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  • Amanresorts Limited and Another v Novelty Pte Ltd[2008] 2 SLR 32; [2007] SGHC 201
    the present buyers to others including foreigners subject to approval from the authorities In 2006 foreigners formed about 23 of buyers of private properties in Singapore Many of the plaintiffs customers or potential customers were foreigners and there was a strong likelihood that they would be confused into believing that the Yio Chu Kang project was connected to the plaintiffs 20 The use of the name Amanusa by the defendant would lead to the gradual whittling away and eventual erosion of the uniqueness and exclusivity associated with the plaintiffs Aman trade marks and lessen their capacity to identify and distinguish the plaintiffs goods and services from others Other third parties could also decide to do the same thereby causing further whittling away and erosion Members of the public in Singapore would no longer associate the Aman brand with a standard equivalent to other prestigious developments here such as the Four Seasons Park and the St Regis Residences There would also be loss of branding fees as other developers would see no need to pay for the exclusive use of the Aman brand for their projects The plaintiffs would suffer further damage in not being able to use the name Amanusa or other Aman prefixed name for their own real estate developments in Singapore or elsewhere due to possible customer confusion given the globalised nature of the plaintiffs real estate market 21 Two private investigation agencies were employed by the plaintiffs to conduct investigations in relation to the Yio Chu Kang project On 26 March 2007 Leong Chee Wing Leong general manager of Pan Intel Investigation Consultants visited the defendant s sales office cum show flat in the vicinity of Balestier Road There he met Jerry Koh Jerry of Huttons Residential Pte Ltd Huttons the marketing agents for the Yio Chu Kang project Jerry explained to him the details of the project and handed him a hardcover sales brochure Leong asked Jerry about the name Amanusa and was told that it was an Indian name it is like a resort there is a resort called Amanusa It is a very famous resort Jerry explained further that a search on the Internet would show the Indonesian resort Jerry s colleague added that the name meant quiet safe native 22 Kelley Teo Kelley a private investigator employed by Commercial Investigations LLP visited the sales office for the Yio Chu Kang project on 30 March 2007 She spoke to Jason Cai Jason of Huttons and was given a hardcover sales brochure When she mentioned that the development looked kind of like exclusive Jason said that was because it was named after a very well known holiday resort and that the concept of the Yio Chu Kang project was resort living Jason was unable to say where that famous resort was located 23 The pleaded particulars of the defendant s alleged fraudulent intention to deceive were that a the defendant and or its representatives and agent involved in the development of the Yio Chu Kang project knew of the Aman group of resorts and its other Aman properties b the defendant deliberately chose the word Amanusa for the name of its condominium development a name identical to the plaintiffs Amanusa resort in Bali c the defendant intended to use the Amanusa name to market the Yio Chu Kang project as one with an exclusive and luxurious Balinese resort style concept and d the use of the name Amanusa was intended to show a connection between the plaintiffs Amanusa resort and the Yio Chu Kang project 24 The plaintiffs claimed a declaration that their Amanusa trade mark and or their Aman trade mark were well known trade marks in Singapore and pursuant to s 55 3 a of the Trade Marks Act an injunction to restrain the defendant from using a trade name trade mark or business identifier including the prefix or word Aman in relation to any form of accommodation The plaintiffs also sought an injunction to restrain the defendant from passing off any form of accommodation as that of the plaintiffs by the use of the trade mark Amanusa or any word with the prefix Aman or otherwise They sought an order for delivery up and destruction at the defendant s expense of all goods and documents the use of which by the defendant in the course of trade would be a breach of the said injunctions and an order for the removal of the name Amanusa or any word with the prefix Aman from any infringing goods which could not be delivered up The plaintiffs also asked for an inquiry as to damages or an account of profits for the unauthorised use of Amanusa and or passing off the Aman trade marks interest and costs The defendant s case 25 The defendant averred that the Yio Chu Kang project was targeted at homeowners in Singapore unlike the plaintiffs resorts and accommodation which focused on visitors tourists and corporate convention participants It claimed that there was no likelihood of or no confusion or deception and no likelihood of or no damage to the plaintiffs interests 26 Manoj Dharmadas Kalwani Manoj a director of the defendant testified that besides the Yio Chu Kang project the defendant and its sister companies had developed many other residential projects in Singapore such as The Tai Pan Tai Pan Jade Tai Pan Regency Bluwaters Platinum Edge Iridium and Vanadium These projects were successful because of reasonable pricing convenient locations and in particular quality finishes and furnishings for which the defendant was well known The purchasers of the units were mostly Singaporeans wishing to own a home or to upgrade 27 In July 2005 the defendant bought the 56 355sq ft site on which the Yio Chu Kang project now stands It was then a vacant plot of land with lush greenery and thick foliage all round nestled in a quiet residential neighbourhood and near a nature reserve The defendant discussed with its architects on how to capitalise on the site to ensure a successful residential project It was decided that the Yio Chu Kang project would comprise a cluster of 36 three storey terrace houses with a basement car park and roof garden The project would also harmonise with its surroundings and provide a peaceful and soothing place of abode for its occupants There would also be high quality fixtures and equipment in the units Because of the vision to provide an oasis or a sanctuary the architects suggested the name Amanusa which meant peaceful island in Malay The defendant agreed without then knowing about the Amanusa resort in Bali or other Aman resorts and hotels 28 On 1 September 2005 the architects applied to the Street and Building Names Board to name the Yio Chu Kang project as Amanusa Approval was given within a week This reinforced the defendant s view that the name was appropriate for the project This was because the said board rejected an application in December 2004 in respect of another project at Jalan Loyang Besar which the defendant had proposed to name Paradise Waters on the ground that it could create the wrong impression that the development was located next to the sea At that time the defendant was still ignorant about the plaintiffs resorts 29 The defendant then engaged Debenham Tie Leung SEA Pte Ltd DTZ to market the Yio Chu Kang project Manoj spoke to some of the visitors at the show flat and learnt that most of them were Singaporean families wishing to own landed property or to upgrade from their current homes mainly public housing They did not give him the impression that they were there because they thought the Yio Chu Kang project was related to the plaintiffs resorts He paid attention to all this because the defendant had received the plaintiffs letter of demand dated 14 February 2006 alleging passing off 30 The defendant s solicitors responded to the said letter of demand The defendant denied that the first plaintiff had extensive reputation or goodwill in Singapore in respect of Aman or Amanusa The defendant stated that the Street and Building Names Board would not have approved the name for the Yio Chu Kang project if it was distinctive and associated in Singapore with only the first plaintiff The defendant also did not believe that many Singaporeans had heard or were aware of Aman or Amanusa Any such knowledge it argued would be confined to a very small and select group of Singaporeans It also argued that aman was a common and descriptive Malay word meaning peace and that nusa meant motherland and that peaceful motherland was an appropriate name for the project with its serene environment The defendant denied any likelihood of confusion between the Yio Chu Kang project and the plaintiffs resorts Further the developer was clearly stated in the sales brochures as the Novelty Group The residential housing project was also clearly different from the temporary holiday accommodation provided by the first plaintiff overseas The actual and potential customers were different The defendant s customers would only purchase a unit after lengthy and careful consideration and evaluation and would not be confused 31 In another letter dated 6 March 2006 the defendant s solicitors reiterated that the composite word amanusa meant peaceful motherland and that the component words were common descriptive ones which the courts were loathe to allow anyone to monopolise 32 As a result of the plaintiffs letter of demand the defendant started issuing questionnaires to potential purchasers of the Yio Chu Kang project from July 2006 Some of the questions asked were what were your reasons factors for choosing the Amanusa development would you have chosen the Amanusa development if it were called by some other name Please state reason s for your yes or no or any other answer and does the name word Amanusa mean anything to you If so please indicate its meaning to you There were 51 responses and these did not bear out the plaintiffs allegations of confusion As at 5 March 2007 more than a year after marketing began only 11 of the 36 units in the Yio Chu Kang project were sold unlike some of the defendant s other projects which sold out within six to eight months of their launch At the time of the trial only one unit remained unsold The defendant submitted that the name Amanusa therefore did not help in driving the sales 33 From the plaintiffs sales brochures and other promotional materials and their trade mark certificates relating to their Aman prefixed marks it was clear that the plaintiffs were not in the business of building residential and commercial properties for sale or lease to homeowners The plaintiffs were in the business of providing leisure retreat recreational spa and other such services within the luxurious and expensive resorts and hotels owned or operated by them The accommodation provided by them was short term stay in the resorts and hotels 34 The plaintiffs business catered to very well to do and high net worth individuals The room rates for Amanusa in Bali were between US 700 and US 1 500 per night not including 10 service charge and 11 government tax The range of room rates for the plaintiffs other resorts in Bali was similar to Amanusa s Out of the 1 382 guests from Singapore between 1995 and 2005 many were probably repeat guests the so called Aman junkies The plaintiffs villas and homes were adjacent to and were part of the relevant resorts enjoying the same amenities such as tennis courts and fitness centres They were owned by others but managed by the plaintiffs and catered to a different category of guests from those in the resorts such as those with large families or those who want their privacy The rates for the villas were similarly very high It was thus evident that the plaintiffs and the defendants catered to different market segments and different clientele 35 Purchasers of real estate in Singapore would generally be discerning and cautious considering other factors such as price location amenities and the reputation of the developer before making a commitment Ordinary Singaporeans wishing to travel overseas for a holiday were highly unlikely to find themselves in the Yio Chu Kang project thinking that they were in the midst of the plaintiff s luxurious Amanusa resort The plaintiffs fear of confusion or deception was unfounded or imaginary This was borne out by three of the defendant s purchasers who testified at the trial that when they bought their respective units in April 2006 and in April 2007 they had not heard of the plaintiffs resorts and did not decide to buy because of the name Amanusa One of them was an Indonesian businessman who travelled frequently between Jakarta and Singapore Another a Singaporean lady testified that her husband did some research on the Internet about the Yio Chu Kang project before buying a unit and chanced upon the plaintiffs website www amanresorts com and the Amanusa resort However the sales agent marketing the Yio Chu Kang project merely said that he had heard of a resort somewhere having the same name and did not claim any connection between the Yio Chu Kang project and the Amanusa resort 36 Chan Sze Chin Chan of JGP Architecture S Pte Ltd the architects for the Yio Chu Kang project explained how the name Amanusa was eventually chosen for the said project His colleagues and the defendant s other consultants met for brainstorming sessions for a suitable name for the project keeping Chan informed of the progress as he was its concept architect They were all aware of the guidelines set out by the Street and Building Names Board that the choice of name should reflect and reinforce the Singaporean character of the locality of the site They considered Cascading Waters and Tropical Waters but decided that these were too mundane and lacked appeal From experience they knew that using a non English name such as Les Jardins de Hollande could help to drive sales However as the project had a tropical theme French names were inappropriate They then turned to the dominant languages in South East Asia namely Bahasa Indonesia and Malay 37 They decided to leverage on the tranquillity of the project s surroundings and peaceful came to mind Two possible equivalent words in the said dominant languages for peaceful were aman and sentosa The latter was rejected as it would be associated with our southern island bearing that name Having decided on Aman they considered words that could capture the setting as well They came upon the term nusantara meaning archipelago However the word was too long and it was decided that it would be shortened to nusa meaning island which would convey the impression of an oasis and sanctuary the very ambience they were seeking to create 38 After deciding on the two components they had to decide on the order of the two words in a way that could be easily pronounced and remembered Amanusa was preferred over nusa aman as the former rolled off the tongue more easily One of the n s was dropped because the double n would cause the reader to pause before pronouncing the word as it would be very difficult to pronounce Since it was a name it would be easier to have one word instead of two For instance in one project the two Malay words tanah and merah were compressed into tanamera It was felt that the name would adequately capture the design concept for the Yio Chu Kang project The brainstorming team members were not aware of the plaintiffs Amanusa resort then although Chan had heard of Amanpuri in Phuket Thailand However he foresaw no difficulty as that resort was completely different in many aspects from the Yio Chu Kang project and it never crossed his mind that any sensible person would object to the use of the name Amanusa on the ground of confusion with Amanpuri The choice of name was therefore not influenced in any way by the plaintiffs Aman resorts and hotels 39 On 8 September 2005 the Street and Building Names Board approved the name Amanusa unconditionally and stated that no request for a change of name would be entertained Chan and his team were aware that the said board would not approve a proposed name if it was identical with or substantially similar to the name of an existing development here or elsewhere such that there was a likelihood of confusion For instance the defendant had originally wanted to name its Bluwaters residential development as Twin Waters but that name was rejected as there was a resort known as Twin Waters in Australia something