17. INTELLECTUAL PROPERTY LAW

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1 (2007) 8 SAL Ann Rev Intellectual Property Law INTELLECTUAL PROPERTY LAW TAN Tee Jim SC LLB (University of Singapore), LLM (University of London); Advocate and Solicitor (Singapore). NG-LOY Wee Loon LLB (Singapore), LLM (London); Advocate and Solicitor (Singapore); Associate Professor, Faculty of Law, National University of Singapore. Trade marks and passing off 17.1 There were three trade mark judgments delivered in 2007 (in chronological order): (a) Future Enterprises Pte Ltd v McDonald s Corp [2007] 2 SLR 845 (CA). These were trade mark opposition proceedings. The main focus of the dispute was on s 8 of the Trade Marks Act (Cap 332, 2005 Rev Ed) which sets out what are sometimes called conflicts with earlier marks and rights. This is where one party (the opponent) opposes the trade mark application filed by another party (the applicant) on the basis that registration of the trade mark in the name of the trade mark application would conflict with an earlier trade mark or right belonging to the opponent. (b) Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073 (HC). These were proceedings to expunge a trade mark from the register. The validity of the initial registration was challenged on the grounds that the registration was made in bad faith and/or was obtained by fraud or misrepresentation, and here, the focus of the dispute was on ss 7(6) and 23(4) of the Trade Marks Act. Alternatively, even if the initial registration was valid, it was alleged that the registration ought to be revoked on the grounds of non-use of the trade mark set out in s 22(1) of the Trade Marks Act. (c) Amanresorts Ltd v Novelty Pte Ltd [2007] SGHC 201. These were proceedings to stop the use of a trade mark by a party on the basis that such use constituted passing off at common law, and infringement of a statutory right conferred by s 55 of the Trade Marks Act on proprietors of well-known trade marks The issues explored in these trade mark cases varied. But there was one issue that appeared in all three cases, namely, the principle of

2 300 SAL Annual Review (2007) 8 SAL Ann Rev territoriality in trade mark law. This common issue will be explored first, before attention is turned to some of the other issues raised in the cases. The principle of territoriality 17.3 At the international level, the territorial nature of trade mark rights is embodied in Art 6(4) of the Paris Convention for the Protection of Industrial Property 1967 (the international treaty on trade marks): A mark duly registered in a country of the [Paris] Union shall be regarded as independent of marks registered in the other countries of the Union. Registration of a trade mark in one country confers on its proprietor a certain monopoly in that country only. So, for example, the UK Trade Marks Act 1994 specifies in s 9 that the proprietor of a registered trade mark has exclusive rights in the trade mark which are infringed by use of the trade mark in the United Kingdom without his consent. (In the US, though, they have, in a rather controversial case, applied American trade mark law extra-territorially to deal with a US citizen for conducting infringing activities in Mexico: see Steele v Bulova Watch Co 344 US 280 (1952).) 17.4 In Singapore, the territoriality principle is manifested within the Trade Marks Act (Cap 332, 2005 Rev Ed) in, for example, s 22 on revocation of registered trade marks which have not been used in Singapore for the relevant five-year period. Thus, the registration in Singapore cannot be saved by the fact that the registered proprietor has used the mark in other countries. Proof of user outside of Singapore is irrelevant for the purposes of revocation for non-use In the common law action for passing off the branch of the law which could be said to protect the common law rights of a trader to an unregistered trade mark the territoriality principle manifests itself in the notion that goodwill, the first element in the action, is local in nature and divisible (Star Industrial Co Ltd v Yap Kwee Kor [ ] SLR 20 ( Star Industrial ) at 31, a Privy Council decision on appeal from Singapore). Thus, if a trade mark proprietor conducts business in several countries, a separate goodwill attaches to his business in each of these countries. If the trade mark proprietor is suing for passing off in Singapore, he must prove that he has a business in Singapore to which goodwill attaches. Proof of his business conducted in other countries, and his user of the trade mark in these other countries, is irrelevant for the purposes of satisfying the first element in an action for passing off in Singapore. This requirement for goodwill to be hinged onto a business/user of the trade mark within jurisdiction has been described as the hard line approach (see, eg, Mechanical Handling Engineering (S) Pte Ltd v Material Handling Engineering Pte Ltd [1993] 2 SLR 205 at 210). The Star Industrial case and the hard line approach,

3 (2007) 8 SAL Ann Rev Intellectual Property Law 301 was endorsed by our Court of Appeal in 1998 in the Millenia case (CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 2 SLR 550 at [50]). While adopting the hard line approach in this case, the Court of Appeal at the same time took a liberal interpretation as to how this approach may be satisfied. It held that it was not necessary for the trader to show that, as at the relevant date, he had commenced business in Singapore. Pre-trading activities in the case, it was extensive prelaunch publicity could also generate goodwill It is precisely because Singapore adopts the hard line approach in the common law scenario that ss 55(1) 55(2) was added into the Trade Marks Act (Cap 332, 2005 Rev Ed) when it was first enacted. The original version of ss 55(1) 55(2) was amended in The current provisions read as follows: (1) A well known trade mark shall be entitled to protection under this section (a) whether or not the trade mark has been registered in Singapore, or an application for the registration of the trade mark has been made to the Registrar; and (b) whether or not the proprietor of the trade mark carries on business, or has any goodwill, in Singapore. (2) Subject to subsections (6) and (7), the proprietor of a well known trade mark shall be entitled to restrain by injunction the use in Singapore, in the course of trade and without the proprietor s consent, of any trade mark which, or an essential part of which, is identical with or similar to the proprietor s trade mark, in relation to identical or similar goods or services, where the use is likely to cause confusion The substantive right in s 55(2) is, in many ways, similar to the protection available in the action for passing off. The significance of this right lies in the definition of the type of trade marks entitled to the protection that is found in s 55(1), in particular, the inclusion of proprietors of unregistered well known trade marks who do not carry on business or have any goodwill in Singapore. Traders in this position, whilst they do not have a remedy in the law of passing off, are compensated by having this statutory right in s 55(2). (Note that s 55(3) provides substantive rights of other nature. These will be discussed later.) 17.8 It is against this background that we assess what impact the three trade mark cases under review have on the issue of territoriality In Future Enterprises Pte Ltd v McDonald s Corp, the fast food chain giant McDonald s, relied on its earlier registered mark McCafé for coffee and related products, to oppose the application filed by a local company ( Future Enterprises ) to register the mark MacCoffee in

4 302 SAL Annual Review (2007) 8 SAL Ann Rev respect of instant coffee mixes. McDonald s argued that the two marks were similar, the parties goods were similar if not identical, and there existed a likelihood of confusion amongst the public. Hence, registration of the MacCoffee mark would contravene s 8(2)(b) of the Trade Marks Act. The High Court s findings were in favour of McDonald s, and Future Enterprises trade mark application was rejected. The High Court s decision (which was reviewed last year) was upheld by the Court of Appeal Before the appellate court, Future Enterprises then launched a novel argument: it had a common law right to the MacCoffee mark which restricted and rendered inoperative MacDonald s right to oppose the registration of the MacCoffee mark, even though it was confusingly similar to McCafé, an earlier registered trade mark. Before assessing the merits of this novel argument, the Court of Appeal had to decide a preliminary point, namely, whether Future Enterprises had in fact acquired a common law right to the MacCoffee mark Future Enterprises claimed that this common law right had been acquired in two ways: first, by its use in Singapore and secondly, by its international reputation stemming from its sales in Russia and other East European countries since On the first ground, the Court of Appeal reviewed the advertisements tendered by Future Enterprises as evidence to prove user of the MacCoffee mark in Singapore, and noted that the advertisements related primarily to marketing efforts in Russia and other East European countries (and not in Singapore) and even these advertisements abroad highlighted a different mark, namely, a composite mark comprising the word MacCoffee and a prominent eagle device. Future Enterprises was really selling its coffee products under this composite mark rather than the word mark MacCoffee. (Future Enterprises had previously been involved in litigation over the use of this composite mark: see Future Enterprises Pte Ltd v Tong Seng Produce Pte Ltd [1998] 1 SLR 1012; McDonald s Corp v Future Enterprises Pte Ltd [2005] 1 SLR 177.) The Court of Appeal concluded that there was insufficient use of the MacCoffee mark in Singapore so as to entitle Future Enterprises to protection on the basis of prior use It is the second argument made by Future Enterprises that is interesting. By relying on its international reputation arising from its sales of MacCoffee products in Russia, etc, as the basis for its common law right to the mark in Singapore, it was in effect challenging the hard line approach. This is what this argument amounts to, even though no reference was made to the hard line approach or to the Privy Council s 1965 decision in Star Industrial Co Ltd v Yap Kwee Kor [ ] SLR 20 or to our Court of Appeal s 1998 decision in CDL Hotels International Ltd v Pontiac Marina Pte Ltd

