STATUTORY DAMAGES FOR USE OF A “COUNTERFEIT TRADE MARK” AND FOR COPYRIGHT INFRINGEMENT IN SINGAPORE

• Published date: 01 December 2016
• Date: 01 December 2016
• Citation: (2016) 28 SAcLJ 61
• Author: David LLEWELYN LLB (Hons) (Southampton University), BCL (Oxon); Solicitor (England and Wales); Deputy Dean & Professor (Practice), School of Law, Singapore Management University; Professor of Intellectual Property Law, King's College London; Door Tenant, Chambers of Mark Platts-Mills QC, 8 New Square London.

A Radical Remedy in the Law of Intellectual Property or One in Need of a Rethink?

The difficulty in (trade mark) counterfeiting and (copyright) piracy cases of assessing damages on traditional tortious principles led to the introduction into Singapore law of the statutory damages remedy in 2004, following the US—Singapore Free Trade Agreement. The new remedy does not require the successful plaintiff to prove its loss in the standard way and allows the court to take into account both the behaviour of the defendant and the need to deter such activities when making awards. Despite the radical nature of the remedy, which was generally welcomed by rights-owners at the time of its introduction more than a decade ago, it does not seem to have been used as frequently as may have been expected, to judge from the dearth of reported decisions in both the State Courts and the High Court. This article considers the remedy and how it might be amended or extended.

I. Introduction

1 As a result of the US-Singapore Free Trade Agreement1 (“FTA”) that was signed on 7 May 2003, a new remedy was added in 2004 to the suite that is available to the trade mark owner whose right has been infringed by a counterfeit trade mark and to the owner of an infringed copyright. In a radical departure from the traditional view of the role of damages in the law of tort in Singapore, the trade mark and copyright owner was allowed to claim statutory damages that are based not only

on traditional notions of compensation but also on both the behaviour of the defendant and the need to deter others from infringing.

2 Of course, since 1987 the law of copyright in Singapore has contained in its Copyright Act2 (“CA”) the remedy of additional damages, under which a court may make an award that takes into account the flagrancy of the infringement and the profits made by the infringer.3 However, the new remedy introduced into Singapore intellectual property (“IP”) law the possibility of an award of damages aimed at deterrence in addition to the flagrancy element known already to the law of copyright but not, until 2004, the law of trade marks.

3 The new remedy was clearly aimed principally at providing trade mark and copyright owners with a more effective form of redress than had been available hitherto against what, respectively, are known colloquially as “counterfeiters” and “pirates”, although somewhat surprisingly in the case of copyright the remedy is available to all successful plaintiffs. The traditional process of assessing damages in IP infringement cases is too cumbersome and expensive in many cases to provide a meaningful remedy against counterfeiters and pirates who will rarely, if ever, follow the detailed procedures for the submission and exchange of evidence that that process requires.

4 At a time of heightened concern around the world at the level of infringement of IP rights and in view of initiatives to attract more IP disputes to be heard in the domestic courts as well as the Singapore International Commercial Court, it is opportune now, more than

ten years after the introduction of the new remedy, to assess its impact and consider how it might be improved or even extended to other IP rights.

5 This is especially so in view of the recent media coverage of the attempts by Dallas Buyers Club LLC (“DBC”), which owns copyright in the film “The Dallas Buyers Club”, to threaten large numbers of people in Singapore who it alleges have downloaded unauthorised copies of the film. Some of this coverage has made mention of the statutory damages provision in the CA4 when commenting on the warning letters5 sent to the alleged infringers whose names have been provided as a result of court orders obtained by DBC requiring Singaporean Internet service providers like M1 to disclose names and Internet Protocol addresses of those who have downloaded the film via peer-to-peer networks.

6 DBC is a subsidiary of Voltage Pictures Inc, a Hollywood studio that has attracted significant ire in the US and Canada as a result of its profitable activities as a copyright troll, threatening to sue large numbers of downloaders for statutory damages but settling for sums much less than the maximum allowed under the copyright legislation.6 Whilst there are a number of reasons why copyright trolls are unlikely to prosper in Singapore, including the fact that contingency fees are not permitted, the actions of DBC raise important policy questions about the use and possible misuse of the statutory damages provision in the CA, although fortunately the caps contained in it should limit the

prospect of abuse or the type of financial returns that such litigation can deliver in the US.