Chan and his team were not aware of That earlier unsuccessful application showed that the said board did checks with names of developments and resorts in other countries 40 When Chan was asked by the court whether the team checked the coined word Amanusa on the Internet he replied that it did not because it knew that the proposed name would have to be approved by the Street and Building Names Board and there would therefore be some form of checking already The team thought the name sounded nice and was quite comfortable with it 41 Huttons took over the marketing of the Yio Chu Kang project from March 2007 Jerry see 21 above testified that he and the other sales agents of Huttons were briefed by their project director on the Yio Chu Kang project They were told specifically that the said project was not related to or associated with the Amanusa in Bali in any way They were also instructed not to link the project to the Bali resort In addition all purchasers of units in the said project would have to sign a declaration form acknowledging and agreeing that their request for an option to purchase and their subsequent exercise of the same do not confer upon me us any right or interest in respect of the name Amanusa and that the name does not and will not constitute a consideration influencing my our decision to exercise the option to purchase Jerry understood this to mean that the purchasers would be informed thereby that the Yio Chu Kang project was not related to the Amanusa resort in Bali Jerry did not know the reason behind the unprecedented step although he had heard rumours there was a legal dispute regarding the project s name It did not matter to him as he knew from experience that Singaporeans did not usually care about the name of housing developments unless it sounded inauspicious 42 Jerry complied with the above instructions in all his dealings with prospective purchasers On 26 March 2007 when the private investigator Leong see 21 above and his companion visited the sales office Jerry did not volunteer any information about the name Amanusa His only reference to resort living was when he wanted to illustrate his point that having a home in the Yio Chu Kang project would resemble resort living It was only when Leong talked about the name of the project that Jerry replied that he was aware of a resort of that name However Jerry did not suggest any linkage between the project and the Amanusa resort No other prospective purchaser showed any interest in the name of the project 43 Another of Huttons sales agents Jason see 22 above whose actual name is Sua Ting Kuang confirmed the instructions spelt out by Jerry above When he met Kelley and her companion at the sales office on 30 March 2007 towards the end of his sales pitch the private investigators commented that the Yio Chu Kang project looked exclusive Eager to make small talk Jason replied that it was because the project was named after the resort As prospective purchasers were generally not interested in the name of a project he had not bothered to do any research about the resort other than what he had heard from his colleagues When pressed further about the resort he therefore hazarded a guess that it must be an expensive resort in some Western country At no time did he say that the project was linked to the Amanusa resort which he had not heard of then Like Jerry Jason was also of the view that prospective purchasers of property in Singapore were not interested in a project s name unless it happened to sound inauspicious He believed it to be highly unlikely that anyone would confuse the Yio Chu Kang project with the Amanusa in Bali 44 By 30 March 2007 the defendant had modified its hardcover sales brochure For instance on the outer cover a thatched roof at the top right corner and a water spout featuring a mythical creature were erased in the later version In the write up inside the word Balinese was omitted from the sentence Borrowing from a hybrid of modern and tropical architectural style Amanusa which translates to peaceful isle sets the scene for a true Balinese experience 45 Bharat Dharmadas Kalwani Bharat brother of Manoj see 26 above a director of the defendant and the group president and chief executive officer of the Novelty Group affirmed an affidavit of evidence in chief which was admitted in evidence without the deponent being called as there was no challenge to his evidence His evidence addressed the statement by the plaintiffs Gregory Sirois that the defendant had links with the hotel and resort business because of Bharat s involvement with a company called Royal Woods Resort Pte Ltd Royal Woods whose business activities were listed as country and golf clubs and real estate activities on a fee or contract basis 46 Bharat stated that there were only three companies within the Novelty Group which were involved in the hotel or resort business One of these Royal Woods Resort Pte Ltd bought land in Australia in 1995 for the purpose of building a residential development However before it could build the property market there suffered a downturn It then decided to build and market the development as a timeshare resort Shortly thereafter such resorts received bad publicity in the media and so around the year 2000 the company started leasing the units on short term tenancies as vacation accommodation The timeshare memberships that were already issued continued alongside the said tenancies 47 Bharat was not involved in the daily operations of that company although he was one of its directors as he had many other companies to take care of The control and management of that company and the resort were entirely in the hands of his sister The decision of the court 48 In CDL Hotels International Ltd v Pontiac Marina Pte Ltd 1998 2 SLR 550 the Millenia case our Court of Appeal said at 86 In conclusion it would be helpful to remind ourselves of the essential elements of the tort of passing off Lord Oliver in Reckitt Colman Products Ltd v Borden Inc supra gave the following summary at p 406 The law of passing off can be summarised in one short general proposition no man may pass off his goods as those of another More specifically it may be expressed in terms of the elements which the plaintiff in such an action has to prove in order to succeed These are three in number First he must establish a goodwill or reputation attached to the goods or services which he supplies in the mind of the purchasing public by association with the identifying get up whether it consists simply of a brand name or a trade description or the individual features of labelling or packaging under which his particular goods or services are offered to the public such that the get up is recognised by the public as distinctive specifically of the plaintiff s goods or services Secondly he must demonstrate a misrepresentation by the defendant to the public whether or not intentional leading or likely to lead the public to believe that goods or services offered by him are the goods or services of the plaintiff Whether the public is aware of the plaintiff s identity as the manufacturer or supplier of the goods or services is immaterial as long as they are identified with a particular source which is in fact the plaintiff For example if the public is accustomed to rely upon a particular brand name in purchasing goods of a particular description it matters not at all that there is little or no public awareness of the identity of the proprietor of the brand name Thirdly he must demonstrate that he suffers or in a quia timet action that he is likely to suffer damage by reason of the erroneous belief engendered by the defendant s misrepresentation that the source of the defendant s goods or services is the same as the source of those offered by the plaintiff These pronouncements were made with reference to the business of sale of goods in that case but they are equally applicable to the business of provision of services such as in the instant case The respondents had successfully showed that the three elements of passing off were present goodwill misrepresentation and probability of damage 49 The plaintiffs brand name Amanusa is distinctive because it is a portmanteau word invented through the clever use of intentional syntax error coupled with syncopation by dropping one n Incidentally the Millenia case also concerned a dispute over a word Millennia which had one of its n s omitted to become Millenia like the word Amanusa here There is no such word as Amanusa in the Indonesian language This was not in dispute The brand name Aman although a descriptive word meaning peace or peaceful standing by itself is also a fancy mark when used in relation to hotels and resorts as it is not merely describing the plaintiffs goods and services Aman hotel and Aman resort can be and are as distinctive as the Hotel de la Paix paix being the French word for peace and the Peace Hotel in Shanghai China 50 The plaintiffs brand names Aman and Amanusa did have goodwill in Singapore before 2006 as evidenced by their nearly two decades of history their huge sales revenue worldwide more than 35 of which is attributable to its Singapore office and their substantial promotional and marketing expenditure The fact that there is no Aman resort in Singapore is immaterial see Sheraton Corporation of America v Sheraton Motels Ltd 1964 RPC 202 Although the plaintiffs did not advertise through the traditional media of newspapers and television they have asserted their presence through other means such as their promotional materials to travel agents collaboration with airlines and credit card companies in targeting high net worth individuals their newsletters to customers in Singapore and elsewhere and their more than 20 domain names over the Internet all of which are hosted here 51 In luxury markets such as this an article in a periodical about the Aman resorts may build their reputation more effectively than paid advertisements in the usual media As the trial judge in the Millenia case Chao Hick Tin J as he then was said see 1997 3 SLR 726 at 50 Advertising in the press and other media is of course an obvious means and perhaps the most expeditious means But if there are reports in the media extolling the virtues or excellence of a service I fail to understand why that should be disregarded I would have thought the important thing is what is the message that is being conveyed not whether the owners pay for the media s space or time It is the message that counts If the press or a periodical should do a write up on RCMS arguably in terms of goodwill that could even be better than a paid advertisement The publication of brochures and material could also generate goodwill The launch of the Ritz Carlton Millenia Singapore on 17 October 1994 could just as much help to establish goodwill at least among those invited guests who were people from the industry or people who had an interest in the project or were influential The plaintiffs have adduced in evidence many independent publications foreign and local describing the Aman resorts and the Amanusa with superlatives These were not confined to specialist travel magazines or publications targeted at well to do readers They included periodicals of general interest and mass appeal such as Female Time and Her World 52 In the Millenia case a hotel which was in the process of construction succeeded in its claim that it had goodwill in its name In the instant case the first Aman resort has been in operation since 1988 the Amanusa has been in existence since 1992 and the plaintiffs international reservations office has been operating here since 2001 The plaintiffs did allow their Amanusa trade mark registration in Singapore in respect of international classes 3 16 25 and 42 to lapse for economic reasons but clearly there was never any intention to stop usage of the Aman and Amanusa brand names here 53 Some 1 382 Singaporeans visited the Amanusa resort in Bali between 1995 and 2005 This resort is just one out of three Aman resorts on that island The number of visitors to the Amanusa may not be astronomical especially if as the defendant suggested a number of these are repeat visitors but that is largely due to the fact that Aman resorts are not numbers oriented For example the Amanusa has only 35 villas and the Aman resorts worldwide have only 626 rooms In the same way that ultra luxury cars are not produced nor purchased in large numbers the statistics merely reinforced the exclusivity and uniqueness of the resorts I am of the view therefore that the plaintiffs did have goodwill and reputation here in its Aman resorts in 2006 when the Yio Chu Kang project was marketed to the public and even earlier The Aman and Amanusa names were and are wholly distinctive of the plaintiffs 54 Where misrepresentation is concerned The Law of Passing Off Unfair Competition by Misrepresentation by Christopher Wadlow Sweet Maxwell 3rd Ed 2004 has this to say at paras 1 9 5 5 and 5 8 The misrepresentation in passing off is almost always conveyed by the defendant adopting for his own goods or business some material such as a name mark get up or other sign which is deceptively similar to material distinctive of the claimant The misrepresentation is deemed to be made as soon as such goods are released into circulation even if the immediate recipients are traders who are not themselves deceived The misrepresentation need not relate to goods but may be to the effect that the businesses of the claimant and the defendant are the same or have merged or that one is a branch agency or subsidiary of the other or more generally that the defendant has any connection with the claimant that is likely to cause damage Most importantly the misrepresentation in passing off need not be made fraudulently or with any intention to deceive calculated in Lord Diplock s speech in Advocaat Erven Warnink BV v J Townend Sons Hull Ltd 1979 AC 731 1979 2 All ER 927 1980 RPC 31 HL means likely rather than intended The only continuing importance of fraud is for its evidential value emphasis in original 55 Our Court of Appeal in the Millenia case said at 72 that in an action where one party is seeking to prevent an apprehended misrepresentation by another the test is whether there is a real risk that the defendant s representation would deceive a substantial number of persons of the relevant section of the public into believing either that the goods or services of the defendant are those of the plaintiff or that there is a business connection between the plaintiff and the defendant in relation to the goods or services provided by them The Court of Appeal went on to state at 73 Whether there is a substantial number of persons among the relevant section of the public depends on the particular circumstances of each case A substantial number does not necessarily mean a large proportion of the public In Neutrogena Corpn v Golden Ltd 1996 RPC 473 the successful plaintiffs did not have a huge percentage of the market Its product namely shampoo only had 0 25 of the market but it was held that a substantial number of members of the public would be misled into thinking that the defendants products were those of the plaintiffs 56 The Millenia case was concerned about the similarity between the words Millenia and Millennium each of which appeared with some other words to identify a particular hotel In the present case we are dealing with two developments bearing exactly the same name nothing more nothing less than Amanusa It matters not that different fonts or colours are used by the parties in setting out the name Amanusa in whatever font or hue will still be pronounced the same way and any name search on the Internet will present both the Bali resort and the Yio Chu Kang project in the results The plaintiffs burden is therefore lightened to the extent that they do not have to demonstrate the visual or aural similarities between their name and that used by the defendant 57 The relevant section of the public in the present case would encompass Singapore citizens or residents who have visited the Aman resorts one or more times or are prospective visitors to the resorts foreign individuals and corporations here intending to visit the resorts or seeking to invest in high end properties and there is a substantial number of foreign entities here and developers and hoteliers interested in becoming licensees of the Aman brand names Conceivably there would also be a portion of the more than 300 000 Singapore visitors to Bali since 1995 who have read about or heard of the three Aman resorts there As stated earlier when dealing with luxury goods and services catering to those who think nothing of spending US 700 or more per night it should not be surprising that the number of people patronising Aman resorts or who are familiar with their goods and services is a relatively small one That does not detract from the reality that those goods and services are well known to those for whom they are designed 58 Although the risk of confusion will increase if the parties were in mutual competition it is settled law that they need not be in common fields of enterprise see The Millenia case at 63 It must be borne in mind that today s businesses tend not only to expand geographically there is also a perceptible trend that brand names do not confine themselves to the original products or services which made them famous even though such products or services may remain their core competence but may diversify into other areas whether related or not For instance Dunhill has long ceased to be only a famous brand of tobacco The parameters of different industries are also being constantly redrawn by convergence and redefinition Convergence of erstwhile disparate areas in electronics is already an established fact 59 Similarly the dividing line between purely residential developments and luxury hotel or resort developments is no longer pronounced The law should recognise such changing business practices and conditions Here the defendant s Yio Chu Kang project bears the same coined name as the plaintiffs Bali resort That nexus in itself is bad enough Further the Yio Chu Kang project is also being billed as having the atmosphere of a Bali resort and has features of Balinese architectural style There is a significant body of persons in Singapore who have heard

