Tee Yih Jia Food Manufacturing Pte Ltd v Seet Chuan Seng & Anor [1993] 2 CLJ 354

The first appellant and the respondent herein had started a popiah skin business in Singapore
under the name “Tee Yih Jia Po Piah Dried Pastry Factory (Pte) Ltd" and subsequently became
successful manufacturers and sellers of the said product, which they packed in various sizes of
wrappers carrying a logo similar to the swastika symbol. The first appellant later left the
business in Singapore and formed the second appellant," Tee Yih Jia Po Piah Dried Pastry
Factory (M) Sdn Bhd" in Malaysia, and started to carry on similar business using the same
trade name, logo and get-up. The facts showed that on 30 September 1980 the first appellant
sold off his entire shares in the respondent and in the agreement executed therefor, it was
stipulated, inter alia, by clause 5 therein, that "there shall be no restraint of trade or restraint of
competition whatsoever imposed upon the vendor..... and that the vendor is at liberty to engage,
trade or be interested in any form of business whatsoever whether touching on
the manufacturing or dealing of Po Piah Dried Pastry or otherwise".

The respondent applied for an injunction to restrain the appellants from continuing with the
trade on the ground of passing-off, which the learned High Court Judge granted on like ground.
The appellants appealed and argued that the learned Judge had erred as, although there was
representation by their use of the package, get-up and logo and name Tee Yih Jia (TYJ), that
representation did not amount to such misrepresentation necessary for a successful action in
passing-off and secondly, that even if all the elements of passing off had been made out,
passing-off by the appellants was allowed by clause 5 of the aforesaid agreement.

[1] The trial Judge was correct in his finding of fact that to a potential buyer of popiah skins,
discerning or otherwise, the use by the appellants of the name TYJ accompanied by the relevant
logo and get-up not dissimilar to the respondent's products, did tend to confuse, with the result
that the appellants' products could easily be passed off as that of the respondent's. And so too
his finding that the name TYJ, logo and getup had become distinctive of the respondent's
products and the use by the appellants was certainly likely to deceive and cause deception.

[2] In an action for passing-off it is necessary for the plaintiff to establish that he has suffered
damage. However, if the goods in question, as in this case, are in direct competition with one
another, the Court will readily infer the likelihood of damage to the plaintiff's goodwill through
loss of sales and loss of the exclusive use of his name. Be that as it may, on the facts of this
case, in view of the similarity in name, logo and get-up and type of product dealt with by both
parties, there is a likelihood of diversion of customers from the respondent to the appellants
which would result in the loss to the respondent.

[3] In considering the tort of passing off the terms "unfair competition" or "unfair trading"
ought to be given due consideration. The reference in clause 5 to the term "competition" can
only give the impression "fair competition in businesses" and therefore when the parties herein
entered into the said agreement what they had in mind was that there should be no restraint of
fair competition. It would be wrong to equate unfair competition to the word "competition"
used in clause 5 of the agreement and contend that the appellants were therefore allowed to
pass-off their trade or goods as that for the respondent by using the various badges of the
respondent in trade including the get-up, TYJ name and swastika logo.

[4] In construing this agreement, made between two businessmen, there must be ascribed to
the words used therein a meaning that would make good commercial sense. In the
circumstances, the rule of interpretation described by Lord Diplock in Miramar Maritime Corp.
v. Holborn Oil Trading Ltd. [1984] AC 676 as "the good commercial sense principle" ought to
apply, thereby enabling this Court to assert that no business- man, who had not taken leave of
his senses, would intentionally enter into an agreement which exposed him to unfair trading
and the kind which is actionable in a passing-off action. It follows that the contractual word
"competition" used in clause 5 of the agreement, therefore, should not and cannot be
manipulated to say that the appellants cannot be restrained from unfair competition.

Star Industrial Co Ltd v. Yap Kwee Kor T/a New Star Industrial Co [1976] 1 LNS 145
In Star Industrial Co Ltd v Yap Kwee Kor, an appeal from the Court of Appeal of Singapore.
In Yap Kwee Kor, Lord Diplock set forth the classic statement on the territoriality of goodwill,
reasoning that goodwill "is local in character and divisible: if the business is carried on in
several countries a separate goodwill attaches to it in each". Several years before the dispute
arose, the plaintiff (coincidentally, another Hong Kong firm) had abandoned the Singapore
market, when Singapore ceased to be a free port. The Privy Council held that the plaintiff could
not bring a passing off action to enjoin the defendant's activities in Singapore. For the purposes
of passing off, the Hong Kong business was separate from any Singaporean business.
Accordingly, any goodwill it might have in Hong Kong was irrelevant to the existence of
goodwill within Singapore. The Privy Council held that the Hong Kong business and
accompanying goodwill did not provide the basis for a cause of action for passing off within
Singapore.

