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Party Aware of Default Affirming Contract Despite "no waiver" Clause in Contract

27/05/2009

Tele2 International Card Company SA and Ors v Post Office Limited [2009] EWCA Civ 9

The recent decision of the English Court of Appeal held that a provision of a "no waiver" clause in an agreement could not prevent the fact of an election to abandon the right to terminate a contract from existing.

On the facts, the court held that the respondent's continued performance of the contract for a year without any protest or reservation of right in relation to the appellants' breach was a clear and unequivocal communication by conduct of the respondent's election to affirm the contract and to abandon its right to terminate.

Facts: the parties entered into a written agreement (the "Agreement") whereby the appellants would provide to the respondent both physical phonecards and also the telecommunications connections to on-sell to the purchaser of the phonecards.

The Agreement could be terminated in accordance with terms of the Agreement. The relevant provision concerned the provision of parent company guarantees by the appellants. The appellants were obliged to provide the respondent with a certified copy of a Parent Company Letter for each year. None of the appellants did so for the calendar year 2004 (due by 24 December 2003) giving the respondent a right to terminate the Agreement by giving written notice to the appellants that it would do so.

However the respondent only purported to give such written notice on 1 December 2004, nearly one year after the Parent Company Letters for 2004 were due. Furthermore, it performed the contract in the meantime without any protest to the lack of letters.

Decision: despite a "no waiver" clause in the Agreement which the respondent relied upon, the Court of Appeal held that an election to abandon the right to terminate was a question of fact. The respondent's continued performance of the Agreement between 24 December 2003 and 1 December 2004 and its agreement to the appellants performing the Agreement, without any protest concerning the breach or reservation of any rights, was consistent only with it having abandoned its right to terminate.

Thus, the respondent was not entitled to give notice to terminate. That action was an anticipatory renunciation of the Agreement and the appellants were entitled to claim damages.


Relationship between 'Entire Agreement' Clauses and Implied Terms

13/05/2009

In Ng Giap Hon v Westcomb Securities Pte Ltd & Ors [2009] SGCA 19, the Singapore Court of Appeal provided valuable guidance on the relationship between 'entire agreement' clauses and implied terms in contracts.

It was decided that an 'entire agreement' clause would arguably not, as a matter of principle, exclude the implication of terms into contracts. For an 'entire agreement' clause to exclude implied terms, the clause itself must spell out clearly and unambiguously such effect.

Facts: A remisier and stockbroking company (the 'Company') were parties to an agency agreement (the 'Agency Agreement') by which the Company authorised the remisier to trade and deal in securities and agreed to pay the remisier commission on transactions dealt through him. The remisier sued for unpaid commissions arguing, among other things, that the 'entire agreement' clause in the Agency Agreement did not preclude the implication of terms into that agreement, namely, a 'duty of good faith'.

Decision: The High Court took the view that the Agency Agreement 'embodied the entire agreement between the parties' in light of the 'entire agreement' clause and thus declined to imply a term of good faith.

On appeal, the Court of Appeal observed that the effect of an 'entire agreement' clause on the implication of terms into a contract depends on the precise language of the clause in question as well as the nature of the implied terms relied upon.

To exclude implied terms, the 'entire agreement' clause would have to express such effect in clear and unambiguous language. The Court of Appeal declined to imply a duty of good faith into the Agency Agreement because an implied duty of good faith has not been settled in Singapore.

Implication: implied terms in contract law play an important role. The Court of Appeal's decision leaves contracting parties free to delineate their contractual rights and obligations and, if they so wish, circumscribe them by the use of explicit and unequivocal language.


New Business Structure - Limited Partnership

29/04/2009

The ACRA will launch a new business structure known as the limited partnership ("LP"), pursuant to the Limited Partnerships Act 2008 (the "LPA"), on 4 May 2009.

What is an LP? Essentially, an LP resembles a conventional partnership, except that the limited partners in an LP have limited liability. An LP is a partnership comprised of one or more general partners and one or more limited partners.