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  • McDonald's Corp v Future Enterprises Pte Ltd[2005] 1 SLR 177; [2004] SGCA 50
    that the reputation of the earlier mark is irrelevant Far from it In determining the impact which a proposed mark is to have on an audience regard must naturally be had to the reputation of an earlier mark in so far as it has arisen in the course of use What we must guard against is transforming s 15 into a section that protects the reputation simpliciter of the earlier mark Reputation is just one of the factors to take into account together with the similarity of the marks the goods to which they are applied and their packaging Series of marks 33 The trial judge clearly appreciated that it was the prefix Mac in the application marks which the appellant found to be objectionable After noting the visual and aural differences between the two sets of marks the judge said at 44 Is there a conceptual link between the two in that the common use of the first syllable Mac or Mc means that both are likely to be taken as indicative of a common identity The use of the first syllable Mac in the respondent s range of products is not unlike the case of the appellant in that TWC has admitted to the use of the same naming system as McDonald s But it does not in my view override the other differences mentioned earlier and when viewed as a whole I do not believe there will be confusion between the rival marks Having found the dissimilarity in the marks visually and aurally the common idea conveyed by competing marks is not overriding or determinative The judge again referred to the point about the appellant s family of marks and their distinctive common feature when she said at 45 The matter however does not end there The appellant s objection to registration is founded on their rights in a series of marks The term Mc or Mac is the essential feature in the appellant s family of marks consisting of the prefix Mc plus a fast food descriptive Mr Davinder Singh submits that the respondent s use of a mark having the common feature of the appellant s series of marks would likely lead to confusion amongst consumers Consumers are likely to be misled into thinking that each of the application marks is a new mark in the series of the appellant s Mc marks 34 On this issue we think it ultimately boils down to determining whether the trial judge was correct when she said at 46 that the existence of a series of marks and the degree of recognition evoked therefrom is but one factor which along with others the court would have to take into account in the overall assessment of the likelihood of confusion or deception for the average consumer of the goods or services in question In our opinion this proposition is obviously correct in the light of the approach enunciated by this court in Kellogg 32 supra Whether confusion could arise must be looked at against the entire factual situation Thus we agree with the judge that the fact that the prefix is common cannot be decisive 35 The trial judge then quite rightly took into account the following considerations in reaching the conclusion that deception or confusion would be unlikely a The products of the respondent are not the same as those of the appellant s While the appellant does sell tea and chocolate drinks in their restaurant these drinks are not of its own house brands The tea served is the common Lipton tea b The appellant had at the material time in 1995 established itself as a chain of restaurants selling fast food that is the position even now c The appellant had not and still has not sold any of its food products or beverages through supermarkets nor was it involved in the sale of any unprepared food and beverages d The customers of the appellant s restaurants are different from those of the respondent A customer looking for the appellant s products will head straight to an establishment bearing the golden arches logo They will not go to a supermarket The appellant s products are ready for immediate consumption On the other hand the respondent s products will have to be brought home or elsewhere to be prepared Thus the parties products target different market segments 36 The judge also noted that no evidence of confusion or deception was placed before the principal assistant registrar or the court nor was any survey carried out By so noting we do not think the judge was suggesting that a market survey is absolutely essential in every case It would be of some assistance depending on how the survey was carried out including the nature of the questions posed 37 It is quite apparent that over the years the appellant has taken proceedings in various jurisdictions to oppose third parties applications to register marks involving the prefix Mc or Mac In some it succeeded and in others it failed Invariably in each case the trade mark officer or the court would go into a careful examination of the facts and circumstances surrounding the proposed use of the applicant s mark and how the various McDonald s marks were being used and the likelihood of the new proposed mark being mistaken as that of McDonald s 38 For example in those cases involving the marks McBagel McPretzel and McSalad the appellant succeeded in its opposition 39 In McDonald s Corporation v McBagel s Inc 85 Civ 7868 10 Dec 1986 a case from the United States US the applicant s business was a bagel bakery and restaurant in New York bearing the name McBagel The outlet sold bagels salads sandwiches soft drinks breakfast items and others The appellant in the McBagel case objected to the use of the name McBagel because it would create confusion as to whether McDonald s was somehow associated with it However the appellant stated that it would have no complaint with the applicant s use of the Mc prefix in conjunction with a word unrelated to food products A survey was conducted on McDonald s behalf which showed that a number of people believed that McDonald s sponsored or promoted McBagel s and the reason given was the use of the prefix Mc We should add that a significant aspect relating to the McBagel case was that it was the mark of a restaurant as is McDonald s 40 Similarly in J J Snack Foods Corporation v McDonald s Corporation United States Court of Appeals Fed Cit 17 May 1991 the defendant marketed cold soft pretzels in bulk at the wholesale level under the McPretzel mark The US court while noting that McDonald s did not register Mc in itself as a mark rejected the argument that Mc must be so registered in order to establish rights to a family of marks based on that prefix The court held that there was likelihood of confusion because the wholesale buyers of the McPretzel would be retailing them to the public and the public might buy the pretzel thinking it had something to do with McDonald s 41 In In the Matter of an Application to Register the Mark McIndians UK Patent Office 16 August 1996 an application to register the mark McIndians in Leicester England in respect of r estaurant cafe and cafeteria services preparing food and drink for consumption in class 42 was refused 42 In the meantime in two 1997 Australian Trade Mark Office cases Opposition by McDonald s Corporation to the Registration of the Trade Mark McMint Australian Trade Mark Office 7 November 1997 McMint and Opposition by McDonald s Corporation to the Registration of the Trade Mark McVeg Australian Trade Mark Office 10 November 1997 McVeg where McDonald s was the opponent the opposition failed More will be said of these two cases in a moment However the appellant submitted that the later Australian case of McDonald s Corporation v Macri Fruit Distributors Pty Ltd 2000 ATMO 37 was more sensible and should be preferred There the applicant sought to register McSalad and McFresh The hearing officer upheld the opposition and reasoned as follows Taken together I believe that McDonald s family of 17 marks above with one important proviso supplies a sufficient expectation that any trade mark prefixed by Mc which is conjoined to a word which describes either the goods or services themselves or a quality or characteristic of the goods would form part of the opponent s family of marks The important proviso here is that the goods or services referred to in the part word conjoined to the prefix Mc in the trade mark would also need to be seen to form a normal or usual part of the opponent s ie McDonald s business Thus I find that these two trade marks McSALAD and McFRESH are deceptively similar in a contextual sense to each of the 17 trade marks listed above owned by McDonald s 43 On the other hand in McMint and McVeg the results were different These two Australian cases related to s 28 of the Australian Trade Marks Act 1955 which was in pari materia to our s 15 In both cases the hearing officer decided that there would be no confusion or deception The appellant here sought to distinguish these two cases from our present case on the ground that in those two cases there was an Australian practice direction concerning construction and application of s 28 as set out in the Official Journal of 12 September 1991 in these terms Opposition proceedings In order to succeed an opponent will be required to show not only that the use of the applicant s mark would be likely to cause confusion or deception but that that likelihood has been brought about by conduct on the part of the applicant which is somehow wrongful Although the Court left the question of what constitutes blameworthy conduct unclear it seems that by a bare majority the Court would have favoured the view that blameworthy conduct could be equated with conduct which would render a mark disentitled to protection in a court of justice 44 The appellant highlighted the fact that there was and still is no such practice direction in Singapore We do not think the presence of such a direction in Australia means that the two decisions are of no relevance at all First a practice direction cannot change the law as set out in the Australian s 28 Second it should be noted that what the practice direction sought to do was to interpret two decisions of the Australian courts and set out guidelines for future cases that should come before the Australian Trade Marks Office Third if what was set out in the practice direction was wrong in law and a decision was arrived at by the hearing officer in accordance therewith surely there would be nothing to preclude an opponent like the appellant from challenging the decision of the hearing officer before the courts If the appellant had thought that the hearing officer in McMint and McVeg the same officer in both cases was wrong in following the approach laid down in the practice direction we would have expected McDonald s to pursue the matter and seek the court s order to strike down the practice direction Thus we do not think the attempted distinction has any merit 45 In McVeg the mark sought to be registered was in relation to vegetable hamburgers It was recognised that the opponent s reputation as a restaurant chain was immense and had the habit of coining new marks with the use of the prefix Mc eg McNuggets McRib etc Even though the applicant did not explain how the mark was adopted the hearing officer held that the practical risk of deception or confusion is completely negligible He went on to say that nobody except the most abnormally naïve people would be likely to be confused on that account 46 In McMint the applicant sought to register the mark in relation to confectionery There it was also accepted that the public was familiar with McDonald s practice of coining Mc trade marks The contention was made that the applicant was trying to ride on the reputation of McDonald s and its other related marks While the hearing officer held that it is possible but not necessarily probable that the applicant acted at least in part to parody the opponent s mark he did not think that there would be any real risk of confusion except for the most extremely ill informed of consumers He expressed the view that It seems to me that very few people would expect McMINT confectionery to originate from the opponent unless it was sold at the opponent s restaurants In the ordinary run of sweet shops theatre snack bars service stations and grocers it is vastly unlikely that anybody who was very exceptionally naïve would believe the opponent had gone into the wholesale confectionery trade The whole thrust of the opponent s business is otherwise and there is no shred of evidence to suggest that anyone would expect it to diversify into the wholesale confectionery line 47 Perhaps one could distinguish McMint from McBagel and McPretzel on the ground that in these two latter cases bagels and pretzels were somewhat similar to the burgers and cookies which McDonald s sells in its restaurant There is some difficulty with regard to McVeg as that was intended to be used on vegetable hamburgers which one could say are the same sort of things sold in a McDonald s restaurant 48 Finally we will refer to Yuen Yu Kwan Frank v McDonald s Corporation 2001 WL 1422899 Yuen where the court disregarded the objection of McDonald s and allowed the registration of the mark McChina The appellant sought to distinguish it on the basis that it was an English case and that in Scotland a territory which is just adjacent to England surnames that begin with Mc or Mac are commonplace and that this seemed to have influenced the judge who said at 37 A ny tribunal must obviously be careful before reaching a conclusion which involves giving an effective monopoly to a common prefix to a surname in the context of a common type of business Moreover the applicant there agreed to restrict the specification of goods and services to Chinese restaurants and Chinese food 49 In this connection we note that the judge in Yuen remarked at 67 that the opponent in the case ie McDonald s was virtually seeking to monopolise all names and words with prefix Mc or Mac at least in relation to food or restaurant services 50 What is pertinent to observe about Yuen is the fact that in coming to his conclusion Neuberger J took into account all the circumstances as did the trial judge in our present case including a the lack of similarity between the applicant s marks and the opponent s marks b the acceptance of the restriction mentioned above c the fact that the opponent s marks were not associated with oriental food and oriental food services and