Optional for understanding

This case was made reference to the case of Starbucks (HK) Ltd v British Sky Broadcasting
Group. This case was concerned with the issue of Starbucks was trying to enjoin an action for
passing off in United Kingdom’s jurisdiction. Starbucks was operating a tv business that
marketed its service under “NOW”. British were planning to launch a tv service in UK under
the name of “NOW TV”. Starbucks demand for an injuction but was dismissed on the ground
of insufficient reputation in UK. As they did not directly established their brand in UK and the
consumers outside of Hong Kong could not get access to, UK only get to known this channel
through exposure of youtubes, airlines programmes and websites Chinese tv programme.

Proposition from British

First, goodwill is territorial, meaning that goodwill exists and is protected on a jurisdiction-
by-jurisdiction basis. Accordingly, a firm doing business in country X and country Y has two
distinct bundles of property rights, one protected under the law of X and the other under the
law of Y. Secondly, the territorial limitations on goodwill mean that it is only customers within
the jurisdiction who count for the purposes of establishing whether goodwill exists. The trial
judge had held that the claimants' United Kingdom reputation was more than de minimis.

Findings: Goodwill must be territorial in nature which is evaluated by a solid customers

foundation based.

Clairol Incorporated v. Too Dit Company [1980] 2 MLJ 112

The plaintiffs in this case were manufacturers of an herbal shampoo under the trade name
"Clairol". Since November 1972, through their sister company, Bristol Myers (Singapore) Pte.
Ltd., they have been marketing Clairol in Singapore.

The bottles of the shampoo were transparent plastic. They were of different sizes and had three
different formulations which were distinguished by different coloured caps on the bottles. The
colour of the borders of labels were different for the different formulations. The trade name
"Clairol" was on the label and there were descriptive words on it. On the label was a trade
mark, a graphic design of a young woman in a pool surrounded by green leaves and coloured
flowers.
The defendant, a company registered in 1973 manufactured shampoo under a trade name
"Backer" and a trademark which was registered in 1963. In 1976 the defendant went into herbal
essence shampoo. The shampoo was sold in bottles with green caps which were of the same
size and shape as the bottle, P157, of the plaintiffs. The label on the defendant's bottle P158,
was similar in form and colour to the label on P157. So were the descriptive words on it. But
the trade name on the bottle has "Backer" and, instead of a young girl in a pool of water, the
defendant's label had the trade mark, a yellow circle and in it the device of a bent arm holding
an arrow. There were leaves and flowers surrounding the circle about alike but different in size
to those on P157.

The plaintiffs took objection to the get-up of the defendant's product and claimed passing-off
and infringement of copyright against the defendant.

Held, dismissing the plaintiffs' claim:

 (1) this was not the case where a particular get-up (Whole external appearance) of
goods had been for a long time, for many years, on the market, so as to become
identified in course of time with the plaintiffs' goods and with no others, so that that
get-up almost of necessity was identified in the market or amongst the public as
representing the plaintiff's goods;
 (2) the said two labels unquestionably did not resemble each other. It was the different
trade names and trade marks of the two products that distinguished each of them;
 (3) the plaintiffs had not distinguish a case of reputation in the get-up of their product.

M.I & M. Corporation & Anor. V. A. Mohamed Ibrahim [1964] 30 MLJ 392

In this case the original plaintiff commenced proceedings against the defendants claiming that
they had infringed his registered trade mark and had passed off their goods as his. The goods
were cooking oil and the registered trade mark was that of a hibiscus flower with red petals and
green leaves. The label used by the defendants for their goods was that of a sun flower with
green leaves on a yellow background. The plaintiff died before the trial of the action and his
personal representatives continued the action. The learned trial judge gave judgment ( [1963]
MLJ 232) against the defendants, who appealed.
Held:
(1) the question whether a device used as a trade mark so nearly resembles another as to be
likely to deceive or cause confusion is a question of fact;

(2) the test to be applied is whether a person who sees the one trade mark in the absence of the
other trade mark and in view only of his general recollection of what the nature of the other
trade mark was, would be liable to be deceived and to think that the trade mark is the same as
the other of which he has a general recollection. This recollection test is to be applied having
regard to the sort of people who would buy the goods and the circumstances in which they buy;

(3) in this case the flower device used by the appellants was likely to deceive or cause confusion
and so enable the appellants to pass off their goods as and for the goods of the respondents.

Erven Warnink B.V. v. J. Townend & Sons (Hull) Ltd. 1989) RPC 31
Warnink was one of the primary market producers of a Dutch liqueur made from a blend of
hen egg yolks, aromatic spirits, sugar, and brandy, which it sold under the name "Advocaat".
Townend produced a similar alcoholic drink but using egg and Cyprus wine which it sold as
"Keeling's Old English Advocaat".

The Court held that Townend was passing off their goods as those of Warnink. In applying the
test for passing off, the Court developed what is known as the "extended" tort of passing off
which included any situation where goodwill is likely to be injured by a misrepresentation.

Lord Diplock established five criteria for a claim of extended passing off. There must be:

1. misrepresentation
2. by a trader in the course of trade
3. to prospective customers of his or ultimate consumers of goods or services supplied by
him,
4. which is calculated to injure the business or goodwill of another trader, and
5. which causes actual damage to the business or goodwill of the trader bringing the action.