In a recent High Court hearing the operator of a local website, SGbuy4u.com, was held liable for trademark infringement for selling fake Calvin Klein goods online.
Singapore’s first reported summary judgement relating to fake online goods
The fashion designer, Calvin Klein, Inc, sued the operator of the website, Global PSM, and obtained a summary judgement against the operator, after investigators had purchased fake Calvin Klein goods on the SGbuy4u.com website that included wallets and underwear. This is the first reported case involving a summary judgment against a company selling fake online goods in Singapore.
How SGbuy4u.com operates and what was argued
The SGbuy4u.com website allows users to search and buy goods ranging from apparel, bags, shoes, health products and electronics. When a user in Singapore selects and purchases a desired good, a corresponding order is placed on the Chinese online shopping website Taobao.com. The operators of the business then pay for the goods on Taobao.com, receive delivery of the goods in China, and freight it back to Singapore.
Global PSM, which operates the SGbuy4u.com website, argued that it serves as a courier or freight forwarding service similar to DHL or FedEx, and that the original sellers on Taobao.com should be liable for the trademark breaches. Global PSM also claimed that it provides customer-to-customer service and merely facilitated the sale and purchase of goods, similar to the services provided by other e-commerce platforms on the internet (e.g. ebay.com or carousell.com).
The High Court's Judgment
Justice Chan stated that “the crux of the dispute lies in the proper characterization of the business and the involvement of each of the defendants in those business activities”.
- The Judge rejected the submission that SGbuy4u.com merely provides a courier or freight forwarding service. He considered that SGbuy4u.com collects payments, buys the goods from a seller on Taobao.com and directs the seller to send the goods to a warehouse in Guangzhou. No such facilities are provided by deliverers such as FedEx or DHL.
- The Judge also rejected the claim that Global PSM merely serves as a customer-to-customer service and facilitate the sale and purchase of goods. This is because unlike other e-commerce platforms (such as ebay.com or carousell.com), SGbuy4u.com plays a more active role in liaising with the buyer and seller, receiving and making payments, and conveying the goods from the seller to the buyer.
- The Judge did not consider SGbuy4u.com to be a service that procures and coveys the desired good (without sale) to the user. The Judge stated that although the product listings on the SGbuy4u.com website mirror those on the Taobao.com website, it cannot be easily concluded that the users of SGbuy4u.com website are transacting with the Taobao.com sellers or that the SGbuy4u.com website merely facilitates the transaction. The Judge agreed with the Plaintiff that the situation is akin to a seller offering for sale goods that are in someone else’s catalogue. The Judge stated that it is the SGbuy4u.com business, and no one else, that places these product listings on the SGbuy4u.com website.
- The Judge also did not consider SGbuy4u.com to be a seller of goods advertised on the Taobao.com website. The Judge concluded that SGbuy4u.com uses photographs and product descriptions advertised on the Taobao.com website on its own website as a catalogue to make sales to users of the SGbuy4u.com website.
Global PSM found liable for trademark infringement
In conclusion, the Judge had “no hesitation” in holding Global PSM liable for trademark infringement. He found that Global PSM operates and manages the SGbuy4u.com website, displays the product listings of the infringing goods and allows a user to buy directly from Global PSM on the SGbuy4u.com website.
As acknowledged by the Judge, "there is a pressing need for intellectual property law to keep up with technological advances in order to ensure that the law continues to protect intellectual property and rights owners in real and relevant ways". With the wide reach and availability of the internet, and the low cost and efficiency of freight services, it is likely to see an increase in the number of online transactions of goods and services in Singapore. It is therefore anticipated that this area of intellectual property law will continue to develop and evolve over the years.