5 (2007) 8 SAL Ann Rev Intellectual Property Law 303 [1998] 2 SLR 550. Instead, Future Enterprises referred to a more recent decision of the Privy Council on appeal from Mauritius, Sprints Ltd v Comptroller of Customs (Mauritius) [2000] FSR 814, and in particular to the following passage of the judgment (at 822): [It] is essentially the reputation of the mark which will give rise to possible confusion and in light of the growth in international commerce and communication it may now be possible in the case of an internationally established trade mark to proceed upon evidence of its notoriety in a country even without any actual user of the mark there This claim in Sprints Ltd v Comptroller of Customs (Mauritius) [2000] FSR 814 was not for passing off. It concerned an opposition to the registration of a trade mark on the basis that such registration would by reason of its being calculated to deceive or otherwise, be disentitled to the protection in a court, and contravene a provision in the trade marks statute of Mauritius (Singapore used to have this same ground for refusing registration: see s 15(1) of the repealed Trade Marks Act 1939). The opinion of the Privy Council cited above was given by way of obiter, since the court did find that there was user of the mark in question within the jurisdiction. Nonetheless, this obiter given in a trade mark registration case is significant in that it may be a signal that the Privy Council, if it has to review the hard line approach in passing off which it adopted in 1965 in Star Industrial Co Ltd v Yap Kwee Kor [ ] SLR 20, may find that this approach has become outdated in the globalised world of today The response of our Court of Appeal to the Privy Council s obiter was as follows (at [14]): We do not disagree with this observation in relation to internationally established marks. [W]e note that the current legal requirements of actual use may need to be re-conceptualised in the wake of the Internet and the corresponding ubiquitous nature of online advertisements. It is not difficult to envision a future trade marks regime which provides for and protects the inevitable increase in the use of trade marks online as opposed to offline. The concept of the territoriality of a trade mark is likely to be affected by its ubiquitous use online This suggests that, like the Privy Council in Sprints Ltd v Comptroller of Customs (Mauritius) [2000] FSR 814, the Court of Appeal may be prepared to re-look the hard line approach in passing off. However, the factual matrix before the Court of Appeal did not allow it to embark on this journey. The court found that Future Enterprises documentary evidence related to use of the composite mark and not the word mark MacCoffee. In making this finding, what the Court of Appeal was saying is this: If (at all) Future Enterprises had an

6 304 SAL Annual Review (2007) 8 SAL Ann Rev international reputation, it was in relation to the composite mark and not in relation to the mark which was the subject-matter of the dispute. In other words, Future Enterprises had not even succeeded in getting past the first base to show that the public in Singapore knew of its MacCoffee products. This was not a case where the trader had reputation but no business within the jurisdiction. The issue of whether the trade mark law of Singapore should protect a trader s reputation per se was not before the Court of Appeal If the appropriate factual matrix presents itself before the Court of Appeal, should it decide that the hard line approach be abandoned? Indeed, in countries such as Australia (ConAgra Inc v McCain Foods (Aust) Pty Ltd (1992)106 ALR 465) and Canada (Orkin Exterminating Co v Pestco Co of Canada (1985) 19 DLR 90), the courts there have opted for a soft line approach, allowing their law of passing off to assist the plaintiff-trader who may not have business within the jurisdiction but whose reputation has spread to that jurisdiction. Traders who find themselves in this position would point to these soft line cases, and argue that Singapore should follow suit, that the hard line approach is not only passé in a border-less business world, it is unfair for one trader to take a free ride on the reputation built up by another trader. This is unfair competition, in short. They might argue that CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 2 SLR 550, which endorsed the hard line approach, was decided ten years ago (in 1998) and the situation since then has changed such that adherence by the Court of Appeal to its prior decision would cause injustice in a particular case or constrain the development of the law in conformity with the circumstances of Singapore (see the Practice Directions (Judicial Precedent) dated 11 July 1994) There is, however, the other side of the story. The traditional hard line approach is not completely without justification: it has been argued that a country s trade mark law should not allow a trader to stifle competition if he has not entered the market and contributed to the local economy (see further Ng-Loy, Passing Off in Singapore: Interpreting Goodwill for the New Millennium [2001] JBL 74 at 82). Further, the hard line approach as adopted in CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 2 SLR 550 ( the Millenia case ) is not as harsh or unfair as it seems. As pointed out earlier, the Court of Appeal in the Millenia case had already taken a step towards softening the hard line approach by recognising that it was not necessary for the trader-plaintiff to have started trading in Singapore, and that his pretrading activities in Singapore could generate goodwill. (In fact, as we will see later in the review of the third trade mark case, Amanresorts Ltd v Novelty Pte Ltd [2007] SGHC 201, the hard line approach in Singapore is really not so stringent.) Finally, the trader who has no goodwill at all that is, no business or pre-trading activities in

7 (2007) 8 SAL Ann Rev Intellectual Property Law 305 Singapore but whose mark qualifies as a well-known trade mark is not without remedy: he may still turn to s 55 which entitles him to an injunction to restrain unauthorised use of his trade mark As for the argument that the ten-year-old rule in CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 2 SLR 550 is outdated, the question to be asked should be this: have circumstances in Singapore changed so much since 1998 as to warrant a departure from the hard line approach? Globalisation the increase in people travelling abroad and businesses going border-less is not a recent phenomenon. At that time, the statutory remedy conferred by s 55 was not even available to the plaintiff in the Millenia case, as the Trade Marks Act (Cap 332, 2005 Rev Ed) came into force only on 15 February In spite of all this, the Court of Appeal when deciding the Millenia case in 1998 saw it fit to continue with the hard line approach The other aspect of the Court of Appeal s decision in Future Enterprises Pte Ltd v McDonald s Corp [2007] 2 SLR 845 was its view that the current legal requirements of actual use may need to be reconceptualised in the wake of the Internet and the corresponding ubiquitous nature of online advertisements. The concern of the Court of Appeal was this: given that trade mark rights are territorial in nature and hence it is use of the trade mark within jurisdiction which is relevant, does it mean that when a trader advertises his wares via the Internet and his trade mark appears on the website, he may be said to have used the trade mark in Singapore? This issue arose in the second trade mark case under review, Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR This case concerned, inter alia, an application to revoke a registered trade mark on the basis that there had been no genuine use of the trade mark in Singapore for a period of five years (see s 22(1) of the Trade Marks Act). The registered proprietor, a foreign company located outside of Singapore, had a website on which its registered trade mark appeared. Before we look at how the High Court resolved this issue, it should be noted that this issue had arisen earlier in another Singapore IP case a patent infringement case In Trek Technology (Singapore) Pte Ltd v FE Global Electronics Pte Ltd [2005] 3 SLR 389, the plaintiff who had obtained patent registration for its invention in Singapore sued a party, located outside of Singapore, for offering for sale the patented invention on an internet website. For this party to be liable for patent infringement under Singapore s Patents Act (Cap 221, 2005 Rev Ed), its offer for sale of the patented invention must have occurred in Singapore. (Patent rights, just like trade mark rights, are territorial in nature.) According to the late Lai Kew Chai J, an offer for sale of the invention via a website constituted an offer in Singapore only if a reasonable internet user (surfer) looking at the website would understand that an offer of the patented invention

