Singsung Pte Ltd and another v LG 26 Electronics Pte Ltd (Trading as L S Electrical Trading) and another

1. George Wei J:

2. [1]

   [1] In Suit No 238 of 2012, the plaintiffs commenced proceedings and claimed against the defendants on the grounds of passing off, copyright infringement and defamation. The defendants counterclaimed for malicious falsehood and groundless threats of a copyright infringement action. The present trial is bifurcated, and I am only concerned with liability at this stage. In full recognition that this judgment is of substantial length and complexity, I add a glossary of the key acronyms used in the judgment for the reader’s convenience in an appendix at the end of the judgment.

3. The background to the claims

4. [2]

   [2] A large number of factual disputes and issues was raised by the parties. Instead of setting out all my factual findings here, I set out only a brief summary of the main events leading up to the dispute. I will discuss my specific factual findings in greater detail where relevant to the legal issues before me.

5. [3]

   [3] The dispute between the parties has a long history, going back well over 15 years. At trial, the parties’ recollections of the dates and details of many material events were often inconsistent or hazy.

6. S H Econ Electrical Trading

7. [4]

   [4] See Lam Huat (“the 2nd Plaintiff”) and See Lam Seng (“the 2nd Defendant”) are brothers. Sometime in 1998, the 2nd Defendant started a sole proprietorship under the name of S H Econ Electrical Trading (“S H Econ”). In 2001, S H Econ was converted into a partnership in the names of the 2nd Defendant and his other brother, See Lam Quee (“SLQ”). In reality, S H Econ was a partnership between the 2nd Plaintiff and the 2nd Defendant. Although the 2nd Plaintiff was not formally named as a partner, SLQ’s shares and interest in the partnership were held on trust for the 2nd Plaintiff. The brothers entered into this complicated arrangement because the 2nd Plaintiff was being sued by a creditor, and he did not want the legal dispute to jeopardise the business.

8. [5]

   [5] It appears that S H Econ was (at least initially) in the business of acquiring outdated and/or second-hand electrical and household products in Singapore and Malaysia for resale to customers overseas. It is unclear how the partnership was run. The role played by each partner in the partnership was never clearly explained to the court. No written partnership agreement of any sort has been adduced in evidence.

9. [6]

   [6] The start of the new millennium witnessed a number of significant events. Apart from the conversion of S H Econ into a partnership, the 2nd Defendant and SLQ purchased three shop houses in Singapore (“the Shop Houses”). Legally, the 2nd Defendant and SLQ each held a 50% share in the Shop Houses as tenants-in-common. However, beneficially, SLQ held his share of the Shop Houses on trust for the 2nd Plaintiff. The brothers entered into this arrangement also because the 2nd Plaintiff was worried that any property in his name might be subject to seizure by the same creditor mentioned above.

10. [7]

    [7] Disputes eventually arose between the brothers over the invoices and accounts of S H Econ. Whilst the evidence as to when the said disputes started is hotly contested and confused, it is clear that by 2005, the relationship between the 2nd Plaintiff and 2nd Defendant had deteriorated. On 9 November 2007, the 2nd Defendant commenced Originating Summons No 1652 of 2007 (“OS 1652/2007”) against the 2nd Plaintiff and SLQ to liquidate the Shop Houses, and for an account of monies due to the partners from the S H Econ business. OS 1652/2007 was settled before the actual hearing, set for June 2008.

11. [8]

    [8] The S H Econ partnership was subsequently dissolved. The date of S H Econ’s dissolution is unclear. The 2nd Plaintiff claims that the dissolution happened in 2007. The 2nd Defendant however asserts that S H Econ was only dissolved in 2009. I note in passing, that in all probability, the 2nd Plaintiff and the 2nd Defendant effectively ceased working together sometime around 2007, but the S H Econ partnership was only legally dissolved in January 2009.

12. Singsung Pte Ltd

13. [9]

    [9] Either way it is clear that in April 2006, before the dissolution of the S H Econ partnership, the 2nd Plaintiff incorporated Singsung Pte Ltd (“the 1st Plaintiff”). The name “Singsung” was chosen by the 2nd Plaintiff. The 1st Plaintiff was in the business of selling new electrical and household equipment. Whilst the plaintiffs assert that some of these new products were sold in Singapore to Singapore-based customers for use in Singapore, it is apparent that the vast majority of the sales were to trade buyers who exported the products overseas. Further, whilst the plaintiffs assert that their trade buyer customers come from a variety of African and Asian countries, it appears that most of the new products were acquired by foreign trade buyers for sale to end users (or consumers) in Africa. In particular, the evidence adduced by the parties related only to end users from the Republic of Cameroon (“Cameroon”). As such, where the foreign markets in which the plaintiffs’ and defendants’ products are sold become relevant, my discussion will mainly centre on the market in Cameroon.

14. [10]

    [10] The 2nd Plaintiff’s position is that the business of the 1st Plaintiff belongs solely to him. In particular, the said business was never a part of S H Econ’s business. This is so even though there are invoices which suggest that at least some of the 1st Plaintiff’s business operations in 2007 were being conducted through S H Econ. The plaintiffs claim that the 1st Plaintiff’s business was conducted in that way purely as a matter of convenience. The question as to whether S H Econ had any interest in the 1st Plaintiff will be discussed later in connection with the plaintiffs’ claim for passing off.

15. LG 26 Electronics Pte Ltd

16. [11]

    [11] In October 2007, the 2nd Defendant registered L S Electrical Trading (“the 1st Defendant”) as a sole proprietorship. Initially, the 1st Defendant dealt only in the purchase and re-sale of second-hand electrical goods. However, the 1st Defendant soon expanded into the business of purchasing and selling new electrical and household products to foreign trade buyers for export to consumers in Africa and elsewhere. In January 2009, the 1st Defendant, LG26 Electronics Pte Ltd (trading as L S Electrical Trading), was legally incorporated. The brand name adopted by the 2nd Defendant was “LS”. The long and short of the evidence is that the brothers had gone their separate ways and were now effectively competitors.

17. The parties’ products

18. [12]

    [12] The 1st Plaintiff’s first line of new products appears to have been DVD players. Subsequently, it expanded its range of products to include television sets, rice cookers, electric kettles, blenders, floor fans and gas stoves.

19. [13]

    [13] The 1st Plaintiff’s business model involves sourcing its products from manufacturers in China. Typically, the 2nd Plaintiff would visit the Chinese factories and examine the range of products the factories had. The products were often displayed in the premises of the factories, or were set out in the factories’ catalogues. I pause here to note that it is helpful to determine whether these Chinese factories are original equipment manufacturers (“OEMs”), or original design manufacturers (“ODMs”). Whilst these are not legal terms but trade terms, and whilst the legal principles of intellectual property law do not depend on these categories, an appreciation of the factual differences between these two types of manufacturers is helpful. To be clear, I use the terms OEM and ODM in this judgment purely for convenience and expediency.

20. [14]

    [14] An OEM generally refers to a manufacturer who produces component parts for another manufacturer, who then incorporates the component parts into its products. The final products are sold under the second manufacturer’s brand name. For example, where a United States computer manufacturer orders the hard disk drives installed inside its computers from a Chinese disk manufacturer, the latter is an OEM.

21. [15]

    [15] However, consider the following example: Company A designs and manufactures a product, which is sold to Company B. Company B then releases and sells the product into the market under its own brand. In this example, Company A is not an OEM, but an ODM.

