9 March, 2017
The saga between Main-line Corporation and United Overseas Bank Ltd and First Currency Choice Pte Ltd has finally ended with a judgment in Main-line Corporation v United Overseas Bank and another [2016] SGHC 285 in favour of the plaintiff, Main-line Corporation. This judgment brings finality to the 10-year long litigation between the plaintiff and the 1st and 2nd defendants (United Overseas Bank Ltd and First Currency Choice Pte Ltd respectively).
The case is significant in that the High Court considered the appropriate damages to be awarded, and the availability of exemplary damages in patent infringement cases. Facts The plaintiff owned the patent rights to the "Dynamic Currency Conversion for Card Payment Systems" (the "Patent). The Patent was a method and system for automatically determining the operating currency of a credit card at the point of sale between the customer and a merchant.
This would allow the customer to know the exact costs of his purchase in his "home currency" at the time of purchase. Around October 2001, the 2nd defendant approached the 1st defendant and offered its own system which contained the same functionality as the plaintiff's patented system.
The plaintiff commenced action against the 1st and 2nd defendants for infringement of the Patent. The trial culminated in a finding of liability against both defendants. In 2008, the liability of the defendants was upheld by the Court of Appeal. The plaintiff then elected for an account of profits against the 1st defendant and damages (including exemplary damages) against the 2nd defendant.
The plaintiff based its claim for exemplary damages on the following factors: (
a) There is no bar in Singapore precluding the Court from awarding exemplary damages;
(b) The 2nd defendant had been dragging out the proceedings to repatriate profits to holding companies outside of Singapore "to put those monies out of the reach of [the Plaintiff]";
(c) The 2nd defendant had continued to infringe the Patent in Thailand;
(d) The 2nd defendant's conduct was so egregious such that compensatory damages were inadequate; and
(e) The 2nd defendant's infringement emboldened other service providers and banks in Singapore to infringe the Patent.
Exemplary damages for patent infringement in Singapore?
The Court ultimately decided that it did not have jurisdiction to grant exemplary damages in patent infringement cases. In reaching its decision, the Court compared the Copyright Act against the Patent Act. Section 119(4) of the Copyright Act expressly provides: "the court may, in assessing damages for the infringement under subsection (2)(b), award such additional damages as it considers appropriate in the circumstances." (emphasis added) As the Patents Act did not contain such provision for damages, and given that parliamentary debates were silent on this matter, the Court was of the view that Parliament had not intended for exemplary damages to be available in patent infringement cases.
The Court also distinguished the approach adopted by its UK counterparts – which appears to be more permissive in awarding exemplary damages in patent infringement cases. The Court attributed this distinction to the European Union Intellectual Property regulations which the UK had to comply with.
Comments
Damages for patent infringement are confined to an account of profits that are compensatory rather than exemplary or punitive in nature.
The Court's decision may influence companies' strategies in combating IP infringers as rights owners will need to consider other avenues to discourage infringement.
The case may have a broader impact on the law of trademark and registered designs. Like the Patents Act, the statutes governing trademarks and registered designs do not contain provisions that provide courts with jurisdiction to grant exemplary damages.
As such, the courts in other cases may be inclined to adopt the same approach when deciding whether to grant exemplary damages for the infringement of trademarks or registered designs.
For further information, please contact:
Andy Leck, Principal, Baker & McKenzie.Wong & Leow
andy.leck@bakermckenzie.com
