defence may be a traverse, or denial of the plaintiff’s...