In a legal dispute regarding the import of counterfeit clothing, Singapore’s Court of Appeal has again ruled in favor of the defendant, the shipping company Megastar. The freight forwarder had been accused of infringing the trademarks of well-known manufacturers by importing counterfeit fashion items worth over one million US dollars (approx. 880,000 euros).
In March 2013, customs in Singapore had intercepted two containers from China and seized a total of over 15,000 counterfeit fashion items. The fakes illegally carried several brands, including Burberry, Gucci, Luis Vuitton, Hermes, and Sanrio. Freight forwarder Megastar had previously received the sealed containers from another shipping company in Singapore and was to transship them for onward transport to Indonesia. The contents of the containers, labelled as car parts, household goods, and computer accessories among other things, had presumably not been checked by Megastar.
In response to the seizures, several trademark owners had sued the shipping company for trademark infringement but had lost in the first instance. Explaining its decision, the Singaporean court had stated that Megastar was neither the importer nor the actual exporter of the counterfeits. “This does not mean that the Plaintiffs’ trade marks in Singapore were not infringed. They were infringed by the importer,” the court had said at the time.
Burberry and Louis Vuitton appealed – and have failed again before the Court of Appeal. According to the new verdict, there was no proof that Megastar knew that the trademarks in question were on the goods it was supposed to transport. The company had only provided a routine service and was not liable, the court found. “The need for effective enforcement of intellectual property rights has to be balanced against the over-extension of liability to honest commercial persons who happen to be tangentially involved in the movement or handling of counterfeit goods,” the Court of Appeal explained.