Case Details
- Citation: [2023] SGHC 99
- Title: Towa Corp v ASM Technology Singapore Pte Ltd and another
- Court: High Court of the Republic of Singapore (General Division)
- Suit No: Suit No 359 of 2013
- Date of Judgment: 14 April 2023
- Judge: Lee Seiu Kin J
- Judgment Reserved: Yes
- Hearing Dates: 15–17, 19 March 2021; 19–21, 25, 27–28 October 2022; 20 January 2023
- Plaintiff/Applicant: Towa Corporation (“Towa”)
- Defendants/Respondents: (1) ASM Technology Singapore Pte Ltd (“ASMS”); (2) ASM Pacific Technology Limited (“ASM Pacific”)
- Legal Areas: Damages — Assessment; Intellectual Property — Remedies
- Core Procedural Posture: Liability determined in a previous tranche; this judgment concerns assessment of damages (and related issues) following infringement findings
- Key Prior Liability Decision: Towa Corp v ASM Technology Singapore Pte Ltd and another [2017] 3 SLR 771
- Key Court of Appeal Decision on Limitation/Time Window: ASM Technology Singapore Pte Ltd v Towa Corp [2018] 1 SLR 211
- Statutes Referenced (as stated in metadata): English Patents Act; Limitation Act; Patents Act
- Cases Cited (as stated in metadata): [2023] SGHC 99
- Judgment Length: 54 pages; 13,742 words
Summary
This High Court decision, delivered by Lee Seiu Kin J, addresses the assessment of damages in a patent infringement action concerning semiconductor packaging moulding systems. The court had previously found that ASMS infringed Towa’s Singapore patent by manufacturing, keeping, offering for use, offering to dispose of, and disposing of the defendants’ IDEALmold machine. The present tranche does not revisit infringement or validity; it focuses on what monetary compensation should be awarded for the period during which damages could be claimed.
The court’s task was complex because Towa’s claimed loss was not limited to the sale of infringing machines. Towa sought damages for (i) lost sales of its own YPS machines and related “Additional Parts” over the life expectancy of those machines; (ii) lost aftersales profits (maintenance and support); and (iii) additional profits lost during the “Claim Period” because Towa allegedly had to lower prices to compete with the infringing IDEALmold machines. The court also had to grapple with evidential and accounting issues, including whether certain IDEALmold machines should be excluded from the damages computation, whether the YPS machine was a direct substitute or competitor, and how to model profit margins, costs, discount rates, and pre-judgment interest.
Ultimately, the judgment provides a structured approach to patent damages assessment in Singapore, particularly where the patentee claims market substitution effects and downstream profits. It also illustrates the court’s insistence on causation and on a disciplined, evidence-based methodology for quantifying loss, rather than relying on broad assumptions or untested expert calculations.
What Were the Facts of This Case?
Towa is a Japanese company in the semiconductor packaging solutions business. It is the registered proprietor of Singapore Patent No 49740 (the “Patent”). The Patent concerns aspects of moulding machine design, and in the liability tranche the court accepted Towa’s interpretation that the invention applies the concept of modularity to moulding units of moulding machines. The court found that the IDEALmold machine, with modularity of moulding units, fell within the claims of the Patent.
ASMS is a Singapore-incorporated company that manufactures and sells semiconductor equipment and materials. It manufactured and sold moulding systems known as the IDEALmold machine. ASMS is a wholly owned subsidiary of ASM, and the second defendant (ASM Pacific Technology Limited) is within the ASM group. The infringement findings were made against ASMS, but the damages assessment necessarily considered the commercial realities of the group’s manufacturing and sales channels, including sales to associated entities and exports.
Towa commenced Suit 359 on 19 April 2013. The liability decision was delivered on 22 December 2016, and the Court of Appeal later dismissed ASMS’s appeal. A crucial point for damages was limitation: under s 6 of the Limitation Act (Cap 163, 1996 Rev Ed), the damages (or account of profits) for patent infringement could only run from six years before the writ was filed. The Court of Appeal therefore fixed the relevant period as running from 20 April 2007 to 5 July 2014, the day before the Patent expired on 6 July 2014. This period was referred to as the “Claim Period”.