22. [16]

    [16] There can be many variants of the factual pattern described above, and the exact relationship between Company A and Company B will depend on the particular facts. In some cases, Company B may be permitted to request certain design alterations or modifications. In other cases, Company A may design and produce the product under its own brand. Subsequently, it may enter into an arrangement with Company B whereby Company B can apply its own brand to the product under some form of reseller arrangement.

23. [17]

    [17] In the present case, it appears that the Chinese factories were in the position of being ODMs because they designed and manufactured the 1st Plaintiff’s products. In many cases, the Chinese factories offered numerous different models of a particular product line. The models were of different sizes, surface designs and decoration, or technical features. Customers such as the 1st Plaintiff ordered the model(s) of their choosing, and in some cases, asked for changes to particular aspects of the product. This included requests relating to the packaging.

24. [18]

    [18] The question as to who owns the intellectual property rights in the design and technology of the products (if any) depends on the facts of each case. Prima facie, any industrial design right will likely belong to the ODM. Any technology invented or developed by the ODM will also likely belong to him. In other words, going back to the example I gave above, prima facie, Company A owns the intellectual property rights in the design and technology of the products that it designs and manufacturers and then sells to Company B.

25. [19]

    [19] However, the question whether Company B acquires rights over the design and technology will depend on whether these have been assigned or licensed (any type of licence) by Company A to Company B. It also depends on whether Company B brought in any intellectual property of its own to the products. The question as to whether the ODM (ie, Company A) has lost the right to sell the chosen models to other customers, including competitors of Company B, also must depend primarily on the agreement reached between the parties. In some cases, Company A may agree to sell the selected range of products exclusively to Company B. In other cases, there may be no express restriction or other limitation placed on Company A’s right to sell the same range of products to other customers. Further, questions may arise over the legal rights in respect of changes or alterations made at the request and/or instruction of Company B.

26. [20]

    [20] It should also be kept in mind that the position is rendered even more complex by the range of different intellectual property rights that may exist in relation to the products. Even if Company A owns the industrial design rights in a product, this does not mean that Company B cannot acquire goodwill over aspects of the product’s get-up in a particular market. Such goodwill would enable Company B to claim protection over those aspects of get-up under the tort of passing off.

27. [21]

    [21] In the present case, it is clear that the 2nd Plaintiff would visit the Chinese ODMs and place a bulk order for the products of his choosing. Depending on the factory and the type of product, some degree of customisation of the product and the packaging was possible. I give some examples of the customisation requested by the 2nd Plaintiff.

28. (a) In the case of the DVD players, the plaintiffs were able to secure some changes to the number of ports provided at the back of the player. Additionally, the plaintiffs were allowed to make suggestions in respect of the design of packaging.

29. (b) In the case of television sets, the plaintiffs requested that a sticker be placed on the screen, setting out key features or functions of the product.

30. (c) The 1st Plaintiff’s brand “SINGSUNG”, the statement “Made in Singapore”, and the Plaintiff’s warranty card was also affixed to some of the 1st Plaintiff’s products and packaging.

31. [22]

    [22] To sum up the above discussion, whilst the plaintiffs could and did request for some changes to the products they ordered from the Chinese manufacturers, it is clear that the plaintiffs were not the manufacturers of the products. Neither can they be properly regarded as the designers of the products, save in the manner that I have briefly alluded to (ie, by making small alterations and additions to the products). They were in a loose sense resellers who have applied their own brand to the acquired products. The brand names were affixed or applied in China by the ODMs. The evidence that some of the Chinese manufacturers may have assigned the intellectual property rights over the design and technology embodied in the products to the plaintiffs is unclear, and will be referred to later. Indeed, as will be seen and discussed in more detail below, the Chinese manufacturers were, in general, prepared to sell their product range to any trade buyer.

32. [23]

    [23] Aside from requesting changes to the appearance of the packaging, and on some occasions, requesting minor changes to the product, the main effort expended by the 2nd Plaintiff was to be found in his selection of particular models from a product line which he thought would be attractive to the overseas trade buyers, and in particular the African trade buyers. On all accounts, it appears that the 1st Plaintiff’s business was rather successful, chalking up substantial sales to trade buyers from Africa.

33. The plaintiffs’ grievances

34. [24]

    [24] Essentially, the core of the plaintiffs’ complaint against the defendants is that they chose to shadow the business of the 1st Plaintiff. The 2nd Plaintiff (through the 1st Plaintiff) moved into the business of acquiring new electrical and household products for sale to overseas trade buyers first. The defendants decided to follow suit even though they started their business with the sale of second-hand equipment. They also moved into new products.

35. [25]

    [25] One of the plaintiffs’ biggest grievances is clearly that the products chosen by the defendants were essentially identical to those chosen by the 2nd Plaintiff and sold by the 1 Plaintiff. For example, if the plaintiffs purchased and started selling electric kettles with a particular pattern and shape, the defendants would follow suit and place orders for the same or similar kettles. Sometimes, the Chinese manufacturer selected by the defendants turned out to be the same as the one who supplied the goods to the 1st Plaintiff.

36. [26]

    [26] The export market targeted was also the same, namely, overseas trade buyers from, in particular, Cameroon.

37. [27]

    [27] At this point, I note again that the evidence does not establish that the plaintiffs are the designers of the products they chose. As will be seen, a huge range of kettles were designed by the Chinese manufacturers and displayed or set out in catalogues for wholesale buyers to choose from. On the whole, the evidence is that these Chinese design manufacturers would sell their products to any wholesale merchant. If exclusivity was required, this would have to be contractually provided for.

38. [28]

    [28] Complaint was also made that in some cases, the defendants did not just choose the same or a similar product, but they also used similar packaging (eg, the cartons in which the products were presented for sale to retail customers). This was so in the case of the DVD players and televisions. In the case of the televisions, the defendants did not merely choose similar television models; they also requested similar stickers.

39. [29]

    [29] Whilst it is clear that the defendants decided to “shadow” the 1st Plaintiff’s business, I should stress that the brand name affixed to the 1st Defendant’s new products is completely different from the 1st Plaintiff’s. The 1st Plaintiff’s brand is “SINGSUNG”. The 1st Defendant’s brand is “LS”.

40. [30]

    [30] After placing the bulk orders, the shipments would arrive in Singapore, where they were stored in warehouses. The 1st Plaintiff had a shop at 38/39 Upper Weld Road Singapore. The defendants’ shop was next door, at 36/37 Upper Weld Road. The evidence was that trade buyers would visit Singapore and attend at the shop premises (and elsewhere) for discussion and selection of products. After orders were placed, the consignment would be loaded into containers and shipped to the trade buyers’ home country, where they would eventually be on-sold by the trade buyers to retail shops and end users.

41. [31]

    [31] That said, the evidence as to how exactly the placement of orders with the Chinese manufacturers, the shipment to Singapore, and sale to trade buyers from Africa were carried out, was in dispute. In particular, the defendants’ general position is that the goods merely transited through Singapore, and then went straight on to Africa. This formed the basis of their submission that any goodwill enjoyed by the 1st Plaintiff (if at all) is only so enjoyed in Africa.

42. [32]

    [32] The plaintiffs complain that even if the trade buyers were not confused over the origin of the LS products that they selected in Singapore, the end-buyers (consumers) in Cameroon would be confused. Given the products had the same or similar design, members of the public in Cameroon would purchase “LS” products under the impression that they were connected in some way with the 1st Plaintiff and the SINGSUNG brand. The complaint is that the defendants were effectively copying the business of the 1st Plaintiff.

