Case Details
- Citation: [2024] SGCA 52
- Title: TOWA Corporation v ASMPT Singapore Pte Ltd
- Court: Court of Appeal (Singapore)
- Date: 21 November 2024 (grounds of decision delivered on 22 November 2024)
- Judges: Tay Yong Kwang JCA and Andrew Phang Boon Leong SJ
- Proceedings: Civil Appeal Nos 25 and 26 of 2024 (cross-appeals)
- Underlying Suit: Suit No 359 of 2013
- Plaintiff/Applicant (CA 25): TOWA Corporation
- Defendant/Respondent (CA 25): ASMPT Singapore Pte Ltd
- Plaintiff/Applicant (CA 26): ASMPT Singapore Pte Ltd
- Defendant/Respondent (CA 26): TOWA Corporation
- Parties in Suit: TOWA Corporation (claimants); ASMPT Singapore Pte Ltd and ASMPT Limited (defendants)
- Legal Area: Intellectual property (patent infringement) — damages assessment
- Key Issue Area: Assessment of damages (loss of profits; allocation of unclassified costs) and pre-judgment interest
- Statutes Referenced: Not specified in the provided extract
- Cases Cited (in extract): Main-Line Corporate Holdings Ltd v United Overseas Bank [2017] 5 SLR 175; Grains and Industrial Products Trading Pte Ltd v Bank of India and another [2016] 3 SLR 1308
- Related Decisions: Towa Corp v ASM Technology Singapore Pte Ltd [2023] 5 SLR 870 (AD Judgment); TOWA Corp v ASMPT Singapore Pte Ltd [2024] SGHC 163 (Supplemental AD GD)
- Judgment Length: 11 pages, 2,590 words
Summary
This Court of Appeal decision concerns cross-appeals arising from the assessment of damages (“AD”) following a finding of patent infringement. TOWA Corporation (“TOWA”) sued ASMPT Singapore Pte Ltd (“ASMPT”) and its wholly owned subsidiary for infringing TOWA’s Singapore Patent No 49740 (the “Patent”) relating to TOWA’s “YPS” auto mould machines. ASMPT was found to have breached the Patent through its acts of making, disposing of, offering to dispose of, keeping and offering the use of its “IDEALmold” machine.
The AD phase proceeded on the basis that TOWA would be compensated using a hypothetical but-for counterfactual scenario: what profits TOWA could have made from its YPS machines if there were no IDEALmold machines. After the first AD judgment, the parties disagreed on the parameters for the computation and returned to court multiple times, resulting in a supplemental AD decision. In the Court of Appeal, TOWA’s appeal (CA 25) was dismissed in its entirety, while ASMPT’s appeal (CA 26) was dismissed in part and allowed on one point.
The principal appellate correction was on the allocation of “general additional costs of sales” that were unclassified and could not be directly attributed to any specific product line. The Court held that the trial judge erred by failing to proportionally attribute certain “Contested Unclassified Costs” to the YPS machines when calculating TOWA’s loss of profit. The Court also addressed ASMPT’s arguments on pre-judgment interest, relying on Main-Line Corporate Holdings Ltd v United Overseas Bank, and considered whether the timing rules there applied to the context of election of remedy and offers to settle.
What Were the Facts of This Case?
The underlying dispute began with TOWA’s claim that ASMPT infringed its Singapore Patent No 49740. The Patent related to TOWA’s “YPS” auto mould machines. In the infringement liability stage, ASMPT was found to have breached the Patent by engaging in various infringing acts in relation to its “IDEALmold” machine. The infringement finding established that ASMPT’s conduct deprived TOWA of sales and profits that TOWA would otherwise have earned.
After liability was established, the matter moved into the damages assessment phase. TOWA elected to claim damages on 8 August 2018. This election of remedy is significant in patent damages because it fixes the point from which the claimant seeks monetary compensation rather than other forms of relief. The AD phase required the court to estimate, on a but-for basis, the profits TOWA would have made absent the infringing products.
In the AD Judgment (Towa Corp v ASM Technology Singapore Pte Ltd [2023] 5 SLR 870), the judge adopted a computation framework based on the profits TOWA could have made from its YPS machines in a hypothetical but-for scenario where there were no IDEALmold machines. The parties, however, interpreted the AD Judgment differently. Their disagreement was not limited to abstract legal principles; it extended to the practical parameters used in the profit calculation.
