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SINGAPORE: WOULD A FREIGHT FORWARDER BE LIABLE FOR TRADEMARK INFRINGEMENT FOR TRANSSHIPPING COUNTERFEIT GOODS?

4th March, 2019

This case is in relation to whether a freight forwarder would be liable in the event if they import or export either by way of transshipment without having the knowledge that the package may contain counterfeit goods.

A trade mark infringement action was taken against a Singapore freight forwarder Megastar Shipping Pte. Ltd. at the Singapore High Court by Burberry Limited and Louis Vuitton Malletier for trade mark infringement because Megastar assisted in shipping goods from China to Singapore in two sealed containers which were intended for onward shipment to Batam in Indonesia. The High Court took the view that Megastar did not fall under the definition of “importer” by virtue of the Singapore Trade Mark Act therefore Megastar did not infringe the trade marks of Burberry and Louis Vuitton and had dismissed case.

Burberry Limited and Louis Vuitton Malletier (hereinafter known as “the Appellant”) had then filed an appeal at the Singapore Court of Appeal against the High Court judgment. The issue here is that whether the Megastar Shipping Pte. Ltd. (hereinafter known as “the Respondent” will be liable under Section 27(1) of the Singapore Trade Mark Act which states that: “a person infringes a registered trade mark if, without the consent of the proprietor of the trade mark, he uses in the course of trade a sign which is identical with the trade mark in relation to goods or services which are identical with those for which it is registered,” and under Section 27 (4) (C): “a person “uses” a sign if he imports or exports goods under the sign”.

The Respondent defended the High Court’s opinion by explaining their role was merely an agent for a third party to provide transship services and had no interest in the trade marks as stated in the case of City Chain Stores (S) Pte Ltd v Louis Vuitton Malletier [2010] 1 SLR  382.

With regards to whether the Respondent falls into the definition of “exporter” by virtue of the Trade Mark Act, whereby “export requires an actual act of export and also including the intention to export. However, in this case, the Respondent was merely acted on the third party instructions whereby the counterfeit goods enters Singapore for the sole purpose of transshipment to another country. Such purpose would not fall under the Section 27 of the Trade Marks Act and it is further explained by the amicus curiae in this case and as highlighted by the court in the case of Koninklijke Philips Electronics NV v Lucheng Meijing Industrial Company Ltd and others, Nokia Corporation v Her Majesty’s Commissioners of Revenue and Customs Joined Cases C-446/09 and C-495/09, [2011] ECR I-12435. The Court of Appeal had further explained that mere intention of export does not amount to the definition of “export” in the Trade Marks Act.

Based on the above, the Court of Appeal was of the opinion that in order to prove infringement under Section 27 of the Trade Marks Act, the alleged infringing importer must have intended to do the infringing act with the knowledge or reason to believe that there was a sign presented on the counterfeit goods. Although the Respondent in this case may have directly facilitated the physical act of importing the goods i.e. transshipment of the counterfeit goods, the Respondent was not aware or has no knowledge about the infringing goods whereby the document given to the Respondent by its clients merely indicated that the consignment contained household goods and other seemingly innocuous generic merchandise.

Besides that the Respondent did not “use” the signs of the infringing trade marks because it was not aware that these were the counterfeit goods and had no reason to believe that there were signs on those goods.

The appeal was dismissed.