General partners have control over management and are jointly and severally liable for all debts and obligations of the LP.

Limited partners are not entitled to take part in the management of the LP and do not have the power to bind the LP. Limited partners have limited liability. However if a limited partner does take part in management then they will be liable for the debts and obligations of the LP as if he were a general partner. There is a non-exhaustive list of "safe harbour" activities a limited partner can participate in without being deemed to have taken part in management (see First Schedule of the LPA).

Registration: The LP and its partners must be registered with the ACRA. The words "limited partnership" or the acronym "LP" must be included in their name to give notice of their status to persons who transact with them.


Pre-contractual Negotiations and Drafts May be Admissible as Evidence

15/04/2009

The Singapore High Court, in Goh Guan Chong v Aspentech, Inc [2009] SGHC 73 has affirmed that pre-contractual negotiations and drafts may be admissible for interpreting latently ambiguous terms in the final contract as long as they are relevant; are reasonably available to the parties in the situation in which they were at the time of the contract; and relate to a clear or obvious context.

Facts: The Defendant (Aspentech) wanted to recruit the Plaintiff (Goh Guan Chong) as Vice-President of its Supply Chain Consulting/Asian Operations. A Sign-on Bonus clause offering the Plaintiff a cash bonus of $348,000 payable in quarterly instalments to sign on with the Defendant was included in a draft of the letter of employment. The Plaintiff was assured by the Defendant that he would not be liable to repay the Sign-on Bonus if he left the Defendant involuntarily. The Plaintiff signed the letter of employment but within a few months, the Defendant terminated his employment with $290,000 of the Sign-on Bonus remaining unpaid. The Defendant argued the Sign-on Bonus was payable only if the Plaintiff remained an employee.

Decision: The court held that the Plaintiff was entitled to the full amount of the Sign-on Bonus as soon as he entered into employment with the Defendant but it was payable only in accordance with the agreed instalment schedule.

The parties attempted to adduce evidence of pre-contractual negotiations and email correspondence leading to the signing of the letter of employment, and the draft. Pre-contractual negotiations leading up to the formation of a contract is admissible to interpret latently ambiguous terms as long as the extrinsic evidence is (i) relevant; (ii) reasonably available to both parties at the time of the contract; and (iii) related to a clear or obvious context.

Evidence of pre-contractual negotiations was found to be admissible in satisfaction of the three requirements. The email correspondence the Defendant sought to rely upon was held to be inadmissible because they were between the Defendant's employees and thus was not reasonably available to all contracting parties at time of contract. The draft was found to be unhelpful and irrelevant in helping to ascertain contractual intentions of the parties (it was worded only by the Defendant) and thus failed the test of relevance.

Implication: This case reaffirms that courts have moved towards a contextual approach to contract interpretation - contracts must now be interpreted against the background in which they were entered.


Proposed Amendments to the Business Registration Act

03/04/2009

On 19 January 2009, the Business Registration (Amendment) Bill 2009 (the 'Amendment Bill') was passed in Parliament primarily to amend the Business Registration Act (the "Act") to:

  • Empower the Minister for Finance (the 'Minister') to register certain professionals or professional firms which are currently exempted from registration; and
  • Facilitate the enforcement of injunctions granted under the Trade Marks Act.
Registration of professionals and professional firms: currently, professional practices (e.g. of lawyers, doctors and architects) that are currently registered as businesses under section 4(1)(g) of the Act are not required to register with the Accounting and Corporate Regulatory Authority (the "ACRA"). However, professional practices which are set up as corporations or limited liability partnerships are required to register with ACRA under the Companies Act and Limited Liability Partnerships Act respectively.

The Amendment Bill proposes to amend section 4(1)(g) to empower the Minister to prescribe the professional practices to which the exemption will not apply. Those professional practices will be required to register as a business under ACRA. The amendment will facilitate a consistent treatment for professional practices across the various legislations.

