28 June 2018

Lee Tat Cheng v Maka GPS Technologies Pte Ltd [2018] SGCA 18

In the recent decision of Lee Tat Cheng v Maka GPS Technologies Pte Ltd (“Lee Tat Cheng”), the Singapore Court of Appeal held that the court’s power to grant relief for groundless threats of infringement proceedings pursuant to section 77 of the Patents Act is discretionary in nature, and not mandatory. Following this decision, it appears that a groundless threats claim under the Patents Act would not automatically lead to the grant of relief for future claimants, even if the threats prove unjustified.

Facts

The appellant, Lee Tat Cheng, was the proprietor of a patent for an in-vehicle camera (“Patent”). The appellant alleged the respondent had infringed the Patent by offering three models of in-vehicle cameras for sale. The respondent denied the claim and contended that the Patent was invalid; and alternatively, if the patent was found to be valid, it had not been infringed. The respondent also claimed the appellant had made groundless threats of infringement proceedings. This article focuses on the court’s decision in relation to relief for groundless threats of infringement proceedings.

High Court’s decision on groundless threats

The High Court in Lee Tat Cheng v Maka GPS Technologies Pte Ltd [2017] SGHC 48 held that the patent was valid, but the devices sold by the respondent did not infringe the Patent. On the issue of groundless threats, the Judge held that the respondent, being the recipient of two cease and desist letters from the appellant demanding fees and damages, was a “person aggrieved by the threats” as set out in section 77(1) of the Patents Act. Pursuant to section 77(2), the appellant’s threats of infringement proceedings were not justified as the Judge found that the respondent’s acts did not constitute an infringement of the Patent. Therefore, a grant of relief for the respondent under section 77 for the appellant’s threats had to be considered.

The High Court considered the Court of Appeal’s earlier decision in Singsung Pte Ltd v LG 26 Electronics Pte Ltd (trading as L S Electrical Trading) [2016] SGCA 33 (“Singsung”). In Singsung, the Court of Appeal held that, in the context of section 200(1) of the Copyright Act, which deals with groundless threats of proceedings, the court is not obliged to grant any relief as such power is discretionary. This conclusion was based on the consideration that an overly broad reading of the groundless threats provisions may cause intellectual property right holders to hesitate in the enforcement of their rights for fear of exposure to liability for groundless threats.

When considering the relevance of Singsung to the groundless threats provision in the Patents Act, the Judge distinguished Singsung on the basis that the language used in section 200(1) of the Copyright Act differs from section 77(2) of the Patents Act. The Judge held that the relief available in the Copyright Act used discretionary language whereas the Patents Act employed language which was more prescriptive in nature.

Therefore, the High Court held that under section 77 of the Patents Act, the court does not have discretion as to whether to award relief. Once a claimant had established all the requisite elements under section 77(1) of the Patents Act, and the threats were shown to not be justified, the claimant would be entitled to be granted a form of relief.

Accordingly, the High Court granted an injunction against the continuance of the threats.

Court of Appeal’s decision on groundless threats

The Court of Appeal disagreed with the High Court’s decision to grant the injunction against the continuance of threats. In an approach similar to the one taken in Singsung, the Court of Appeal held that the grant of relief under section 77 of the Patents Act is not mandatory even if a claim for groundless threats had been made out. The Court of Appeal held that the grant of relief remains at the discretion of the court.

The Court of Appeal was of the view that the language employed in section 77(2) did not suggest that the granting of relief was mandatory. In holding that the grant of relief was discretionary, the Court of Appeal pointed out that a claimant has to satisfy the court that he is “aggrieved” and a claimant cannot be “aggrieved” by the threats if he cannot satisfy the court that it would be appropriate to grant him at least one of the forms of relief.

Consequently, as the courts were not obliged to grant any relief under section 77 of the Patents Act, the Court of Appeal set aside the injunction as there was nothing to suggest the appellant would make further threats of infringement proceedings against the respondent.

Impact of this decision

In the wake of Lee Tat Cheng, it appears that a groundless threats claim under the Patents Act would not automatically lead to the grant of relief for future claimants, even if the threats prove unjustified, since the court may not grant any of the reliefs stipulated in section 77 of the Patents Act should the reliefs be considered superfluous.

The decision in Lee Tat Cheng is also likely to extend to the groundless threats provisions in the Trade Marks Act and Registered Designs Act. As both section 35 of the Trade Marks Act and section 44 of the Registered Designs Act rely on a claimant proving that he is “aggrieved”, the rationale of the Court of Appeal in Lee Tat Cheng would likely apply to both these provisions.

As Singsung has applied the discretionary approach to the Copyright Act and Lee Tat Cheng has extended this approach to the Patents Act, it appears likely that a consistent approach will be adopted in future cases concerning groundless threats of legal proceedings. Claimants should take note that, moving forward, a court will likely start off on the premise that the grant of relief for groundless threats is entirely discretionary.

 

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