SINGAPORE IP CASE UPDATE : KEY DEVELOPMENTS IN COPYRIGHT AND PASSING OFF

Singsung Pte Ltd v LG 26 Electronics Pte Ltd (trading as LS Electrical Trading) [2016] SGCA 33 – A Case Summary

This is an appeal from the High Court judgement in 2015. In this Court of Appeal case, the appellant, Singsung Pte Ltd (“Singsung”) sued the respondent, LS Electrical Trading (“LS”), for passing off, copyright infringement and defamation. LS counterclaimed for malicious falsehood and for groundless threats of copyright infringement. Singsung claimed that LS was liable for passing off as the get-up for eight of LS’ electrical products (“LS Get-Up”) was identical or confusingly similar to the get-up of Singsung’s electrical products (“Singsung Get-Up”) and LS had infringed the copyright of Singsung’s White Get-Up Picture, Blue Get-Up Picture and the TV Stickers. The Court explored how a plaintiff may prove the elements of the tort of passing off, the operation of the doctrine of instruments of deception, and the scope of liability for issuing groundless threats under s 200 of the Copyright Act.

I) Passing-off: Goodwill; Misrepresentation; and Damage

Goodwill can be established if Singsung can prove that the Singsung Get-Up has become specifically distinctive of its business. Contrary to the High Court decision, the Court of Appeal found that there was goodwill in the Singsung Get-up because goodwill exists when a business offers a product or service for sale and a customer purchases the product or uses the service in Singapore. In the present case, buyers bought the goods from Singsung’s shop in Singapore and the large volume of sales was sufficient to establish goodwill. The issues of where the buyers reside or if the goods purchased were ultimately used in Singapore were irrelevant in establishing goodwill. The Court held that evidence showed LS had taken steps to deliberately copy the Singsung Get-ups with an intention to deceive customers was sufficient to find misrepresentation. Lastly, Singsung must prove damage, or a real likelihood of damage, to Singsung’s goodwill. LS’ misrepresentation and the fact that the parties were competing in the same line of products and export jurisdictions proved that damage was likely to Singsung’s business. Accordingly, Singsung succeeded in establishing passing off.

II) The Doctrine of Instruments of Deception

The law of passing off recognises the doctrine of instruments of deception, which addresses the issue of whether the Defendant would have committed the tort of passing off if it had put into circulation goods which are inherently likely to deceive ultimate purchasers or consumers, even though the immediate purchasers may be middlemen who are not themselves deceived and may have ultimately disposed of the goods in a manner which does not deceive anyone at all. The Court applied this doctrine to the present case and held that LS’ Get-Up was inherently deceptive, being identical to the corresponding Singsung Get-Up.LS was therefore liable for passing off even though the middlemen in the supply chain were not confused as to the origin of the goods in question.

III) Copyright Infringement and Groundless Threats

The Court overruled the High Court’s decision and found that LS had infringed the copyright in Singsung’s White Get-Up Picture and the TV Stickers. Ownership of copyright in the White Get-Up Picture had been validly assigned to Singsung and LS knew or ought reasonably to have known that they were infringing the Singsung’s copyright in the TV Stickers. However, there was no infringement of Singsung’s Blue Get-Up Picture which was a straightforward representation of a commonplace object (i.e. a DVD player) and required identical copying for copyright infringement.

The Court held that it does not necessarily follow that a groundless threat of infringement must be found when there was no infringement of Singsung’s Blue Get-Up Picture. On the facts, there was no conceivable damage flowing from the demand which cannot be compensated by a cost order against Singsung for having made an unwarranted threat. Therefore, a declaration that the threat was groundless is unnecessary. This decision would protect the rights owner from being penalised merely because he has made a good faith attempt to enforce his rights.

Furthermore, this case established that grant of relief under Section 200 of the Copyright Act is discretionary in nature. We may, therefore, draw an analogy of this decision to similar provisions under Sections 35, 77 and 44 of the Trade Marks Act, Patents Act and Registered Designs Act respectively.

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