The sentencing framework of Section 49(c) of the Trademarks Act

Singapore
  • Fashion retailer appeals court’s decision of four weeks’ imprisonment for selling counterfeit shoes
  • Judge stated that sentencing is always fact-sensitive and examined seminal cases
  • Case clarifies sentencing framework in the Trademarks Act and affirms Singapore’s no-nonsense approach to infringement

Introduction

Fashion retailer Niki Han Jiayi was sentenced to four weeks' imprisonment under Section 49(c) of the Trademarks Act for possession of counterfeit shoes for the purpose of trade, which she appealed against on the basis that a non-custodial sentence was more appropriate. The court clarified the sentencing framework for Section 49(c) Offences as set out in the seminal cases of Goik Soon Guan v Public Prosecutor ([2015] 2 SLR 655) and Tan Wei v Public Prosecutor ([2016] 3 SLR 450) and held that a custodial sentence was appropriate in her case.

Niki
Han sold counterfeit shoes from three retail shops. She was sentenced to four weeks' imprisonment for five charges under Section 49(c) of the Trademarks Act for the possession of counterfeit shoes for the purpose of trade. In determining the appropriate sentence, the district judge thoroughly examined seminal cases involving Section 49(c) offences.

The seminal cases

Prior to Goik and Tan Wei, the sentencing principles in respect of Section 49(c) offences were disparate. Whether a custodial sentence was warranted appeared to hinge on factors that were not uniformly applied.

In the seminal decision of Goik, Justice Chao Hick Tin helpfully emphasised that the "primary sentencing consideration in cases of trade mark…is deterrence", given the importance of ensuring that Singapore continues to attract foreign investors. Chao articulated a systematic framework to guide courts in deciding the appropriate sentence for Section 49(c) offences:

  • "first, consider "the nature and extent of the infringements, and the manner in which the infringements were carried out""; and
  •  "examine whether there are any other relevant aggravating or mitigating factors."

Further, he observed from past case law that a fine was imposed when one or more of the following factors were present:

  • where the offender operated a temporary stall;
  • there were fewer than 1,000 infringing articles; and
  • there were other relevant mitigating factors.

Also, the determination of the infringer's level of involvement is a useful starting point for the appropriate sentence.

This benchmark would then be adjusted based on aggravating and/or mitigating factors as set out in Tan Wei, including, but not limited to the:

  • size of the business;
  • number of employees;
  • number of infringing articles;
  • duration of infringement;
  • degree of permanence in offender's dealing; and
  • compensation.

Solidifying the sentencing framework in Niki

From the seminal cases above, the district judge in Niki distilled that a custodial sentence was the norm when the offender's dealings with the infringing articles had a degree of permanence. To determine an appropriate sentence, the judge considered:

  • whether, as a threshold requirement, there was a degree of permanence that would warrant a custodial sentence, and if warranted:
    • adjust the resultant sentence based on Tan Wei and other factors.
    •  adjust the sentence based on the number of infringing articles; and
    • determine the level of involvement of the infringer and the corresponding starting point sentence;

In view of the degree of permanence of Han's dealings through her three retail shops and her moderate involvement, it was held that a starting sentence of five to six months' imprisonment was appropriate. However, given her lack of prior antecedents, that her business was small and had low profitability, that only a small number of infringing articles were involved and considerable compensation efforts were made, the judge held that considerable discount to the starting point was warranted and sentenced Han to two weeks' imprisonment per charge, which were to run consecutively for an overall sentence of four weeks' imprisonment.

Comment

Niki has affirmed Singapore's no-nonsense attitude towards trademark infringements by fleshing out the sentencing framework for Section 49(c) Offences. While Niki has solidified some relevant sentencing factors, as Chao stated in Tan Wei, "[s]entencing is always fact-sensitive".

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