Following the AD Judgment, the parties returned to court repeatedly—at least six times—to clarify the parameters that should be applied in the relevant computation. These further proceedings resulted in the Supplemental AD GD (TOWA Corp v ASMPT Singapore Pte Ltd [2024] SGHC 163). The supplemental decision addressed additional disputes about how to treat certain cost categories and how to compute the resulting loss of profit. The present Court of Appeal decision is therefore best understood as a “second look” at the damages computation after the parties’ prolonged disagreement about the mechanics of the but-for calculation.
What Were the Key Legal Issues?
The first major issue was whether the trial judge had correctly calculated TOWA’s loss of profits by properly allocating costs under the but-for counterfactual. Specifically, the dispute focused on the category of “general additional costs of sales”, which comprised unclassified costs that could not be linked to any specific equipment category and therefore had to be proportionally allocated across different product lines, including YPS machines.
Within that category, the trial judge had excluded certain costs—identified as the “Contested Unclassified Costs”—from the proportional allocation to YPS machines. The Court of Appeal had to decide whether this exclusion was legally and evidentially justified. This required the appellate court to examine the nature of the costs, the evidential basis for attributing (or not attributing) them to the YPS product line, and whether the trial judge’s reasoning aligned with the logic of the but-for profit calculation.
The second issue concerned pre-judgment interest. ASMPT argued that, applying Main-Line Corporate Holdings Ltd v United Overseas Bank, pre-judgment interest should run from the date of election of remedy (8 August 2018) rather than from the date of the writ (19 April 2013). ASMPT further argued that where a plaintiff refuses an offer to settle (OTS) more favourable than the eventual judgment sum, pre-judgment interest should end 14 days after the date of that OTS. The Court of Appeal had to determine whether these timing principles applied in the patent damages context and, if so, how they should be implemented.
How Did the Court Analyse the Issues?
The Court of Appeal began by situating the appeals within the broader damages framework. Both CA 25 and CA 26 were cross-appeals against the judge below’s AD decisions. The Court emphasised that, save for two specific issues, it agreed with the trial judge’s reasoning and findings set out in the AD Judgment and Supplemental AD GD. This framing matters because it signals that the appellate court was not re-litigating the entire damages methodology; rather, it corrected discrete errors in the computation.
On CA 25, TOWA challenged aspects of the damages awarded that resulted in TOWA receiving less damages than it sought. The Court of Appeal dismissed CA 25 in its entirety. A key reason was that TOWA’s pleadings claimed only for relief relating to its YPS machines, not other machines (such as YPM machines). This pleading limitation was “fatal” to many of TOWA’s arguments for higher damages. The Court thus treated the scope of pleadings as a boundary on what damages could be claimed and how the but-for scenario could be constructed.
On CA 26, ASMPT advanced three points to reduce the damages. The Court dismissed two of them and addressed the remaining point it accepted. That point concerned whether the trial judge erred by failing to account for certain costs within “general additional costs of sales”. The Court explained that this category comprises costs arising from sales of machines that cannot be linked to any specific category of equipment and therefore must be proportionally allocated between different categories. The Court contrasted these unclassified costs with costs of sales exclusively attributable to YPS machines and costs of sales exclusively attributable to equipment other than YPS machines.
The Court then analysed the evidential and conceptual basis for allocating the “Contested Unclassified Costs” (costs (e), (f) and (g) within the general additional costs of sales list). The trial judge had held that these costs were not attributable to YPS machines because they were “amorphous” and applied to the whole product range, relying on TOWA’s subsequent expert report that the portion attributable to YPS machines was “inconclusive” and that there were no records of direct attribution. The Court of Appeal disagreed. It reasoned that, by definition, general additional costs of sales are unclassified costs that cannot be attributed to any specific equipment category and apply across the product range. The impossibility of directly attributing the Contested Unclassified Costs to any one product line, in the Court’s view, pointed towards proportional allocation rather than away from it.
Crucially, the Court treated the allocation question as one of inference and evidential burden. It held that ASMPT had discharged the evidential burden of showing that the most reasonable inference was that unclassified costs would increase with more sales of YPS machines. Once that evidential burden shifted, TOWA had to show that this was not the case. The Court found that TOWA did not do so. It also rejected TOWA’s attempt to justify non-allocation by characterising some of the costs as “negligible”. While the quantum of the allocated costs might be relevant, the Court held that “negligible” is not, by itself, a sufficient reason to refrain from proportional allocation.