Enforcement of injunctions under the Trade marks Act: the Amendment Bill will also amend section 13 of the Act to empower the Registrar of Business to direct a person who has been registered to carry on business under a name to change that name if the use of the name has been restrained by an injunction granted under the Trade marks Act.

The Bill has yet to come into operation.


Grounds for Revocation and Invalidation of Trademark

18/03/2009

In the recent case of Wing Joo Loong Ginseng Hong (Singapore) Company Pte Ltd v Qinghai Xinyuan Foreign Trade Co Ltd [2009] SGCA 9, the Court of Appeal discussed the grounds for revocation and invalidation of trademarks under the Trade Marks Act 2005 and the granting of declarations regarding the criminal consequences of a party's conduct.

Facts: The first defendant was the registered owner of a trademark and the second defendant was its exclusive licensee. Acting on a warrant, they searched the plaintiff's premises for evidence of infringement of the mark and found certain goods bearing marks identical and/or similar to the mark. The goods were seized and charges under the Trade Marks Act and the Copyright Act 2006 were then filed against the plaintiff and some of its directors.

The plaintiff subsequently applied for the revocation and invalidation of the registration of the first defendant's mark, as well as a declaration that any copyright in various labels relating to the mark did not subsist in favour of either defendants and therefore, that the plaintiff had not infringed any copyright. The trial judge dismissed the plaintiff's application for revocation and invalidation of the mark, but granted the declaratory order sought. Both the plaintiff and the defendants appealed.

Decision: The Court of Appeal held that none of the claimed grounds for revocation and invalidation under the Trade Marks Act were made out.

The grounds for revocation are enunciated in s 22: (a) that, within the period of 5 years following the date of completion of the registration procedure, it has not been put to genuine use in the course of trade in Singapore, by the proprietor or with his consent, in relation to the goods or services for which it is registered, and there are no proper reasons for non-use; (b) that such use has been suspended for an uninterrupted period of 5 years, and there are no proper reasons for non-use; (c) that, in consequence of acts or inactivity of the proprietor, it has become the common name in the trade for the product or service for which it is registered; (d) that, in consequence of the use made of it by the proprietor or with his consent in relation to the goods or services for which it is registered, it is liable to mislead the public, particularly as to the nature, quality or geographical origin of those goods or services


Agency Arrangements

06/03/2009

The recent decision of Choo Han Teck J in Yuen Chow Hin and Another v ERA Realty Network Pte Ltd [2009] SGHC 28 highlights some important points about agency arrangements.

Facts: A husband and wife (the plaintiffs) decided to sell their flat. By recommendation from the husband's family, they asked "Jeremy" to help them find a buyer. Jeremy was a "Senior Marketing Director" of ERA Realty Network Pte Ltd ("ERA").

Jeremy worked as a subordinate to "Mike". Mike had at all material times, about 200 agents working under him, all of whom used the ERA name and logo. The arrangement in place was that whenever an agent under Mike has successfully helped a client to complete a sale and purchase transaction he would share his commission with Mike and ERA.

Jeremy found a buyer named "Natassha" for $688,000. The plaintiffs did not know at that time that Natassha was Mike's wife; and they also did not know that Mike was Jeremy's superior in ERA. Also unknown was that Mike had placed newspaper advertisements for the sale of the flat; and conversely, Jeremy did not place any advertisement.

The plaintiffs investigated after receiving a query from the Central Provident Fund Board asking them why they had sold their flat below valuation. They searched the newspapers and found the advertisements placed by Mike. They also discovered through a search made at the Registry of Marriages that Natassha was Mike's wife. The plaintiffs sued ERA for breach of contract and specifically, for the breach of the implied terms that the defendant would use its best endeavours to obtain the best price for the plaintiffs and not act in conflict of interest, or obtain any secret profit.