d the fact that though McChina had been trading for ten years there was no evidence of confusion 51 McIndians is probably distinguishable from Yuen because McIndians not only sold Indian food but also Southern fried chicken cheeseburgers French fries and shakes Our analysis 52 We do not think it is possible to reconcile all the cases We accept that the appellant has through extensive use and advertisement in Singapore of its various marks acquired substantial reputation and goodwill in the mark McDonald s and in those other marks as menu items It is also clear that the common feature that links its family of marks is the prefix Mc It is not disputed that Mac is synonymous with Mc 53 We also note that in its design of the word portion of the application marks FE had followed the same style which the appellant had adopted namely the prefix Mc or Mac followed by a descriptive with no spacing between the prefix and the descriptive and the first alphabet of the descriptive being capitalised 54 Although the appellant recognised that third parties have been using the prefix Mac or Mc but not in relation to the fast food or the restaurant business it wanted in the present proceeding to monopolise the prefix Mc as far as food and beverages were concerned irrespective of the state in which the relevant items were being sold and the manner in which they were sold This was the difficulty In fact the appellant has registered Mc as a mark only in class 42 in respect of restaurant and catering services As so pithily put by Millett LJ in Harrods Limited v Harrodian School Limited 1996 RPC 697 Harrodian School at 712 to be known to everyone is not to be known for everything 55 Here we would refer to two Canadian cases First is McDonald s Corp v Silcorp Ltd 1989 24 CPR 3d 207 where Strayer J ruled that McDonald s could not claim a monopoly over the use of Mc or Mac syllables either alone or in combination with other words Second is McDonald s Corp v Coffee Hut Stores Ltd 1994 55 CPR 3d 463 where the Federal Court of Canada in an application to register the mark McBeans in respect of gourmet coffee while noting that McDonald s had established a reputation in the business of fast food restaurants said that there was nothing inherently distinctive about the McDonald s marks once one looked outside that area of business 56 As mentioned before no evidence was tendered as to any actual confusion or deception Neither was a survey carried out to gauge the impression of the public The question was left entirely to the personal

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  • Ong Ah Tiong v Public Prosecutor[2004] 1 SLR 587; [2004] SGHC 11
    trial judge and the additional arguments brought before me I reminded myself of the limited function of an appellate court faced with an appeal against sentence An appellate court may only interfere if it is satisfied that a the sentencing judge made the wrong decision as to the proper factual basis for sentence b there was an error on the part of the trial judge in appreciating the material placed before him c the sentence was wrong in principle or d the sentence imposed was manifestly excessive Tan Koon Swan v PP 1986 SLR 126 Lim Poh Tee v PP 2001 1 SLR 674 11 This appeal was brought on the fourth ground that the sentence of 32 months imposed on the appellant was manifestly excessive in light of the trial judge s failure to consider or consider adequately the facts of the case all the mitigating factors and the relevant sentencing precedents 12 I turn now to the issues raised upon appeal Aggravating factors 13 The appellant took issue with various aggravating factors that the trial judge noted when coming to his decision on sentence 14 I accepted the appellant s contention that the total number of infringing articles involved was only 25 234 and not the number of 26 449 arrived at by the trial judge Nevertheless I considered that this relatively slight difference in number was immaterial for sentencing purposes 15 The appellant argued that there was no evidence supporting the conclusion that he was a large scale distributor of the counterfeit items as the items seized had been accumulated over a period of five to six years I was not convinced by this argument Regardless of the period over which the items were accumulated the fact remained that a large number of items which the appellant admitted to acquiring with the intention of selling were amassed and found in his shop In response to the appellant s further argument that there was no evidence of him selling the items at the time of the raid I can only point him to s 49 c of the TMA under which he was charged The section clearly states that the appellant was charged with possession for the purpose of trade and the appellant himself admitted that there was that requisite purpose 16 In addition to this argument counsel told the court that the appellant intended to re export the articles in order to recoup his losses In my view this could only be construed as an admission that the appellant had a recent intention to trade in the articles Further as the trial judge succinctly noted Singapore is a prominent business hub with a reputation for upholding intellectual property rights It is manifestly in the public interest to deter potential criminals who are inclined to use Singapore as a distribution centre or a base for transhipment of counterfeit products to neighbouring countries I therefore agreed with the sentiments of the trial judge that the appellant s intention of re exporting the counterfeit items rather than of selling them in Singapore was not of any mitigating value whatsoever 17 The appellant further alleged that there was no basis for the trial judge s conclusion that the items involved were popular items since they were old stock bought over two years ago and were obsolete and not saleable In my understanding both the old Gameboy cartridges as well as the Sony PS1 memory cards and game controllers are backward compatible that is these older accessories can still be used in newer models of the Gameboy handheld and the Sony PlayStation For this reason although I accepted the premise that the industry dealing in counterfeit items is generally characterised by its ability to offer the newest and latest goods in its field ahead of the retail market I was not convinced that the items in the appellant s possession would have been entirely unsaleable 18 The appellant also sold genuine electronic products in his shop and the trial judge found this arrangement to be a convenient cover for his illicit activities since it would make detection of the appellant s offences more difficult To my mind this was a logical and reasonable inference to draw from the facts and I found no reason to disturb the finding Overlapping charges 19 This court held in PP v Mok Ping Wuen Maurice 1999 1 SLR 138 that it is in the court s discretion whether or not to consider outstanding offences upon sentencing If the court does consider them then the effect of this is to enhance the sentence that would otherwise be awarded The trial judge acted on this authority to justify the imposition of a longer sentence on the appellant 20 On appeal the appellant canvassed the argument that the trial judge had failed to consider the overlapping items in the second and third charges as well as in the second third and fourth charges All these charges included 1 255 pieces of the PS2 game controller which had three trade marks applied to each piece The second and third charges dealt with infringement of the PS and PlayStation word marks whilst the fourth charge dealt with infringement of the Dual Shock device mark 21 In my opinion this was a non issue Although the items in the second and third charges overlapped the trial judge ordered the sentences for these two charges to run concurrently There was therefore no reason for the appellant to argue that the overlap between the charges lengthened his sentence Further although the trial judge considered the other three outstanding offences when deciding on what sentence to award it was not clear to me that the items in the fourth charge had a significant influence on the length of the sentences awarded Rather when I considered the sentencing precedents I was of the view that the sentences awarded were not manifestly excessive even if the three outstanding offences had not been taken into consideration As such

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  • Intellectual Property
    Intellectual Property Display By Year select 2009 2008 2007 2005 2004 2003 2001 2000 1999 1998 1994 1993 1991 1985 Peng Lian Trading Co v Contour Optik Inc and Others 2003 2 SLR 560 2003 SGCA 25 Decision Date June 24 2003 Reemtsma Cigarettenfabriken GmbH v Hugo Boss AG 2003 3 SLR 469 2003 SGHC 4 Decision Date January 15 2003 Ng Kok Cheng v Chua Say Tiong 2001 3 SLR 487 2001 SGHC 143 Decision Date June 22 2001 Genelabs Diagnostics Pte Ltd v Institut Pasteur and Another 2001 1 SLR 121 2000 SGCA 60 Decision Date November 2 2000 Merck Co Inc v Pharmaforte Singapore Pte Ltd 2000 3 SLR 717 2000 SGCA 39 Decision Date July 28 2000 Sime Darby Edible Products Ltd v Ngo Chew Hong Edible Oil Pte Ltd 2000 4 SLR 360 2000 SGHC 145 Decision Date July 21 2000 Lifestyle 1 99 Pte Ltd v S 1 99 Pte Ltd trading as ONE 99 SHOP 2000 2 SLR 766 2000 SGCA 19 Decision Date April 12 2000 Hunter Manufacturing Pte Ltd and Another v Soundtex Switchgear Engineering Pte Ltd and Another Appeal No 1 2000 1 SLR 401 1999 SGCA 88 Decision Date

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  • Intellectual Property
    Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Intellectual Property Display By Year select 2009 2008 2007 2005 2004 2003 2001 2000 1999 1998 1994 1993 1991 1985 CDL Hotels International Ltd v Pontiac Marina Pte Ltd 1998 2 SLR 550 1998 SGCA 23 Decision Date April 9 1998 Risis Pte Ltd v Polar Gems Pte Ltd and Others 1995 1 SLR 88 1994 SGHC 184 Decision Date July 16 1994 Robert John Powers School Inc and Others v Tessensohn trading as Clea Professional Image Consultants 1993 3 SLR 724 1993 SGHC 204 Decision Date September 1 1993 Chiarapurk Jack and Others v Haw Par Brothers International Ltd and another and another appeal 1993 3 SLR 285 1993 SGCA 55 Decision Date August 2 1993 Tang Siew Choy and Others v Certact Pte Ltd 1993 3 SLR 44 1993 SGCA 35 Decision Date May 12 1993 Haw Par Brothers International Ltd and Another v Chiarapurk Jack and Others 1991 SLR 626 1991 SGHC 35 Decision Date March 1 1991 Excelsior Pte Ltd v Excelsior Sport S Pte

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  • Intellectual Property Licensing
    ADR Institutions Maxwell Chambers Singapore International Arbitration Centre Singapore International Mediation Centre Singapore Mediation Centre Singapore Chamber of Maritime Arbitration ADR Publications Laws of Singapore Overview Commercial Law Case Law Cases in Articles Free Law Arbitration Cases Statutes Singapore Law Watch Headline News Commentaries Judgments Legislation Notices Directions Continuing Legal Education Resources Media Press Releases Speeches Publications Online References Sample Clauses Directory of Law Practices Latest Singapore Rankings Events Upcoming Events Archive Events Archive 2013 Events Archive 2012 Intellectual Property Licensing Display By Year select 2009 2007 2004 1996 Kickapoo Malaysia Sdn Bhd and another v The Monarch Beverage Co Europe Ltd 2010 1 SLR 1212 2009 SGCA 63 Decision Date December 11 2009 Weir Warman Ltd v Research Development Pty Ltd 2007 2 SLR R 1073 2007 SGHC 59 Decision Date April 30 2007 Chwee Kin Keong and Others v Digilandmall com Pte Ltd 2004 2 SLR 594 2004 SGHC 71 Decision Date April 12 2004 Creative Technology Ltd v Aztech Systems Pte Ltd 1997 1 SLR 621 1996 SGCA 71 Decision Date November 12 1996 Display 5 10 15 20 25 30 50 100 All Overview Commercial Law Case Law Cases in Articles Agency Arbitration Company Conflict of

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  • Weir Warman Ltd v Research & Development Pty Ltd[2007] 2 SLR(R) 1073; [2007] SGHC 59
    that these registered marks be in actual use or be bona fide intended to be used by the registered proprietors any contrary approach would result in unjust monopolies where devious registered proprietors could prevent the use of a mark by others despite not having any intention to use it simply by reason of prior registration Indeed such squatting situations are addressed by most modern trade mark registration statutes which require that the registrant has at least a bona fide intention to use a mark before registering it see ie s 5 2 of the TMA s 32 3 of the English Trade Marks Act 1994 Kitchin et al Kerly s Law of Trade Marks and Trade Names Sweet Maxwell 14th Ed 2005 at p 237 helpfully illustrates this by reference to three instances of hijacking a mark or spoiling a competitor s plans that suggest bad faith 1 The applicant has no bona fide intention to use the trade mark at all but wishes to prevent a competitor from using the or a similar mark 2 The applicant has no present or fixed intention to use the mark but wishes to stockpile the mark for use at some indeterminate time in the future and 3 The applicant becomes aware that someone else plans to use the mark and files a pre emptive application with a view to selling it The modern day function of a trade mark 43 The essential function of a trade mark has been coherently set out by Laddie J in Glaxo Group v Dowelhurst Ltd No 2 2000 FSR 529 Dowelhurst No 2 at 540 541 T he mark is a sign to the customer both that the goods are the goods of a particular source whether he knows or cares what that source is and that the proprietor of the mark holds himself out as responsible for those goods and their quality This representation of responsibility for quality is inseparable from the mark s function as an indication of source The proprietor of a mark can raise or lower the quality of his goods at will So the mark does not represent quality as such Rather it indicates that the goods are of the standard which the proprietor is content to distribute under his banner emphasis added 44 This vital characteristic of the trade mark is addressed inter alia by the crucial requirement of distinctiveness demanded by modern trade mark legislation further provisions against bad faith in trade mark legislation continue to legally denounce the appropriation of another s goodwill in a mark by registration which results in the erosion of the function of that mark as a badge of origin It is plain that trade mark legislation is generally enacted to promote the effective functioning of trade marks legitimately in use This should be borne in mind when interpreting and applying such legislation 45 Before I move on to deal with the specific issues at hand I find it apt to reiterate the perceptive observations of Laddie J in Dowelhurst No 2 see 43 supra at 539 540 Unfortunately there is much mystique surrounding trade marks Where registered marks are concerned there have grown up detailed and sometimes obscure statutory provisions relating to registration infringement and validity Marks can be created and destroyed bought sold and licensed Sometimes they can be very valuable However the complex statutory framework and the value of marks can sometimes blind us to their essential features and functions I cannot agree more and to those astute words I must also add that when faced with trade mark cases involving complex law or facts it is always helpful and sometimes even critical to keep in mind the essential objective of trade marks and the nature of the protection conferred by the trade mark registration regime This is particularly important in a case with a unique and novel factual matrix such as the present Preliminary note on the issue of invalidation 46 The sections stipulating for invalidation on the ground of bad faith are a Section 7 6 of the TMA A trade mark shall not be registered if or to the extent that the application is made in bad faith b Section 23 1 of the TMA The registration of a trade mark may be declared invalid on the ground that the trade mark was registered in beach of section 7 With respect to invalidation for fraud or misrepresentation the provision is as follows Section 23 4 of the TMA The registration of a trade mark may be declared invalid on the ground of fraud in the registration or that the