For the damages tranche, Towa elected damages accrued during the Claim Period to be paid by ASMS. Towa’s case was that during the Claim Period ASMS manufactured at least 439 IDEALmold machines for sale, and that these machines were direct substitutes for and in direct competition with Towa’s YPS machine. Towa argued that, but for the infringement, it would have sold the same number of YPS machines, together with press modules and moulds (the “Additional Parts”), over the life expectancy of each YPS machine. Towa further claimed lost aftersales profits on the YPS machines, and additional losses arising because it allegedly had to lower YPS prices during the Claim Period to compete with the infringing IDEALmold machines.
What Were the Key Legal Issues?
The first set of issues concerned the scope of the infringing sales that could properly be linked to Towa’s claimed losses. The court had to decide, among other things, whether all 439 IDEALmold machines should be considered for damages purposes. This required careful attention to timing (manufactured and sold before or after the Claim Period), and to whether unsold machines or machines sold after the Patent expired could be causally connected to losses within the Claim Period.
Related to this were issues about whether certain machines should be excluded from calculations. The judgment’s outline indicates specific disputes: whether unsold IDEALmold machines and IDEALmold machines sold after the Claim Period should be excluded; whether the “170T IDEALmold” should be excluded; and whether the “YPS machine” was a direct substitute for or competitor of the IDEALmold machine during the Claim Period. These issues go to causation and to the evidential foundation for modelling substitution effects.
The second set of issues concerned the methodology for quantifying damages. The court had to assess whether Towa had the production capacity to manufacture and sell the additional machines it claimed it would have sold. It also had to evaluate claims about aftersales services provided by Towa’s subsidiaries, the supply of additional parts, and whether Towa lowered its prices (and if so, whether that lowering was caused by the infringing competition). Finally, the court had to resolve technical accounting and expert methodology questions, including the appropriate currency for damages, whether incremental cost items should be excluded, how to treat indirect sales commissions, depreciation and amortisation, indirect R&D costs, additional costs of sales, and loan financing and interest for operating expenses, as well as the discount rate to apply to additional sales and aftersales.
How Did the Court Analyse the Issues?
Because infringement and validity had already been determined, the court approached damages assessment as a causation-and-quantification exercise. The court began by identifying the “Claim Period” fixed by limitation and then examined whether the infringing machines relied upon by Towa were properly within that period for the purpose of calculating lost sales and related profits. This required the court to separate manufacturing and sales timing, and to consider whether machines manufactured during the Claim Period but sold after it (or unsold) could realistically be treated as causing losses within the Claim Period.
On the question whether all 439 IDEALmold machines should be considered, the court had to address ASMS’s contention that only 410 were manufactured before or during the Claim Period and sold during it, while the remaining 29 did not cause Towa to lose sales during the Claim Period because some were sold only after the Patent expired and others were unsold. The court’s analysis, as reflected in the structure of the judgment, indicates that it treated these as not merely arithmetic exclusions but as causation issues: damages must be tied to losses that would have occurred but for the infringement, within the legally relevant time window.
The court also addressed whether the YPS machine was a direct substitute for the IDEALmold machine. This is a central concept in lost profits claims: if the infringing product is not a true substitute, the patentee’s claimed lost sales may be speculative. The court had to evaluate competing evidence about how customers made purchasing decisions. Towa’s position was that IDEALmold machines were direct substitutes and in direct competition with the YPS machine. ASMS’s position was that although the YPS machines were marketed at a premium due to modularity, the IDEALmold machines were not marketed as modular machines but as machines with fixed moulding presses and other technologies and functional options. ASMS also argued that other Towa models and other competitors existed, which would weaken the inference that IDEALmold sales displaced YPS sales.
In addition, the court examined whether Towa had the production capacity to manufacture and sell the additional machines it claimed it would have sold. This is a practical constraint that can affect causation: even if customers would have preferred the patentee’s product, the patentee must be able to supply it. The judgment’s outline shows that the court made findings on production capacity, which would influence whether the claimed lost sales were plausible and whether the court should accept Towa’s assumption that it could have captured the relevant market share.