Was Jeremy an Agent? The Court regarded Jeremy as an agent of "ERA". The plaintiffs understood ERA to be a company that provided the services of a housing agency; and that a person carried an ERA calling card or who advertised himself as a housing agent under the banner of ERA was an ERA agent.

The judge accepted that had the plaintiffs known the full facts, that is, that Natassha was Mike's wife; and Mike was not only an ERA agent, but also a Divisional Director and Jeremy's boss, they would not have agreed to sell the flat to Natassha; and that they would have asked an agent from a different housing agency to act for them.

Mike and Jeremy breached the contract by reason of creating a conflict of interest between their client and themselves. Jeremy was the contractual link between the plaintiffs and ERA, but Mike was person behind the scheme, and his position in ERA rendered Jeremy's breach even more reprehensible.

The evidence showed that the contract had the defendant's logo printed on it. The agent's commission agreement was in fact executed between the plaintiff and ERA. All the advertisements were made with the object of persuading the public that if they engaged an ERA housing agent they would have the backing of ERA Realty Pte Ltd and its network of clients and agents. This was exactly what the plaintiffs' believed. Jeremy and Mike were agents of ERA and their conduct binds ERA. The result of the concerted efforts of Jeremy, Mike, and Natassha resulted in the plaintiffs' selling their flat for less than what they might have had they been properly and honestly advised. The profit Natassha made from the subsidiary sale is what the court regards as a secret profit even though Natassha herself was not a housing agent. She was a party to the plan made and carried out by two agents of the defendant.


Liability for Company Director

25/02/2009

The Singapore High Court in Lim Leong Huat v Chip Hup Hup Kee Construction Pte Ltd [2009] SGHC 2 has held that a company director may, in principle, be liable in conspiracy with a company of which he is the "moving spirit and controlling mind" under circumstances where they have established an arrangement which benefits the company to the detriment of third parties.

Facts: The Defendant was a wholly-owned subsidiary of a company controlled by the managing director (the "MD") of the Defendant. The MD owned almost all of the issued share capital of the Defendant's parent company. The Plaintiff applied to add the MD as a defendant to the action on the grounds that he had conspired with the Defendant to cause loss and damage to the Plaintiff by wrongfully depriving the Plaintiff of the payment of moneys advanced by the Plaintiff to the Defendant.

Decision: The court held that, in principle, a cause of action in conspiracy against both the MD and the Defendant was available and granted the Plaintiff's application to add the MD as a co-defendant in the action.

A claim in conspiracy cannot succeed unless (among other things) a combination of two or more persons is proven. A controlling director may, in principle, be liable in conspiracy with the company where they are in an established arrangement which benefits the company to the detriment of third parties.

The controlling director must, however, not have acted in a bona fide manner within the scope of his authority. If he had acted in good faith and within the scope of his authority, it "cannot be easily said that he had the requisite intention or purpose to injure or damage the plaintiff" (such intention being a prerequisite to establishing a claim in conspiracy).

The court also took pains to stress that a company does not become a co-conspirator with its directors where it is a victim of an alleged conspiracy of its directors and sues its directors for breach of duties. The reason for this is to prevent the company's errant directors from escaping liability by contending that, as co-conspirator, the company cannot bring an action against them.


Construction and Validity of Corporate Guarantee

18/02/2009

The High Court in Cytec Industries Pte Ltd v Asia Pulp & Paper Co Ltd [2009] SGHC 32 delivered judgement on a dispute revolving around the construction and validity of a corporate guarantee.

Facts: On 18 October 1999, the plaintiff, Cytech Industries Pte Ltd, concluded a Letter of Intent ("LOI") with APP Chemicals International (Mau) Ltd ("APP Chemicals"). The LOI confirmed APP Chemical's intent to purchase products from the plaintiff and the plaintiff's willingness to sell. If the plaintiff proved to be up to mark as a supplier, a Purchase Agreement ("PA") would then be awarded to it.

