A&M Beauty Wellness Sdn Bhd (“A&M”) is a personal care company and has skincare and beauty products. It sought an injunction against Shopee to force them to remove all products bearing the ‘AM’ brand (until conclusion of a trial).
Decision of the Court:
Shopee is not obligated to remove the products.
The legal principles and findings of the court are as follow:
The criteria for a person to succeed in court to obtain an interlocutory prohibitive injunction are:
- That there is a serious question to be tried;
- Damages are not an adequate final remedy for the applicant;
- Balance of justice or balance of convenience lies in favour of granting an injunction;
- If all relevant factors are evenly balanced, the status quo should be maintained; and
- Whether the applicant has given a meaningful undertaking as to damages.
Further, if the applicant needs the respondent to perform certain acts, then in addition to the above requirements, the applicant needs to also show:
- They have an unusually strong and clear case;
- The mandatory injunctions sought must be expressed in terms which are clear, certain and no wider than necessary; and
- There are special circumstances before the court can grant the applicant the reliefs sought.
- The Applicant ought to have gone through the complaint process and engage with Shopee to address the listing they had issues with.
- Shopee, as an e-commerce operator, is not the appropriate party to obtain the injunction from. Shopee is merely the operator of the online marketplace which facilitates the process of buying and selling.
- Shopee does not have the technical capability to pre-screen each listing before they are made published by users or to perform an ‘autoblock’ involving any AM products on the platform.
- The Court also found that A&M was not the registered proprietor of the ‘AM’ mark. A&M argued that all intellectual property rights, title and interest of the trademark had been assigned to A&M. However, the law requires the registered proprietor to take proceedings for infringement of trademark. This means that an assignee cannot sue for infringement.
This is a huge win for Shopee. The Court appears to acknowledge that it is humanly impossible for Shopee to process all listing before it is published in the marketplace. This decision may have a slippery slope consequence – if an illegal item is published and sold, will the operator get away scot-free?
As social media giants such as Facebook and Twitter occasionally come under fire for not removing contents which are deemed violent or ‘fake’, it’ll be interesting to see how regulators balance the ball between responsibility and immunity.