43. The claims and issues

44. [33]

    [33] The plaintiffs’ main cause of action is founded on passing off. Without going into the details, the claim is in respect of goodwill asserted in the “get-up” and certain design aspects of the following products belonging to the 1st Plaintiff: DVD players, television sets, rice cookers, electric kettles, electric blenders, electric floor fans and gas stoves. The following issues arise in respect of this claim:

45. (a) Is there goodwill in the claimed badges or indicators of origin?

46. (b) Was there a misrepresentation by the defendants likely to cause confusion? Specifically, can there be liability for passing off in Singapore where the confusion (assuming this is proved) in respect of the goods supplied from Singapore arises solely or mainly in an overseas market, and not in Singapore? I note here that there is no claim before me that while the tort of passing off was committed in another country, the foreign tort is actionable in Singapore under applicable principles of private international law: on this point, see Tan Tee Jim, Law of Trade Marks and Passing Off in Singapore vol 2 (Sweet & Maxwell, 3rd Ed, 2014) (“Tan Tee Jim”) at paras 19.314–19.322.

47. (c) Has there been damage, or is there likely to be damage, to the 1st Plaintiff’s goodwill?

48. [34]

    [34] In addition, the plaintiffs claim copyright over some pictures on the packaging of the DVD players, the start-up screen built into the DVD players, the design of a sticker, a logo and a floral pattern. By logo, what is referred to is the phrase “Rotary Rotatory” set out in a cursive font. The following issues arise in relation to the copyright infringement claim:

49. (a) Is there any copyright subject matter over which the plaintiffs can claim ownership?

50. (b) If there is, are the defendants liable for copyright infringement in Singapore?

51. [35]

    [35] I note that the defendants deny copyright infringement, and counterclaim for losses arising from the plaintiffs making groundless threats of a copyright infringement action.

52. [36]

    [36] The 2nd Plaintiff also proceeds against the 2nd Defendant in the tort of defamation. The 2nd Plaintiff claims that the 2nd Defendant defamed him when the latter made remarks to a visiting trade buyer describing the 2nd Plaintiff as, inter alia, a cheat. These are the issues which I have to decide in relation to defamation:

53. (a) Did the 2nd Defendant utter the words alleged?

54. (b) If he did, do the words spoken by the 2nd Defendant bear a defamatory meaning?

55. (c) If the words do bear a defamatory meaning, do the defences of justification or qualified privilege apply?

56. [37]

    [37] The defendants, on the other hand, counterclaim for malicious falsehood. They allege that the 2nd Plaintiff made disparaging remarks about the quality of the 1st Defendant’s products to a trade buyer. The principal issues here are whether the disparaging statement was true, whether it was made maliciously, and whether it has resulted in special damage.

57. [38]

    [38] I note that no claim has been brought for registered trade mark infringement. There is also no claim in respect of registered design rights or patent rights.

58. The witnesses

59. [39]

    [39] At trial, 11 witnesses gave evidence. Given the large number of factual and legal disputes, as well as the length of the cross-examination, I propose to set out a brief summary of the main areas of evidence covered by each witness. Where relevant, portions of the evidence will be discussed in more detail later in the judgment.

60. Plaintiffs’ witnesses

61. [40]

    [40] See Lam Huat: the 2nd Plaintiff was the principal witness for the plaintiffs. His evidence traversed the background to the dispute, as briefly set out above. In particular, he gave evidence on:

62. (a) how he came to select the products that are the subject matter of the dispute;

63. (b) his visits to the factories and manufacturers in China; and

64. (c) the inputs he claimed to have made in respect of the packaging and get-up of the products in dispute, including design changes to the number of ports on the DVD players, his requests for warranty cards, stickers, and so forth.

65. [41]

    [41] The thrust of his evidence was that he spent considerable time and effort selecting products he thought would appeal to end users. The models or products that he selected were of high quality. The end users (in Cameroon) were familiar with the “SINGSUNG” brand and associated it with high quality products from Singapore. The products generally bore the statement “Made in Singapore”, even though the products were essentially designed and made in China. In some cases, Singapore warranty cards in SINGSUNG’s name were provided even though the end user in Cameroon had no effective recourse against the plaintiffs should the 1st Plaintiff’s products turn out to be defective. The end user’s only recourse was to bring the defective product back to the retail shop in Cameroon. His evidence was that customers in Cameroon associated Singapore with high quality products, and that “SINGSUNG” had acquired a good reputation in that market.

66. [42]

    [42] Huang Bao Yu (“HBY”): HBY was a marketing representative from the Chinese manufacturer that supplied blenders to the plaintiffs. Her evidence primarily concerned a catalogue of products that the Chinese manufacturer made available to its customers. The catalogue sets out a broad range of blenders from which the customer could make a selection. The 1st Plaintiff was one such customer. The witness testified that the catalogue sets out the whole range of blenders offered, and that the Chinese manufacturer designed all the products. The witness also gave evidence on her company’s business dealings and relationship with the defendants, as well as the defendants’ requests for blenders of a particular design and warranty cards.

67. [43]

    [43] Serene Chew Wanlin (“SEC”): SEC is an arts management student. The 1st Plaintiff briefly employed her as an administrative assistant from January to July 2010. Her evidence mainly concerned her role in assisting the 2nd Plaintiff develop designs for the packaging of the DVD players and the sticker for a range of television sets that the plaintiffs had sourced from Chinese manufacturers.

68. [44]

    [44] Guy Emmanuel Ntoudam (“GEN”): GEN is a businessman from Douala, Cameroon. He is in the import and retail-goods business. Products that he sources from overseas include DVD players, television sets, electric blenders, floor fans and gas stoves of the SINGSUNG brand. These are obtained from the plaintiffs in Singapore. This witness gave evidence of the market in Cameroon, the competition in Douala between SINGSUNG branded products and LS appliances, as well as the alleged confusion that had arisen amongst the end consumers. The witness also testified that he made several visits to the defendants’ shop in Singapore in September 2011, during which the 2nd Defendant made derogatory remarks about the 2nd Plaintiff.

69. [45]

    [45] Chen Yongxiu (“CYX”): CYX was employed by the 1st Plaintiff as a quality control manager. She was based at the 1st Plaintiff’s office in Shenzhen, China. Her evidence traversed the 2nd Plaintiff’s working visits to factories in China and the inputs made by the 2nd Plaintiff on design tweaks to various products purchased from those factories. Her evidence touched on nearly all the disputed products: the DVD players, television sets, electric kettles, blenders and rice cookers. She also gave evidence on the competition from and alleged copying by the defendants.

70. Defendants’ witnesses

71. [46]

    [46] See Lam Seng: the 2nd Defendant was the main witness for the defence. His evidence traversed the same ground as the 2nd Plaintiff, and included testimony on the business of S H Econ, the split between the brothers, and the development of the 1st Defendant’s business (including his role in selecting products from the Chinese manufacturers). The general tenor of his evidence was that he would look for particular models or designs from the Chinese manufacturers based on requests from customers.

72. [47]

    [47] Dong Li (“DL”): DL was an employee of the 1st Defendant and was based in Hong Kong. Her job was to place and process orders for products (in particular the television sets, rice cookers, and blenders) selected by the defendants with the Chinese ODMs. This included making requests for certain design changes as well as warranty cards.