8 306 SAL Annual Review (2007) 8 SAL Ann Rev was being made in Singapore. In adopting this approach, Lai J referred with approval to Euromarket Designs Inc v Peters [2001] FSR 20, an English trade mark case where Jacob J (as he then was) held that the appearance of a trade mark on a website that could be accessed in the UK did not necessarily mean that the trade mark was used in the UK. He said that there must be an inquiry as to what the purpose and effect of the advertisement in question is (at [16]). The views of Jacob J are even clearer in another trade mark case, 800-Flowers Trade Mark [2000] FSR 697. This is the relevant passage of his judgment (at 705): [The trade mark proprietor argued that] any use of a trade mark on any website, wherever the owner of the site was, was potentially a trade mark infringement anywhere in the world because website use is in an omnipresent cyberspace; that placing a trade mark on a website was putting a tentacle into the computer user s premises. I questioned this with an example: a fishmonger in Bootle who put his wares and prices on his own website, for instance, for local delivery can hardly be said to be trying to sell the fish to the whole world or even the whole country. And if any web surfer in some other country happens upon that website he will simply say this is not for me and move on. For trade mark laws to intrude where a website owner is not intending to address the world but only a local clientele and where anyone seeing the site would so understand him would be absurd. So I think that the mere fact that websites can be accessed anywhere in the world does not mean, for trade mark purposes, that the law should regard them as being used everywhere in the world. It all depends upon the circumstances, particularly the intention of the website owner and what the reader will understand if he accesses the site The English Court of Appeal affirmed Jacob J s decision (see [2002] FSR 12). But Buxton LJ proposed another approach to this issue. According to him, it was not enough for a trade mark proprietor to put up his trade mark on a website, from a location outside the jurisdiction in question, and simply wait in the hope that someone from that jurisdiction would download it and thereby create use of the trade mark in that jurisdiction. What was required was proof that the trade mark proprietor had taken additional active steps, other than the act of putting the trade mark on the Internet, to market the trade-marked goods in that jurisdiction In Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073, it was Buxton LJ s approach which V K Rajah J sitting in the High Court endorsed and applied. His focus was thus on whether the registered proprietor had taken active steps, other than putting up the website, to market his trade-marked goods in Singapore. To prove user of the trade mark in Singapore during the relevant five-year period, the proprietor relied on (a) enquiries it received from three Singapore companies after seeing its website, and (b) a fax sent by the proprietor to a Singapore company offering sale of its trademarked

9 (2007) 8 SAL Ann Rev Intellectual Property Law 307 goods and a meeting with Singapore-based business to discuss how to promote its trademarked goods in Singapore. With regard to (a), the court was reluctant to regard the use of the trade mark in the enquiries as sufficient and genuine use of the trade mark in Singapore because this was exactly what Buxton LJ had warned against, that is, the proprietor had merely put up a website and was waiting for someone in Singapore to make an enquiry. However, the court was satisfied that the activities in (b) constituted the necessary active steps from the proprietor. The registered trade mark was saved from revocation on the basis of (b) It would appear that V K Rajah JA was not referred to Lai J s approach taken in Trek Technology (Singapore) Pte Ltd v FE Global Electronics Pte Ltd [2005] 3 SLR 389 ( Trek Technology ) (derived from Jacob J s approach in 800-Flowers Trade Mark [2000] FSR 697). Although Trek Technology was a patent case, the issue faced by Lai J on the website point was really the same as the one before V K Rajah JA. It would have been better if we have the same approach in the patents scene and in the trade mark scene. Conceptually, there is a difference between Buxton LJ s approach and Lai J/Jacob J s approach: the former focuses the inquiry primarily on the conduct of the trade mark proprietor ( Has he taken active steps to market his goods in Singapore? ) whereas the latter focuses the inquiry on the intention of the trade mark proprietor in setting up the website and the understanding of the Internet surfer when he accesses the website ( Is the trade mark proprietor using the Internet to target at, inter alia, the Singapore market? Is this website aimed at the surfer located in Singapore as a potential customer? ). This does not, however, mean that if V K Rajah JA had adopted the Lai J/Jacob J s approach, he would have come to a different conclusion: with regard to the proprietor s case in (a), the fact that Singapore companies sent enquiries to the trade mark proprietor could indicate that they thought, upon seeing the website, that the proprietor s online advertisement was meant for people in, inter alia, Singapore. This would have satisfied Lai J/Jacob J s approach In the third case under review, Amanresorts Ltd v Novelty Pte Ltd [2007] SGHC 201 ( Amanusa ), the territoriality issue concerned the hard line approach in passing off. The claims of the plaintiffs in this case were for passing off and for infringement of s 55. The plaintiffs owned and operated exclusive high-end resorts, for example, the Amanpuri resort in Phuket, Thailand (since 1988) and the Amanusa in Bali, Indonesia (since 1992). In early 2006, the defendant, a property developer, started marketing one of its condominium projects under the name Amanusa. On the claim for passing off, the plaintiffs relied on the following to prove the first element of goodwill: its International Corporate Office and an International Reservations Office in

10 308 SAL Annual Review (2007) 8 SAL Ann Rev Singapore; publicity to the public in Singapore by, inter alia, making brochures on their resorts available at their offices in Singapore; the promotion of the resort on their websites which (unlike the Weir Warman case) were hosted in Singapore; evidence of some 1382 Singaporeans having visited the Amanusa resort between 1995 and 2005, a number which the plaintiffs argued was impressive given that the resort targeted at high net worth individuals The High Court trial judge, Tay Yong Kwong J, found that the plaintiffs did have goodwill in Singapore before Goodwill must have been acquired as at the date of the defendant s act complained of, that is, in early The learned judge said (at [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 Corp of America v Sheraton Motels Ltd [1964] RPC 202) Tay J also referred to CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 2 SLR 550 ( the Millenia case ) (at [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 Although Tay J s discussion of the first element of goodwill did not expressly mention the hard line approach, it is submitted that the learned judge had in mind the need for the plaintiffs to show that they had business within jurisdiction. Sheraton Corp of America v Sheraton Motels Ltd [1964] RPC 202, which the judge referred to (at para above), is an English decision which falls within the hard line line of cases in the UK (see Ng Siew Kuan, Foreign Traders and the Law of Passing Off: The Requirement of Goodwill within Jurisdiction [1991] Sing JLS 372 at 387). In the case, the plaintiff had no hotels in England at the material time, but it had a booking office in London and there was evidence that bookings for its hotels abroad were frequently made through this office as well as through travel agents in the UK. The court granted an interlocutory injunction to restrain the defendant from using the name Sheraton Motels in England In finding that the presence of the plaintiffs International Reservations Office in Singapore, which accepted bookings for the Amanusa resort, was sufficient to generate goodwill for the plaintiff in Singapore, Tay J s judgment is very much in line with the liberal

11 (2007) 8 SAL Ann Rev Intellectual Property Law 309 approach to the concept of business within jurisdiction that was first taken by the Court of Appeal in the Millenia case. If pre-trading activities can generate goodwill, why not the activities undertaken by a booking office? The presence of the booking office in Singapore to promote the plaintiffs Amanusa resort and to take bookings from the public here indicates that the plaintiffs were very interested in the customers they could get from Singapore. This was not a case where the court should be concerned that the plaintiff-trader was trying to stifle competition in a market which he had no interest in exploiting. It has been mentioned earlier that the hard line approach in Singapore is not as harsh as it seems, and the Amanusa case is an example of how our courts when applying this approach do take into account the practices in the commercial world and the ways businesses are actually conducted There is one aspect of Tay J s judgment which perhaps requires some clarification. The learned judge, in finding that the plaintiffs had goodwill in Singapore, took into account their huge sales revenue worldwide (more than 35% of which is attributable to its Singapore office). The plaintiffs evidence was that worldwide sales of their goods and services ranged from US$39m in 1995 to around US$86m in No matter how impressive the plaintiffs worldwide sales may be, it is ultimately the portion of the sales which could be attributed to the business in Singapore that is relevant for the purposes of determining goodwill. This would be the 35% of the sales coming through from the booking office in Singapore The rest of this review will look at each of the three cases in greater detail, to discuss the important issues raised in each case. Sections 8(7)(a) and 28(2) of the Trade Marks Act To recap, Future Enterprises Pte Ltd v McDonald s Corp [2007] 2 SLR 845 involved opposition proceedings initiated by McDonald s. The High Court, as well as the Court of Appeal, found that the McCafé mark and the MacCoffee mark were confusingly similar and therefore McDonald s opposition based on s 8(2)(b) succeeded. The whole discussion of Future Enterprises alleged common law right to the MacCoffee mark was a preliminary point to Future Enterprises case for registration, namely, a trader with a common law right to an unregistered trade mark is entitled to register this trade mark, and this entitlement is recognised in ss 8(7)(a) and 28(2) of the Trade Marks Act and overrides the right of an earlier registered trade mark Once the Court of Appeal had reached the conclusion that Future Enterprises had no common law right to talk about, Future Enterprises whole case for registration fell. However, because of the