registration was obtained by misrepresentation 47 I must point out that I am keenly aware the defendant s registration of the Trade Marks took place in 1996 and 1997 and the TMA had not then come into force The applicable law governing these registrations therefore remains ex facie the Trade Marks Act Cap 332 1992 Rev Ed However the Third Schedule of the TMA sets out transitional provisions of which para 17 2 is relevant to the present proceedings It provides For the purposes of proceedings under section 23 of this Act as it applies in relation to an existing registered mark the provisions of this Act shall be deemed to have been in force at all material times except that no objection to the validity of the registration of an existing registered mark may be taken on the ground specified in section 8 3 of this Act In light of this s 23 1 read with s 7 6 of the TMA as well as s 23 4 of the TMA is applicable to the present application apropos the invalidation of the Trade Marks Bad faith 48 The appropriate test for bad faith under s 7 6 of the TMA was first reviewed by our courts in Rothmans of Pall Mall Ltd v Maycolson International Ltd 2006 2 SLR R 551 Maycolson where Lai Siu Chiu J endorsed at 32 Lindsay J s succinct formulation of the concept of bad faith in Gromax Plasticulture Ltd v Don Low Nonwovens Ltd 1999 RPC 367 Gromax Plasticulture at 379 Plainly it includes dishonesty and as I would hold includes also some dealings which fall short of the standards of acceptable commercial behaviour observed by reasonable and experienced men in the particular area of trade being examined It would be fair to say that the term bad faith embraces not only actual dishonesty but also dealings which would be considered as commercially unacceptable by reasonable and experienced persons in a particular trade even though such dealings may otherwise involve no breach of any duty obligation prohibition or requirement that is legally binding upon the registrant of the trade mark see Demon Ale Trade Mark 2000 RPC 345 at 356 and Tan Tee Jim SC in Law of Trade Marks and Passing Off in Singapore Sweet Maxwell 2nd Ed 2005 Tan Tee Jim at p 129 49 In the present case it is common ground that the key issue in the determination of bad faith pivots around the fulcrum of proprietorship of the Warman mark in Singapore It appears to me to be an incontrovertible proposition that if a registrant of a trade mark has proprietorship of that trade mark or at the very least the right to register that trade mark then such registration of the trade mark should fall well within the standards of acceptable commercial behaviour observed by reasonable and experienced persons in the particular trade Conversely where it can be shown that the applicant knew of an exclusive proprietary right of another in relation to the trade mark it seeks to furtively register then any such registration would almost invariably quite clearly fall short of the relevant standards As such it is important to first examine and determine the issue of proprietorship Proprietorship of the Warman mark in Singapore The agreements between the parties 50 On the present facts the intent and purport of the Agreements and in particular the 1971 Agreement are of paramount significance in determining the issue of proprietorship of the Warman trade mark 51 The Agreements do not expressly deal with trade mark rights in Singapore The only specific mentions of trade marks arise in cll 5 l 5 m and 6 of the 1969 Agreement the 1971 Agreement does not make any express reference to trade marks at all Clause 6 of the 1969 Agreement mandates the assignment to Peko of all trade marks the property of the defendant at such time see 8 above This merely transfers to the plaintiff s predecessor the trade marks owned by the defendant at the time the 1969 Agreement was reached which do not include any trade mark rights in Singapore Clause 5 l states that the Fourth Schedule sets out particulars of inter alia all trade marks held by CHW and the defendant throughout the world and cl 5 m provides for the Fifth Schedule to set out particulars of inter alia all trade marks to pass into Peko s control upon completion of the 1969 Agreement Trade mark rights in Singapore feature in neither the Fourth nor the Fifth Schedule Hence the contractual arrangement between the parties with respect to trade mark rights in Singapore if any such arrangement exists must be implied into the Agreements 52 The plaintiff submits that the Agreements must be construed as conferring on the plaintiff sole proprietorship of the Warman mark in Singapore since exclusive manufacturing rights are granted to the plaintiff or that the agreements are at best silent as to proprietorship of the mark and consequently by virtue of prior use the plaintiff is the common law proprietor of the mark In contrast the defendant argues that on a proper interpretation of the agreements both the plaintiff and the defendant are entitled to use the Warman mark in Singapore and to claim proprietorship over the mark this argument is premised on the fact that the 1971 Agreement allows both parties to sell their products under the Warman mark in the Non Exclusive Territories Implying a contractual term 53 The law relating to the implication of a term in a contract has been set out with clarity by Andrew Phang Boon Leong J as he then was in Forefront Medical Technology Pte Ltd v Modern Pak Pte Ltd 2006 1 SLR R 927 Forefront He held that terms can only be implied if both the business efficacy and the officious bystander tests are satisfied Phang J then cited at 35 Scrutton LJ in Reigate v Union Manufacturing Company Ramsbottom Limited and Elton Cop Dyeing Company Limited 1918 1 KB 592 at 605 to illustrate the inclusiveness as well as complementarity of the business efficacy and officious bystander tests in practice A term can only be implied if it is necessary in the business sense to give efficacy to the contract that is if it is such a term that it can confidently be said that if at the time the contract was being negotiated some one had said to the parties What will happen in such a case they would both have replied Of course so and so will happen we did not trouble to say that it is too clear Unless the Court comes to such conclusion as that it ought not to imply a term which the parties themselves have not expressed 54 I also respectfully associate myself with Phang J s observations at 41 of Forefront 53 supra where he further clarified the business efficacy and officious bystander tests However it is important to note that the tests considered above relate to the possible implication of a particular term or terms into particular contracts In other words the court concerned would examine the particular factual matrix concerned in order to ascertain whether or not a term ought to be implied This is the established general approach regardless of the view one takes of the business efficacy and officious bystander tests There are practical consequences to such an approach the most important of which is that the implication of a term or terms in a particular contract creates no precedent for future cases In other words the court is only concerned about arriving at a just and fair result via implication of the term or terms in question in that case and that case alone The court is only concerned about the presumed intention of the particular contracting parties and those particular parties alone emphasis in original Therefore the crucial question here is whether a term should be implied into the Agreements having regard to the particular factual matrix within which the Agreements were reached and the intentions of the parties as primarily construed from the express terms of the Agreements and if so what is the term that should be implied 55 On the facts the 1971 Agreement is the agreement apportioning the trading rights of the parties with respect to the Warman products and if a term as to the proprietorship of the Warman trade mark is to be implied it should be implied into that agreement The 1969 Agreement on the other hand provides the backdrop of the commercial relationship between the parties against which the 1971 Agreement is to be understood Thus in considering the implication of a term I accordingly direct my mind primarily to the 1971 Agreement 56 For the purposes of proprietorship of the Warman mark cl 2 of the 1971 Agreement set out in 15 supra is of the utmost importance In that clause CHW assigned to Peko his right to make and sell Products and Licensed Items anywhere in the world It is noteworthy that Licensed Items are defined with reference to the trade mark Warman and items listed as such are Warman marked items see 14 above CHW had however retained his right to make and sell Products and Licensed Items in Japan and Africa as well as to use and sell these Products and Licensed Items manufactured in Japan and Africa in Non Exclusive Territories of which Singapore is one As an aside CHW assigned such rights pertaining to Japan to the plaintiff in 1981 as mentioned in 18 above and thus for the present purposes the defendant only has the right to make the relevant products in Africa and to sell these products in Africa as well as in the Non Exclusive Territories 57 Counsel for the defendant Mr Dedar Singh suggests that since both the plaintiff and the defendant through their respective predecessors possess the right to sell various relevant products under the Warman trade mark in Non Exclusive Territories it must necessarily follow that both must have the right to protect that trade mark under which they are selling Consequently it should be implied that both must have the right to register the Warman trade mark in Non Exclusive Territories including Singapore In contrast counsel for the plaintiff Mr M Ravindran argues that the fact that cl 2 of the 1971 Agreement only gives the plaintiff and not the defendant the right to make the relevant products under the Warman mark in Non Exclusive Territories indicates that the parties intended the plaintiff to have exclusive proprietorship of the mark in Singapore and a term should be implied to that effect Further he asserts that the defendant operates under a limited licence from the plaintiff to sell Warman marked products in Singapore and any infringement proceedings that the defendant wishes to institute must be through the plaintiff the registered proprietor of the mark 58 Having regard to the totality of the evidence before me and especially the express terms of the 1971 Agreement governing the apportionment of rights with respect to Warman marked products I am inclined to conclude that on these particular facts the right to register and thus to protect the Warman trade mark is necessary to give business efficacy to the right to sell products under that mark While the parties had not directed their minds specifically to future registrations of the Warman trade mark in Singapore at the time of the 1971 Agreement I am satisfied that if one were to ask the parties at that time what the position was with respect to the right to register the mark in Non Exclusive territories the obvious answer would be that both the plaintiff and the defendant would be equally entitled to such right I draw this conclusion from the position of the parties in relation to their exclusive territories as well as from commercial logic and common sense I now elaborate on my reasons for coming to this conclusion 59 The position taken by the parties on the matter of trade mark registrations in their respective exclusive territories is clear and undisputed Only the plaintiff has the right to make and sell products under the Warman mark in its exclusive territories as marked in red and mauve on the map in Appendix B of the 1971 Agreement The plaintiff has therefore interpreted the agreement as conferring upon it the right to register the Warman trade mark in these territories as evidenced by its registrations in various countries in America Europe and Australasia Similarly the defendant has registered the Warman trade mark in numerous African countries and appears to have taken the view that it has the right to register the Warman mark in Africa the territory where only it can make and sell the relevant products There seems therefore to be an understanding between the parties based on their positions as created by the various agreements between them that the plaintiff is the only proprietor of the trade mark in its exclusive territories and the defendant is the only proprietor of the trade mark in its only exclusive territory Africa Thus it stands to reason that with respect to the Non Exclusive Territories as stipulated by the 1971 Agreement wherein both parties have the right to sell Warman marked products both parties must have the right to protect and register the Warman trade mark 60 Protection of the Warman mark in Singapore necessarily entails the registration of the trade mark since only registered proprietors can prevent the use of the mark by unauthorised parties through infringement proceedings Admittedly the tort of passing off may be available to traders using particular trade marks However I am of the view that the 1971 Agreement in giving the parties a right to use the Warman mark in Non Exclusive Territories must have envisaged a stronger protection than that simply provided by common law tort The elements of goodwill misrepresentation and damage the necessary prerequisites for an action in passing off are at odds with an understanding of the 1971 Agreement which unequivocally confers on both the plaintiff and the defendant unfettered rights to sell the relevant products under the Warman mark in Non Exclusive Territories Besides many of the non exclusive territories are not common law based jurisdictions Since the right to sell is unfettered the corresponding right to protect the trade mark should be equally so and it is only the statutory trade mark regime that can offer such unqualified protection 61 In addition I am of the view that the plaintiff s suggested interpretation of the 1971 Agreement that the plaintiff is the exclusive proprietor of the Warman mark is commercially implausible and unviable in light of the rights apportioned to both parties through the 1971 Agreement A simple example suffices to illustrate this Consider the situation where the defendant wishes to start trading in a Non Exclusive Territory wherein neither party has any prior presence and wherein the plaintiff has neither any present nor any future interest If the plaintiff s suggestion is accepted the defendant will not be able to independently protect the Warman mark in that territory as the defendant will have no right to register that trade mark Instead if the plaintiff is correct the defendant will have to plead with the plaintiff to register the trade mark in that territory with which the plaintiff might have no interest or connection so that it may institute infringement proceedings through the plaintiff What if the plaintiff refuses Must it and can it then join the plaintiff as a co defendant This leads to an utterly incomprehensible result and surely flies against all commercial logic 62 It is clear that the 1971 Agreement must have contemplated that both the plaintiff and the defendant should be entitled to individually and independently avail themselves of the protection afforded by the trade mark registration regime apropos the Warman mark under which each of them trades The right to protect the trade mark is necessarily implied by the right to sell in this particular case I caution however that this conclusion is drawn from the particular factual matrix of this case see Phang J s observations at 54 supra significantly the nature of the relationship between the parties was an important consideration It is by no means a proposition of law that the right to protect must inevitably result from any unfettered right to sell Trade mark licence 63 One instance of a right to sell under a trade mark being divorced from a right to protect that mark by way of trade mark registration is in the case of a trade mark licensee This is perhaps an appropriate juncture to deal with the plaintiff s assertion that the defendant s right to sell under the Warman trade mark derives from a licence conferred by the plaintiff In light of established authorities on the nature of a trade