I. INTRODUCTION

  1. Trade marks, patents and registered designs are personal property1
    and they
    can be the subject of commercial dealings as would any other form of
    property. Indeed, common examples of commercialisation of intellectual
    property rights include assignments and licences.
  2. In some jurisdictions, registration of such transactions which affect the
    intellectual property rights (“IP-related transactions”) are compulsory in that
    they are required to be recorded and registered on the relevant intellectual
    property register. Singapore however, does not make such registrations
    mandatory and IP-related transactions are “not necessarily invalid just because
    they are unregistered”.
    2 However, there are serious repercussions that can
    arise due to a failure to register such IP-related transactions. This article will
    explore two such consequences: entitlement to remedies and rights in relation
    to third parties.
    II. ENTITLEMENT TO REMEDIES
  3. A failure to register an IP-related transaction would severely curtail the
    remedies available to a plaintiff in intellectual property infringement
    proceedings. For example, section 75 of the Patents Act provides that
    Effect of non-registration on infringement proceedings
  4. Where by virtue of [an assignment, mortgage, licence, grant of
    security interest, order of Court] a person becomes the proprietor or
    one of the proprietors or an exclusive licensee of a patent and the
    patent is subsequently infringed, the court or the Registrar shall not
    award him damages or order that he be given an account of the profits
    in respect of such a subsequent infringement occurring before the
    transaction, instrument or event is registered unless —
    (a) the transaction, instrument or event is registered within the
    period of 6 months beginning with its date; or
    (b) the court or the Registrar is satisfied that it was not practicable
    to register the transaction, instrument or event before the end
    1 See section 36 of the Trade Marks Act, section 41(1) of the Patents Act and section 32(1) of
    the Registered Designs Act
    2 Guy Neale v Ku De Ta SG Pte Ltd [2015] 4 SLR 283 at [75]
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    This write-up is provided for general information only.
    It is not intended to be nor should it be relied upon as legal advice.
    Specific advice will have to be given on a case-by-case basis depending on the facts and circumstances in question.
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    TRANSACTIONS
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    of that period and that it was registered as soon as practicable
    thereafter.
    Similar provisions exist in respect of trade marks and registered designs.3
  5. The effect of such a provision can be severe, as illustrated in the UK case of
    LG Electronics Inc. v NCR Financial Solutions Group Ltd (“LG Electronics”).
    4
    In
    this case, the claimant was the registered proprietor of two patents. It had
    come to own these two patents through a series of four separate assignments.
    None of these assignments was registered with the UK Patent Office at the
    time in which the assignments were carried out. It was only later that the
    claimant sought to register all the assignment agreements with the UK Patent
    Office.
  6. This case involved a preliminary point in a patent infringement action, namely,
    the interpretation of section 68 of the UK Patents Act (which is the basis on
    which section 75 of the Singapore Patents Act was drafted).
  7. Jacob J explained that section 68 of the UK Patents Act “is aimed at making
    the people who own the monopolies get on the register. If they do not, they lose
    their rights to damages and they do not have a right to sell the right to damages
    to someone else”.5
    In other words, “the primary purpose of the section is to
    ensure that the British, indeed world, public knows who owns British
    monopolies”.6
  8. The impact of section 68 of the UK Patents Act on the claimant’s action was
    two-fold:
    (a) First, until the claimant (who is the current proprietor of the patents in
    issue) managed to register its interest with the UK Patent office, it
    could not claim damages during the period which the assignment was
    not registered, despite the fact that it was the owner/proprietor of the
    patents; and
    (b) Second, because the previous owners had all failed to register its
    ownership interest, the claimant could not also claim for past
    infringements during these earlier periods. In the words of Jacob J, the
    claimant “has acquired, and all that he ever can acquire, is any right to
    3 Section 39(4) of the Trade Marks Act and section 34(4) of the Registered Designs Act
    4
    [2003] FSR 24
    5
    LG Electronics at [18]
    6
    LG Electronics at [15]
    © Yusarn Audrey
    This write-up is provided for general information only.
    It is not intended to be nor should it be relied upon as legal advice.
    Specific advice will have to be given on a case-by-case basis depending on the facts and circumstances in question.
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    damages of his predecessor in title. He cannot acquire more than the
    assignor has to give”.7
  9. As a result, the claim was barred for various time periods where section 68 of
    the UK Patents Act was not complied with.
  10. Should a similar fact pattern arise in Singapore, a similar, if not identical, result
    is likely to be reached.
  11. Two important lessons can be learned:
    (a) First, it is important that a party who is obtaining rights to a particular
    piece of intellectual property ensure that the IP-related transaction is
    registered with the relevant intellectual property registry. Otherwise,
    there are likely to be adverse consequences with regard to the scope
    of remedial measures available to the rights holder.
