Freight Forwarding Company is not Liable for Trademark Infringement

Recently, Burberry and Louis Vuitton lost their appeal in a trademark dispute against Singaporean transport company Megastar Shipping.

The dispute began in the Spring of 2013, when sealed cargo containers labelled “household goods” were sent from China to Indonesia, with a planned pit stop in Singapore. Once the goods arrived in Singapore, Megastar Shipping was responsible for transferring the containers to another vessel for the final leg of the shipment. An inspection of these cargo containers revealed that the “household goods” in question were, in fact, more than 15,000 counterfeit items, including designer handbags, worth more than $1 million. Soon after, brands including Burberry, Louis Vuitton, Gucci, Hermes and Sanrio brought separate law suits against Megastar, alleging that it had infringed their trademarks by importing and conspiring to export counterfeit goods.

In November 2017, Justice Wei dismissed these claims on the basis that there was no ground for the court to find that Megastar was the “importer” or that it should be held accountable for the counterfeit items.

Only Burberry and Louis Vuitton appealed the decision to the Singaporean Court of Appeal.

In a written judgement delivered recently, Justice Tay Yong Kwang held that, in order for Megastar to be held accountable for the counterfeit goods, the appellants would have had to establish that Megastar both intended to import or export the trademarked goods, and that it knew, or had reason to believe, that the products in question contained protected trademarks. Louis Vuitton and Burberry failed to establish both requisite elements on the evidence.

As Justice Tay Yong Kwang wrote, “There was also no evidence of any intention to import trademarked products. The facts surrounding the transactions showed that the respondent was merely providing a commercial service as freight forwarders in its ordinary course of business and nothing more.”

Authors: Larissa Fulop and Pearl Lee, 2018/2019 Articling Student-at-law