Weir Warman Ltd v Research & Development Pty Ltd

• Jurisdiction: Singapore
• Judge: V K Rajah JA
• Judgment Date: 30 April 2007
• Neutral Citation: [2007] SGHC 59
• Court: High Court (Singapore)
• Year: 2007
• Published date: 04 May 2007
• Plaintiff Counsel: M Ravindran and Adrian Kwong (Ravindran Associates)
• Defendant Counsel: Dedar Singh Gill and Lim Siau Wen (Drew & Napier LLC)
• Subject Matter: Trade Marks and Trade Names,Invalidity,Bad faith,Two related companies involved in dispute over registration and validity of trade mark,One company registering trade mark in Singapore,Whether proprietorship of mark had been conferred on such company via contractual term in agreements between it and other company,Whether company registering mark operating as trade mark licensee of other company,Whether absence of manufacturing rights in place of registration of trade mark fatal to claim of proprietorship of trade mark,Whether contractual right to register mark in Singapore sufficient to negate allegation of bad faith on part of company registering such mark,Whether company registering mark having duty to disclose contractual relationship with other company to Registrar of Trade Marks at time of registration mark,Revocation,Company registering trade mark in Class 7 for range of goods including milling equipment and valves,Company using mark on pumps and pump parts only,Whether registration of mark in Class 7 should be partially revoked to limit specification to pumps and pump parts,Section 22(6) of Trade Marks Act (Cap 332, 2005 Rev Ed),Genuine use,Company registering trade mark and using mark on pump parts,Whether three sales transaction in relation to pump parts bearing such mark sufficient to constitute "genuine use",Whether "genuine use" may be established where no evidence of actual sales existing,Section 22(1) of Trade Marks Act (Cap 332, 2005 Rev Ed)
• Citation: [2007] SGHC 59

30 April 2007 Judgment reserved.

V K Rajah JA:

1 The plaintiff and the defendant are Australian firms trading in products that have the same name and a common heritage.

2 The defendant is the registered proprietor of the following three trade marks for the word ‘WARMAN’ in Singapore (“the Trade Marks”):

(a) T96/0566I for pumps; milling equipment; valves; parts and fittings for the aforesaid goods in Class 7;

(b) T97/13163J for maintenance of materials handling apparatus and pumps in Class 37; and

(c) T96/05662G for distribution services; (other than delivery or transportation services); locating and purchasing of goods for others; all being services in relation to materials handling apparatus and pumps in Class 42.

3 The plaintiff seeks, by way of originating summons, to invalidate and/or revoke the Trade Marks registered by the defendant.

Background

4 Charles Harold Warman (“CHW”) is the founder, beneficial owner and director of the defendant. Prior to 1969, CHW and companies in which he had a direct or indirect interest (including the defendant) were in the business of manufacturing and selling pumps and other related products. In connection with this business, a number of intellectual property rights, including trade marks and patents, were created and protected by CHW, the defendant and/or their affiliates.

5 Pursuant to several agreements entered into over time, CHW’s and the defendant’s intellectual property rights were transferred to various parties, including the plaintiff’s predecessor-in-title, Peko-Wallsend Ltd (“Peko”); it was also agreed that both CHW and Peko were to be bound by certain trade restraints. Certain provisions in these agreements constitute the kernel of the present dispute.

The 1969 Agreement

6 The first agreement is dated 16 April 1969 (“the 1969 Agreement”) between CHW, Warman Investments Pty Ltd and related parties on the one hand and Peko on the other.

7 Prior to the 1969 Agreement, all shares in the defendant were owned by a holding entity, Warman Holdings Pty Limited. Shortly before the parties entered into the 1969 Agreement, Peko acquired all the issued shares in the defendant. This was expressly recorded in Recital (d) of the 1969 Agreement. Pursuant to the 1969 Agreement, Peko then acquired all the issued shares in Warman Holdings Pty Limited from the related parties for a consideration of AUD 6,425,000.

8 Following Peko’s acquisition of all the shares in Warman Holdings Pty Limited, Peko was obliged to give effect to cl 6 of the 1969 Agreement, which provided:

Upon the registration of the transfers of shares in the Company [Warman Holdings Pty. Limited] pursuant to Clause 4 hereof the Purchaser [Peko] shall with all due diligence and expedition proceed and procure Research & Development Pty. Limited [the defendant] to assign all its assets other than the amounts standing or to be placed to the credit of its capital profits reserve account and its profit and loss appropriation account to the Purchaser or some other company or person as nominated by the Purchaser including therein all patents and trade marks the property of Research & Development Pty. Limited at such time to the intent that Research & Development Pty. Limited shall be left without assets or liabilities other than its interest in 50 percent of the Royalties to flow from its licence agreement with Simonacco Ltd. and shall then forthwith cause to be executed transfers of all the issued capital in Research & Development Pty. Limited to Charles Harold Warman or his nominee in consideration of the payment of One hundred dollars ($100). The Purchaser in so distributing and disposing of the assets of Research & Development Pty. Limited will avoid any liability being attached to Research & Development Pty. Limited for taxation gift or stamp duties.

[emphasis added]

Upon Peko’s compliance with cl 6 in or about July 1969, the defendant was left without any of its assets (other than its interest in 50% of the royalties from a licence agreement).

