SAMPLE COMPARATIVE TRADEMARK LAW ASSIGNMENT (MALAYSIA)

EVALUATE WHETHER WELL KNOWN TRADE MARK GETS ADEQUATE PROTECTION

UNDER THE MALAYSIAN LAW

I. INTRODUCTION

WRITTEN BY

Ahmad Rawi

The writer can be contacted at

scholars.assist@gmail.comMarks like ADABI,MAGGI,MYDIN,MAYBANK and PETRONAS are household names in Malaysia

and perhaps in some parts of neighbouring Thailand, Indonesia,Singapore and Brunei. But they are

price to be paid for being famous, and in relation to trademark, these famous trademarks are necessarily

exposed more than normal brands to unscrupulous ‘entrepreneurial’ attacks – whether through

counterfeiting or pre-emptive registration by third parties. Underlying this attack is the attempt by these

unscrupulous third parties to free ride on the tailcoats of these famous brands commercial success

through the suggestion of a connection with these established brands.

These unscrupulous practice may also injured the well known trademarks through a concept known in

some Common Law jurisdictions as 'dilution' though in Malaysia the concept is practically rejected by

the Court of Appeal in the case of McCurry Restaurant (KL) Sdn. Bhd. (Appellant) vs. McDonalds

Corporation (Respondent)1. Dilution most often occurs when an identical or similar mark is used for

non-competing or dissimilar goods or service. Dilution causes harm not by causing confusion in the

consumer minds regarding the source of a good or service, but by creating an association in consumer

minds between a mark and a non-competing or dissimilar goods or service.

This paper examines the legal positions in Malaysia to evaluate and determine whether well known

trade mark gets adequate protection in Malaysia.

1 Report available online at http://www.kehakiman.gov.my/judgment/coa/latest/2009/Capp%20388%20Mc%20Curry%20Restaurant%20Sdn%20Bhd%20v%20Mc%20Donalds%20Corporation%20_W-02-1037-2006_.pdf

II. CONCEPTUAL AND LEGAL FRAMEWORK OF PROTECTION OF WELL KNOWN

TRADEMARKS IN MALAYSIA

i) Malaysia's obligations under international treaties to protect well-known mark

Malaysia is party to both the Paris Convention and TRIPS which stipulates that member countries are

under obligation to protect well-known marks. Article 6bis of the Paris Convention provides that :

“Marks: Well-Known Marks

(1) The countries of the Union undertake, ex officio if their legislation so permits, or at the

request of an interested party, to refuse or to cancel the registration, and to prohibit the use, of a

trademark which constitutes a reproduction, an imitation, or a translation, liable to create

confusion, of a mark considered by the competent authority of the country of registration or use

to be well known in that country as being already the mark of a person entitled to the benefits of

this Convention and used for identical or similar goods. These provisions shall also apply when

the essential part of the mark constitutes a reproduction of any such well-known mark or an

imitation liable to create confusion therewith.

(2) A period of at least five years from the date of registration shall be allowed for requesting

the cancellation of such a mark. The countries of the Union may provide for a period within

which the prohibition of use must be requested.

(3) No time limit shall be fixed for requesting the cancellation or the prohibition of the use of

marks registered or used in bad faith.”

Article 16bis is transposed to Agreement on Trade-Related Aspects of Intellectual Property Rights

(TRIPS) via Article 16(2) and (3) of TRIPS. Article 16 (2) and (3) of TRIPS provide that :

“Article 16. Rights Conferred

1. …...............................

2. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to services. In

determining whether a trademark is well-known, Members shall take account of the knowledge

of the trademark in the relevant sector of the public, including knowledge in the Member

concerned which has been obtained as a result of the promotion of the trademark.

3. Article 6bis of the Paris Convention (1967) shall apply, mutatis mutandis, to goods or

services which are not similar to those in respect of which a trademark is registered, provided

that use of that trademark in relation to those goods or services would indicate a connection

between those goods or services and the owner of the registered trademark and provided that the

interests of the owner of the registered trademark are likely to be damaged by such use.”

ii) Protection of well known mark under the Trade Marks Act 1976

As a result of being a member of the Paris Convention and the TRIPs Agreement, Malaysia amended

its Trade Mark Act 1976 to incorporate its international obligations to protect well-known marks in

2001.The following protection was extended for well-known marks in Malaysia under the Trade Marks

Act 1976.

Such protection can be found in Section 14 (d) and (e) and also under Section 70B of the Trade Marks

Act 1976. Section 14 (d) and (e) provide that:

“Prohibition on registration

14. (1) A mark or part of a mark shall not be registered as a trade mark—

(a) …........................