73. [48]

    [48] See Nam Hai (“SNH”): SNH was a brother of the 2nd Plaintiff and the 2nd Defendant. His evidence concerned his own business dealing with second-hand electrical goods and his relationship with the defendants. He also gave evidence on the breakup of the partnership at S H Econ, and testified that he helps out at the 1st Defendant’s shop.

74. [49]

    [49] Talla Simplice Adolphe (“TSA”): TSA was a trader from Cameroon. His evidence touched on the nature of the market in Cameroon for electrical household products and “famous” brands such as “SONY”, “SAMSUNG” and “LG”. This witness also gave evidence on the presence of Singapore brands such as “SINGSUNG”, “LS” and “Sole Star” in the African market. The witness explained his business dealings with the plaintiffs and the defendants, and testified as to why he eventually decided to place orders with the defendants. This witness also gave evidence of disparaging remarks allegedly made by the 2nd Plaintiff about the quality of the 1st Defendant’s goods.

75. [50]

    [50] Phang Ti Hui (“PTH”): PTH is a Singapore businessman who accompanied the 2nd Defendant on some of his trips to China. The purpose of those trips was to purchase DVD players and television sets for the 1st Defendant’s business. His evidence touched on the extent to which the Chinese manufacturers offered customization of the products and packaging.

76. An overview of the plaintiffs’ claims

77. [51]

    [51] Before I turn to consider each issue in detail, an overview of the plaintiffs’ claims may be helpful given the large number of issues before the court.

78. Passing off

79. [52]

    [52] The plaintiffs’ claim in passing off is primarily based on the allegation that the defendants copied the design, get-up and packaging of the 1st Plaintiff’s products in manufacturing their own products. There is no allegation that the defendants used the 1 Plaintiff’s brand (“SINGSUNG”) as such (save possibly in some warranty cards). Indeed, it is not disputed that the brand chosen and used by the 1 Defendant on its products (ie, “LS”) is completely different from the 1 Plaintiff’s brand. To be absolutely clear, the plaintiffs’ passing off claim is not based on goodwill in its brand name “SINGSUNG”, but in the get-up described below.

80. [53]

    [53] I now identify and describe (where possible) the specific get-up and packaging of each of the 1st Plaintiff’s products that are the subject matter of the present dispute, and which the plaintiffs claim are the generators of goodwill:

81. (a) Packaging of DVD Player Model A (“DVD A”). I shall call this the “White Get-Up”. This refers to the use of a white carton box depicting, amongst other things, a photographic image of a modern living room and guitars.

82. (b) Packaging of DVD Player Model B (“DVD B”). I shall call this the “Blue Get-Up”. This refers to the use of a blue carton box depicting, amongst other things, an image of the actual DVD player. The evidence suggests that there were in fact a number of versions of DVD B sourced by the plaintiffs and on-sold to African importers.

83. (c) Start-up screen of DVD A and DVD B. This refers to an image that appears on the television when the DVD player is turned on. The image comprises snow-capped mountains set against a blue sky with white clouds.

84. (d) Warranty card on DVD A and DVD B. This refers to the warranty card provided with the SINGSUNG DVD players.

85. (e) Design of the back panel of DVD A and DVD B.

86. (f) Stickers on DVD A and DVD B. The sticker is placed on the front panel of DVD A and DVD B, setting out key functions and attributes of DVD A and DVD B, such as “USB Download Function” and “32 Digital Game”.

87. (g) Sticker on television sets. The design and placement of a sticker on the television screen, setting out key features and attributes of the television, such as “Rotary Rotatory”, and a symbol indicating that the TV can swivel 90 degrees. The phrase “Rotary Rotatory” also appears on the packaging of the television set.

88. (h) Floral pattern on the rice cooker. There is a floral pattern design on the side of the rice cooker. It is noted that whilst the 1st Plaintiff and the 1st Defendant dealt with a range of rice cookers, the plaintiffs’ claim was in respect of “model no RC-18L”.

89. (i) In relation to the electric kettles, the plaintiffs referred to the shape and design of five different electric kettles, each with its own get-up. The plaintiffs described these five kettles as possessing the “Domed-Get-up”, the “Pitcher Plant Get-Up”, the “White Curved Kettle Get-Up”, the “Penguin Kettle Get-Up”, and the “Metallic Get-Up”.

90. (j) In relation to the electric blenders, the plaintiffs referred to the shape and design of three different electric blenders. Each of these blenders possesses its own get-up, and has been described by the plaintiffs as the “White and Grey Get-Up”, the “Black and White Get-Up” and the “Black Stainless Steel Get-Up”.

91. (k) Get-up of the electric floor fans. This refers to a particular model of fans, CRSF-18A, which contain a round plastic base made in the shape of a car steering wheel.

92. (l) Get-up of the gas stoves. This refers to the design of gas stove GS-88, comprising features like an embossed horse-shoe shape bearing the SINGSUNG brand, as well as a gold coloured burner rimmed by a circular chrome support pot.

93. I refer to this collectively as “the SINGSUNG Get-Up”.

94. [54]

    [54] I repeat the observation I made above, that all of the above products were designed and made in China by ODMs.

95. [55]

    [55] The plaintiffs adduced evidence of its substantial sales in Singapore to overseas trade buyers, as well as some sales to Singapore-based customers. The defendants deny that any sales to Singapore-based customers exist. However, even taking the plaintiffs’ evidence at face value and at its highest, it is clear that the 1st Plaintiff’s sales to Singapore-based customers is very significantly less than its sales to wholesale buyers from Africa. These wholesale buyers ordered products from the 1st Plaintiff in Singapore for export and sale to consumers overseas.

96. [56]

    [56] The plaintiffs also assert that the defendants had used similar expressions in marketing or advertising their rival products. In particular, the plaintiffs point out that the phrase “Rely on us, as amongst the FINEST, we offer the MOST affordable prices” can be found in both English and Swahili in the 1st Plaintiff’s catalogue. This phrase is also found in the LS catalogue. In response, the 2nd Defendant asserts that he did not intend to copy the 1st Plaintiff’s catalogue, and that he used it for reference only. I should point out that the plaintiffs have not asserted any rights in the phrases as such. Instead, they merely rely on the alleged use of the phrases as evidence of the defendants’ intention to copy the 1st Plaintiff’s business and to cause confusion.

97. [57]

    [57] The passing off claim, as it developed during the course of the hearing, appears to be founded on two different submissions. First, the plaintiffs’ claim that the defendants have passed off their products as being those of the 1st Plaintiff. Second, the plaintiffs’ claim that defendants have passed off their business as being associated with or connected with the 1st Plaintiff. What has not been clearly pleaded in my view, however, is the exact form of the passing off. Given the 1st Plaintiff is not a direct retailer, but is more a wholesale trade buyer in Singapore which sells its products to middlemen who export the products to other countries, precisely identifying the relevant market in which passing off is claimed to have taken place is crucial. I elaborate on this below.

98. Copyright

99. [58]

    [58] The plaintiffs’ copyright claim is advanced on the basis of the following works:

100. (a) The “White Get-Up” picture comprising a DVD player, guitar and a sitting room. As mentioned previously, this is found on the packaging of DVD A.

101. (b) The “Blue Get-Up” picture comprising the picture of a DVD player. As mentioned previously, this is found on the packaging of DVD B.