12 310 SAL Annual Review (2007) 8 SAL Ann Rev novelty of Future Enterprises arguments, the Court of Appeal went on to consider whether this common law right to an unregistered mark could override the rights of the proprietor of an earlier registered mark, as suggested by Future Enterprises Section 8(7)(a) provides that a trade mark shall not be registered if its use in Singapore is liable to be prevented by virtue of any rule of law (in particular, the law of passing off) protecting an unregistered mark or other sign used in the course of trade. This subsection, together with ss 8(1) 8(4) and 8(7)(b), set out the grounds on conflicts with earlier marks or rights. They are traditionally raised by the Registrar of Trade Marks as a basis for rejecting a trade mark application, and/or by the party opposing the registration of a trade mark in the name of the applicant. Therefore, it was very novel that Future Enterprises, the trade mark applicant in this case, should rely on s 8(7)(a). In essence, its case was that s 8(7)(a) is not just a ground for refusing to register a trade mark, it could also confer a right on the trade mark applicant to registering a trade mark which conflicted with an earlier registered trade mark Other than s 8(7)(a), Future Enterprises also relied on s 28(2). This sets out what is sometimes referred to as the prior use defence to an infringement action. For example, a person who has been using an unregistered trade mark before the date of registration of the registered trade mark is permitted to continue using this unregistered trade mark. Again, the essence of Future Enterprises case was that this defence provision did not only exonerate the prior user, it could also confer a positive right on the prior user to secure registration of its unregistered mark The Court of Appeal noted the supposed novelty of these arguments (at [16]), but found that they had no merit in the context of the legislative framework of the Trade Marks Act. The court said (at [22]): In determining the scope of the rights conferred by the system of registration of trade marks, paramount consideration must be given to the legislative framework and the clear and unambiguous wording of its provisions. The Act provides for several distinct types of applications (eg, opposition, infringement, invalidation, revocation) for good reason. Construing the provisions to create a defence for unregistered marks on the basis of prior use in opposition proceedings initiated by proprietors of registered marks would undermine the rights conferred by registration. This would be detrimental to conceptual clarity and militate against the statutory objective of transparency and certainty sought to be achieved by a register of trade marks.

13 (2007) 8 SAL Ann Rev Intellectual Property Law Underlying the Court of Appeal s decision was the need to avoid having two similar marks for the same kind of goods appearing on the register, as this would be the very antithesis of the rationale for having a system of registered marks (at [26]) Increasingly, our courts are going back to the basics when they analyse trade mark cases. For example, in Rothmans of Pall Mall Ltd v Maycolson International Ltd [2006] 2 SLR 551, where Lai Siu Chiu J was concerned about the bad faith provision in the Trade Marks Act (see further below), the learned judge spoke of the need to uphold the sanctity of the trade marks register and its system of registration (at [19]). Of the three trade mark cases under review this year, the Court of Appeal in the Future Enterprises Pte Ltd v McDonald s Corp [2007] 2 SLR 845 case was not the only court which checked its conclusion against the rationale of the registration system. V K Rajah JA in Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073 also set out at length the broad objectives and functions of the trade mark registration system, starting with the origins of the protection of unregistered trade marks in the 18 th century (to the tort of deceit), and tracing the reasons for the establishment of the first register in the UK in V K Rajah JA summarised the functions of the register in the following paragraph (at [41]): It is plain that the trade mark register is intended to be a comprehensive and accurate record of trade marks currently in use. As such, it is crucial to maintain the accuracy of the register and to ensure that undeserving and invalid trade marks are removed from the register without undue delay and complication. In addition, the register is meant to assure and endorse the function of registered trade marks as badges of origin so as to protect the public against deception. Hence marks that are misleading or likely to cause confusion or no longer serve their function should not be accepted or allowed to remain on the register, as the case may be. [emphasis added] The italicised words in this passage of his judgment are especially appropriate in Future Enterprises Pte Ltd v McDonald s Corp [2007] 2 SLR 845. This is an expansion of what the Court of Appeal meant when it said that having two confusingly similar marks on the register was antithesis to the function of the registration system. Genuine use in revocation proceedings We have looked at how V K Rajah JA in Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073 dealt with the concept of use of a trade mark in the internet context for the purposes of determining whether there has been use of the registered mark in Singapore for the purposes of revocation proceedings initiated under s 22(1)(a) for non-use for five years. In V K Rajah JA s judgment, the

14 312 SAL Annual Review (2007) 8 SAL Ann Rev proprietor of the registered trade mark was referred to as the defendant and the applicant for revocation was referred to as the plaintiff. Henceforth, in this review, these terms shall be used to refer to these parties V K Rajah JA held that there was use of the registered mark in Singapore because, other than the use of the mark on the defendant s website, the defendant had taken active steps to market the trademarked goods in Singapore by, inter alia, meeting with a Singaporebased business to discuss how to promote the goods. This Singaporebased company was a potential agent or dealer who would facilitate the supply of the goods to other parties in Singapore. No sales had been concluded during the relevant five-year period To successfully fend off an application for revocation on the basis of non-use, it is not sufficient that the use of the registered mark occur in Singapore. Such use must also qualify as genuine use. On this, V K Rajah JA gave the following guidelines. Firstly, genuine use can be established even if there is no evidence of actual sales being made. Therefore, the fact that the defendant in this case had not concluded any sales was not in itself fatal Secondly, genuine use does not require communication of the mark to the ultimate consumers of the goods. Once the mark is communicated to a third party in such a way as to be consistent with the essential function of a trade mark, that is, as a badge of origin, that communication would constitute genuine use. In this case, the use of the registered mark during the meeting with the Singapore-based company, the potential agent, was use of the mark as a badge of origin. It did not matter that there had been no communication to the actual buyers of the goods. Sections 7(6) (bad faith) and 23(4) (fraud and misrepresentation) In Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073, apart from revocation proceedings, the plaintiff had also filed invalidation proceedings to challenge the validity of the initial registration. The plaintiff argued that the initial registration was unlawful because (a) it was made in bad faith, and hence, contravened s 7(6) read with s 23(1) of the Trade Marks Act, and (b) it was obtained by misrepresentation and hence, contrary to s 23(4) On what can amount to bad faith, V K Rajah JA gave the following examples (at [42]):

15 (2007) 8 SAL Ann Rev Intellectual Property Law 313 (a) 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; (b) 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 (c) the applicant becomes aware that someone else plans to use the mark, and files a pre-emptive application with a view to selling it In these instances, the objection was that the applicant was hijacking a mark or spoiling a competitor s plans (at [42]). This is not the first time the term hijacking was used by our judges to describe the scope of the bad faith provision in s 7(6). In Nautical Concept Pte Ltd v Mark Richard Jeffery [2007] 1 SLR 1071, the applicant of the mark JWEST for footwear, was previously the local agent of an English company selling JEFFERY-WEST and JW ladies shoes. Tan Lee Meng J found that the applicant was attempting to hijack the English company s marks (at [24]) and held the application was filed in bad faith In Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073, the allegation of bad faith was founded on these facts. The plaintiff and the defendant had an agreement to divide up the territorial markets between them for the purpose of making and selling WARMAN goods. The plaintiff had the exclusive right to manufacture WARMAN goods in Singapore, but both the plaintiff and the defendant were free to sell WARMAN goods in Singapore. (The WARMAN goods sold by the defendant were made in Africa.) The defendant took the position that under this agreement it had a right to register the mark in Singapore, and exercising this right, the defendant registered the mark in Singapore. The defendant knew that the plaintiff would object to this registration in Singapore; both were already engaged in litigation in other countries where the defendant had registered the mark. The plaintiff argued that, by registering the application in Singapore knowing about the plaintiff s objection and without disclosing the existence of the overseas litigation to the Registrar of Trade Marks, the defendant had acted in bad faith. The plaintiff relied on Rothmans of Pall Mall Ltd v Maycolson International Ltd [2006] 2 SLR 551, where the trade mark applicant s principal was involved with a third party in overseas litigation over the use of the trade mark in question. Lai Siu Chiu J imposed on the trade mark applicant a duty to inquire into the bona fides of a trade mark, the scope of which included a duty to disclose to the Registrar the existence of these overseas litigation. She found that the applicant s non-disclosure in the case amounted to bad faith.

