Sun Electric v Sunseap: Security for Costs in Patent Infringement Suits

In Sun Electric Pte Ltd v Sunseap Group Pte Ltd, the High Court of Singapore heard applications by the Defendants, Sunseap Group Pte Ltd, Sunseap Energy Pte Ltd, and Sunseap Leasing Pte Ltd, for security for costs against the Plaintiff, Sun Electric Pte Ltd, in two related patent infringement suits. The Plaintiff alleged infringement of its patents relating to methods of determining power consumption. The court ordered the Plaintiff to furnish security for costs totaling $315,000, staying proceedings until the security is provided, on the condition that the Defendants discontinue their counterclaims if the Plaintiff's claims are struck out for failure to furnish security.

1. Case Overview

1.1 Court

High Court of the Republic of Singapore

1.2 Outcome

The Plaintiff was ordered to furnish security for costs. Proceedings stayed until security is provided.

1.3 Case Type

Intellectual Property

1.4 Judgment Type

Judgment

1.5 Jurisdiction

Singapore

1.6 Description

The High Court ordered Sun Electric to provide security for costs in patent infringement suits against Sunseap, concerning methods of determining power consumption.

1.7 Decision Date

2. Parties and Outcomes

Party NameRoleTypeOutcomeOutcome TypeCounsels
Sun Electric Pte LtdPlaintiff, RespondentCorporationSecurity for costs orderedPartialChan Wenqiang, Alvin Lim, Alvin Tan
Sunseap Group Pte LtdDefendants, ApplicantsCorporationSecurity for costs grantedWonNicholas Lauw, Leow Jiamin
Sunseap Energy Pte LtdDefendants, ApplicantsCorporationSecurity for costs grantedWonNicholas Lauw, Leow Jiamin
Sunseap Leasing Pte LtdDefendants, ApplicantsCorporationSecurity for costs grantedWonNicholas Lauw, Leow Jiamin

3. Judges

Judge NameTitleDelivered Judgment
Justin YeoAssistant RegistrarYes

4. Counsels

Counsel NameOrganization
Chan WenqiangRavindran Associates LLP
Alvin LimRavindran Associates LLP
Alvin TanRavindran Associates LLP
Nicholas LauwRajah & Tann Singapore LLP
Leow JiaminRajah & Tann Singapore LLP

4. Facts

  1. Sun Electric Pte Ltd is the registered proprietor of two Singapore patents.
  2. Sunseap Group Pte Ltd, Sunseap Energy Pte Ltd and Sunseap Leasing Pte Ltd are the defendants in two patent infringement suits brought by Sun Electric.
  3. The Defendants applied for security for costs under s 388 of the Companies Act.
  4. Sun Electric Power Pte Ltd, a wholly-owned subsidiary of Sun Electric (Singapore) Pte Ltd, applied to be put under judicial management.
  5. A worldwide Mareva injunction was sought against the Plaintiff in a separate suit.
  6. Money was withdrawn from SEPPL’s bank account in breach of an interim injunction.
  7. The Plaintiff's controlling majority stake in SEEA would be sold as part of a “proposed investment”.

5. Formal Citations

  1. Sun Electric Pte Ltd v Sunseap Group Pte Ltd and others and another suit, , [2020] SGHCR 1

6. Timeline

DateEvent
Suit 1229 filed
Suit 190 filed
Defendants discovered Sun Electric Power Pte Ltd applied for judicial management
Menrva filed ex parte application seeking worldwide Mareva injunction against the Plaintiff
Defendants became aware of injunction sought against Plaintiff in Suit 200
High Court granted the injunction
Defendants requested security for costs from the Plaintiff
Plaintiff refused to provide security
Defendants filed Summonses No 5302 of 2019 and 5303 of 2019
Hearing
Judgment reserved

7. Legal Issues

  1. Security for Costs
    • Outcome: The court ordered the Plaintiff to furnish security for costs, staying proceedings until the security is provided.
    • Category: Procedural
    • Sub-Issues:
      • Ability of plaintiff to pay costs
      • Overlap between claim and counterclaim
      • Delay in applying for security
      • Oppression of plaintiff
      • Quantum of security