102. (c) The sticker pasted on the television sets.

103. (d) The phrase “Rotary Rotatory” in cursive font found on the sticker and the packaging of the television sets.

104. (e) The floral pattern on the rice cookers.

105. (f) The start-up screen linked to the DVD players.

106. [59]

     [59] The plaintiffs assert that the above works attract copyright protection as original artistic works in Singapore. There is no claim to literary copyright or any other type of copyright subject matter.

107. Defamation

108. [60]

     [60] The claim of defamation is a claim by the 2nd Plaintiff against the 2nd Defendant, based on certain words spoken by the 2nd Defendant to GEN. According to the 2nd Plaintiff, the 2nd Defendant had said that:

109. (a) the 2nd Plaintiff cheated the 2nd Defendant;

110. (b) the 2nd Plaintiff was a “big Ali Baba man”;

111. (c) the 2nd Plaintiff was “a very crazy man”; and

112. (d) the 2nd Plaintiff was “very dangerous.”

113. [61]

     [61] In addition, there is an allegation that the 2nd Defendant uttered words to the effect that the 1st Plaintiff had sold some defective DVD players and TV sets. Apart from having to resolve the factual dispute as to whether the 2nd Defendant did indeed speak the words described above, the question arises as to whether those words are defamatory, and if so, whether the defence of justification and/or qualified privilege applies. Now that I have set out broadly the claims made by the parties, I turn to analyse the plaintiffs’ first claim: passing off.

114. Passing off

115. The plaintiffs’ pleaded case

116. [62]

     [62] As alluded to above, the plaintiffs’ pleaded case for passing off is somewhat unclear. The lack of clarity, in my view, mainly stemmed from insufficient attention to the territorially-specific nature of any passing off claim.

117. [63]

     [63] It is well established that for a passing off claim to succeed, a plaintiff needs to prove goodwill, misrepresentation, and damage: Novelty Pte Ltd v Amanresorts Ltd and another [2009] 3 SLR(R) 216 at [36] (“Novelty v Amanresorts”). It is also well established that the goodwill must exist, and the misrepresentation must take place, in the relevant jurisdiction or market with which the particular court is concerned. So, before a Singapore court, it must ordinarily be established that goodwill exists in Singapore for a passing off claim in Singapore to succeed: Staywell Hospitality Group Pty Ltd v Starwood Hotels & Resorts Worldwide, Inc and another and another appeal [2014] 1 SLR 911 at [130]. Likewise, goodwill must exist in the United Kingdom (“the UK”) for a passing off action in the UK to succeed: Tan Tee Jim at para 19.144 and Starbucks (HK) Limited and anor v British Sky Broadcasting Group PLC and others [2015] UKSC 31 (“Starbucks (HK)”). I state at the outset that there are qualifications to this principle, one of which is crucial to this case, and which I will discuss in greater detail below.

118. [64]

     [64] It follows that a plaintiff pursuing a passing off claim involving foreign elements needs to plead his case very precisely. It is insufficient for a plaintiff to state that his brand name or get-up (or whatever he claims to be a generator of goodwill) has generated goodwill. It is essential that he pleads and proves that the goodwill he owns exists in the relevant jurisdiction. It is also essential that he pleads and proves that a misrepresentation has taken place in the relevant jurisdiction.

119. [65]

     [65] In the present case, the plaintiffs have failed to plead essential details about their passing off claim in the statement of claim. While the plaintiffs assert in their statement of claim that the SINGSUNG Get-Up has “gained goodwill”, and that it “denotes to the trade and public that the Singsung Products are of the 1 Plaintiff”, they never once specify which “trade and public” they refer to, or where the SINGSUNG Get-Up has “gained goodwill”. Much is left for the court to infer based on the evidence the plaintiffs present and the arguments they employ.

120. [66]

     [66] Indeed, the language used in the pleadings on misrepresentation was also vague on this issue. I quote portions of the plaintiffs’ statement of claim to illustrate my point:

121. [67]

     [67] It can be seen that the reader is left uncertain as to where the misrepresentation has taken place. In particular, it is wholly unclear which “trade and public” is deceived, misled or confused.

122. [68]

     [68] I bring up this point about pleadings because it is particularly pertinent for a plaintiff in a case with facts which involve domestic and foreign markets to be sensitive to the territorial nature of a passing off claim, and plead its claim(s) precisely. Here, there are several markets and jurisdictions potentially involved—Singapore, Cameroon, and all other markets to which the 1st Plaintiff’s products are exported. As such, without clear pleadings, the court will have real difficulty evaluating the plaintiffs’ passing off claim.

123. [69]

     [69] Nevertheless, notwithstanding the lack of clarity in the pleadings, the plaintiffs eventually developed their case as we drew to the end of trial. In their closing submissions, the plaintiffs remained somewhat unclear about the jurisdiction in which they claim goodwill exists. They state that “Singsung has the requisite goodwill” in their closing submissions, but clearly, that is not sufficiently particularised. Some clarity may however be sought from the way the plaintiffs describe the misrepresentations they claim have taken place. They claim firstly, that the defendants confused the traders that visited the 1st Defendant’s shop in Singapore; and secondly, they claim that the ultimate consumer in Africa is also confused. Using the plaintiffs’ own words, “passing-off is likely to occur at the point of sale, and even post-sale, to the ultimate consumer”.

124. [70]

     [70] From the above, I believe it may be reasonably deduced that the plaintiffs’ passing off claim (in brief) is two-fold:

125. (a) First, passing off takes place straightforwardly in Singapore because goodwill in the SINGSUNG Get-Up exists in Singapore, and trade consumers/customers who buy directly from the plaintiffs and defendants are deceived or confused by the similar get-up on the defendants’ products. I call this the straightforward passing off claim.

126. (b) Second, passing off takes place in Singapore because by selling their infringing products to overseas trade buyers in Singapore, the defendants put into circulation “instruments of deception”. This second claim is supported by proof that goodwill exists in Cameroon (rather than Singapore), and that there is confusion there between the plaintiffs’ and defendants’ products because of the similar get-up.

127. [71]

     [71] It is on the basis of the above two claims (so characterised) that I shall proceed. I note that while the language of “instruments of deceptions” cannot be found in the pleadings, in fairness to the plaintiffs, such an argument is made in their closing submissions at paras 89–93. I shall discuss the law and the evidence in relation to each of the above two claims separately.

128. Interaction between the tort of passing off and other intellectual property protection

129. [72]

     [72] Before discussing the passing off claim any further, it may be helpful to briefly explore the interaction between the tort of passing off and other intellectual property protection (such as copyright and industrial design protection). In particular, given that several different intellectual and industrial property rights can be claimed in respect of a single product, it is crucial to have a clear understanding of the distinctions between the various available rights. This would help to bring into sharper focus the aim of the law of passing off, as well as provide a helpful context for the subsequent discussion on passing off and the dispute that has arisen between the parties.

130. [73]

     [73] Passing off is not concerned with product design as such. Depending on the design in question and the surrounding circumstances, a design might be protected by registration under the Registered Designs Act (Cap 266, 2005 Rev Ed). Registered design law is concerned with the protection of industrial designs. This includes protecting the appearance of articles of manufacture where the said appearance, in whole or in part, is chosen because of the visual statement that is made.

