High Court clears distributors of passing off

In Yunnan Baiyao Group Co Ltd v Tong Jum Chew pte Ltd and Tong Jum Chew Medical Store (Case 163/2002), the Singapore High Court has dismissed a claim by Yunnan Baiyao, a China-based company, against two Singaporean companies for passing off in respect of a well-known herbal medicine called 'Yunnan Paiyao', which is widely used in China and Southeast Asia for healing wounds.

Yunnan Baiyao manufactures the medicine in China and had been using another Chinese company to distribute its product. This distribution agent then appointed distributors in several Southeast Asian countries, including the two defendants in Singapore. Before delivering Yunnan Baiyao's product to the Singaporean distributors, the Chinese distribution agent applied its own trademark to the goods - CAMELLIA YUNNAN PAIYAO. Yunnan Baiyao claimed that when the two defendants distributed the product in Singapore, this amounted to passing off in respect of the name 'Yunnan Paiyao'.

The High Court disagreed and ruled in favour of the two Singaporean defendants. It based this ruling on two main findings. First, the words 'Yunnan Paiyao' (meaning 'Yunnan white medicine') are descriptive and Yunnan Baiyao provided no evidence that the words had attained a secondary meaning in Singapore. Thus, the words were not entitled to trademark protection.

Second, a passing-off action was not appropriate. The Chinese manufacturer failed to prove that it had not manufactured the medicine that was distributed by the two defendants in Singapore. Rather, the Singaporean distributors provided evidence that the product had in fact been produced by the plaintiff in China. Thus, the defendants could not be found guilty of passing off goods as Yunnan Baiyao's goods, because the goods were in fact Yunnan Baiyao's.

Tee Jim Tan SC, Allen & Gledhill, Singapore