8. Remedies Sought

  1. Security for Costs
  2. Stay of Proceedings
  3. Striking Out of Claims

9. Cause of Actions

  • Patent Infringement

10. Practice Areas

  • Litigation
  • Intellectual Property Litigation
  • Security for Costs

11. Industries

  • Energy

12. Cited Cases

Case NameCourtAffirmedCitationJurisdictionSignificance
Creative Elegance (M) Sdn Bhd v Puay Kim Seng and anorHigh CourtYes[1999] 1 SLR(R) 112SingaporeCited for the two-stage test in determining whether security for costs should be ordered under s 388(1) of the Companies Act.
StreetSine Singapore Pte Ltd v Singapore Institute of Surveyors and Valuers and orsHigh CourtYes[2019] SGHCR 1SingaporeCited for the principle that the defendant bears the legal burden of proof in security for costs applications.
Frantonios Marine Services Pte Ltd v Kay Swee TuanHigh CourtYes[2008] 4 SLR(R) 224SingaporeCited for factors to consider when assessing a plaintiff's ability to pay costs, including sources of funds, cash position, assets, and liabilities.
Bilia AB v Te Pte Ltd and othersHigh CourtYes[1999] SGHC 96SingaporeCited as a case that lists factors to consider when assessing a plaintiff's ability to pay costs.
Elbow Holdings Pte Ltd v Marina Bay Sands Pte LtdHigh CourtYes[2014] SGHC 219SingaporeCited for the principle that concessions made by the plaintiff in relation to the plaintiff’s financial situation are relevant.
Uni-continental Holdings Ltd v Eurobond Adhesives LtdCourt of AppealYes[1996] FSR 834England and WalesCited for the principle that the assessment of a plaintiff’s ability to pay costs is prospective in nature.
SIC College of Business and Technology Pte Ltd v Yeo Poh Siah and othersCourt of AppealYes[2016] 2 SLR 118SingaporeCited for principles relating to the Claim-Counterclaim Overlap and the weight to be given to any delay.
Jurong Town Corp v Wishing Star LtdCourt of AppealYes[2004] 2 SLR(R) 427SingaporeCited for principles relating to the Defence-Counterclaim Overlap.
B J Crabtree (Insulation) Ltd v GPT Communication Systems LtdNot AvailableYes(1990) 59 BLR 43England and WalesCited for the principle that a plaintiff should not have to defend a counterclaim with one hand tied behind its back.
Dumrul v Standard Chartered BankHigh CourtYes[2010] CLC 661England and WalesCited for the principle that an unfair result may be occasioned if the plaintiff has succeeded in defending against the co-extensive counterclaim but remains unable to secure judgment on the claim.
Jane Rebecca Ong v Pricewaterhousecoopers and othersHigh CourtYes[2009] 2 SLR(R) 796SingaporeCited for the principle that the existence of overlaps does not constitute a bar to the ordering of security.
Global Flood Defence Systems Ltd & Anor v Johan Van Den Noort Beheer BV & OrsHigh Court of JusticeYes[2016] EWHC 1851 (Pat)England and WalesCited for the principle that a finding of infringement of the 883 Patent in Suit 190 will also go towards fulfilling certain defences raised in Suit 1229.
McGhan Medical UK Ltd v Nagor LtdCourt of AppealYes[2002] FSR 9England and WalesCited for the principle that determining the validity of the Patents will also have a direct impact on whether the asserted claims have been infringed.
Sunseap Group v Sun Electric Pte LtdCourt of AppealYes[2019] 1 SLR 645SingaporeCited for the principle that in Singapore a defendant is only permitted to challenge the validity of asserted claims.
Siva Industries and Holdings Ltd v Foreguard Shipping I Singapore Pte LtdHigh CourtYes[2017] SGHCR 5SingaporeCited for the principle that the court ordered security for costs on the condition that the defendant provides a written undertaking to discontinue its counterclaim should the plaintiff’s claim be struck out for failure to provide security.
Axent Holdings Pty Ltd v Compusign Australia Pty Ltd (No 2)Federal Court of AustraliaYes[2017] FCA 1102AustraliaCited for the court's concern that the later an application for security for costs is made, the greater the likelihood that it will cause substantial disruption or distraction in the conduct of the plaintiff’s case.
Aleksander v Zsolt Adam and OthersHigh Court of JusticeYes[2015] EWHC 1582 (Ch)England and WalesCited for the principle that the later an application for security is made, the more a plaintiff would have spent on the proceedings.