(b) ….......................

(c) ….......................

(d) if it is identical with or so nearly resembles a mark which is well known in Malaysia for

the same goods or services of another proprietor;

(e) if it is well known and registered in Malaysia for goods or services not the same as to

those in respect of which registration is applied for:

Provided that the use of the mark in relation to those goods or services would indicate a

connection between those goods or services and the proprietor of the well known mark,

and the interests of the proprietor of the well known mark are likely to be damaged by

such use.”

Whereas Section 70B provides that :

“Protection of well-known trade marks

70B. (1) The proprietor of a trade mark which is entitled to protection under the Paris

Convention or the TRIPS Agreement as a well known trade mark is entitled to

restrain by injunction the use in Malaysia in the course of trade and without the

proprietor’s consent of the trade mark which, or the essential part of which, is

identical with or nearly resembles the proprietor’s mark, in respect of the same

goods or services, where the use is likely to deceive or cause confusion.

(2) Nothing in subsection (1) shall affect the continuation of any bona fide use of a

trade mark begun before the commencement of this Act.

(3) In this section, references to a trade mark which is entitled to protection under

Article 6bis of the Paris Convention or Article 16 of the TRIPS Agreement as a

well known trade mark are to a mark which is well known in Malaysia as being

the mark of a person whether or not that person carries on business, or has any

goodwill, in Malaysia, and references to the proprietor of such a mark shall be

construed accordingly.”

Regulation 13A of the Trade Marks Regulation 1997 stipulates that the Registration of a mark is not

allowed: -

“a) If it is identical or confusingly similar or constitutes a translation of a mark which is

considered by the relevant authority in Malaysia to be well-known in Malaysia,

whether or not the mark is registered and used for identical or similar goods or

services;

b) If it is identical or confusingly similar or constitutes a translation of a mark which is

considered well-known under Regulation 13B in Malaysia, which is registered in

Malaysia, in respect to similar or different goods or services registered for; so long as

the use of the mark indicates a connection between those goods and services with the

proprietor of the registered mark (well-known mark), provided further that the interests

of the proprietor of the mark are likely to be damaged by such use.”

iii) Requirements and types of evidences to qualify as well-known mark under the Trade Marks

Act 1976

Regulation 13B of the Trade Marks Regulation 1997 provides that in determining whether a mark is

well-known or not, the following criteria may be taken into account:

(a) the degree of knowledge or recognition of the mark in the relevant sector of the public;

(b) the duration, extent and geographical area of any use of the mark;

(c) the duration, extent and geographical area of any promotion of the mark, including advertising

or publicity and the presentation, at fairs or exhibitions, of the goods or services to

which the mark applies;

(d) the duration and geographical area of any registrations, or any applications for registration, of

the mark to the extent that they reflect use or recognition of the mark;

(e) the record of successful enforcement of rights in the mark, in particular, the extent to which the

mark was recognized as well-known by competent authorities;

(f) the value associated with the mark.

III. DISCUSSION ON THE EXTENT OF PROTECTION OF WELL KNOWN MARKS IN

MALAYSIA

Since there are no special trademark regime governing well known marks in Malaysia, trade mark

applications for well-known marks claiming goods or services that are used in connection with the

channel of trade have to be filed in the usual manner like all other trade mark applications.

The trade mark application will be examined in the similar fashion as other trade marks. In the event

of objection or other third parties raising opposition against the application, the applicant, by

satisfying the criteria of the well-known mark under Regulation 13B, may rely on the protection of

well-known marks, to defend their trade mark. In case they want to protect their trade mark across the

board in all classes of goods and services, besides the class of goods and services in which the well-

known mark is actually used in, the proprietor has the option of relying on defensive trade mark

protection under Section 57 of the Act 1976. Section 57 provides that :

“Defensive registration of well known trade marks

57. (1) Where a trade mark consisting of an invented word or words has become so well

known as regards any goods or services in respect of which it is registered and, in

relation to which it has been used, that the use thereof in relation to other goods

or services would likely to be taken as indicating a connection in the course of

trade between the other goods or services and a person entitled to use the trade

mark in relation to the first mentioned goods or services, then, notwithstanding

that the proprietor registered in respect of the first mentioned goods or services

does not use or propose to use the trade mark in relation to the other goods or

services and notwithstanding anything in section 46 the trade mark may, on the

application in a prescribed manner of the proprietor registered in respect of the

first mentioned goods or services, be registered in his name in respect of the

other goods or services as a defensive trade mark and while so registered, shall

not be liable to be taken off the Register in respect of other goods or services

under section 46.