131. [74]

     [74] In some cases, it may also be possible to assert copyright in industrial design drawings, sketches, sculptures, models, works of artistic craftsmanship or engravings. These works can constitute original artistic works protected under copyright law. I note that while in the early days, copyright in an artistic work was thought to be concerned only with works of art, it has long since been established that “artistic works” can include works like engineering drawings which serve a purely functional purpose.

132. [75]

     [75] The law has long been concerned to maintain the line between registered design and copyright laws. Extensive and complicated provisions now exist to limit the copyright protection given to designs that are capable of protection under the registered design system. If the law was otherwise, the carefully crafted checks and balances woven into registered design law could be circumvented by a proprietor’s decision not to register the industrial design, and to rely on copyright instead. Indeed, these issues have provoked considerable academic discussion.

133. [76]

     [76] Different rights under the tort of passing off and trade mark law may also come into play where product get-up and shape are concerned. Both the get-up and shape of a product (which may be the subject matter of the tort of passing off and registered trade mark law), as well as the industrial (or registered) design of a product, are primarily concerned with visual appearance.

134. [77]

     [77] However, and crucially, the difference between passing off and registered design rights lies in the function that the appearance of the product performs: is the get-up or shape serving the role of an indicator of trade origin (to distinguish the goods from one trade source from those from another trade source), or is it simply there to make an “aesthetic” contribution via the visual statement it makes?

135. [78]

     [78] A designer may select a particular design feature (such as a specific pattern, ornamentation, colour combination, or shape) because the said feature would be, in the designer’s judgment, attractive to his customers. A customer who selects a product for its design may do so because the design is pleasing to the eye, or because the design is “functional” and makes the article easy to use. Indeed, I have no doubt that considerable thought is often expended to make the design of an article aesthetically pleasing, yet simple and functional.

136. [79]

     [79] However, the aesthetic or functional value of a product design is not the concern of passing off. Regardless of the effort and skill put into coming up with the design feature, the said feature does not automatically become an indicator of trade origin. What is necessary for passing off is proof that the public perceives the design feature to be an indicator of a particular trade origin. The design feature must interact with the customer in such a way that it provides the customer with an indicator of origin.

137. [80]

     [80] To better understand what it means to perform the function of being an indicator of trade origin, we may pause to consider the role of brand names. The primary function or value of appending a brand name onto a product is usually not to make the product look nice or functional. The fundamental importance of a brand name resides in its role as an indicator of trade origin.

138. [81]

     [81] From the above discussion, it should be clear that the tort of passing off is exclusively concerned with protecting goodwill generated through the use of indicia of trade origin. It is not concerned with protecting product design for its aesthetic or functional value. If this were not so, the tort of passing off would be encroaching into areas that are within the purview of industrial design law.

139. [82]

     [82] It should be noted that alongside the common law of passing off is a registration system for protecting trade marks, which directly protects indicia of trade origin. Under s 2(1) of the Trade Marks Act (Cap 332, 2005 Rev Ed) (“the TMA”), a “trade mark” is defined as:

140. [83]

     [83] A “sign” is defined in s 2(1) of the TMA as including: “any letter, word, name, signature, numeral, device, brand, heading, label, ticket, shape, colour, aspect of packaging or any combination thereof”.

141. [84]

     [84] At this juncture, I note in particular that the protection trade mark law gives to the shape of an article is very limited. Whilst the shape of an article can amount to a “sign”, it is necessary to show that the “sign” is capable of distinguishing goods or services in the course of trade from those of any other person. Signs that are highly descriptive of the goods or services in question may be rejected because they lack distinctiveness, ie, the capability to distinguish competing brands in the market place. Some shapes may be excluded from registration as a trade mark because it lacks distinctiveness.

142. [85]

     [85] Moreover, even if the shape of a product is found to possess the capability to distinguish, s 7(3) of the TMA sets out important exclusions to the protection of shapes. It provides that:

143. [86]

     [86] Similar statutory provisions in the UK and Europe have produced a considerable body of case law and academic discussion. Whilst it is not necessary to discuss these developments, the point is that the law has acted with considerable caution in conferring protection on the shape of an article by means of trade mark registration.

144. [87]

     [87] The reluctance to grant trade mark protection to the shape of products is an outworking of the legislative policy of not easily granting monopolies over particular designs and features of goods. Indeed, the policy considerations discussed in the UK and Europe are rooted in the concern to ensure that trade mark law does not operate in an anti-competitive manner.

145. [88]

     [88] This anti-competitive concern has been recognised in Singapore as well. In Nation Fittings (M) Sdn Bhd v Oystertec Plc and another Suit [2006] 1 SLR(R) 712, Andrew Phang J (as he then was) adopted a narrow interpretation of certain statutory transitional provisions concerning whether a registered two-dimensional mark could be treated as a three-dimensional mark under the TMA. The learned judge expressed the view that an overly expansive approach to granting proprietors trade mark protection might lead to the development of disguised monopolies that may stifle or stymie the general public interest and welfare.

146. [89]

     [89] In the present case, the plaintiffs do not claim protection of the get-up and design features as “signs” under the TMA. The claim is based solely on the tort of passing off. Nevertheless, it is apparent that similar policy concerns relating to competition arise. The tort of passing off is not about protecting design for the sake of design. Passing off is concerned with preventing unfair competition and is squarely centred on protecting goodwill established by the use of indicia of trade origin in the market place. Bearing these concerns in mind, I now proceed to discuss the law on passing off.

147. Law on the tort of passing off

148. General principles

149. [90]

     [90] The basic principles of the tort of passing off are well established. The tort is concerned with protecting the goodwill of a trader in his brand name and other indicia or badges of origin. The tort also seeks to ensure transparency in the market place so that another trader does not, whether by design or accident, sell his goods or services in a manner that causes members of the public to be confused as to their origin. That said, passing off is not a tort based simply on confusion or deception; nor has it developed into an action that targets unfair competition simpliciter. Notwithstanding the considerable developments in the tort over the past century, such as the recognition of shared goodwill, deception as to quality, inverse passing off and the broader approaches to determining the likelihood of deception and damage (especially where the plaintiff and defendant are not in direct competition as such), the tort remains true to its origin, which is to protect the goodwill belonging to the trader.

150. [91]

     [91] In Erven Warnink Besloten Vennootschap and another v J Townend & Sons (Hull) Ltd and another [1979] 1 AC 731 (“the Advocaat case”), a seminal decision on the tort of passing off from the House of Lords in England, Lord Diplock held (at 742) that there were five elements in an action for passing off. These are: (a) a misrepresentation; (b) made by a trader in the course of trade; (c) to prospective customers of goods and services supplied by him; (d) which is calculated to injure the business or goodwill of another trader (in the sense that the injury is a reasonably foreseeable consequence); and (e) which causes actual damage, or (in a quia timet action) is likely to cause damage, to a business or goodwill of the trader by whom an action is brought.

151. [92]

     [92] Lord Oliver of Aylmerton in Reckitt & Colman Products Ltd v Borden Inc and others [1990] 1 WLR 491 (“Reckitt”) at 499D–H reformulated the above statement of law in the Advocaat case, as follows:

152. [93]

     [93] The three elements identified by Lord Oliver in the tort of passing off, ie, goodwill, misrepresentation, and damage, have been followed and applied consistently by the Singapore courts: see in particular Novelty v Amanresorts at [36]; Hai Tong Co (Pte) Ltd v Ventree Singapore Pte Ltd and another and another appeal [2013] 2 SLR 941 at [109]; and Golden Season Pte Ltd and others v Kairos Singapore Holdings Pte Ltd and another [2015] 2 SLR 751.