On 28 February 2000, the defendant Asia Pulp & Paper Company Ltd, the parent company of APP Chemicals, entered into a guarantee with the plaintiff, whereby it undertook to guarantee the payment obligations of APP Chemicals ("the Guarantee"). The Guarantee was backdated to 25 October 1999.

The defendant argued that execution of the PA is required under the Preliminary Statements of the Guarantee and that it forms part of the consideration for the same, and the fact that no PA was entered into between APP Chemicals and the plaintiff meant that the Guarantee was unenforceable for want of consideration. Further, the defendant argued that the parties never intended that the Guarantee be executed as a deed.

The plaintiff contended that the Guarantee was executed as a deed and, alternatively, consideration was furnished by the plaintiff in any event. It also submitted that the scope of the Guarantee covered pre-PA purchases made by APP Chemicals.

Decision: The judge held that the Guarantee had in fact been executed as a deed because firstly, it was sealed which supports the contention that it was intended to be executed as a deed. Secondly, it is commercially unusual today to set out the "consideration" in Preliminary Statements or recitals. Third, the contracting parties backdated the Guarantee despite knowing that no consideration had been provided by either party on 25 October 1999. This indicates that it was more likely that the parties had intended to execute the Guarantee as a deed to formally avoid the issue of consideration.

Even if the Guarantee was not executed as a deed, the judge found the requisite consideration had been given by the plaintiff. The PA was not part of the consideration for the Guarantee vis--vis the pre-PA obligations. The plaintiff would not have transacted with APP Chemicals in the absence of a guarantee (including at the pre-PA stage), and the parties never intended the PA to be a condition precedent for the Guarantee to operate.

Thus the plaintiff's claim succeeded.


Protection for Well-Known Trade Marks

11/02/2009

Under the Singapore Trade Marks Act ("the Act"), even if a well-known mark is not registered in Singapore, the owner may take action against the use of a trade mark/business identifier under the following circumstances:

  • The use of the trade mark/business identifier would indicate a connection between those goods or services and the owner of the well-known trade mark, and is likely to damage the interests of the owner of the well-known trade mark.
  • If the trade mark is well-known to the public at large in Singapore, where the use of the trade mark/business identifier would: (a) cause dilution in an unfair manner of the distinctive character of the well-known trade mark; or (b) take unfair advantage of the distinctive character of the well-known trade mark.
A number of factors may be considered in determining whether a mark is well-known. The landmark case of Amanresorts Limited and Another v Novelty Pte Ltd [2008] 2SLR 32 was the first where Courts recognised a trade mark as being well-known and consequently restrained another party from using the mark.

In that case, the plaintiffs were the proprietors of various trade marks consisting of the prefix "Aman", including "Amanusa", the name of one of the plaintiff's exclusive resorts. The defendant, a developer of real estate, named one of its projects "Amanusa". The Court found that the various "Aman" marks were well-known marks under the Act, and granted an injunction to restrain the defendant from using the name "Amanusa".


Civil Law (Amendment) Bill 2009

04/02/2009

The Civil Law (Amendment) Bill 2009 (the "Bill") was passed in Parliament on 19 January 2009 but has yet to come into operation. One set of the proposed amendments to the Civil Law Act (the "Act") is to lower the age of contractual capacity from 21 to 18 years.

When the Bill comes into force, the Act will give contracts entered into by a minor who has attained the age of 18 years (the "specified minor") the same effect as if the contracts were entered into by a person of full age. Such contracts will therefore be binding on and enforceable against the specified minor as if they were a person of full age. Furthermore, minors will also be allowed to bring certain legal proceedings or actions in their own names and without a litigation representative, as if they were of full age.

