Malaysia - Can An Infringer Have Locus Standi As An Aggrieved Party?

Legal News & Analysis - Asia Pacific - Malaysia - Intellectual Property

29 June, 2018


Introduction
 
This case raised a few important and novel issues that dealt with the locus standi of an aggrieved person, Internet searches as evidence for use of a trade mark and the role of a sub-brand as a source identifier when used together with a house brand.
 
The plaintiff in the case, Munchy Food Industries Sdn Bhd (“Munchy Food”), commenced an action against the defendant, Huasin Food Industries Sdn Bhd (“Huasin Food”), for trade mark infringement and passing-off. The basis of Munchy Food’s claim surrounded its rights to the trade mark LEXUS used together with a distinctive get-up in relation to its biscuits products.
 
Munchy Food alleged that Huasin Food infringed its registered LEXUS trade mark and/or passed off its goods as and for the goods of Munchy Food by employing the trade mark LEX and/or a get-up which is confusingly and deceptively similar to Munchy Food’s LEXUS trade mark and get-up in relation to its biscuits products. Huasin Food denied trade mark infringement and passing-off and counterclaimed for cancellation.
 
Below are some of the issues considered by the High Court in the present suit: 

 

  • Whether Huasin Food as an infringer has the necessary locus standi of an “aggrieved party” within section 45 of the Trade Marks Act 1976 (“TMA”).
  • Whether Huasin Food may rely on a stranger’s trade mark (not a party to the suit) to expunge Munchy Food’s registered trade mark.
  • Whether Internet searches (such as Wikipedia search) can be used to substantiate use of a trade mark in Malaysia.
  • Whether a sub-brand can be distinctive of the goods or services of a user when used together with its house mark. 

 

Whether Huasin Food as an infringer has the necessary locus standi of an “aggrieved party” within section 45 of the TMA

 
In dealing with the locus standi issue, the Court had to consider whether an infringer has the locus standi required as an “aggrieved party” within section 45 of the TMA.
 
Notwithstanding the Federal Court decision in LB (Lian Bee) Confectionary Sdn Bhd v QAF Ltd [1] (“Lian Bee”), the High Court drew a distinction between Lian Bee and the present suit. The Court in the present suit held that the respondent company in Lian Bee had successfully obtained a trade description order in respect of the use of the trade mark in question under the repealed Trade Descriptions Act 1972. Hence, any use of the trade mark in question by the appellant company in that case contravened the trade description order.
 
However, in the present case, infringement had yet to be determined. The Court, in holding that Huasin Food has locus standi as an “aggrieved person”, said that Huasin Food had satisfied the Court that it had used its LEX trade mark in the course of trade and/or Huasin Food’s legal interest is adversely and substantially affected by the presence of Munchy Food’s LEXUS registration.
 
The Court reasoned that if a party who infringed a registered trade mark were to be disqualified from being an aggrieved party and thus disentitled from applying to expunge a registered trade mark, it would defeat the purpose of sections 45(1)(a) and 46(1)(a) and (b) of the TMA which may cause injustice to parties who have legitimate grounds for expungement.
 
Consequently, an infringer has locus standi as an “aggrieved person” so long as he can satisfy the Court that he has: 

 

  • used his mark as a trade mark; or
  • a genuine and present intention to use his mark as a trade mark in the course of a trade which is the same as or similar to the trade mark of the owner of the registered trade mark that he wants to have removed from the register. 

 

Despite Huasin Food having locus standi within section 45 of the TMA, it failed to establish the necessary requirements to cancel Munchy Food’s LEXUS registered trade mark.
 
Whether Huasin Food may rely on a stranger’s trade mark (not a party to the suit) to expunge Munchy Food’s registered trade mark
 
The Court in addressing this issue held that Huasin Food may rely on a stranger’s trade mark to expunge Munchy Food’s registered trade mark. It was held that there was nothing in the TMA which prevents the Court hearing an expungement application from considering a likelihood of confusion/deception between a registered trade mark and a stranger’s trade mark.
 
The Court further held that section 14(1)(a) of the TMA, which provides that a mark shall not be registered if it is likely to deceive or cause confusion to the public, is intended to protect the public from a likelihood of confusion/deception. Such a section would thus empower the Court to consider a likelihood of confusion/deception between a registered trade mark and a prior mark (whether in the name of a third party or otherwise) in an expungement application.
 
A prior mark could therefore affect the validity of a registered trade mark and could be used as a ground to challenge the registration — provided the party challenging the registration has passed the locus standi threshold as an aggrieved party.
 
Although the Court held that reliance on third party marks was permitted in expungement applications, it held that, in the present case, Huasin Food failed to discharge the burden to prove a likelihood of deception/confusion between Munchy Food’s LEXUS mark and Toyota’s LEXUS mark. As such, the third party mark (Toyota’s LEXUS trade mark) did not warrant the expungement of Munchy Food’s registered LEXUS trade mark.
 
Whether Internet searches (such as Wikipedia search) could be used to substantiate use of a trade mark in Malaysia
 

The Court also addressed the issue whether Internet searches (such as Wikipedia search) could be used to substantiate use of a trade mark in Malaysia. It was held in this case that Internet searches could not be accepted as evidence of use of a trade mark in Malaysia. The Court had misgivings about the weight of such Internet searches as the Court was not informed of the authorship of the website and source of information relied upon by the author of the website.
 
Whether a sub-brand could be distinctive of the goods or services of a user when used together with its house mark
 

It is not uncommon for businesses to use their house mark together with other trade marks and/or sub-brands. The issue considered by the Court is whether a sub-brand is capable of acting as a source identifier and be distinctive of the goods or services of a user when used together with its house mark.
 
It was held that in circumstances where both the house mark and sub-brand were used together in respect of the same goods/services, they were in law “stand alone” trade marks with their own distinctiveness. As such, the house mark and the sub-brand may be distinctive of the applicable goods/services if they satisfied the criteria of distinctiveness as provided under the TMA.
 
Conclusion

The novel issue of whether an infringer has locus standi as an aggrieved person has been clarified by the High Court. It was further clarified that an applicant in expungement applications may rely on a third party’s trade mark to expunge a registered mark.
 
The Court further took a restrictive approach with regard to the evidence adduced to show prior use. Internet searches could not be relied upon as evidence showing use of a trade mark. The position of whether sub-brands may be distinctive and may function as a source identifier independent from the house marks has also been clarified by the Court.

 

[1] [2012] 4 MLJ 20

 

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For further information, please contact:

 

Sim Sook Eng, Shearn Delamore & Co​

sookeng@shearndelamore.com