9 Pursuant to cl 5(m) of the 1969 Agreement, the Fifth Schedule of the 1969 Agreement expressly and exhaustively sets out particulars of all the trade marks which would pass into Peko’s control on completion of the Agreement:

(a) ‘WARMAN’ in Australia, bearing the trade mark application numbers 130,107 and 130,108;

(b) ‘SIMONACCO-WARMAN’ in the United Kingdom;

(c) ‘WARMAN’ in Hungary, bearing the trade mark application number 111,907; and

(d) ‘WARMAN’ in France, bearing the trade mark application number 64,344.

It is clear that the 1969 Agreement does not pertain to any existing or future trade marks registered in Singapore.

10 Various trade restraints were also included in the 1969 Agreement. Clause 10(a) prohibited Peko (and its related companies) from manufacturing in or exporting to Japan or Africa (including Madagascar) any article the subject of any current patent in CHW’s name, or any improvement thereof. These territories were defined in that clause as the “exclusive Warman Territories”. It should be pointed out, however, that these exclusivity provisions under the 1969 Agreement were subsequently superseded by the 1971 Agreement (see infra from [12] to [16]).

11 To summarise, the position following the 1969 Agreement was essentially that Peko owned all the shares in Warman Holdings Pty Limited, as well as the assets owned by the defendant prior to the agreement, including the specific trade marks listed in the Fifth Schedule of the 1969 Agreement (see [9] supra). At the same time, the ownership of the defendant was placed in the hands of CHW and/or his nominee(s). Japan and Africa (including Madagascar) were also deemed “exclusive Warman Territories” in which Peko was prohibited from either manufacturing or exporting.

The 1971 Agreement

12 A further agreement dated 6 December 1971 (“the 1971 Agreement”) was entered into between CHW, the defendant and Peko. This is really the key agreement in the present proceedings.

13 By recital (E) of the 1971 Agreement, Peko sought to have CHW:

… assign forego and forever relinquish to it part of his rights existing at the date hereof to make and sell Products and Licensed Items anywhere in the world.

[emphasis added]

14 “Products” and “Licensed Items” are defined in cl 10 of the 1971 Agreement. “Products” is stated to mean “any article or machine … the production of which … necessitates the utilisation of “know-how and associated matter”… .” “Know-how and associated matter” is in turn defined in some detail as, in effect, the know-how of the Warman business acquired by Peko under the 1969 Agreement, and any “continuation, extension, modification or variation” of the same. “Licensed Items” is then defined to include the items listed in the Second Schedule of the 1971 Agreement, which identifies each “Licensed Item” with reference to the trade mark ‘WARMAN’, for instance, ‘WARMAN’ pumps, ‘WARMAN’ hydraulic cyclones and ‘WARMAN’ spares and/or parts applicable to various other listed items.

15 The broad intention of the parties manifested in recital (E) found further expression in cl 2 of the 1971 Agreement. This is a crucial clause. It provides:

That in consideration of the sum of Fifty Thousand Dollars ($50,000-00) to be paid to Warman [CHW] by Peko Warman does hereby grant assign and relinquish absolutely to Peko his right to make and sell Products and Licensed Items anywhere in the world save that Peko acknowledges that Warman retains

(a) the absolute and exclusive right (to the absolute exclusion of Peko) to make and sell in Japan and Africa for use in Japan and Africa Products and Licensed Items.

(b) the exclusive right to export from Japan and Africa Products and Licensed Items for use and sale within the Non-exclusive Territories hereinafter defined and coloured green on the map annexed hereto as Appendix “B”.

[emphasis added]

16 “Non-Exclusive Territories” is defined in cl 10 of the 1971 Agreement, which sets out, inter alia, a non-exhaustive list of these territories and specifically includes Singapore as one such territory.

17 Hence, by virtue of the 1969 and 1971 Agreements (collectively “the Agreements”), the parties (through their predecessors) agreed that they were both free to sell relevant products under the ‘WARMAN’ trade mark in the Non-Exclusive Territories, including Singapore, subject to mutual restraints as to the place of manufacture of the goods.

The 1981 Agreement

18 For completeness, it should be mentioned that by a final agreement in 1981 between the parties and/or their predecessors (“the 1981 Agreement”), the plaintiff acquired all of CHW’s right, title and interest in Japan, including the registered trade mark ‘WARMAN’ in Japan. Nothing, however, in the present proceedings turns on this.

The facts

19 The plaintiff (whether itself or through its predecessor or related companies and its/their agents and distributors) has allegedly been selling ‘WARMAN’ marked equipment in Singapore since the early 1960s. The first recorded sale into Singapore by the plaintiff itself was in August 1984, when the plaintiff sold a ‘WARMAN’ pump for AUD 94,763. The plaintiff’s sales turnover from 1984 to December 2005 was AUD 878,972, and of this sum, AUD 601,384 was the turnover from 1984 to 1996 (when the defendant first registered the ‘WARMAN’ trade mark in Singapore). The plaintiff had also appointed a Malaysian licensee and distributor, Warman Wil, in 1987 who has the right to sell into Singapore. From 1987 to 2005, the latter had sold RM 3,541,485 worth of ‘WARMAN’ trade marked pumps and spare parts in Singapore. The figure from 1987 to 1996 was RM 1,846,776.

20 The plaintiff has, to date, registered the trade mark ‘WARMAN’ in respect of pumps and other products in a number of countries. The Non-Exclusive Territories in which the plaintiff made such registrations are: China, Georgia, India, Indonesia, Iran, Iraq, Kyrgzy Republic, Malaysia, Republic of Kazakhstan, Russian Federation, Sabah, Saudi...