Trade Mark Infringement and Goods in Transit
Facts:The case involved Burberry Ltd and Louis Vuitton Malletier, two luxury brand owners who brought trade mark infringement actions against Megastar Shipping Pte Ltd, a freight forwarder company in Singapore. The dispute arose because Megastar Shipping handled the transhipment of counterfeit goods infringing the appellants’ registered trade marks. These counterfeit goods were shipped from China to Singapore in sealed containers with the final destination being Batam, Indonesia. The goods were never intended for the Singapore market, never placed on sale in Singapore, and were never physically handled or inspected by the freight forwarder except when customs intervened.
The respondent, Megastar Shipping, received documents showing the goods as household items but did not have knowledge of the counterfeit nature of the cargo. The freight forwarder's role was limited to arranging transhipment through the Port of Singapore, a common practice given the geographic constraints of smaller ports. The counterfeit goods were seized by Singapore Customs upon arrival, and the appellants commenced infringement proceedings against Megastar Shipping.
### Procedural Details
The case initially came before the High Court, which dismissed the appellants’ claims against Megastar Shipping on the ground that the freight forwarder was not the importer or exporter of the goods for the purposes of the Trade Marks Act (Cap 332, 2005 Rev Ed) ("the TMA"). The issue at hand was whether Megastar Shipping’s role amounted to "use" of the trade marks under section 27 of the TMA, specifically whether receiving and forwarding the goods for transhipment amounted to importing or exporting goods "under the sign," thereby constituting trade mark infringement.
The appellants appealed to the Court of Appeal challenging the High Court's interpretation of import, export, and liability under section 27(4)(c) of the TMA.
### Dispute
The key legal issues concerned whether goods in transit through Singapore were to be treated as imported or exported under the TMA and whether the freight forwarder, which handled the sealed containers without knowledge of counterfeit marks, was liable for infringement. The debate revolved around the interpretation of the statutory provisions governing trade mark infringement, particularly what constitutes "use" of a trade mark, the scope of "import" and "export" under the TMA, and the mental element required for liability.
The appellants argued that Megastar Shipping was liable as the importer and potential exporter, given its control over the goods in Singapore and would have completed forwarding the goods but for customs intervention. They contended that liability should extend to local consignees and freight forwarders to effectively combat trade mark infringement by counterfeiters.
Megastar Shipping asserted that mere transhipment without knowledge of the infringing signs does not amount to trade mark use or infringement. They maintained they acted as an agent for the actual shipper, had no ownership or beneficial interest in the goods, and no involvement in decisions about the cargo. Liability for trade mark infringement, they argued, required knowledge or at least reason to believe that infringing signs were present on the goods.
### Detailed Reasoning and Legal Discussion
The Court of Appeal began by affirming the requirement of "use" for trade mark infringement under section 27(1) of the TMA. The court confirmed that "use" does not merely mean physical handling but involves use of a sign that identifies the trade origin of goods and happens "in the course of trade." The presence of a sign identical to a registered trade mark on the goods, combined with trade use, constitutes infringement.
The Court agreed with the High Court that the definitions of "import" and "export" in the TMA are aligned with the ordinary meanings in the Interpretation Act, which extends to goods brought into or taken out of Singapore by any means, including transit or transhipment. This was distinguished from EU cases where goods in transit are not considered imported for infringement purposes, reflecting different policy considerations including free movement of goods within the European Union. The Singapore Court emphasized Singapore’s role as an entrepot and indicated that goods brought physically into the country, even for transhipment, may be considered imported under the TMA.
The Court also examined international jurisprudence, such as *Beautimatic International Ltd v Mitchell International Pharmaceuticals Ltd* and *Waterford Wedgwood Plc v David Nagli Ltd*, which supported infringement findings in cases of transhipment.
Importantly, the Court highlighted that the mere physical import or export is insufficient to impose liability. Instead, knowledge or reason to believe that infringing signs are present on the goods is a necessary condition for liability. This mental element is consistent with principles of fairness and commercial reality, especially considering the many persons involved in international shipping.
The Court held that strict liability in trade mark infringement means fault or knowledge of infringement is not required once presence of infringing signs and use in trade are established. However, this strict liability does not extend to persons genuinely unaware of the signs' presence on the goods, especially in the context of freight forwarders who have no access or knowledge of the cargo’s contents. Cases like *Gillette UK Limited v Edenwest Limited* and Singapore decisions including *Creative Technology Ltd v Cosmos Trade-Nology Pte Ltd* reiterated that knowledge of presence of signs is vital for liability, even if knowledge of infringement specifically is absent.
Applying these principles to the facts, the Court found that Megastar Shipping did not know or have reason to suspect counterfeit goods were in the containers, as documents described the goods generically and no suspicious circumstances existed. The freight forwarder’s role was administrative and facilitative without actual possession or proprietary interest in the goods. Physical handling was minimal, and no evidence indicated complicity in infringement.
On the question of export liability, the Court agreed that a mere intention to export is insufficient to constitute infringement. There must be clear actions or evidence that goods would definitely be exported under the sign. Here, although Megastar Shipping would have forwarded the goods to Batam if not stopped, this point was rendered moot as the goods were seized and destroyed before export.
The Court also affirmed the limits of liability for freight forwarders, emphasizing their duty to disclose information if they become aware of counterfeit goods under recent legislative amendments providing border enforcement measures.
The Court ultimately dismissed the appeals, holding that while the goods were imported into Singapore, Megastar Shipping did not "use" the infringing signs for purposes of the TMA because it lacked knowledge or reason to believe the goods bore the infringing marks.
### Decision
The Court of Appeal dismissed the trade mark proprietors’ appeals with costs, holding that Megastar Shipping was not liable for trade mark infringement under section 27 of the TMA as it did not knowingly import or export goods under the infringing signs. The Court emphasized the importance of the knowledge requirement for imposing liability, balancing trade mark enforcement with the practicalities of international shipping and fairness to freight forwarders.
Case Title:Burberry Ltd Vs Megastar Shipping Pte Ltd
Order Date: 5 September 2018
Case Number: Civil Appeal Nos 237 and 238 of 2017
Neutral Citation: [2019] SGCA 1
Court: Court of Appeal of the Republic of Singapore
Hon’ble Judges: Justice Andrew Phang Boon Leong JA, Justice Judith Prakash JA, Justice Tay Yong Kwang JA
Disclaimer: The information shared here is intended to serve the public interest by offering insights and perspectives. However, readers are advised to exercise their own discretion when interpreting and applying this information. The content herein is subjective and may contain errors in perception, interpretation, and presentation.
Written By: Advocate Ajay Amitabh Suman, IP Adjutor [Patent and Trademark Attorney], High Court of Delhi