There are some exceptions for the following types of contracts:

  • contracts for the sale, purchase, mortgage, assignment or settlement of any land, other than a contract for a lease not exceeding three years;
  • contracts for a lease of land for more than three years;
  • contracts for the sale, transfer or pledge of a minor's beneficial interest under a trust;
  • contracts for the settlement of any legal proceedings or action in respect of which the minor is, pursuant to any written law, considered to be a person under disability on account of their age; and
  • contracts for the extinguishment or variation of a trust or for the transfer of their beneficial interest under a trust to another person.
Several statutes will be amended to facilitate specified minors entering into valid and binding contracts and engaging in certain commercial activities. These include amending the Companies Act to allow a specified minor to be a director of a company and admending the Employment Act to clarify that a minor under the age of 18 years is competent to enter into a contract of service and to enable that contract to be enforced against a specified minor.


Expanded Scope for Employment Act

20/01/2009

The Singapore Employment Act (the "Act") has been amended to keep pace with changes in the labour market. The amendments made on 18 November 2008 took effect on 1 January 2009 and is expected to benefit at least 279,000 more workers in Singapore.

The key amendments to the Act include:

Revising the Coverage of the Act:

  • 1) Confidential Staff - the Act now covers employees employed in confidential positions regardless of their salary.
  • 2) Salary Claims - junior managers and executives earning a basic monthly salary of $2,500 and below are now able to seek redress in the Labour Court for salary claims. However, they are still excluded from the protection of the Act in respect of other matters.
  • 3) Part IV of the Act - Provisions in Part IV now apply to employees earning a basic monthly salary of $2,000 and below. Part IV of the Act provides for rest days, hours of work, holidays and other conditions of service. Previously, Part IV of the Act covered all workmen, regardless of their salaries. Part IV will now only cover workmen who earn $4,500 and below on the grounds that highly paid workmen are expected to be able to negotiate favourable employment terms without the Part IV protection.
Reviewing Employment Standards and Benefits:
  • 1) Paid public holidays and sick leave - paid public holiday and sick leave will now apply to all employees who are covered by the Act regardless of salary level, to reflect the current practice in industry.
  • 2) Eligibility for paid sick leave - employees will now be eligible for paid sick leave after completing 3 months of service. Between their 4th to 6th month of service, the employee's sick leave entitlement will be prorated i.e. the employee will be entitled to 5 - 11 days of sick leave until he/she has completed at least 6 months. The pro-rated entitlements are to alleviate the employers' cost burden for the accelerated sick leave entitlement.
  • 3) Part-time employees - part-time employees will now be defined as employees who work for up to 35 hours or lesser per week (previously 30 hours). This amendment intends to encourage employers to offer more part-time working arrangements and also benefits employees who require flexible working arrangements as they are now able to work up to 35 hours per week as "part-time" employees, entitled to pro-rated benefits based on the hours worked.
Enhancing Penalties and Streamlining Administrative Procedures:
  • 1) Penalties - to deter infringements and align the penalties under the Act with the penalties for similar offences in other legislation such as the Work Injury Compensation Act and the Employment of Foreign Manpower Act, the penalties under the Act have been increased.
  • 2) Powers of Employment Inspectors - the Employment Inspectors will now have the following additional powers to carry out effective investigations: a) search and examine premises for employment records, b) take photographic and video graphic evidence, and c) issue warrant of arrest to secure attendance of witnesses in court
Rationalising Outdated Provisions: Obsolete provisions have been removed and outdated provisions are now updated to reflect the current practices in the industries.

Updating provisions in the Act:

  • 1) Restriction on Collective Agreements - the restriction on collective agreements offering maternity benefits which are more favourable than the ones provided in the Act will be removed.
  • 2) Use of the terms "dismissal" and "termination" - the terms "dismissal" and "termination" were previously not defined in the Act. To prevent the often differing interpretations of both the terms, "dismissal" will now be defined as an act of the employer in terminating employment (with or without notice) while "termination" will be defined more broadly as the cessation of employment initiated by either the employee or the employer.


Unique Entity Number For All Entities

05/01/2009

From 1 January 2009, all entities that are registered in Singapore will have a Unique Entity Number (UEN) as its identification number. These include businesses, local companies, limited liability partnerships (LLPs), societies, representative offices, healthcare institutions and trade unions. The UEN will be used for correspondence and interaction with government agencies.