mark licence it is my view that this assertion is incorrect 64 The test for the validity of a trade mark licence was set out in Rainforest Coffee Products Pte Ltd v Rainforest Café Inc 2000 1 SLR R 725 where Lai Kew Chai J at 33 in delivering the judgment of the Court of Appeal endorsed the English decision in BOSTITCH Trade Mark 1963 RPC 183 at 567 The key to the validity of a trade mark licence was whether or not the licence arrangement had destroyed the trade connection between the proprietor of the trade mark and the goods Therefore for there to be a valid trade mark licence between parties there must be a trade connection between the purported proprietor of the trade mark allegedly the plaintiff in this case and the goods ultimately sold under the mark by the licensee the defendant s goods in this case 65 In the commentary of the TMA by Mr M Ravindran in Butterworths Singapore Statutes Intellectual Property Butterworths 2002 the Butterworths Statutes it is stated that whether the proprietor has any trade connection with the goods or services in question is ultimately a question of fact Mr Ravindran coincidentally the counsel for the plaintiff in the present case explains in the commentary at p 126 if the proprietor does not in fact exercise control or supervise the use of his registered trade mark notwithstanding provisions which allow him to do so there is no trade connection between him and the goods or services for which the mark has been registered It appears to be trite law that to establish the requisite trade connection for a valid trade mark licence there must be at least some control or supervision of the use of the trade mark by the purported licensee 66 The same view has been adopted in Tan Tee Jim 48 supra at p 216 in relation to the licensing of unregistered trade marks The learned author is of the view that such licence is valid only if there is a quality control relationship between the licensor and the goods or services in question 67 The leading treatise of Wilkof and Burkitt Trade Mark Licensing Sweet Maxwell 2nd Ed 2005 at p 252 notes that the approach in the United States of America with respect to implied licences emphasises that evidence of control is necessary for an implied trade mark licence The authors cite the American case of Villanova University v Villanova Alumni Educational Foundation Inc 123 F Supp 2d 293 for the proposition that the existence of an implied trade mark licence requires evidence that permission was given to use the mark coupled with an exercise of reasonable control over such use This requirement is assessed by the objective conduct of the parties This seems sensible 68 Both from precedent and logic I conclude that a trade mark licence arrangement between the plaintiff and the defendant may only be established if the plaintiff exerts some manner or form of control or supervision over the defendant s goods From the undisputed facts I note that the plaintiff and the defendant are in fact two entities trading separately and entirely independently of each other albeit in goods having a common heritage and affixed with an identical trade mark As such neither party can control or supervise the other s goods and use of the trade mark in the Non Exclusive Territories I find therefore that there is no trade connection between the plaintiff and the defendant s goods and accordingly that there can be no basis for asserting that the plaintiff or its predecessors has merely conferred a trade mark licence on the defendant Relevance of manufacturing rights 69 I turn now to the plaintiff s further submission that the plaintiff s right to make the relevant products under the Warman trade mark in Singapore coupled with the defendant s lack of such right is a decisive factor ineluctably demonstrating the exclusive proprietorship that the plaintiff has over the mark 70 The plaintiff takes the view that the right to manufacture under the Warman mark in Singapore is crucial to the finding of proprietorship of that mark and consequently the right to register that mark In Gromax Plasticulture at 48 supra however Lindsay J in finding that a non manufacturer could have the right to register a trade mark remarked perceptively at 380 I t is not a requirement that a mark on goods should invariably denote the manufacturer of them It has been common enough especially while for example Far Eastern labour costs have been lower than those here for manufacturers to establish a mark in the market only later to find it is more economical or profitable for them to give up manufacture themselves but to have the goods instead made elsewhere under their control or to their specification emphasis added 71 I agree The fact of manufacture is often irrelevant in assessing the rights of registration to a trade mark a fortiori the place of manufacture is also normally irrelevant If it is not a requirement that a trade mark denotes the manufacturer of the goods on which it is affixed then how can it be said that the right to register a trade mark is circumscribed or conferred by the right to manufacture in the place of registration per se Conversely how can it be said that the absence of the right to manufacture in a particular place in itself deprives a party of the right to register a trade mark 72 Admittedly Lindsay J s comments in Gromax Plasticulture in 70 above were made in respect of a registrant who chose not to manufacture in the place of registration of the trade mark Nonetheless I am of the view that they should apply equally to a registrant who is contractually restrained from manufacturing there This is derived from my understanding of the principles underpinning the trade mark regime see 36 45 supra 73 In Tan Tee Jim at 48 supra the underlying rationale of trade mark protection has been helpfully summarised at p 1 A trade mark acts as a badge of origin or source to the consumer conveying an underlying message concerning the quality and other desirable characteristics of the goods or services in question It in effect offers a guarantee to the consumer that the goods or services emanate from the same source or are of the same or equal quality as those that he had used or experienced before Reference may also be made again to the observations of Laddie J in Dowelhurst No 2 set out in 43 above Nowhere in these two references are the manufacturing rights mentioned It is not surprising that Mr Ravindran has also been unable to draw to my attention any authority endorsing the proposition that a trade mark serves to indicate the place of manufacture of goods or services Manufacturing rights are clearly quite irrelevant to the purposes that a trade mark serves As such since the trade mark register must protect the public against deception by only keeping on record trade marks that serve their function see 40 41 supra the absence of any manufacturing rights in or change of any place of manufacture from the place of registration should not be a basis to refuse to register or remove a trade mark from the register It is not the essence of trade mark registration for the registrant to have the right to manufacture in the place of registration So long as the registrant has a legitimate right to use that mark in the place of registration in respect of its goods and services and save in the case of trade mark licensees which is not presently applicable see 63 68 supra then that registrant should prima facie have the right to register the mark 74 In the present case the defendant is in fact the manufacturer of the relevant products sold in Singapore under the Warman mark and the Warman marked goods do in fact originate from it it is simply that the defendant must manufacture only in Africa I am not convinced that this in itself deprives the defendant of its right to register the Warman mark in Singapore The plaintiff contends that if the defendant cannot manufacture goods under the Warman mark in Singapore it should not be possible for it to stop others from so manufacturing by virtue of its trade mark registration and therefore the defendant should not have the right to register the trade mark in the first place I however adopt the contrary view Even if the defendant as a registered proprietor of the Warman trade mark does not have the right to manufacture goods under that mark in Singapore the right to prevent others from doing so is nevertheless consistent with the function of a trade mark that is as a badge of origin The defendant should be able to prevent others from manufacturing under that trade mark as such manufacture by a third party will be likely to cause confusion between the defendant s and that third party s goods The fact that the defendant or the plaintiff itself may not manufacture in Singapore does not change this the trade mark should signify that the goods bearing that mark originated from it wherever manufactured and either of them should be able to protect itself against any use of that trade mark by other parties which could erode that connection Hence I am of the view that the absence of a right to manufacture under a particular trade mark in the intended place of registration does not in itself necessarily preclude the right to register that mark Prior use 75 On the issue of proprietorship of the Warman trade mark the plaintiff had argued in the alternative that the agreements between the parties were silent about the right to register the trade mark in Non Exclusive Territories and hence the plaintiff should be recognised as the common law proprietor of the mark in Singapore by virtue of its prior use of the mark here 76 The proposition that the first user of the mark in Singapore is the true owner of the mark is acknowledged in Sifco Industries Inc v Dalic SA 1997 3 SLR R 930 In that case Lim Teong Qwee JC held at 12 I n the case of a used trade mark the proprietor is the person who first used it in relation to goods or services for the purpose stated in the definition of trade mark under the Act He endorsed Morritt LJ s statement in the English case of Al Bassam Trade Mark 1995 RPC 511 525 supra at 30 The statutory right to registration is given to he who is the proprietor Proprietorship depends on use in the case of a used mark and the right to the unregistered mark cannot be assigned separately from the associated goodwill 77 This correctly states the position at common law However the common law position on the proprietorship of a trade mark is merely the default position that applies in the absence of any contractual agreements between parties assigning or stipulating for the right to register a trade mark This is in fact acknowledged by the plaintiff itself in its further written submissions of 2 February 2007 where it states at para 4 In order for the Defendant to dislodge the Plaintiff s claim to proprietorship of the Warman mark in Singapore in 1996 by virtue of use the Defendant has to prove that the Agreements stipulate either expressly or implicitly that both parties are entitled to register the trade mark in Singapore 78 As I have interpreted the 1971 Agreement as having implicitly according both the plaintiff and the defendant the right to register the Warman trade mark in Non Exclusive Territories see 53 62 supra the defendant was entitled to dislodge the plaintiff s claim of common law proprietorship based on prior use There is therefore no further necessity to dwell on the issue of prior use Provision for the co ownership of trade marks in the TMA 79 Finally before I leave the issue of proprietorship it is pertinent to note that the TMA itself provides specifically for the co ownership of registered trade marks This is set out in s 37 of the TMA modelled on s 23 of the English Trade Marks Act 1994 and reads in full as follows 1 Where a registered trade mark is granted to 2 or more persons jointly each of them is entitled subject to any agreement to the contrary to an equal undivided share in the registered trade mark 2 Subsections 3 to 8 apply where 2 or more persons are co proprietors of a registered trade mark by virtue of subsection 1 or otherwise 3 Subject to any agreement to the contrary each co proprietor is entitled by himself or his agents to do for his own benefit and without the consent of or the need to account to the other or others any act which would otherwise amount to an infringement of the registered trade mark 4 One co proprietor may not without the consent of the other or others a grant a licence to use the registered trade mark or b assign or charge his share in the registered trade mark 5 Infringement proceedings may be brought by any co proprietor but he may not without the leave of the Court proceed with the action unless the other or each of the others is either joined as a plaintiff or added as a defendant 6 A co proprietor who is added as a defendant under subsection 5 shall not be made liable for any costs in the action unless he takes part in the proceedings 7 Nothing in subsection 5 shall affect the granting of interlocutory relief on the application of a single co proprietor 8 Nothing in this section affects the mutual rights and obligations of trustees or personal representatives or their rights and obligations as such 80 This section regulates the situation which the Agreements seem to envisage Where both the plaintiff and the defendant have the right to register a trade mark in Singapore s 37 1 of the TMA allows each to be registered and entitled

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  • Chwee Kin Keong and Others v Digilandmall.com Pte Ltd[2004] 2 SLR 594; [2004] SGHC 71
    claims to the media The sixth plaintiff 68 Yeow Kinn Oei is 29 years old and the brother of the third plaintiff He is currently employed as an accountant in an accounting firm Ernst Young 69 The sixth plaintiff was awakened by his brother the third plaintiff at about 3 00am The third plaintiff informed him that laser printers were being sold at 66 each and that these laser printers could be sold at a much higher price about a thousand plus The sixth plaintiff told his brother to order some for him without specifying how many laser printers he wanted or how he intended to pay for the laser printers 70 The third plaintiff proceeded to place orders on behalf of the sixth plaintiff on the HP website The initial order for 30 laser printers was placed at round 3 45am while the second order for 300 units was placed at around 3 53am The payment mode selected by the third plaintiff was cash on delivery 71 The sixth plaintiff s position can be dealt with very briefly Given that he left everything in the third plaintiff s hands his legal position is to that extent identical to the third plaintiff s The purchase transactions 72 To effect the purchase transactions on the respective websites the plaintiffs had to navigate through several web pages In terms of chronological sequence the initial page accessed was the shopping cart followed by checkout order particulars checkout order confirmation check out payment details and payment whether by cash on delivery or by credit card In the final stage of the process after the payment mode was indicated each of the plaintiffs was notified successful transaction your order and payment transaction has been processed Upon completing this sequence each of the orders placed by the plaintiffs was confirmed by automated responses from the respective websites stating Successful Purchase Confirmation from HP online The fourth plaintiff s single transaction with the Digilandmall website was confirmed by a similar automated response stating Successful Purchase Confirmation from Digilandmall 73 The sixth plaintiff s orders did not receive matching confirmations from the defendant as his e mail box was full There is no question however that he placed the orders that these orders were received by the HP website and that the same automated response sent to the other plaintiffs was sent out to him 74 Under product description on each webpage instead of the actual description of the laser printer which in this case should have been HP 9660A Color LaserJet 4600 only the numerals 55 appeared this was the result of Samuel Teo s earlier inadvertent input There was also no indication that the product was being sold on promotion Promotions would be indicated by a P inside a yellow circle next to the product in question The product descriptions in all the other pages of