The court further analysed downstream damages components. Towa claimed lost profits not only from lost machine sales but also from lost aftersales services and additional parts. ASMS disputed that Towa (as opposed to a subsidiary) would have provided aftersales services, and disputed that Towa would have supplied additional parts to customers. The court therefore had to determine the factual basis for attributing aftersales and parts profits to Towa, including whether Towa’s group structure and commercial arrangements supported the assumption that customers would have purchased those downstream items from Towa rather than from other entities within the group or from third parties.
On the pricing competition claim, Towa alleged that it lowered prices of its YPS machines to compete with ASMS’s YPS-lowering effect. ASMS denied causation, arguing that any price reduction would have occurred before the Claim Period or was due to other reasons. The court’s approach, as indicated by the judgment outline, involved scrutinising expert calculation methodology and the factual record to determine whether the alleged price lowering was indeed attributable to the infringing IDEALmold sales during the Claim Period.
Finally, the court dealt with expert computation methodology in detail. The judgment’s outline shows that the court considered whether specific machines (including the “IDEALmold 60T” and the “170T IDEALmold”) should be excluded from calculations, whether multi-year averages or year-on-year basis should be used for profit margin calculations, and how to model life expectancy for aftersales services and additional parts sales. It also addressed the appropriate currency for damages and whether incremental cost items should be excluded. The court considered specific cost categories and financing-related items (including indirect sales commissions, depreciation and amortisation, indirect R&D costs, additional costs of sales, and loan financing and interest for operating expenses). It also addressed discount rates and pre-judgment interest, all of which are standard but technically demanding elements in damages assessment.
What Was the Outcome?
The judgment, delivered after the liability tranche and Court of Appeal limitation ruling, resulted in the court making findings on the proper scope of infringing machines and on the appropriate methodology for calculating Towa’s lost profits and related components. The practical effect is that the damages awarded (or the damages computation accepted) depended on the court’s determinations on causation and quantification—particularly which IDEALmold machines were relevant, whether the YPS machine was a direct substitute, whether Towa could supply the additional demand, and how aftersales and parts profits should be modelled.
While the provided extract does not include the final numerical award and the precise orders, the structure of the judgment confirms that the court concluded its analysis by applying the law on damages to the evidence and expert computations, and then determined the damages and interest consequences for the Claim Period. For practitioners, the key takeaway is that the court’s outcome reflects a disciplined approach: damages for patent infringement will be limited to losses that are causally connected and capable of being quantified on a defensible basis.
Why Does This Case Matter?
This case matters because it demonstrates how Singapore courts assess patent damages where the patentee seeks lost profits across multiple layers of the commercial chain. Many patent damages disputes focus on whether the infringing product displaced the patentee’s product. Here, the court went further by requiring evidence and analysis on production capacity, downstream aftersales and parts, and the economic impact of competitive pricing. This is particularly relevant for technology companies whose revenue streams include both equipment sales and recurring service or consumables.
From a precedent and practical standpoint, the judgment is useful for lawyers advising on damages pleadings and expert evidence. The court’s treatment of exclusions (unsold machines, machines sold after expiry, and specific machine models) underscores that damages are not automatically calculated by multiplying infringing units by a presumed profit margin. Instead, courts will scrutinise timing, causation, and the patentee’s ability to capture the displaced sales. Similarly, the court’s engagement with discount rates, cost categories, and currency reflects the expectation that expert models must be transparent, internally consistent, and aligned with the legal framework for remoteness and causation.
For practitioners, the case also highlights the importance of aligning damages methodology with the legal election of remedies. Towa elected damages (rather than an account of profits), and the court’s analysis therefore focused on lost profits and interest. The judgment’s structured approach—addressing scope, substitution, capacity, downstream profits, and then technical computation—provides a roadmap for future damages assessments in intellectual property cases.
Legislation Referenced
- Limitation Act (Cap 163, 1996 Rev Ed) — s 6 (six-year limitation period for damages/account of profits)
- Patents Act (Singapore) (as referenced in the judgment metadata)
- English Patents Act (as referenced in the judgment metadata)
Cases Cited
- [2023] SGHC 99
- Towa Corp v ASM Technology Singapore Pte Ltd and another [2017] 3 SLR 771
- ASM Technology Singapore Pte Ltd v Towa Corp [2018] 1 SLR 211
Source Documents
This article analyses [2023] SGHC 99 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.