16 314 SAL Annual Review (2007) 8 SAL Ann Rev The facts before V K Rajah JA were different: he found that under the agreement, the plaintiff and the defendant were equally entitled to apply to register the WARMAN mark in Singapore. The defendant was merely exercising this contractual right when he filed the trade mark application in Singapore. This being the case, the defendant could not be said to have acted in bad faith in not disclosing the plaintiff s objection and the existence of the overseas litigation to the Registrar. V K Rajah JA distinguished Rothmans of Pall Mall Ltd v Maycolson International Ltd [2006] 2 SLR 551 ( Maycolson ) in the following manner (Weir Warman Ltd v Research & Development Pty Ltd [2007] 2 SLR 1073 at [89]): The duty to inquire in Maycolson only arose in relation to a registrant feigning ignorance of facts that would have negated its rights to register. In contrast, where one does not deny awareness of material facts surrounding the registration of a trade mark, and relies instead on an independent right to register, as in this case, there should not be any basis for creating a broad and general duty to disclose on the registrant The other ground for invalidation was s 23(4). This provides that the registration of a trade mark may be declared invalid on the ground of fraud in the registration on the ground that the registration was obtained by misrepresentation This is the first time that the question of fraud and misrepresentation under the Trade Marks Act (Cap 332, 2005 Rev Ed) has been considered by our courts. But the concept of fraud did exist under the repealed Trade Marks Act 1939 (in s 48(1)), and there are local cases which have explored what fraud meant under the old law. It is from these cases that V K Rajah JA derived the following principle for the purposes of the current law (at [92]): A registration made under fraud or with misrepresentation is one that succeeds only on the strength of an untrue statement made by the registrant The facts relevant for the consideration of fraud and misrepresentation in the case were as follows. As mentioned above, it was agreed between the plaintiff and the defendant that the plaintiff had the exclusive right to manufacture WARMAN goods in Singapore, but both the plaintiff and the defendant had equal rights to sell WARMAN goods in Singapore. The WARMAN goods sold by the defendant in Singapore were made in Africa. When the defendant applied to register the WARMAN mark in Singapore, it described itself in the application form as the manufacturer and merchants vis-à-vis its use of the WARMAN mark in Singapore. The plaintiff argued that, in describing itself as the manufacturer, the defendant was representing to the Registrar of Trade Marks and the public that it had the right to manufacture the goods in Singapore and that was untrue.

17 (2007) 8 SAL Ann Rev Intellectual Property Law V K Rajah JA disagreed. There was no untrue statement when the defendant was in fact the manufacturer of the WARMAN goods sold in Singapore, even if these goods were not made in Singapore (but in Africa). Without any untrue statement, there can be no fraud or misrepresentation. Protection for well-known trade marks under s The plaintiffs in Amanresorts Ltd v Novelty Pte Ltd [2007] SGHC 201 succeeded in their claim for passing off. Apart from the goodwill element (which is discussed above), Tay Yong Kwang J found that the other two elements, namely, misrepresentation and damage, were also satisfied On misrepresentation, he held that the public in Singapore would think that the defendant s Amanusa condominium was somehow related or connected to the plaintiffs Amanusa resort (eg, by way of a licence to use the name). It would seem that the learned judge was of the view that the parties one being in the business of operating hotels/resorts and the other in the business of developing residential properties were in direct competition with each other. This speculation is derived from the fact that the judge took pains to emphasise that parties in a passing off action need not be in common fields of enterprise (at [58]), and it was possible in such circumstances for the element of misrepresentation to be made out On damage, there were two specific types of damage which the plaintiffs were likely to suffer: first, the intangible loss that may be occasioned by the insidious process of dilution such that the famous name loses its uniqueness (at [65]); and second, loss of licensing revenue if developers were permitted to appropriate the Aman names for their residential property The plaintiffs had also sued for infringement under s 55. Sections 55(1) 55(2) have been briefly mentioned earlier. This creates a statutory right which is very useful for proprietors of well known trade marks, a right which is not dependent on registration of the trade mark or the presence of business or goodwill in Singapore To qualify for protection under s 55, the plaintiffs must first show that their marks are well known in Singapore. In this regard, ss 2(7) 2(9) are very important. Section 2(7) lays down a nonexhaustive list of factors (eg, duration of use; whether the mark was registered) that the court must take into account. Section 2(8) provides that where a trade mark is well-known to any relevant sector of the public in Singapore, the trade mark shall be deemed to be well known in Singapore. Section 2(9) defines the phrase relevant sector of the

18 316 SAL Annual Review (2007) 8 SAL Ann Rev public in Singapore to include, for example, the sector of actual and potential consumers of the goods, or the sector of distributors of the goods. It is clear from s 2(8) that, to qualify as a well-known trade mark, it is not necessary for the mark to be well known to the general public at large in Singapore. This is an important point and we shall return to this point in a little while Tay J held that the relevant sector of the public in Singapore referred to the sector dealing with the goods or services of the plaintiffs (the high-end hotel and resort market) and not those of the defendant (residential property market). In other words, the question Do you know or have you heard of the Aman and Amanusa marks? must be directed at those connected with the high-end hotel and resort industry, and not those connected with the residential property industry. Tay J found that the plaintiffs marks were well known to the actual and potential consumers of high-end resort services as well as the people working in the travel and leisure industry. By virtue of s 2(8), he concluded that the plaintiffs marks were deemed to be well-known in Singapore The next question was whether the substantive rights in s 55 were available to the plaintiffs. The substantive rights in s 55 are found in ss 55(2) and 55(3). Section 55(2) entitles the proprietor of the wellknown trade mark to an injunction to restrain unauthorised use of the well-known trade mark in relation to identical or similar goods or services, where the use is likely to cause confusion. (An injunction is the only remedy available under s 55, and this is one aspect in which the statutory right differs from passing off.) The plaintiffs did not rely on s 55(2). This was probably because the plaintiffs did not regard the defendant as dealing with identical or similar goods or services. It has been noted that Tay J appeared to take this view. This being the case, s 55(2), which is confined to cases where the parties good or services are identical or similar, has no application here. It must be for this reason that the plaintiffs case on s 55 was built on the other substantive provision, namely, s 55(3). Section 55(3) provides as follows: Subject to subsections (6) and (7), the proprietor of a well known trade mark shall be entitled to restrain by injunction the use in Singapore, in the course of trade and without the proprietor s consent, of any trade mark which, or an essential part of which, is identical with or similar to the proprietor s trade mark, in relation to any goods or services, where the use of the trade mark (a) would indicate a connection between those goods or services and the proprietor, and is likely to damage the interests of the proprietor; or