153. [94]

     [94] Indeed, in accordance with this tripartite framework, the plaintiffs’ first, and in my view, more straightforward passing off claim, is founded on the following premises:

154. (a) The SINGSUNG Get-Up (described at [53] above) enjoys goodwill in Singapore.

155. (b) There was a misrepresentation such that the trade buyers who directly purchased the 1st Defendant’s products were deceived or are likely to have been deceived as to the origin of the defendants’ goods.

156. (c) As a result of the deception, the plaintiffs’ goodwill in Singapore is damaged.

157. Instruments of deception

158. [95]

     [95] However, as mentioned at [70(b)] above, the plaintiff has a second passing off claim that does not (ultimately) depend on goodwill or confusion in Singapore as such. Indeed, I recognise that there is a second type of passing off that does not depend on the defendant actually deceiving or confusing its direct consumers, but that is premised on the defendant having circulated “instruments of deception”. As the learned author of Christopher Wadlow, The Law of Passing-Off: Unfair Competition by Misrepresentation (Sweet & Maxwell, 4th Ed, 2011) (“Wadlow on Passing Off”) at para 5-134 puts it:

159. [96]

     [96] Under the doctrine of “instruments of deception”, passing off can be committed where instruments of deception are supplied to a third party, even if the third party (the trade buyer or middleman) is not deceived or confused. It is no defence for a manufacturer to say that the retailer to whom he sold his products is not deceived. A manufacturer who sells products which enable retailers to make false representations to others can be liable in passing off. Passing off arises if the plaintiff shows that the ultimate consumers would be confused into thinking that they are acquiring the products of the plaintiff: James Mellor et al, Kerly’s Law of Trade Marks and Trade Names (Sweet & Maxwell, 15th Ed, 2014) (“Kerly”) at para 18-232.

160. [97]

     [97] On one view, the tort of passing off is complete when the goods are supplied to the wholesaler or retailer, although the actual deception of customers and consequent damage may not occur until later, or at all: Wadlow on Passing Off at para 5-134, Tan Tee Jim at para 19.306. A plaintiff therefore need not prove that the “instruments of deception” actually reached ultimate consumers who were confused. It only need show that the goods were supplied, or put into circulation. On the other hand, Kerly at para 18-233 is of the view that an instrument of deception is a misrepresentation waiting to happen which only needs to be exposed to the ultimate consumer for the tort of passing off to be complete. Whilst it is not essential that the question as to whether passing off is complete by the mere act of supplying an instrument of deception to a middleman (who is not himself deceived) is decided in the present case, I am of the view that the claim is better seen as one brought on a quia timet basis.

161. [98]

     [98] I also note that passing off may take place and be actionable in the home jurisdiction even if the instruments of deception supplied in that jurisdiction are to be subsequently exported by the trade buyer: John Walker & Sons Ltd and others v Henry Ost & Co Ltd and another [1970] 1 WLR 917. In such a case, some authorities suggest that what must ultimately be proved is that there is goodwill in the mark in the sense that the mark is distinctive of the plaintiff in the foreign market and misrepresentation has arisen in the foreign market. As stated in Wadlow on Passing Off at para 5-152:

162. [99]

     [99] While it may seem counter-intuitive that passing off is also considered to have occurred in Singapore despite the fact that the actual market where distinctiveness is ultimately in issue and where the misrepresentation exists is an overseas market (ie, Cameroon in this case), the view may be taken that this makes sense because the wrong lies in circulating “instruments of deception” which enable a middlemen or retailer to pass off his goods in another market. As long as the instruments of deception are supplied in a particular jurisdiction, the tort on one view takes place and is completed in that jurisdiction. At the very least, it is sufficient for a quia timet action to be brought in the jurisdiction where the instruments are supplied. The question remains, however, whether it is necessary to also show that the instruments supplied are instruments of deception in both the home jurisdiction (where the action is brought) as well as the overseas market. This is discussed below at [144].

163. [100]

     [100] The tortious wrong underlying this form of passing off and the grant of relief is the supply of instruments of deception.

164. [101]

     [101] I turn now to the meaning of an “instrument of deception”. In British Telecommunication plc and another v One in a Million Ltd and others [1999] 1 WLR 903, Aldous LJ helpfully explained at 920D–F that:

165. [102]

     [102] From the above passage, it is clear that there are instruments which would “inherently lead to passing off”, and goods which may not “inherently lead to passing off”, but may nevertheless be “adapted to be used for passing off”. As the learned author of Wadlow on Passing Off states at para 5-141, goods which are “inherently deceptive” are goods which carry indicia so close to what is distinctive of the claimant that the public is bound to be deceived unless specific remedial or differentiating measures are taken. On the other hand, where the goods supplied fall just short of being inherently deceptive, but nevertheless can easily, by means of a misrepresentation of the retailer, become deceptive, the supplier may still be liable if he provided the goods with the intention that they will be passed off by retailers. In such a case, the supplier’s liability flows from the doctrine of joint tortfeasorship (with the retailer).

166. [103]

     [103] Take for example the South African decision in Omega, Louis Brandt et Frère SA and Another v African Textile Distributors (1982) (1) TPD 951 (“Omega”). The case involved rights over the well-known trade mark “OMEGA” for watches in South Africa. The plaintiff’s basic complaint was that the defendant was selling watches branded “HOMEGAS”. Traders (hawkers) who bought the watches for retail sale were able to remove the alphabets “H” and “S” with the result that the watches now bore the “OMEGA” brand. The hawkers sold these altered watches to members of the public. The South African court had to decide whether the defendant (as a wholesaler) was liable in passing off for supplying “HOMEGAS” watches when these watches were not instruments of fraud per se. The brand “HOMEGAS” was not so close to “OMEGA” as to be likely to cause deception on its own. There was evidence, however, that the defendant knew that some of the hawkers removed the letters “H” and “S”. The defendant also sold a special tool for removing the watch crystals, thereby aiding the hawkers in altering the brand embossed on the watch face. There was also evidence that the defendant had used the same technique in respect of watches bearing other brands. The Transvaal Provincial Division court, on appeal, granted a temporary interdict (injunction). There was prima facie evidence that the defendant knew that some of its customers were in the habit of removing the letters “H” and “S”, and that the maker of the watches had deliberately chosen the “HOMEGAS” brand for this purpose. Even though the defendant did not put the “OMEGA” brand on its watches, the court accepted that the defendant was aware of what the hawkers were doing. In these circumstances, the court, citing English authorities, held that the plaintiff was entitled to an interlocutory injunction.

167. [104]

     [104] In Omega, the defendant put into the hands of the retailers a product which, whilst not an instrument of deception in its own right, could be converted into an instrument of fraud by a simple operation. Indeed, the defendants supplied the product with the knowledge that some of its retail customers were doing that. Given evidence that the defendant also sold a device used to facilitate the brand conversion (removal of the watch crystal), together with the similar-fact evidence that the defendant had done this on several previous occasions (in respect of other well-known brands), it was not surprising that interlocutory relief was granted. Whilst the South African court did not set out in detail the legal principles it relied on, it is apparent that a case of prima facie liability had been established on the basis of joint tortfeasorship (more specifically, assisting the commission of a tort), rather than on the basis of primary infringement: Omega at 57A; and Wadlow on Passing Off at para 5-148.