    (b) Second, if the intellectual property in question involves a history with
    a chain of title, due diligence should also be conducted to determine
    whether if there have been ‘gaps’ during which the relevant
    transactions were not recorded on the register. This will allow the
    potential buyer to (re)assess its position on the matter.
    III. RIGHTS IN RELATION TO THIRD PARTIES
  12. A second consequence of the failure to record an IP-related transaction arises
    when there are competing claims by a third party. To illustrate, assume Party
    A assigns its trade mark to Party B. Subsequently, Party A assigns the same
    trade mark to Party C, resulting in a dispute between Parties B and C as to
    who has ownership of the trade mark. In such a situation, section 39(3) of the
    Trade Marks Act provides that
    Until an application has been made for the registration of [an
    assignment, grant of licence, grant of security interest, making by
    personal representatives of an assent or order of Court], the
    transaction is ineffective as against a person acquiring a conflicting
    interest in or under the registered trade mark in ignorance of the
    transaction.
    7
    LG Electronics at [11]
    © Yusarn Audrey
    This write-up is provided for general information only.
    It is not intended to be nor should it be relied upon as legal advice.
    Specific advice will have to be given on a case-by-case basis depending on the facts and circumstances in question.
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    Similar provisions exist in respect of patents and registered designs.8
  13. In such a situation, the gist of Singapore’s intellectual property legislation
    provides that an initial interest in the intellectual property may be defeated
    by a subsequent purchaser of the same rights, provided that the purchase was
    done without notice of the earlier rights. It is likely the case that the
    subsequent purchaser had to act in good faith in its purchase.
  14. The Canadian case of Verdellen v Monaghan Mushrooms Ltd (“Verdellen”)9
    concerned such a situation of competing rights. The applicant was an
    employee of Rol-land Farms Limited and had invented the patent in issue. He
    claimed that there was an agreement between himself and the company
    whereby he would own the rights to whatever he invented, including the
    patent in issue.
  15. The respondent subsequently purchased Rol-land Farms Limited (including its
    intellectual property rights) and asserted that it was the owner of the patent.
  16. Section 51 of the Canadian Patent Act provides that
    Every assignment affecting a patent for invention, whether it is one
    referred to in section 49 or 50, is void against any subsequent
    assignee, unless the assignment is registered as prescribed by those
    sections, before the registration of the instrument under which the
    subsequent assignee claims.
  17. The import of the Canadian legislation is clear: that a failure to register the
    first-mentioned transaction would mean that it is ineffective as against a
    subsequent assignee. The Court elaborated that the subsequent assignee
    must be one who had acquired rights to the same IP in good faith, for value
    and without notice. Whilst the wording of the Canadian Patent Act is not
    identical to the Singapore Patents Act, in substance, the theoretical
    underpinnings can be said to be the same as the case in Singapore.
  18. As the agreement between the applicant and Rol-land Farms Limited was not
    properly registered, the Court found that the said agreement is void as against
    the respondent which was a good faith purchaser for value without notice of
    any such agreement.
    8 Section 43(1) of the Patents Act and section 34(3) of the Registered Designs Act
    9 2011 ONSC 5820
    © Yusarn Audrey
    This write-up is provided for general information only.
    It is not intended to be nor should it be relied upon as legal advice.
    Specific advice will have to be given on a case-by-case basis depending on the facts and circumstances in question.
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    TRANSACTIONS
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  19. Two important lessons can be learned:
    (a) First, if a party acquires rights to a piece of intellectual property, it is
    extremely important to ensure that the relevant applications are filed
    with the Intellectual Property Office to ensure that his rights are not
    defeated by a subsequent purchaser.
    (b) Second, when acquiring rights to a piece of intellectual property, it is
    likely the case that a purchaser can rely on the relevant Intellectual
    Property Register to satisfy the notice requirement. In Verdellen, the
    respondent-purchaser “conducted due diligence regarding the business
    to be acquired, including information on patents. All of the information
    provided to [it] was consistent with the publicly available information
    that [Rol-land Farms Limited] held the ownership interest in the patent
    rights in question”.10 Unless attention had been drawn to a subsequent
    purchaser of particular facts which would then put it on notice, it
    would not be unreasonable to assume that a subsequent purchaser’s
    reliance on the relevant Intellectual Property Register would be
    sufficient to satisfy the notice requirement.
    IV. CONCLUSION
  20. When entering into IP-related transactions, parties may overlook the need to
    register such IP-related transactions. This article has sought to highlight the
    consequences of a failure to register IP-related transactions. As the risks for
    failing to register IP-related transactions can be drastic, parties should always
    ensure that their rights are not inadvertently lost / curtailed due to a failure
    to comply with the relevant legislation.
    If you would like to have further information on this write-up, please contact:
    Ryan Huang
    Senior Associate
    D (65) 6358 2865
    F (65) 6358 2864
    ryan@yusarn.com