the respective websites at the material time carried a full detailed description of all advertised products 75 Each of the automated confirmatory e mail responses carried under Availability of product the notation call to enquire The web page entitled checkout order confirmation had a notation stating the earliest date on which we can deliver all the products to you is based on the longest estimated time of stock availability plus the delivery lead time The shopping cart website page carried the insertion call to enquire under the heading Availability of product In addition each of the confirmatory e mail responses states at the outset W e will be calling you in the near future to deliver the products to the address shown below You may find the status of your order by calling us at phone number given Special instructions Please call to advise delivery date and time 76 On Monday 13 January 2003 at about 9 15am an employee of the defendant received a call from a prospective customer inquiring whether the defendant was aware of the posted price of 66 for the laser printers on the HP website It was only then that the defendant promptly took steps to remove all references to the laser printer from all three websites Media reports after the discovery of the mistake 77 Soon after the defendant informed the plaintiffs that they did not intend to deliver the laser printers the plaintiffs took their claims to the press In a Straits Times report dated 15 January 2003 captioned 66 printer error angry customers seek lawyer s help it was reported that the second plaintiff described as a network marketer had on 13 January at about 2 00am stumbled upon a offer he could not believe 66 for a Hewlett Packard laserjet printer that normally sells for 3 854 before GST The relevant text reads WHILE surfing the Net at about 2 am on Monday Mr Tan Wei Teck stumbled upon an offer he could not believe 66 for a Hewlett Packard laserjet printer that normally sells for 3 854 before GST emphasis added 78 In a Channel NewsAsia report datelined 15 January 2003 it was reported that Two of the customers Mark Yeow and Malcolm Tan have already spoken to their lawyers The businessmen saw a great opportunity and grabbed it placing an order for 1 000 printers Mr Yeow said After we ordered the very next day some of us have even gone up to talk to buyers in the market about the units So it s going to be our reputation at stake we thought we had a successful transaction They want Digiland to honour the deal or at least to compensate them Mr Tan said As long as we get out sic equitable compensation we should be able to accept lesser terms but that s just under consideration as well emphasis added 79 The second third and fifth plaintiffs tried their best to distance themselves from the quotes attributed to them As the reports contradict portions of their present evidence they have indirectly tried to cast doubt on the accuracy of the reports in so far as the reports referred to them I found their attempts to play down the impact of the statements which they had to all intents and purposes willingly and deliberately made earlier unconvincing While it is possible that the reporters could have exercised some latitude in penning the reports they would in essence be conveying at the very least summaries and impressions of their interviews with the second third and fifth plaintiffs I am not prepared after full consideration to assume that the reporters misquoted the facts The plaintiffs could not coherently explain why neither they nor their lawyers had not attempted to correct the press reports at the material juncture Most telling of all I note that the first to fifth plaintiffs exhibited identical reports in each of their affidavits without any qualification whatsoever Amendments after conclusion of submissions 80 Upon the conclusion of submissions I directed counsel to appear before me Two issues had arisen The first issue dealt with references made by the plaintiffs to certain embargoed material This was summarily resolved The second issue was raised by me and touched upon contentions made by both parties in their written submissions While these contentions were well within the scope of the evidence adduced and their respective lines of cross examination they appeared to transgress their respective pleadings I invited both parties to indicate if they wished to amend their pleadings Both parties expressed that they wished to effect amendments to mirror evidence that had been adduced in the proceedings Neither party raised any objections Plaintiffs counsel indicated that they wanted to further particularise the sixth plaintiff s purchase orders Defence counsel indicated that he wanted to regularise the position on the agency relationship between third and sixth plaintiffs which had been thrashed out during cross examination he also wished to plead additional particulars of the respective plaintiffs actual knowledge of or belief in a mistake having occurred which had emerged both before and during the hearing I granted leave to both parties to file applications to amend the pleadings 81 Plaintiffs counsel thereafter responded somewhat curiously They proceeded to file their amendments to the statement of claim as if leave had already been given However at the actual hearing of the applications plaintiffs counsel opposed any amendments whatsoever to the defence and sought leave to withdraw the plaintiffs earlier unilateral amendments The reason for this inconsistent conduct surfaced later 82 The plaintiffs strenuously opposed the defendant s amendments principally on the ground it was made at a late juncture Furthermore they relied on a passage from Singapore Civil Procedure 2003 Sweet Maxwell Asia 2003 at para 20 8 47 that asserts At the trial leave to amend particulars will as a rule be refused Moss v Malings 1886 83 Ch D 603 83 The defendant maintained that there was no element of surprise and or prejudice arising from the amendments The purpose of the amendments was merely to regularise the pleadings and indeed they went no further than to summarise evidence and submissions that had already been raised 84 It is axiomatic that a court will generally be cautious if not reluctant to effect any amendments once the hearing has commenced even more so once the evidential phase of the proceedings has been completed Lord Griffiths in Ketteman v Hansel Properties Ltd 1987 AC 189 at 220 stated T o allow an amendment before a trial begins is quite different from allowing it at the end of the trial to give an apparently unsuccessful defendant an opportunity to renew the fight on an entirely different defence 85 Having stated the general rule it is imperative that the rationale underlying this approach be understood Rules of court which are meant to facilitate the conduct of proceedings invariably encapsulate concepts of procedural fairplay They are not mechanical rules to be applied in a vacuum devoid of a contextual setting Nor should parties regard pleadings as assuming an amoeba like nature susceptible to constant reshaping Rules and case law pertaining to amendments are premised upon achieving even handedness in the context of an adversarial system by a ensuring that the parties apprise each other and the court of the essential facts that they intend to rely on in addressing the issues in controversy or dispute b requiring that an amendment should be attended to in the usual course of events at an early stage of the proceedings to ensure that no surprise or prejudice is inflicted on or caused to opposing parties c requiring careful consideration whether any amendments sought at a late stage of the proceedings will cause any prejudice to the opposing party Prejudice is to be viewed broadly to encompass any injustice and embraces both procedural and substantive notions d recognising that while a costs award against the party seeking late amendments can frequently alleviate any inconvenience caused this may not always be appropriate e taking into account policy considerations that require finality in proceedings and proper time management of the courts resources and scheduling From time to time there will be cases where this is an overriding consideration In short where does the justice reside There is constant tension in our legal system to accommodate the Janus like considerations of fairness and finality 86 In cases where the facts raised in the proposed amendments have been addressed during the evidence and submissions and particularly where the opposing side has also had an opportunity to address the very same points there can hardly ever be any real prejudice The pleadings in such instances merely formalise what is already before the court As a matter of fairness allowing amendments at a late stage should usually go hand in hand with granting leave to the other party to adduce further evidence if necessary Altogether different considerations may arise if a party at a late stage seeks through an amendment to adduce further evidence to support that same amendment A court is not likely to take a sympathetic view of such manner of amendment The point is there is a chasm between a clarification amendment and a new or distinct issue being raised at a later stage 87 It appeared to me that the extract from Singapore Civil Procedure 2003 relied on by the plaintiffs was blindly lifted from earlier editions of the English White Book without any consideration as to how it dovetails with the present procedural climate It has been pithily said that the rules of procedure should be viewed as a handmaiden and not a mistress to be slavishly followed To assert that as a rule leave to amend particulars will be refused is both illogical and incorrect In principle there is no difference between amending particulars and amending say a cause of action defence or any other part of substance in a pleading The essential point remains will prejudice be caused and or are any policy considerations called into play The essence is not so much in the nature of the amendment but rather in the consequences flowing from any amendment to the pleadings There is often but not inexorably a co relationship between the timing when the amendment is sought and the adverse consequences for the other party The later the amendment the greater the adverse consequences 88 The fact that the amending party has been tardy or even negligent is a factor that a court can and in some egregious cases should take into account but this is by no means a decisive factor cf Ketteman v Hansel Properties The current general approach is correctly stated in Professor Jeffrey Pinsler s Singapore Court Practice 2003 LexisNexis 2003 at para 20 5 7 An amendment may be allowed even after both parties have made their closing submissions 89 In the circumstances I had little hesitation in allowing the amendments sought by the defendant There was no element of surprise or prejudice to the plaintiffs as the points raised had already been developed by the defendant and addressed by the plaintiffs Leave was also given to the plaintiffs to adduce further evidence if they so desired I must add that I did not really think this was necessary and subsequent events confirmed my perception It became apparent that the plaintiffs misplaced reliance on the extract earlier cited probably also explained their singularly odd conduct in applying for amendments only to withdraw their application later in attempting to deny the defendant an opportunity to amend its pleadings The plaintiffs are however entitled to the cost of the amendments in any event which I fix at 1 000 They are not entitled to the costs of the subsequent brief hearing for reasons I now deal with summarily 90 After leave was granted to amend the defence each of the plaintiffs filed a further short affidavit refuting knowledge of the mistake relating to pricing In addition Tan Cheng Peng the girlfriend and business associate of the third plaintiff filed an affidavit detailing her communications with him The affidavits did not add anything new If anything certain portions of the affidavits raised even more doubts about the plaintiffs credibility The plaintiffs and the defendant later reached an agreement to dispense with any further oral evidence save for that of Tan Cheng Peng Her evidence was inconsequential and did not assist the plaintiffs Applicable legal principles Internet contracts 91 There is no real conundrum as to whether contractual principles apply to Internet contracts Basic principles of contract law continue to prevail in contracts made on the Internet However not all principles will or can apply in the same manner that they apply to traditional paper based and oral contracts It is important not to force into a Procrustean bed principles that have to be modified or discarded when considering novel aspects of the Internet 92 The Electronics Transaction Act Cap 88 1999 Rev Ed ETA places Internet contractual dealings on a firmer footing The ETA is essentially permissive It does not purport to regulate e commerce but attempts to facilitate the usage of e commerce by equating the position of electronic records with that of written records thus elevating the status of electronic signatures to that of legal signatures Section 11 of the ETA expressly provides that offers and acceptances may be made electronically Section 13 of the ETA deems that a message by a party s automated computer system originates from the party itself The law of agency and that pertaining to the formation of contracts are expressly recognised in s 13 8 of the ETA as continuing to apply to electronic transactions This provision acknowledges that the essential framework of an electronic contract needs to be considered in the usual manner in other words principles of contract formation consideration terms and conditions choice of law and jurisdictional issues need to be examined 93 Website advertisement is in principle no different from a billboard outside a shop or an advertisement in a newspaper or periodical The reach of and potential response s to such an advertisement are however radically different Placing an advertisement on the Internet is essentially advertising or holding out to the world at large A viewer from any part of the world may want to enter into a contract to purchase a product as advertised Websites often provide a service where online purchases may be made In effect the Internet conveniently integrates into a single screen traditional advertising catalogues shop displays windows and physical shopping 94 Historically the common law has recognised an anomaly in the contractual features pertaining to a display of goods for sale The goods are not on offer but are said to be an invitation to treat The prospective buyer has to make an offer to purchase which is then accepted by the merchant While this is the general principle for shop displays it is open to a merchant to offer by way of an advertisement the mechanics of a unilateral or bilateral contract This is essentially a matter of language and intention objectively ascertained As with any normal contract Internet merchants have to be cautious how they present an advertisement since this determines whether the advertisement will be construed as an invitation to treat or a unilateral contract Loose language may result in inadvertently establishing contractual liability to a much wider range of purchasers than resources permit 95 The known availability of stock could be an important distinguishing factor between a physical sale and an Internet transaction In a physical sale the merchant can immediately turn down an offer to purchase a product that has been advertised otherwise he may be inundated with offers he cannot justify Indeed this appears to be the underlying rationale for the unique legal characteristics attributed to an invitation to treat see Grainger Son v Gough 1896 AC 325 at 333 334 Esso Petroleum Ltd v Commissioners of Customs Excise 1976 1 All ER 117 at 126 If stock of a product has been exhausted a prospective purchaser cannot sue for specific performance or damages as he has merely made an offer that has not been accepted by the merchant 96 In an Internet sale a prospective purchaser is not able to view the physical stock available The web merchant unless he qualifies his offer appropriately by making it subject to the availability of stock or some