Fashion brands lose appeal in TM lawsuit against shipper

Burberry and Louis Vuitton have lost their appeal in a long-running trademark dispute with Singapore freight forwarder Megastar Shipping.

The landmark case centred on a shipment in April 2013 that was being transported from China to the Indonesian island of Batam, via Singapore. During unloading in Singapore to be transferred to a smaller “feeder” vessel, two containers inspected by Singapore customs officials were found to contain 436 cartons of Chinese-made counterfeit goods and fashion accessories estimated to be worth around $1m.

The companies whose brands featured on the knockoffs – Louis Vuitton, Gucci, Burberry, Hermes and Hello Kitty manufacturer Sanrio – sued Megastar claiming the freight forwarder was liable for infringing their trademarks, but just over a year ago the company was found not liable after arguing it was just a middleman.

Undeterred, Burberry and Louis Vuitton filed appeals with Singapore’s Supreme Court, but those were unsuccessful last week, according to court documents which note that the Court of Appeal “dismisses the appeal against the High Court’s decision that the freight forwarder which imported counterfeit goods was not liable for trade mark infringement.”

The judgment suggests liability lies with “the importer or exporter of was the person who brought the goods or caused the goods to be brought into or out of Singapore, respectively.” It says the brands would have to prove that Megastar intended to import or export goods with infringing trademarks.

“In this case, there was no evidence that the respondent knew or had reason to believe that there were [infringing signs] on the goods,” says the judgment.

“The indications on the documents given to the respondent merely indicated household goods and other seemingly innocuous generic merchandise [and] there was no evidence that luxury products were included in the cargoes,” it adds.

The ruling did clarify that while freight forwarders who are unaware that the goods they receive and prepare for export are counterfeit should not be liable, that situation would be different if they became aware during their transit in Singapore and failed to disclose that information to the relevant authorities.