Entities will enjoy the convenience of having a single identification number for interaction with the Government, such as filing of corporate tax returns, applying for import and export permits or submitting their employees' CPF contributions. UEN replaces all other identification numbers issued to them by different government agencies.

From 1 January 2009, 51 government agencies will use UEN to interact with entities (both over-the-counter and online interactions). Among these are the Accounting and Corporate Regulatory Authority (ACRA), the Central Provident Fund Board (CPFB), the Inland Revenue Authority of Singapore (IRAS) and the Singapore Customs. All other government agencies will use UEN from 1 July 2009

No Change in Identification Number for Businesses and Local Companies Businesses and local companies currently registered with the Accounting and Corporate Regulatory Authority (ACRA) retain their ACRA Registration Number as their UEN.

Issuance Of UEN Other than businesses and local registered companies, all other registered entities, such as LLPs, foreign companies, societies and management corporations, have been issued with a new UEN from the government agency that registers or oversees them.

As LLPs are required by legislation to display their LLP registration number on their official stationery, they will need to change to UEN at their next print of the stationery or by 1 January 2010, whichever is earlier.

All new entities which are formed from 1 January 2009 will be issued with the UEN at registration.


Important Reminder to Protect Copyright Enforcement

20/12/2008

The recent English Court of Appeal decision in Meridian International Services v Richardson [2008] EWCA Civ 609 serves an important reminder to expressly determine the ownership of intellectual property rights in software at the commencement of a commercial relationship.

Facts: The appellant company (Meridian) appealed against a High Court ruling that an oral agreement made at a meeting did not contain an implied term that the copyright in certain software would belong to Meridian. The software was developed by computer programmers, hired by Meridian to develop financial forecasting software for a healthcare company ("G").

Decision: The Court of Appeal upheld the High Court ruling. It concluded that the terms of the contract entered into between Meridian and G, under which Meridian warranted that it had copyright in the software, did not justify implying a term of copyright ownership. The contract was in draft at the time of the meeting, in terms which were not known and which were still open to negotiation. In any event, no conduct of G was capable of constituting acceptance by conduct.

Implications: This decision highlights the importance of express terms when providing for the ownership of intellectual property ownership in software or any other work. Draft and unexecuted contracts will not be sufficient, in themselves, to compel a court to imply any term concerning ownership.

The ownership of copyright of works is clarified in section 30 of the Singapore Copyright Act:

  • First ownership of copyright in a literary, dramatic, musical or artistic work belongs to the author.
  • If the author is an employee and his/her work was made pursuant to a contract of employment, the first owner is generally the employer. The work must have been created in the course of employment and the author must be an employee (not an independent contractor).
  • Rules governing ownership of copyright in the context of employment may be excluded or modified by agreement.


High Court Invalidates "LOVE" Mark

06/12/2008

In Love & Co Pte Ltd v The Carat Club Pte Ltd [2008] SGHC 158, the Singapore High Court invalidated a work mark comprising the word "LOVE" because it was not inherently distinctive, and was descriptive of one of the intended purposes of the goods.

Facts: The Plaintiff and Defendant were in the jewellery business. The Defendant sent a letter of demand to the Plaintiff alleging it had passed off and infringed the Defendant's registered trade mark for the "LOVE" Diamond. The Plaintiff applied to the court to invalidate the Defendant's registration of the simple word mark, "LOVE".

Decision: The HC decision invalidated the "LOVE" word mark because it was not inherently distinctive. The decision provides a useful summary of the law on trade marks. Trade marks can be categorised into three categories for the purposes of a distinctiveness analysis:

(a) Category (a): immediately registrable trade marks with distinctive character in the form of inherent distinctiveness; (b) Category (b): immediately registrable trade marks with distinctive character in the form of de facto distinctiveness; and (c) Category (c): not immediately registrable trade marks because they have not attained a distinctive character through use.