II. Remedies for infringement of IP rights in Singapore

7 As a general matter, infringement of IP rights in Singapore is treated as any other tort. See, for example, Belinda Ang Saw Ean J in Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd:7“Patent infringement is a statutory tort.”8 The usual remedies follow a finding of infringement: injunction, damages or an account of profits, delivery up and costs.

8 Where the damages remedy is concerned, in the words of Andrew Phang Boon Leong JA in Kickapoo (Malaysia) Sdn Bhd v The Monarch Beverage Co (Europe) Ltd9 (“Kickapoo”):10

… the overarching guideline is that the aim is to put the plaintiff in question (so far as is possible) in the same position it would have been if the wrong(s) had not been committed and that the plaintiff bears the burden of specifically proving its loss; put simply, the main aim is to compensate the plaintiff and not to punish the defendant (see the House of Lords decision of General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd[1975] 1 WLR 819 at 824 (which, while dealing with a patent infringement, laid down general principles which are applicable in the present context [of trade mark infringement] as well)).

9 One of the difficulties of applying these principles (and subsequent developments to them) in cases involving counterfeiters and pirates was identified by the Court of Appeal in Ong Seow Pheng v Lotus Development Corp11 (“Ong Seow Pheng”) when L P Thean JA (on behalf of the court) noted:12

Turning to the facts of this case [which involved software piracy and unauthorized copying of the accompanying manuals], Mr Sundaresh Menon, the amicus curiae, submitted this was a case where damages are at large. This is because a licence fee approach [as under the General Tire principles] would not be appropriate because the respondents are not in the business of selling their manuals alone and would never have granted the appellants or any others a licence to sell the manuals. We agree.

Both ordinary and additional damages were awarded.

10 A practical problem in both counterfeiting and piracy cases is that where a successful raid has managed to seize from a Singapore distributor large numbers of counterfeited or pirated goods, the ordinary damages remedy may be inadequate to provide a satisfactory (or any) remedy, as it may be argued that there was no loss to the successful plaintiff in the absence of evidence either that the infringing goods were offered for sale or sold in Singapore or that the plaintiff has lost sales. Although application of the “user principle” as it has been developed by the courts may provide some sort of redress in appropriate cases,13 it was to deal with such an issue that the Court of Appeal accepted in Ong Seow Pheng that damages were “at large” in piracy cases, thus avoiding the possible limiting application of the standard rules on the assessment of damages in tort and giving the court the freedom to make a damages award that was just. In such a case, the remedy of

additional damages provided for under s 119(4) of the CA may be claimed also.14

11 It should be mentioned at this juncture that the terms “counterfeits” and “pirated goods” are not legally defined by statute in Singapore and are often used in a very loose sense. By no means are all infringers of IP rights “counterfeiters” or “pirates”. Indeed, most civil (as opposed to criminal) cases involving IP rights and their alleged infringement that are seen by the courts are bona fide commercial disputes in which the defendant thinks it has a reasonable argument to say that its activities are not infringing (or the IP right in question is not valid) and the plaintiff disagrees. Only if one adopts an all-embracing definition of “counterfeit” and “pirated good” to mean an infringement, whether in good faith or not, of any IP right is such a case included. This cannot be correct: from a legal point of view, use of the terms should be limited to (almost) exact copies that are unarguably infringements and intended to deceive. Indeed, although there were no grounds for decision issued, it is somewhat surprising that the judge in Louis Vuitton Malletier v Cuffz (Singapore) Pte Ltd15 (“Louis Vuitton”), having found infringement under s 27(1) of the Trade Marks Act16 (“TMA”), proceeded to grant an order that the defendant's infringing sign was a “counterfeit trade mark” as defined in s 3(6). As will be expanded upon below,17 it is in the first place by no means clear from the trade marks register what the plaintiff's mark is (it must be emphasised that the dispute did not involve the plaintiff's well-known LV mark); secondly, in addition to using on its products the mark registered by the plaintiff the defendant used its own composite mark (the word “Cuffz” together with a logo) and it is therefore difficult to see how this was use of a sign identical to that registered.

III. The US-Singapore FTA and remedies in IP infringement cases

12 The 2003 US-Singapore FTA requires each party to provide civil remedies for the enforcement of IP rights that should include at least:18

(1) Provisional measures, including seizures of products suspected of being involved in the prohibited activity;

(2) The opportunity for...