168. [105]

     [105] Having said all that I have said above, I also acknowledge that there are hardly any goods in existence which cannot be used in a deceptive manner by someone determined to do so: Wadlow on Passing Off at para 5-147. For this reason, the evidence of the surrounding circumstances is critical where we are dealing with goods that are not instruments of deception in their own right. Important considerations a court must take into account include:

169. (a) how close the alleged spurious goods are to being regarded as instruments of fraud in their own right (in respect of the indicia of trade origin);

170. (b) the relationship between the supplier and the retailers;

171. (c) whether the supplier has knowledge that the goods supplied are being used deceptively;

172. (d) whether the supplier has provided any other assistance to his customers to convert the goods into instruments of fraud; and

173. (e) whether the supplier has encouraged the retailers to acquire his goods for the purpose of passing off.

174. [106]

     [106] I now summarise a number of general principles which may be gleaned from the above discussion on instruments of deception and the law of passing off.

175. (a) First, supplying an instrument of deception is but one method of committing the tort of passing off. The elements of the tort must still be satisfied, ie, a plaintiff must show there is goodwill, there would be a misrepresentation when the ultimate consumers purchase the goods, and there is or would be damage or the likelihood of damage to goodwill, albeit in a foreign market if the instruments of deception are to be exported. The key question in cases where the instrument of deception is intended to be exported to a foreign market is whether the relevant indicia of origin has acquired a reputation (distinctiveness) such that there is a likelihood of deception in that market. If the plaintiff does not have goodwill in the relevant market, there is no question of passing off being committed via instruments of deception (or in any manner at all). Further, the alleged instrument of deception must relate to the indicia of trade origin the use of which has generated the plaintiff goodwill. Passing off is not a tort founded on deception or confusion simpliciter. It is, and has always been, founded on goodwill. In Cadbury-Schweppes Pty Ltd and others v Pub Squash Co Pty Ltd [1981] 1 WLR 193 (“Cadbury-Schweppes”), the plaintiff’s business was clearly affected by the entry of the defendant’s goods into the same market. The claim failed because the defendant did not copy any indicia of trade origin which had become part of the goodwill of the product. The defendant’s products, while substantially the same both in terms of the actual product, the packaging, and the marketing, were not instruments of deception because the claimed get-up, etc, had not become part of the goodwill in the product.

176. (b) Second, assuming goodwill, once the defendant supplies a middleman with an instrument of deception in relation to that goodwill, the plaintiff (owner of the goodwill) will have the right to an injunction even if the middleman has not completed the tort by selling the deceptive goods to the public. In such a case, an injunction on a quia timet basis may be granted.

177. (c) Third, assuming goodwill, primary liability for passing off can arise where the defendant supplies inherently deceptive products to the middleman to commit passing off. However, if the defendant also had knowledge that the middleman intends to use those means to commit passing off, the defendant will also be liable as a joint tortfeasor for the acts of passing off committed by the middleman or retailer. For example, if X supplies to Y labels bearing the plaintiff’s trade mark for chilli sauce and containers on which the labels are to be affixed, on the understanding and knowing and intending Y to apply the labels and fill the containers with his own chilli sauce for sale to customers, there is no doubt that X and Y are joint tortfeasors.

178. (d) Fourth, assuming goodwill and proof that the defendant has supplied an instrument of deception to a middleman, liability will arise even if the deceptive goods are intended for sale and are in fact sold to consumers in an overseas market. Of course, it is necessary to show that customers in that foreign country are deceived or likely to be deceived as to the trade origin of the goods. In such a case, provided the transaction between the defendant and the middleman takes place in Singapore, the law regards the tort as being committed in Singapore (and actionable in some cases on a quia timet basis). That said, even if the circumstances are such that the tort is wholly committed overseas (ie, it is a foreign tort), the possibility remains of bringing a suit in Singapore under the rules of private international law.

179. (e) Fifth, liability can still arise where the goods which, whilst not instruments of deception in their own right, are near instruments of deception and have been supplied in circumstances (eg, with the requisite knowledge and intent) such as to render the supplier a joint tortfeasor with the retailer who uses the goods to commit passing off. In the present case, there is no evidence that the defendants’ direct customers (ie, the middlemen) have used the defendants’ goods to commit passing off. On the evidence before the court, no action for passing off has been brought against any of the defendants’ customers or indeed, any retailers of “LS” branded products.

180. Goodwill

181. [107]

     [107] I next consider the law on goodwill. In The Commissioners of Inland Revenue v Muller & Co’s Margarine Limited [1901] AC 217 at 223–224, the House of Lords defined goodwill as “the benefit and advantage of the good name, reputation and connection of a business. It is the attractive force which brings in custom...”. The Singapore Court of Appeal in Novelty v Amanresorts at [39] took a similar approach and identified two essential features of goodwill:

182. [108]

     [108] Not only must a plaintiff prove that it has a business with customers, it must also show the marks, get-up, or design (or whatever it may be) that the plaintiff desires to protect is an “attractive force” (much like a magnet) which brings custom to that business.

183. [109]

     [109] Practically, a plaintiff seeking to establish that it owns goodwill must prove that the public recognises use of the claimed brand name, logo, colour scheme, get-up, slogan, shape, etc, as serving the purpose of an indicator of origin. The public must regard goods or services with the claimed mark as coming from a particular source (manufacturer, retailer, service provider and so forth). Applying this principle to the present case, the plaintiffs bear the burden of proving that the SINGSUNG Get-Up has generated goodwill on the part of the Singapore public (or at least a section of it). To be clear, the mark or get-up etc. must be attached to the goods or services by association such that these are recognised by the public as distinctive specifically of a plaintiff’s goods or services.

184. [110]

     [110] Goodwill is usually established by evidence of use, advertising expenditure promoting the indicia of origin, as well as market surveys. The law of passing off frequently protects the brand name of the product, given that it is usually quite easy to establish that the brand name is an indicator of origin and hence generates goodwill. However, this does not mean that the shape or get-up of a product (being an aspect of the product itself), or the advertising slogans used with it, can never be protected by the tort of passing off. What it does mean is that the court will examine the evidence on these other aspects of the product with care before deciding whether customers (the market) recognise these features as being distinctive of the plaintiff.

185. [111]

     [111] At this juncture, I note that courts have been cautious in the face of claims that get-up, product design or slogans (rather than the brand name) have become generators of the goodwill of a business. Given that the plaintiffs’ claims in this case relate to precisely that, I shall discuss in slightly more detail the case law on the extent to which the shape and get-up of a product, or even certain slogans used by the business to advertise the product, can be part of the goodwill, and hence protected under the law of passing off.

186. [112]

     [112] White Hudson & Co v Asian Organisation Ltd [1965] MLJ 186 (Privy Council on appeal from Singapore) is a well-known case where the plaintiff succeeded in establishing goodwill in the colour of packaging of the product. Despite the fact that the plaintiff and the defendant had different brand names, the plaintiff succeeded in his claim for passing off based on his use of red paper wrapping for cough sweets. The evidence showed that members of the public in Singapore at that time usually referred to the plaintiff’s sweets as “red paper wrapped sweets” in Chinese, rather than by its English brand name, “Hacks”. This finding was supported by evidence that the plaintiff’s Singapore customers at that time were not fluent in English, and hence used the colour of the wrapper to identify the product.

The judgment continues past this page. Read the rest at eLitigation.