Malaysia - Dart Industries Inc v CMN International Sdn Bhd [2019] MLJU 120 Suit Nos WA-22IP-16-04 Of 2017 And WA-22IP-17-04 of 2017.

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

5 April, 2019

 

The salient facts
 
The first plaintiff, Dart Industries Inc (“Dart Industries”), an American company, and the second plaintiff, a Malaysian company holding a licence from Dart Industries, initiated proceedings against the first defendant, CMN International Sdn Bhd (“CMN International”) and the individual defendants (comprising individual Malaysian customers participating in CMN International’s Entrepreneur Program) for infringement of Dart Industries’s registered industrial designs (“RIDs”) by distributing and selling bottles and food container covers, as provided for under section 32(2) of the Industrial Designs Act 1996 (“IDA 1996”).
 
CMN International counterclaimed, seeking the Court’s declaration that the alleged infringing products did not infringe Dart Industries’s RIDs. The individual defendants claimed “innocent infringement” and asserted that they are customers of CMN International and do not have the expertise or the capability to exploit Dart Industries’s RIDs. Interestingly the individual defendants did not testify at the trial.
 
Question raised for the Court
 
A novel issue raised in this case pertained to the individual defendants’ defence that they were “innocent infringers” under section 35(3) IDA 1996 and therefore not liable for infringement of Dart Industries’s RIDs.
 
Section 35(3) IDA 1996 provides that:
 
The Court may refuse to award damages, or to make an order for an account of profits, in respect of an infringement, if the defendant satisfies the Court: 

 

a.     that, at the time of the infringement, he was not aware that the industrial design was registered; and 26 Laws of Malaysia ACT 552 

b.     that he had, prior to that time, taken all reasonable steps to ascertain whether the industrial design had been registered.”               

 

The Court’s decision
 
The fact that the individual defendants did not testify at the trial meant they were unable to rebut evidence in support of Dart Industries’s claim that they had sold the infringing products.

The Court further found that the individual defendants, contrary to section 35(3)(b) IDA 1996, had failed to adduce evidence supporting their assertions that prior to the infringement, they had taken all reasonable steps to ascertain whether the industrial designs had been registered. The Court therefore rejected the defence of innocent infringement put forward by the individual defendants.

 

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For further information, please contact:

 

Ameet Kaur Purba, Partner, Shearn Delamore & Co​

ameet@shearndelamore.com