The HC thought it would be difficult for members of the public to realise or expect the ordinary looking "LOVE" mark to distinguish the Defendant's jewellery from other traders. The HC further considered that ordinarily a trade mark that is descriptive of any characteristics of the goods it designates is not registrable. Taking the intended purpose of the ordinary discerning purchaser (and not the trader or recipient), the court held there was sufficient evidence to establish that an intended purpose of jewellery was to be an expression of love. Thus the "LOVE" mark was descriptive of the Defendant's goods, and not inherently registrable.


Introduction of the Work Injury Compensation Act

25/11/2008

The Work Injury Compensation Act (WICA) took effect on 1 April 2008. It amended and renamed the Workmen's Compensation Act ("WCA") with aims to provide a quick and simplified process for obtaining compensation for workplace injuries that is an alternative to claiming for damages under the common law. Some of these amendments and their impact on employers and employees are:

Increased coverage: Previously under WCA, only manual workers and non-manual workers earning S$1,600 or below per month were covered. The WICA takes on an expanded definition of "employee" that covers all employees, in general, engaged under a contract of service or apprenticeship, regardless of their level of earnings.

Unlike civil lawsuits against the employer, compensation is payable under WICA on a 'no-fault basis', as long as an employee suffers an injury arising out of and in the course of his employment. There is also a fixed formula in the Act on the amount of compensation to be awarded, and capped so that the financial liability on the employer is limited.

Subject to the maximum amounts prescribed by WICA, an injured employee (or their estate) is entitled to claim:

  • medical expenses, including medical consultation, hospitalisation, treatment and surgery, artificial limbs and surgical appliances.
  • compensation for Permanent Incapacity or Death.
  • wages while on medical leave.
The maximum amounts that can be claimed under WICA are:
  • For medical expenses, these must be incurred within one year from the date of the accident, or up to a cap of $25,000, whichever is reached earlier.
  • For Permanent Incapacity, the maximum is $180,000 x [% loss of earning capacity] + a further 25% if you suffer permanent total incapacity (i.e. You suffer 100% loss of earning capacity).
  • For death, the compensation amount payable to your dependents is subject to a maximum of $140,000
  • For medical leave wages, full pay up to 14 days outpatient medical leave, and full pay up to 60 days hospitalisation. Once this limit is reached, two-thirds of salary is payable up to a maximum period of one year following the date of the accident.
Self-employed persons, independent contractors, domestic workers, members of the Singapore Armed Forces, officers of the Singapore Police Force, the Singapore Civil Defence Force, the Central Narcotics Bureau and the Singapore Prisons Service are not covered under the WICA.

Increased compensation for employees holding multiple jobs: The WICA removes the old WCA requirement of similar jobs to claim lost wages for multiple jobs. Now, an employee with multiple jobs can claim lost earnings in respect of all of his/her jobs, provided that their employer for whom he/she was working when the accident occurred knew about the employee's other jobs.

Increased compensation for medical expenses incurred: WICA allows employees to claim medical expenses incurred outside of Singapore. This is on the condition that the medical expenses were necessary for immediate medical treatment due to the nature of the injury suffered.

Recovery from third party regardless of employer's fault: Under WICA, an employer can recover damages from a third party to the extent that the third party is at fault, even if the employer is partly to blame for the accident. By way of example, if the employer was 70% liable for the accident, and the third party was 30% liable, the employer will be able to recover from the third party 30% of the damages payable to the employee.

Direct payments in cases of death and permanent incapacity: The procedure under WICA allows the Commissioner for Labour to authorise compensation to be paid directly to the injured employee, his dependants or his estate. This is expected to greatly expedite and improve the effectiveness of the claim process which in turn will encourage employees to utilise WICA's compensation route.

On the whole, WICA provides a more efficient compensation system which is now available to more categories of employees in Singapore.


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