Optaglio Ltd v Tethal and AnotherNot AvailableYes[2019] 1 Costs LR 41England and WalesCited for the principle that the later an application for security is made, the smaller the opportunity for the plaintiff to have a real choice between whether to furnish security and proceed or not do so and give up.
Thomas (Arthur Edward) Ltd v Barcrest Ltd and anotherNot AvailableYes[1995] RPC 138England and WalesCited as a patent decision in the UK where the courts did not concern themselves with the issue of overlap when deciding whether to order security for costs.
Baygol Pty Ltd v Huntsman Chemical Co Australia Pty Ltd t/a RMAXFederal Court of AustraliaYes[2004] FCA 1248AustraliaCited as a patent decision in Australia where the courts did not concern themselves with the issue of overlap when deciding whether to order security for costs.
Vitaly Evgenievich Pilkin v Sony Australia LtdFederal Court of AustraliaYes[2018] FCA 1018AustraliaCited as a patent decision in Australia where the courts did not concern themselves with the issue of overlap when deciding whether to order security for costs.
Procon (Great Britain) Ltd v Provincial Building Co Ltd and anorCourt of AppealYes[1984] 1 WLR 557England and WalesCited for the principle that security should be given for sums that the Defendants are out of pocket for, and not just for sums to be incurred moving forward.
Mitora Pte Ltd v Agritrade International (Pte) LtdCourt of AppealYes[2013] 3 SLR 1179SingaporeCited for the principle that an unless order will not be given as a matter of course but as a last resort.
Radu v Houston and AnotherCourt of AppealYes[2007] 5 Costs LR 671England and WalesCited for the principle that an order for large sums of security should not be made subject to the ‘unless’ sanction until a real opportunity has been given to the claimant to find the money.
ASM Technology Singapore Pte Ltd v Towa CorpHigh CourtYes[2018] 1 SLR 211SingaporeCited as a comparison for the number of prior art used in invalidity challenges.
Lee Tat Cheng v Maka GPS Technologies Pte LtdHigh CourtYes[2018] 3 SLR 1334SingaporeCited as a comparison for the number of prior art used in invalidity challenges.
Rohm and Haas Electronic Materials CMP Holdings, Inc (formerly known as Rodel Holdings, Inc) v NexPlanar Corp and anotherHigh CourtYes[2018] 5 SLR 180SingaporeCited as a comparison for the number of prior art used in invalidity challenges.
Dien Ghin Electronic (S) Pte Ltd v Khek Tai Ting (trading as Soon Heng Digitax)High CourtYes[2011] 3 SLR 227SingaporeCited as a comparison for the number of prior art used in invalidity challenges.
Trek Technology (Singapore) Pte Ltd v FE Global Electronics Pte Ltd and others and other suitsHigh CourtYes[2005] 3 SLR(R) 389SingaporeCited as a taxation precedent in patent cases.
Main-Line Corporate Holdings Ltd v United Overseas Bank Ltd and another (First Currency Choice Pte Ltd, third party)High CourtYes[2007] 1 SLR(R) 1021SingaporeCited as a taxation precedent in patent cases.
Trans Eurokars Pte Ltd v Koh Wee MengHigh CourtYes[2015] SGHCR 6SingaporeCited as a taxation precedent in patent cases.
Lin Jian Wei and anor v Lim Eng Hock PeterHigh CourtYes[2011] 3 SLR 1052SingaporeCited as a taxation precedent in patent cases.
Seraya Energy Pte Ltd v Denka Advantech Pte LtdHigh CourtYes[2019] SGHC 100SingaporeCited for the principle that the figures computed under Part III(A)(i) of the Costs Guidelines ought to be taken as a guide for assessing the entirety of party-and party costs for the suit.

13. Applicable Rules

Rule Name
No applicable rules

14. Applicable Statutes

Statute NameJurisdiction
Companies Act (Cap 50, 2006 Rev Ed)Singapore

15. Key Terms and Keywords

15.1 Key Terms

  • Security for costs
  • Patent infringement
  • Companies Act
  • Judicial management
  • Mareva injunction
  • Counterclaim
  • Overlap
  • Delay
  • Quantum
  • Indemnity costs

15.2 Keywords

  • Patent
  • Infringement
  • Security for costs
  • Singapore
  • Sun Electric
  • Sunseap
  • Intellectual property
  • Litigation

16. Subjects

  • Intellectual Property
  • Civil Procedure
  • Patent Litigation
  • Security for Costs

17. Areas of Law

  • Civil Procedure
  • Intellectual Property Law
  • Patent Law