19 (2007) 8 SAL Ann Rev Intellectual Property Law 317 (b) if the proprietor s trade mark is well known to the public at large in Singapore (i) would cause dilution in an unfair manner of the distinctive character of the proprietor s trade mark; or (ii) would take unfair advantage of the distinctive character of the proprietor s trade mark. [emphasis added] The protection in s 55(3), unlike s 55(2), is available even if the parties goods or services are dissimilar Within s 55(3), there are actually three substantive rights: the right in s 55(3)(a), the right in s 55(3)(b)(i) and the right in s 55(3)(b)(ii). The plaintiffs invoked the right in s 55(3)(a). Tay J held that the tests for determining whether the defendant s unauthorised use of the well-known trade mark would indicate a connection and is likely to damage the interests of the proprietor were no different from those in a passing off action. In coming to this conclusion, the learned judge referred to the WIPO Joint Recommendations for the Protection of Well Known Trade Marks. This document sets out the model law in implementing the protection for well-known marks required in the Paris Convention for the Protection of Industrial Property (of which Singapore is a member). Tay J noted that in relation to the model provision which is the equivalent of s 55(3)(a), there is a note in the Joint Recommendations, explaining that the requirements of connection and damage are targeted at a wrong connection concerning the real source of the goods or services, whether this connection is by way of an impression that the proprietor of the wellknown trade mark is the provider of the goods or services, or that he has licensed or endorsed the goods or services. This is the confusing-type of connection as to trade origin known to anyone familiar with the law of passing off This aspect of Tay J s judgment is very important. This is the first time that any provision in s 55 has been considered by our courts. The scope of s 55(3)(a) has been the subject of much speculation. In particular, the question is whether the connection therein refers to a connection that may be made by the public between the goods of the defendant and the proprietor of the well-known trade mark which leads them to think that the defendant s goods are somehow connected with the proprietor. If so, the connection needed in s 55(3)(a) is the confusing-type of connection. A second interpretation is that the connection simply refers to the public making a mental association between the goods and the proprietor but not to the extent where they think that the goods originate or are in some way connected with the proprietor. In this second interpretation, the classic scenario would be

20 318 SAL Annual Review (2007) 8 SAL Ann Rev the public, on seeing the defendant s goods, are merely reminded of the well-known trade mark without more. By equating the tests in s 55(3)(a) with those in passing off, Tay J had chosen the first interpretation. Just as the second element of misrepresentation in passing off requires proof that the public is likely to be confused, the right in s 55(3)(a) requires proof that the public would be confused To some, requiring proof of a confusingly-type of connection in s 55(3)(a) is wrong because they regard s 55(3) as embodying what is called the anti-dilution law, where protection is not dependent on proof of confusion. In support of this argument, they may refer to the other substantive rights in s 55(3)(b): sub-para (i) which prevents dilution and sub-para (ii) which prevents taking unfair advantage. These two rights are not dependent on proof of confusion. In the case of the term dilution, this is very clear in its statutory definition in s 2(1) ( the lessening of the capacity of the trade mark to identify or distinguish the goods or services, regardless of whether there is (b) any likelihood of confusion on the part of the public ). It is also clear from English or European cases which have interpreted the phrase taking unfair advantage of, that existence of confusion is not necessary. (On this, the latest English Court of Appeal decision at the time of writing is L Oreal SA v Bellure NV [2008] ETMR 1.) Since confusion is not needed in s 55(3)(b), neither is confusion needed in s 55(3)(a) To others, requiring proof of a confusing-type of connection in s 55(3)(a) makes sense. Two arguments may be advanced in favour of this position. The first argument comes from looking at the protection of well-known trade marks mandated in the international agreements. It is respectfully submitted that Tay J was right to be guided by the WIPO Joint Recommendations. The joint authors will provide some further background, for a better understanding of the position taken in the Joint Recommendations. The starting point is Art 6bis of the Paris Convention. This article provides that well-known trade marks must be protected against unauthorised confusing use in relation to identical or similar goods/services. The level of protection for well-known trade marks was moved up one notch in Art 16(3) of the TRIPS Agreement. This article provides as follows: Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or services which are not similar to those in respect of which a trademark is registered, provided that use of that trademark in relation to those goods or services would indicate a connection between those goods or services and the owner of the registered trademark and provided that the interests of the owner of the registered trademark are likely to be damaged by such use.

21 (2007) 8 SAL Ann Rev Intellectual Property Law Article 16(3) extends the protection under Art 6bis for wellknown trade marks to situations where the well-known mark is used on goods/services which are dissimilar to those of its proprietor. Like s 55(3)(a), Art 16(3) only requires proof of connection and damage, with no explicit reference to confusion. But since the linchpin of Art 6bis is to prevent unauthorised confusing use, it makes sense that the target of Art 16(3) is also the type of connection which confuses the public. This interpretation is consistent with the explanatory note on the model provision in the WIPO Joint Recommendations (which Tay J referred to) that uses the language of Art 16(3) The other argument in support of Tay J s interpretation of s 55(3)(a) is derived from a comparison between s 55(3)(a) and s 55(3)(b). There can be no doubt that s 55(3)(b) embodies the antidilution law. It is very important to note that the anti-dilution rights in s 55(3)(b) both in (i) and in (ii) are given to a special category of well-known trade marks, namely, those that are well-known to the public at large in Singapore. To reward the proprietors for building up this very high degree and widespread reputation in their trade marks, they are given protection against a use which dilutes or takes unfair advantage of their reputation even if the use does not confuse the public. The anti-dilution rights go beyond protecting the traditional function of a trade mark as a badge of origin. On the other hand, s 55(3)(a) is available to a trade mark which is well known to any relevant sector of the public in Singapore. In some countries like the US, this type of trade marks are said to have niche fame. In the scheme of s 55(3), a trade mark with only niche fame qualifies for the protection in s 55(3)(a) but not for the protection in s 55(3)(b). This suggests that the draftsman intended the scope of protection in these two paragraphs to be different. The difference, perhaps, is that s 55(3)(a) is still firmly grounded in the fundamental requirement in trade mark law for confusion, but not s 55(3)(b). The anti-dilution rights in s 55(3)(b) are a special concession that trade mark law has made to a special category of well-known trade marks, those known to the general public at large. Should this special concession be extended to trade marks with only niche fame? Those who would answer this question with a no will heartily support Tay J s holding on s 55(3)(a). Patents Claim construction The extent of monopoly protection conferred by a patent is determined by the claims of that patent. This is clear from s 113 of the Patents Act (Cap 221, 2005 Rev Ed) which provides that an invention for a patent for which an application has been made or for which a patent

22 320 SAL Annual Review (2007) 8 SAL Ann Rev has been granted shall, unless the context provides otherwise, be taken to be that specified in a claim of the specification of the application or patent (as the case may be), as interpreted by the description and any drawings contained in that specification. Specifically, the extent of the protection afforded by the patent to its proprietor is determined by how the claims are interpreted or construed Section 113 is identical with s 125(1) of the UK Patents Act That Act gave effect to the 1973 European Patent Convention ( EPC ) which also provides (in Art 69) that the extent of protection conferred by a patent is to be determined by the terms of the claims. In an attempt to clarify the extent of protection under Art 69, the contracting states of the EPC adopted the Protocol on the Interpretation of Art 69 which rejects a strict literal approach to claim construction, requiring that claims are to be construed to combine fair protection for the patentee with a reasonable degree of certainty for third parties. In Kirin-Amgen Inc v Hoechst Marion Roussel Ltd [2005] RPC 9, the House of Lords confirmed that the purposive approach to claim construction, as set down in Catnic Components Ltd v Hill & Smith Ltd [1982] RPC 183, satisfied this requirement. The approach rejects a meticulous verbal analysis of the language of a patent claim and provides that it should be construed to mean what a reasonable person skilled in the relevant technical field would, from an objective viewpoint, understand the claim to mean in the context of the patent as a whole and in view of the language adopted by the patent. The House of Lords described this approach as the bedrock of patent construction The approach was roundly endorsed last year by our Court of Appeal in First Currency Choice Pte Ltd v Main-Line Corporate Holdings Ltd [2008] 1 SLR 335 ( the FCC case ). The case involved a patent for an invention which provided an automatic means of determining the preferred currency for a card transaction between a local merchant and a foreign cardholder. The invention was more convenient to use and eliminated the frailties inherent in a manual system of currency conversion. V K Rajah JA, who delivered the judgment of the court, agreed that one of the most significant issues in patent litigation is the determination of the true construction of a patent specification and, in particular, its claims and that in ascertaining the true construction, the claims themselves are the principal determinant, while the description and other parts of the specification may assist in the construction of the claims (at [23]). In this regard, the learned judge had held that the starting point in patent construction is to ask the threshold question: what would the notional skilled person have understood the patent to mean by the use of the language of the claims? In determining this question, the learned judge held in effect that in patent litigation, there is no necessity for the court to expressly

