A recent case heard in the High Court of Singapore has shed some useful light on the issue of proving damage in a trade mark infringement suit.

The plaintiffs, Creative Technology Ltd (Creative), are a global leader in digital entertainment products for personal computers, with their headquarters in Singapore. Creative are known for their Sound Blaster line of sound cards. Creative are the owners of five registrations in Singapore for marks such as Vibra and Creative Vibra in respect of soundcard-related goods, among other things. The present case related mainly to trade mark infringement concerning counterfeit Creative Vibra 128 soundcards.

The first defendant was another Singaporean company, Cosmos Trade-Nology Pte Ltd (Cosmos) and the second defendant was a director and majority shareholder of Cosmos.

After Creative complained to the Intellectual Property Rights branch of the Singapore Police Department, the police obtained a search warrant and seized a number of counterfeit Creative Vibra 128 soundcards bearing Creative's marks from Cosmos's premises. Creative submitted the seized goods as evidence to support their allegation that Cosmos had infringed their trade marks.

Cosmos did not dispute the ownership, validity or subsistence of Creative's registered trade marks or the allegation of trade mark infringement. The second defendant pleaded innocent on the grounds that he had neither knowledge of, nor consented to, the infringement of Creative's registered trade marks. However, the Court found evidence to the contrary and rejected the second defendant's plea. In any event, it was an established rule that innocence is no defence to a claim for damages.

Creative successfully obtained an injunction to restrain the defendants from infringing their marks, an order for delivery up or destruction of all infringing copies and/or copying apparatus, and an inquiry as to damages.

While the High Court was not entirely satisfied by the contradictory evidence adduced by Creative in support of their claim of lost revenue, it held that a finding of infringement or passing off almost necessarily means that some damage will have been caused. Furthermore, even though damage must be proven in principle, there is a presumption in law that the presence in the market of a quantity of deceptive goods will have an adverse effect on the plaintiffs' business.

In assessing damages, the Court rejected Creative's submission that they were entitled to damages for lost research and development costs. The Court considered such costs to be sunken costs, since they would have gone towards Creative's costs in the development, manufacture and sale of their sound cards. The Court did however accept Creative's evidence in support of their claim for lost revenue and lost advertising and promotional costs, and awarded Creative a total of US$80,000 for loss of profits and/or damages at large and a further US$41,000 for loss of business reputation and goodwill.

This case serves as a warning to potential counterfeiters in Singapore that they potentially face paying large amounts of damages as a result of their counterfeiting activities. The case also highlights the serious efforts that are being undertaken by the Singapore authorities to enforce intellectual property rights for the benefit of intellectual property rights holders.