The Court further criticised the trial judge’s acceptance of TOWA’s explanation that the expert omitted these costs because the attributable portion was “inconclusive”. The appellate court viewed this as an afterthought designed to maximise compensation. In effect, the Court of Appeal applied a disciplined approach to the but-for computation: where costs are unclassified and logically scale with sales, the claimant cannot avoid allocation by pointing to the absence of direct records of attribution, especially when the claimant’s own evidence indicated proportional allocation should occur.
On pre-judgment interest, the Court of Appeal engaged with ASMPT’s reliance on Main-Line (Interest & Costs). ASMPT’s position was that, in bifurcated proceedings, pre-judgment interest should run from the date of election of remedy, and should cease 14 days after an offer to settle more favourable than the judgment sum was made and rejected. TOWA responded that recoverability and quantum of pre-judgment interest are matters of discretion and that Main-Line’s factors are not universally applicable to all cases involving election of remedy and/or OTS.
Although the provided extract truncates the remainder of the analysis, the Court’s approach is clear from the portion quoted. The Court emphasised the purpose of pre-judgment interest: to compensate a successful claimant for the time value of money lost because the defendant wrongfully kept the claimant out of sums to which the claimant is shown to be entitled. The Court cited Grains and Industrial Products Trading Pte Ltd v Bank of India and another for the proposition that pre-judgment interest compensates for the defendant’s use of money during the period between the accrual of the cause of action and the date of judgment. This purposive framing suggests that the Court would assess whether the timing rules proposed by ASMPT align with the rationale of compensation in the specific procedural context of patent damages assessment.
What Was the Outcome?
The Court of Appeal dismissed TOWA’s appeal in CA 25 in its entirety. It held that TOWA’s pleadings limited its damages claim to its YPS machines, which undermined many of its arguments for increased damages. The Court agreed with the judge’s reasoning on the issues raised by TOWA, save for matters not affecting the ultimate dismissal.
For CA 26, the Court dismissed ASMPT’s appeal on two of its three points, but allowed the appeal on the remaining point. The Court held that the trial judge erred by not proportionally attributing the Contested Unclassified Costs to the YPS machines. The practical effect is that TOWA’s damages computation would be adjusted to include those costs in the loss of profit calculation, thereby increasing the damages relative to the trial judge’s approach on that specific cost category.
Why Does This Case Matter?
This decision is significant for practitioners because it provides concrete guidance on how courts should treat unclassified cost categories in loss-of-profits calculations in patent damages. The Court of Appeal’s reasoning reinforces that where costs are “general additional costs of sales” and cannot be directly attributed to specific product lines, proportional allocation is the most conceptually coherent method. The Court also clarifies that evidential gaps—such as the absence of direct records—do not automatically justify excluding such costs from the computation, especially when the claimant’s own evidence indicates that proportional allocation should occur.
From a litigation strategy perspective, the case also highlights the importance of pleadings in shaping the scope of damages. TOWA’s failure to plead relief beyond its YPS machines limited its ability to argue for broader damages. This serves as a reminder that, even where liability and methodology are established, the claimant’s pleaded case can constrain the damages envelope.
Finally, the Court’s discussion of pre-judgment interest underscores that timing rules are not applied mechanically. While Main-Line provides relevant guidance, the Court’s purposive approach—compensation for the time value of money and the defendant’s wrongful retention—suggests that courts will examine how procedural events (such as election of remedy and offers to settle) interact with the rationale for interest. Practitioners should therefore treat pre-judgment interest as a discretionary and fact-sensitive component, rather than a purely formulaic add-on.
Legislation Referenced
- Not specified in the provided extract.
Cases Cited
- Main-Line Corporate Holdings Ltd v United Overseas Bank [2017] 5 SLR 175
- Grains and Industrial Products Trading Pte Ltd v Bank of India and another [2016] 3 SLR 1308
- Towa Corp v ASM Technology Singapore Pte Ltd [2023] 5 SLR 870
- TOWA Corp v ASMPT Singapore Pte Ltd [2024] SGHC 163
Source Documents
This article analyses [2024] SGCA 52 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the full judgment for the Court's complete reasoning.