23 (2007) 8 SAL Ann Rev Intellectual Property Law 321 define and delve into who the notional skilled person might be in relation to the patent in question, as long as the court has kept in mind the concept of the notional skilled person and who this person is in relation to the patent in question. Counsel for the appellant had strenuously argued that the trial judge had failed to identify the notional skilled person and had not construed the claims in the patent from the perspective of the person and in the context of the common general knowledge of the art in question. The court rejected his contention that it was insufficient for the trial judge to simply say that the invention was not obvious to a person skilled in the art without giving any further elucidation Notwithstanding the rejection, it is nevertheless prudent in practice for the patentee to identify for the court the relevant notional skilled person and the state of his knowledge at the relevant time. It is necessary to specify the attributes of such a person in a given case. This is because, as Aldous LJ explained in Lubrizol v Esso Petroleum [1998] RPC 727 at 738: Obviousness [T]he court must adopt the mantle of the notional skilled addressee and determine, from the language used, what the notional skilled addressee would understand to be the ambit of the claim. To do that, it is often necessary for the court to be informed as to the meaning of technical words and phrases and what was, at the relevant time, the common general knowledge; the knowledge that the notional skilled man would have Identification of the notional skilled person and his state of knowledge is also obligatory if the validity of the patent is challenged on the ground of obviousness. Section 13(1)(b) of the Patents Act provides that an invention must involve an inventive step. An inventive step is, in turn, defined in s 15 as one which is: not obvious to a person skilled in the art, having regard to any matter which forms part of the state of the art by virtue only of section 14(2) and without having regard to section 14(3) Section 14(2) provides that the state of the art is to be taken to comprise all matter (whether a product, a process, information about either, or anything else) which has been made available to the public, whether in Singapore or elsewhere, at any time before the priority date of the invention in question. This seems to conflate the knowledge of the person skilled in the art with that of the general public. If so, it would mean that there is no distinction between the requirements of novelty and obviousness. Obviousness would cover practically every case of lack of novelty.

24 322 SAL Annual Review (2007) 8 SAL Ann Rev In First Currency Choice Pte Ltd v Main-Line Corporate Holdings Ltd [2008] 1 SLR 335, the court noted that this can be rather confusing. Hence, it expressed preference for Lord Reid s view in Technograph Printed Circuits Ltd v Mills & Rockley (Electronics) Ltd [1972] RPC 346 that there should be a distinction between the two. Lord Reid justified this view by confining the knowledge of the person skilled in the art to that relating to matter which is or ought to have been known to a diligent searcher whereas the knowledge of the general public includes matter which no one would ever know or is likely to know, such as the contents of a foreign publication which a diligent search would probably miss. The court was of the opinion that Lord Reid s view injected substance into the legislative intent underlying s 15 of the Patents Act It is manifest from s 15 that the statutory question is whether the invention is obvious to a notional person skilled in the art. That is, the question of obviousness is to be assessed from the perspective of this person. This means that what he knows of the state of the relevant art at the relevant priority date is of importance. The court has to assume the mantle of such a person and to impute to him what was, at the relevant priority date, common general knowledge of the art in question: see Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59 at where the UK Court of Appeal sets out the well-known four-step structured test for considering obviousness. This notional person has been variously, and perhaps unfairly, described as a normally skilled but unimaginative addressee (at 73) who is supposed to have an unlimited capacity to assimilate the contents of scores of specifications but to be incapable of a scintilla of invention (Mills & Rockley (Electronics) Ltd v Technograph Printed Circuits Ltd [1971] FSR 188 at 193) The Windsurfing test (Windsurfing International Inc v Tabur Marine (Great Britain) Ltd [1985] RPC 59) has been adopted in Singapore in Merck & Co Inc v Pharmaforte Singapore Pte Ltd [2000] 3 SLR 717. In First Currency Choice Pte Ltd v Main-Line Corporate Holdings Ltd [2008] 1 SLR 335, V K Rajah JA observed that the test appears to be here to stay but cautioned that it is no more than a useful guide, adding (at [45]) that it is merely a manifestation of judicial inventiveness on how best to pragmatically interpret and elucidate the requirements of section 15 of the Act. He said that in straightforward cases, it is sometimes sufficient to merely rely on the test formulated in an old case (Vickers, Sons & Co Ltd v Siddell (1890) 7 RPC 292) where the court stated (at 304) that an invention lacked an inventive step if what was claimed was so obvious that it would at once occur to anyone acquainted with the subject, and desirous of accomplishing the end. With this in mind, V K Rajah JA held that the subject invention of the respondent was not obvious because no one had previously thought of using the Bank Identification Number to

25 (2007) 8 SAL Ann Rev Intellectual Property Law 323 identify the operating currency of a payment card. Indeed, no one had taken the significant step of introducing an automatic system to implement the process of deciphering the operating currency of the payment card. The fact that the step may appear Lilliputian or even simple is not a bar to inventiveness, as the learned judge rightly acknowledged. Insufficient disclosure Identification of the notional skilled person is also highly relevant in the event of a challenge of a patent on the ground of insufficiency of disclosure in the specifications. This is provided in s 80(1)(c) which states that a patent may be revoked if its specification does not disclose the invention clearly and completely for it to be performed by a person skilled in the art. This means that the disclosure must enable the invention to be performed to the full extent of the monopoly claimed and not merely a single example of something within the claim: Biogen Inc v Medeva plc [1997] RPC 1 at 48. The case also confirms that where the patent describes a principle of general application, the claims can be in correspondingly general terms. There is no necessity to describe every possible embodiment of the invention or to set out every detail necessary for performing the invention Whether the disclosure is sufficient is a question of fact which depends not only on the nature of the invention but also the attributes of the skilled person and the amount of effort which he can reasonably be required to apply. In general, the disclosure must be such as to enable the skilled person to use his skill to perform the invention. He is not required to carry out any prolonged research, inquiry or experiment but may need to carry out the ordinary methods of trial and error which involve no inventive step: see Mentor Corp v Hollister Inc [1993] RPC 7 at The contribution of First Currency Choice Pte Ltd v Main-Line Corporate Holdings Ltd [2008] 1 SLR 335 to the law in this regard is that there is sufficient disclosure if the addressee has little difficulty in reading and understanding the specification and claims or in understanding the intended workings of the patent, even though there may be some ambiguity regarding certain terms in the patent. As the court pointed out, absolute clarity and completeness of the disclosure is not required, unlike in Australia where the appellant succeeded in respect of a similar patent. Innocent infringement Section 69(1) provides that in proceedings for infringement of a patent:

26 324 SAL Annual Review (2007) 8 SAL Ann Rev damages shall not be awarded and no order shall be made for an account of profits against a defendant who proves that at the date of the infringement, he was not aware, and had no reasonable grounds for supposing, that the patent existed This section was discussed in last year s Annual Review in relation to Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd [2007] 1 SLR 1021 where Tay Yong Kwang J held, amongst others, that the defence of innocent infringement under the section must be positively pleaded and must be established by absence of knowledge as well as absence of reasonable grounds. Upon appeal in First Currency Choice Pte Ltd v Main-Line Corporate Holdings Ltd [2008] 1 SLR 335, V K Rajah JA clarified (at [95]) that the statutory protection conferred by the section is not a defence in the strict sense of the word but is, rather, an extenuating consideration that ameliorates unknowing and, therefore, innocent transgressions in terms of the remedy (either in the form of damages or an order for an account of profits) that can be granted This clarification was elaborated upon recently by the Court of Appeal in Seiko Epsom Corp v Sepoms Technology Pte Ltd [2008] 1 SLR 269 ( the Seiko case ). The case concerned a dispute over the parties consent judgment which had provided, amongst others, that the respondents were to furnish an account of profits. The respondents duly provided the account, but from the date (7 October 2005) when they were served with the appellant s statement of claim. They averred that, prior to that date, they were not aware either that the subject patent existed or that they were infringing it. The appellant was, however, dissatisfied with the account and filed a notice of objection on the ground that it did not cover the entire period of infringement which, in its view, commenced on the date of publication of the patent (20 February 1998), not on 7 October In dismissing the appeal, the court explained that the concept of defence encompassed a denial of liability as well as of the relief claimed and that the term liability involved some form of duty or obligation. However, a duty or obligation could not exist in a vacuum and would only arise if certain legal prerequisites are met. In patent infringement cases, liability arises only if the legal prerequisites for infringement are established and the issue of the relief awardable for infringement should not be conflated with the concept of liability (at [20]). Hence, as s 69(1) only operates to limit the relief awardable, it cannot strictly be characterised as a defence to liability, although it might operate as a defence in another sense in as much as it might restrict the relief awardable (as opposed to liability) [emphasis in original] (at [22]).

