Groundless Threats: Singapore's High Court Sets Out The Ground Rules

Triple D Trading Pte Ltd v Fanco Fan Marketing Pte Ltd [2022] SGHC 226 concerned trade mark infringement proceedings between two fan retailers. Fanco succeeded in its counter-claim that Triple D's mark was registered in bad faith. A second counter-claim of groundless threat of trade mark infringement failed. This article summarises Singapore's position on groundless threats and the High Court's comments on a possible area for development.

What is the relevant test?

1. party making a groundless threat claim ("plaintiff") must prove that:
2. the other party ("defendant") made a threat to sue for trade mark infringement;
3. the threat related to acts other than:
4. 1. the application of the mark to goods or to material used or intended to be used for labelling or packaging goods
   2. the importation of goods to which, or to the packaging of which, the mark has been applied; or
   3. the supply of services under the mark; and

3. the plaintiff is an aggrieved person.

A plaintiff who establishes these elements is entitled to relief unless the defendant proves that the acts complained of did in fact constitute infringement.

Is there a threat?

The Court will employ the perspective of a "reasonable person" to determine if a threat was made. It is possible for a threat to be made out even if the defendant did not use specific legal language (e.g. expressing an intention to issue a writ).

In this case, the following statements in the defendant's letters amounted to threats to sue:

What acts did the threats relate to?

The groundless threat framework does not protect those at the "source" of infringement, namely traders manufacturing or importing goods or supplying services under the mark. These acts are expressly excluded from the provisions on groundless threats.

In this case, Triple D alleged that Fanco had "marketed" and "advertised" its goods under the mark. The Judge held that such threats went beyond the excluded acts. Nothing in the relevant provisions indicated that "further acts such as sale or advertising" would be unactionable.

That being said, the Judge noted that the United Kingdom has amended its laws on groundless threat to reflect the commercial reality that manufacturers and importers would likely also sell the allegedly infringing goods. He further commented that the settlement of disputes may be impeded if asking for undertakings not to "sell or distribute" goods could trigger the groundless threats provision. Nevertheless, in the absence of similar amendments in Singapore, the prevailing provisions had to be given their natural meaning.

Is the plaintiff an "aggrieved person"?

To be an "aggrieved person", a plaintiff must show that:

1. he has suffered loss as a result of the defendant's threats; or
2. it is appropriate for the court to grant a declaration or an injunction even if the threats were found to be groundless.

In this case, Fanco could not prove that Triple D's threats caused their alleged losses. Witnesses testified that they had cancelled orders for reasons independent of Triple D's threats, including the lower price point of competitors' products.

There was also no reason for the Court to grant a declaration or injunction. The infringement claim had been rejected and there was no evidence suggesting that Triple D would make further threats.

As such, Fanco's counter-claim of groundless threat failed.

Conclusion

Although the Court has clearly set out the framework on groundless threats of trade mark infringement, applying these principles to the facts may not be straightforward. If there is any doubt, professional advice should be sought prior to approaching an alleged infringer.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.