In March 2013, two sealed containers shipped from China . The expected final destination of the shipment was Indonesia, with a scheduled stop in Singapore. Although, the contents of the containers were labelled as “household goods” and “other generic merchandise,” during
inspection by Singapore customs, the items were found to actually be Chinese-made counterfeit goods focusing on including designers such as Burberry, Louis Vuitton, and Hermes.
During inspections of the cargoes upon arrival in Singapore, Singapore Customs found the cargoes to include counterfeit products totaling more than 15,000 items and seized the goods.Excerpt from the Appeal
As a result of these seized items, designer companies including
Burberry , Louis Vuitton, Gucci, and Hermès, all filed suits against Megastar Shipping, the Singaporean logistics company, responsible for transferring the goods from one vessel to another in preparation for the shipping from Singapore to Indonesia.
It was not disputed that the respondent, as the freight forwarder, never saw what was contained in the sealed containers and there was no evidence to suggest that it was aware that it was forwarding counterfeit goods. The freight forwarder’s involvement in the transaction was only to receive the cargo from one country (China) and to forward it to another country (Indonesia).Excerpt from the Appeal.
Megastar’s argument in support of its defense was that the company was merely a freight forwarder and not the manufacturer or seller of the counterfeit goods. The company further argued that it was not the proper party to be sued since it was unaware that the products included in the containers were counterfeits.
At the trial court, the designer companies were not successful. They filed an appeal.
Like the trial court, the appeal court on January 7, 2019 found:
…in an infringement action under s 27 of the TMA, it was not enough that the defendant was responsible for the physical act of importing or exporting the infringing goods. To establish liability, the plaintiff also had to prove that the defendant intended to import or export goods under the signs and in particular that the defendant knew or had reason to believe that the signs were used on the goods…. If this was established, it did not matter whether the defendant knew that the sign or its use were infringing.
12 In this case, there was no evidence that the respondent knew or had reason to believe that there were signs on the goods…. The indications on the documents given to the respondent merely indicated household goods and other seemingly innocuous generic merchandise. There was no evidence that luxury products were included in the cargoes. 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. To impose liability for infringement of trade marks on the respondent in this factual situation would be against the letter and the spirit in s 27 of the TMA.Excerpt from the Appeal.
The appeals were therefore dismissed with costs.
Citation: The case is Burberry Limited and another v Megastar Shipping Pte Ltd  SGCA 01, Civil Appeals No 237 and 238 of 2017.
Date of Supreme Court of Singapore Decision: January 7, 2019
Delivered by: Justice Tay Yong Kwang