27 (2007) 8 SAL Ann Rev Intellectual Property Law These observations were necessitated by the appellant s submission that the concept of liability subsumed the issue of the relevant accounting period and that when the respondents consented to final judgment in terms of liability, they had also consented to account for all the profits earned during the entire period of infringement, thus rendering s 69(1) inapplicable. The court was, however, of the view that an objective construction of the consent judgment indicated that it was final only in relation to the issue of liability, with the accounting period still to be determined at a later stage for the purposes of ascertaining the precise quantum owed upon a taking of account. That being so, it was necessary for the court to consider the precise nature and effect of s 69(1) specifically, whether the section operated as a defence to liability or in relation only to damages and account of profits After reviewing the legislative history of the section, Andrew Phang Boon Leong JA, who delivered the judgment of the court, considered the heading and marginal note of the section as well as its text and the relevant case law and textbook commentary and concluded that they all point to the fact that the section does not operate as a defence to liability but merely restricts the relief awardable. It is respectfully suggested that the conclusion is unassailable. It seems plain from the language of the section that it is directed at restricting or limiting the amount of damages or profits payable by a defendant who successfully proves his lack of knowledge at the date of infringement. This is supported by the fact that the section makes no reference to an injunction and other reliefs (such as delivery up), which fact suggests that such reliefs remain available to the plaintiff despite proof of the defendant s innocence. The section has been described as providing a special defence to an infringer (see, eg, Simon Thorley, Richard Miller, Guy Burkill, Colin Birss, Terrell on the Law of Patents (Sweet & Maxwell, 16th Ed, 2005). The contribution of Seiko Epsom Corp v Sepoms Technology Pte Ltd [2008] 1 SLR 269 is that it categorically clarifies that the section provides a defence only in so far as it limits the amount of damages or profits payable The onus is on the defendant to establish the defence. He must prove not only that he was not aware that the patent in question existed but also that he had no reasonable grounds for supposing that it existed. Marking goods with the word patent or patented without the actual number of the patent is not enough to justify the court in holding against him (see s 69(2)) although, it is suggested, it is a very important factor in ascertaining his guilt or innocence. It seems clear from the authorities that the test for ascertaining whether there are reasonable grounds for supposing that the patent in question existed is an objective one (see, eg, Lancer Boss v Henley [1974] FSR 14). Terrell (see para above), however, suggests that the test is objective in the sense that the expression reasonable grounds for supposing involves

28 326 SAL Annual Review (2007) 8 SAL Ann Rev knowledge of facts from which a reasonable man would arrive at the belief that the patent existed, not in light of all the circumstances at the date of infringement. It further submits that this calls for an inquiry of the defendant s state of knowledge at the date of infringement. The Court of Appeal in effect adopted this reasonable man approach in First Currency Choice Pte Ltd v Main-Line Corporate Holdings Ltd [2008] 1 SLR 335 where the respondent had informed UOB in an dated 10 May 2002 that a European patent had been granted in respect of the invention and that a corresponding patent application in Singapore was pending. The Singapore patent application was eventually granted on 30 June On these facts, the trial judge had ruled that in view of the dated 10 May 2002, any protection accorded by s 69(1) ceased to apply by that date In upholding this ruling, the court held that prior to 10 May 2002, it was not reasonable for UOB, which was not in the software business, to have known of the publication of the Singapore patent application. It added that it was somewhat unreasonable to hold that the mere publication of the Singapore patent application [in the Patents Journal on 19 February 2002] should be deemed to have put UOB on notice of potential patent infringement. The use of the expression potential patent infringement relates to s 76 of the Act which entitles the proprietor of a patent to claim damages for infringement of his patent in respect of acts committed after the publication of the patent application in Singapore, with the proviso that the claim can only be brought after the patent has been granted and the acts would, if the patent had been granted on the date of the publication, have infringed not only the patent but also its claims in the application The other important effect of the ruling is that it is not necessary to show that at the date of the infringement, the patent in question in fact existed (see s 69(1)) or was already granted. It suffices that the patent was still pending in Singapore at the date of the infringement. In the case, UOB implemented the infringing system on 11 October 2001 but was informed through an on 10 May 2002 that there was a pending Singapore patent application for the system. It was held by the court to have knowledge of the existence of the patent on 10 May 2002 (and was, thus, not entitled to the protection conferred by s 69(1) from that date), even though the patent was only granted to the respondent on 30 June 2003 in Singapore. In this regard, the court addressed the concerns expressed in last year s Annual Review at para In the result, it is submitted that the concluding words of s 69(1) should now in effect read as follows: he was not aware, and had no reasonable grounds for supposing, that the patent or a pending application in Singapore for the patent existed. [emphasis added]

29 (2007) 8 SAL Ann Rev Intellectual Property Law 327 Copyright Exclusive licensee It is trite law that, unlike an assignment, a licence confers no proprietary interest or rights on the licensee and is a mere permission to the licensee to do that which would otherwise be unlawful. As such, the licensee himself cannot sue for infringement of the interest or rights. In the copyright field, this has caused practical difficulties for the licensee in a number of situations, such as where the copyright owner is not willing or available to prevent the infringement or is otherwise uncontactable. Our Copyright Act (Cap 63, 2006 Rev Ed) addresses these by giving special rights to the exclusive licensee in respect of copyright works The special rights arise by first defining an exclusive licence in s 7(1) as a licence in writing, signed by or on behalf of the owner or prospective owner of copyright, authorising the licensee to the exclusion of all other persons to exercise a right which would otherwise be exercisable exclusively by the copyright owner and stating in s 124 that the exclusive licensee may sue in his own name to restrain infringements of copyright without joining the copyright owner as a plaintiff or adding the owner as a defendant in the action. He is able to do so because it is declared in s 123 that his rights and remedies under the licence are concurrent with those of the copyright owner. This means that he has the same rights of action as the copyright owner and is entitled to the same remedies as if his licence had been an assignment The grant of these special rights was affirmed for the first time in Singapore by Sundaresh Menon JC in Alliance Entertainment Singapore Pte Ltd v Sim Kay Teck [2007] 2 SLR 869 at [23] where the plaintiff had valiantly argued that the rights were also given to nonexclusive licensees under the Copyright Act. It claimed that as a result of a number of licensing arrangements in respect of two cinematograph films and a television serial ( the copyright works ), it had title to sue for infringements of the copyright works and was also entitled to bring proceedings by joining the copyright owners, even though it acknowledged that it was not an exclusive licensee. The claim was rejected by the learned judicial commissioner who held that s 124 changed the default position under the common law so that in certain copyright infringement proceedings, there was no need for the exclusive licensee to join the copyright owner in the proceedings. He also held that there was nothing in the Copyright Act to suggest that a party who was not an exclusive licensee had a right of action under copyright The plaintiff sought to remedy the want of title to sue by attempting to add the copyright owners as co-plaintiffs. One of its

30 328 SAL Annual Review (2007) 8 SAL Ann Rev arguments in this regard was that it was the party who had suffered damage as a result of the infringements and ought to be entitled to recover damages from the defendants for their infringement in the form of loss of profits or an account of profits. The lack of sympathy for this argument by the court emphasises the fundamental nature and scope of a licensee s rights in respect of a copyright work. The rights are to be determined within the context of the Copyright Act. No contractual arrangements between the owner and his licensee can affect or extend the special rights granted by the Act to exclusive licensees.