other condition precedent could be seen as making an offer to sell an infinite supply of goods A prospective purchaser is entitled to rely on the terms of the web advertisement The law may not imply a condition precedent as to the availability of stock simply to bail out an Internet merchant from a bad bargain a fortiori in the sale of information and probably services as the same constraints as to availability and supply may not usually apply to such sales Theoretically the supply of information is limitless It would be illogical to have different approaches for different product sales over the Internet It is therefore incumbent on the web merchant to protect himself as he has both the means to do so and knowledge relating to the availability of any product that is being marketed As most web merchants have automated software responses they need to ensure that such automated responses correctly reflect their intentions from an objective perspective Errors may incur wholly unexpected and sometimes untoward consequences as these proceedings so amply demonstrate 97 Different rules may apply to e mail transactions and worldwide web transactions When considering the appropriate rule to apply it stands to reason that as between sender and receiver the party who selects the means of communication should bear the consequences of any unexpected events An e mail while bearing some similarity to a postal communication is in some aspects fundamentally different Furthermore unlike a fax or a telephone call it is not instantaneous E mails are processed through servers routers and Internet service providers Different protocols may result in messages arriving in an incomprehensible form Arrival can also be immaterial unless a recipient accesses the e mail but in this respect e mail does not really differ from mail that has to be opened Certain Internet service providers provide the technology to inform a sender that a message has not been properly routed Others do not 98 Once an offer is sent over the Internet the sender loses control over the route and delivery time of the message In that sense it is akin to ordinary posting Notwithstanding some real differences with posting it could be argued cogently that the postal rule should apply to e mail acceptances in other words that the acceptance is made the instant the offer is sent In accordance with s 15 1 of the ETA acceptance would be effective the moment the offer enters that node of the network outside the control of the originator There are however other sound reasons to argue against such a rule in favour of the recipient rule It should be noted that while the common law jurisdictions continue to wrestle over this vexed issue most civil law jurisdictions lean towards the recipient rule In support of the latter it might be argued that unlike a posting e mail communication takes place in a relatively short time frame The recipient rule is therefore more convenient and relevant in the context of both instantaneous or near instantaneous communications Notwithstanding occasional failure most e mails arrive sooner rather than later 99 Like the somewhat arbitrary selection of the postal rule for ordinary mail in the ultimate analysis a default rule should be implemented for certainty while accepting that such a rule should be applied flexibly to minimise unjustness In these proceedings it appears that the purchases made by the sixth plaintiff were not accompanied by a corresponding receipt of acceptances as his e mail inbox was full Notwithstanding the defendant does not take issue with this as the sixth plaintiff s orders were received and the appropriate automated responses generated In light of this the parties did not address me on the issue of when the contract was formed though this appears to be a relevant issue depending on which rule is adopted In the absence of proper and full arguments on the issue of which rule is to be preferred I do not think it is appropriate for me to give any definitive views in these proceedings on this very important issue It can be noted however that while s 15 of the ETA appears to be inclined in favour of the receipt rule commentaries indicate that it is not intended to affect substantive law It deals with the process rather than the substance of how to divine the rule 100 There is however another statute that ought to be taken into consideration in determining the appropriate default rule in e commerce transactions The Vienna Sales Convention the Convention applies in Singapore as a consequence of the Sale of Goods United Nations Convention Act Cap 283A 1996 Rev Ed Article 24 of the Convention states For the purposes of this Part of the Convention an offer declaration of acceptance or any other indication of intention reaches the addressee when it is made orally to him or delivered by any other means to him personally to his place of business or mailing address or if he does not have a place of business or mailing address to his habitual residence It appears that in Convention transactions the receipt rule applies unless there is a contrary intention Offer and acceptances have to reach an intended recipient to be effective It can be persuasively argued that e mails involving transactions embraced by the Convention are only effective on reaching the recipient If this rule applies to international sales is it sensible to have a different rule for domestic sales 101 The applicable rules in relation to transactions over the worldwide web appear to be clearer and less controversial Transactions over websites are almost invariably instantaneous and or interactive The sender will usually receive a prompt response The recipient rule appears to be the logical default rule Application of such a rule may however result in contracts being formed outside the jurisdiction if not properly drafted Web merchants ought to ensure that they either contract out of the receipt rule or expressly insert salient terms within the contract to deal with issues such as a choice of law jurisdiction and other essential terms relating to the passing of risk and payment Failure to do so could also result in calamitous repercussions Merchants may find their contracts formed in foreign jurisdictions and therefore subject to foreign laws 102 Inevitably mistakes will occur in the course of electronic transmissions This can result from human interphasing machine error or a combination of such factors Examples of such mistakes would include a human error b programming of software errors and c transmission problems in the communication systems Computer glitches can cause transmission failures garbled information or even change the nature of the information transmitted This case is a paradigm example of an error on the human side Such errors can be magnified almost instantaneously and may be harder to detect than if made in a face to face transaction or through physical document exchanges Who bears the risk of such mistakes It is axiomatic that normal contractual principles apply but the contractual permutations will obviously be sometimes more complex and spread over a greater magnitude of transactions The financial consequences could be considerable The court has to be astute and adopt a pragmatic and judicious stance in resolving such issues 103 The amalgam of factors a court will have to consider in risk allocation ought to include a the need to observe the principle of upholding rather than destroying contracts b the need to facilitate the transacting of electronic commerce and c the need to reach commercially sensible solutions while respecting traditional principles applicable to instances of genuine error or mistake It is essential that the law be perceived as embodying rationality and fairness while respecting the commercial imperative of certainty Unilateral mistake 104 The creases over the theoretical approach to adopt in determining the existence of contracts have for some time now been decisively ironed out in favour of the objective theory The most recent and authoritative pronouncement in this area per Lord Phillips of Worth Matravers in Shogun Finance Ltd v Hudson 2003 3 WLR 1371 at 123 states A contract is normally concluded when an offer made by one party the offeror is accepted by the party to whom the offer has been made the offeree Normally the contract is only concluded when the acceptance is communicated by the offeree to the offeror A contract will not be concluded unless the parties are agreed as to its material terms There must be consensus ad idem Whether the parties have reached agreement on the terms is not determined by evidence of the subjective intention of each party It is in large measure determined by making an objective appraisal of the exchanges between the parties If an offeree understands an offer in accordance with its natural meaning and accepts it the offeror cannot be heard to say that he intended the words of his offer to have a different meaning The contract stands according to the natural meaning of the words used There is one important exception to this principle If the offeree knows that the offeror does not intend the terms of the offer to be those that the natural meaning of the words would suggest he cannot by purporting to accept the offer bind the offeror to a contract Hartog v Colin Shields 1939 3 All ER 566 Smith v Hughes 1871 LR 6 QB 597 Thus the task of ascertaining whether the parties have reached agreement as to the terms of a contract can involve quite a complex amalgam of the objective and the subjective and involve the application of a principle that bears close comparison with the doctrine of estoppel Normally however the task involves no more than an objective analysis of the words used by the parties The object of the exercise is to determine what each party intended or must be deemed to have intended emphasis added In the Singapore context a similar approach has been adopted by the Court of Appeal in Aircharter World Pte Ltd v Kontena Nasional Bhd 1999 3 SLR 1 at 30 and 31 and Projection Pte Ltd v The Tai Ping Insurance Co Ltd 2001 2 SLR 399 at 15 105 It is not only reasonable but right that the objective appearance of a contract should not operate in favour of a party who is aware in the eyes of the law of the true state of affairs when for instance there is real misapprehension on the part of the mistaken party and when the actual reality of the situation is starkly obvious There cannot be any legitimate expectation of enforcement on the part of the non mistaken party seeking to take advantage of appearances Having said that this exception must always be prudently invoked and judiciously applied the exiguous scope of this exception is necessary to give the commercial community confidence that commercial transactions will almost invariably be honoured when all the objective contractual indicia are satisfied The very foundations of predictability certainty and efficacy underpinning contractual dealings will be undermined if the law and or equity expands the scope of the mistake exception with alacrity or uncertainty The rigour in limiting this scope is also critical to protect innocent third party rights that may have been acquired directly or indirectly Certainty in commercial transactions should not be trifled with as this will inevitably affect how commercial and business exchanges are respected and effected The quintessential approach of the law is to preserve rather than to undermine contracts Palm tree justice will only serve to inject uncertainty into the law In light of these general observations I now address the law on unilateral mistake 106 In the Singapore context the first port of call when confronted with issues of contract law is inevitably Professor Andrew Phang s treatise on Cheshire Fifoot and Furmston s Law of Contract 2nd Singapore and Malaysian Ed 1998 He classifies mistake in the following manner at 386 If attention is fixed merely on the factual situations there are three possible types of mistake common mutual and unilateral In common mistake both parties make the same mistake In mutual mistake the parties misunderstand each other and are at cross purposes In unilateral mistake only one of the parties is mistaken The other knows or must be taken to know of his mistake When however the cases provoked by these factual situations are analysed they will be seen to fall not into three but only two distinct legal categories Has an agreement been reached or not Where common mistake is pleaded the presence of agreement is admitted The rules of offer and acceptance are satisfied and the parties are of one mind What is urged is that owing to a common error as to some fundamental fact the agreement is robbed of all efficacy Where either mutual or unilateral mistake is pleaded the very existence of agreement is denied The argument is that despite appearances there is no real correspondence of offer and acceptance and that therefore the transaction must necessarily be void emphasis added 107 As the law now stands mistakes that are not fundamental or which do not relate to an essential term do not vitiate consent Mistakes that negative consent do not inexorably result in contracts being declared void In some unusual circumstances where a unilateral mistake exists the law can find a contract on terms intended by the mistaken party Must the unilateral mistake be known 108 Chitty on Contracts 28th Ed 1999 vol 1 observes at para 5 035 It is not clear whether for the mistake to be operative it must actually be known to the other party or whether it is enough that it ought to have been apparent to any reasonable man In Canada the latter suffices 109 This cautious statement by Chitty needs to be carefully reconsidered in the context of recent developments in this area of law A steady stream of decisions from common law courts indicate a measured but nevertheless distinctly incremental willingness to extend the scope of the exception to not just actual knowledge but deemed or constructive knowledge as well 110 In OT Africa Line Ltd v Vickers Plc 1996 1 Lloyd s Rep 700 at 703 Mance J held that the objective theory ought not to apply if a party had knowledge that a mistake had occurred The question is what is capable of displacing that apparent agreement The answer on the authorities is a mistake by one party of which the other knew or ought reasonably to have known I accept that this is capable of including circumstances in which a person refrains from or simply fails to make enquiries for which the situation reasonably calls and which would have led to discovery of the mistake But there would have at least to be some real reason to suppose the existence of a mistake before it could be incumbent on one party to question whether another party meant what he or she said emphasis added 111 This approach appears to have been endorsed by Judith Prakash J in Ho Seng Lee Construction Pte Ltd v Nian Chuan Construction Pte Ltd 2001 4 SLR 407 at 84 where it was also accepted that The test is an objective one based on what a reasonable person would have known in similar circumstances She opined that situations where unilateral mistake had been considered were those involving fraud or a very high degree of misconduct I agree that this exception should be kept within a very narrow compass I would not however invariably equate the required conduct with fraud To confine this exception to instances of fraud would make the concept of unilateral mistake redundant Unlike instances of fraud where it is said fraud unravels the existing contract in instances of unilateral mistake the very existence of the contract is negatived there is no consensus The essence of unilateral mistake is the knowledge or deemed knowledge of a mistake and though fraud may often be present it is not an essential ingredient There are many different shades of sharp practice or impropriety 112 Phang 106 supra at 418 rightly observes It must be stressed that in this context a man is taken to have known what would have been obvious to a reasonable person in the light of the surrounding circumstances The same view is echoed in Halsbury s Laws of Singapore vol 7 Butterworths Asia 2000 at 80 164 The non mistaken party s appreciation that there is no real offer on the contract s literal terms undermines the basis of the objective theory and

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