(2) The registered proprietor of a trade mark may apply for the registration thereof in

respect of any goods or services as a defensive trade mark notwithstanding that it

is already registered in his name in respect of the goods or services otherwise

than as a defensive trade mark, or may apply for the registration thereof in

respect of any goods or service otherwise than as a defensive trade mark

notwithstanding that it is already registered in his name in respect of the goods as

a defensive trade mark, in lieu in each case of the existing registration.”

A well-known invented mark may be registered as a defensive mark for other goods and services in

respect of which the mark is not registered or used for i.e. dissimilar goods or services, as explained in

Section 14(1)(e) of the Act, above. The use of the mark thereafter in relation to other goods and

services would likely indicate a connection in the course of trade to the registered proprietor of the

well-known mark.

A defensive mark must have an established reputation for certain goods or services for which it is

already registered, and the proprietor must be able to show that if the public saw it on other goods or

services they would be likely to think, incorrectly, that it indicated a trade connection with him, or with

a registered user of his.

The applicant may register for a defensive mark in respect of any goods and services, provided they

own an existing registration. The defensive mark has to be associated with the registered mark.

Registration of a defensive mark is immune to cancellation action for non-use of the mark and will not

be required to show proof of use of the mark for the purposes of renewing the registration, so long as

the main registration is in force. By undertaking this measure, it is possible to take out infringement

action against unlawful use of the well-known mark, as the use of the defensive mark on dissimilar

goods or services without consent would amount to infringement action.

Two recent cases show the judicial trend toward protection of well-known mark in Malaysia.

(a) Consitex SA vs TCL Marketing Sdn Bhd2[2008] 8 CLJ 444 [HC]

In this case, a claim for trade mark infringement and passing off was brought by the reputed Italian

fashion enterprise, Ermenegildo Zegna. Consitex is a member of the Ermenegildo Zegna group, an

international enterprise specialising in the design, manufacture and marketing of menswear. Consitex’s

goods have been sold in Malaysia since 1989. TCL Marketing is a Malaysian private limited company

incorporated in 1996 and is in the business of manufacturing and marketing garments.

The issue was the alleged infringing use of the trade mark “Emmer Zecna” by TCL Marketing for

menswear. Consitex had registered its trade marks “Ermenegildo Zegna” and “Zegna” in Malaysia for

clothing, shoes, boots and slippers. Consitex contended that use of the “Emmer Zecna” mark by TCL

Marketing amounted to trade mark infringement as the said mark was confusingly similar to Consitex’s

“Ermenegildo Zegna” trade mark, resulting in confusion and deception to the public. Consitex also

claimed passing off of its goods and business through the use of a confusingly similar trade mark and

trade name by TCL Marketing.

In the High Court, Consitex’s claim for registered trademark infringement was dismissed as the Court

found on evidence that the marks are not identical or so nearly resembling to each other as they differ

visually and aurally to a great extent and there is no likelihood of confusion or deception in the course

of trade in relation to the products concerned.

Some of the factors considered by the Court are as follows:

(i) Aurally and visually, the two marks differed greatly with Consitex’s mark being longer and

having an emphasis on the suffix “gildo” in the first word.

2 Report available online from http://www.ipsofactoj.com/highcourt/2008/Part02/hct2008%2802%29-009.htm

(ii) Consitex and TCL Marketing operated in different markets. Consitex catered to the more

affluent consumers who purchased designer brands, whilst TCL Marketing catered to middle-

class consumers who shopped at departmental stores and supermarkets.

(iii) The disparity in price between the goods was also a “strong determining factor”. The marked

price difference would deter consumers from mistaking the brand for another.

(iv) There were no known instances of confusion in the market arising from the coexistence of both

marks.

Consitex did not succeed on the claim of passing off either as the Court held that the “Ermenegildo

Zegna” trade mark was only well known amongst “upper bracket income” consumers and not the

general public. Moreover, Consitex failed to show that it had suffered damage to its reputation

following the coexistence of both marks in Malaysia since 1997.

The second case is McCurry Restaurant (KL) Sdn Bhd v. McDonald’s Corporation3 [2009] 1 LNS 309

(b) McCurry Restaurant (KL) Sdn Bhd v. McDonald’s Corporation

The plaintiff, McDonald’s, brought a suit in the High Court against McCurry Restaurant for passing off

of its well-known prefix “Mc” in connection with food products and services.McDonald’s, the well-

known fast food giant with over 30,000 outlets around the world and having opened its first restaurant

in Malaysia in 1982, claimed that it had created the prefix “Mc” as a source/trade identifier for its

goods and services through consistent and extensive use of the same at all levels of the business.

Based on the foregoing, McDonald’s asserted that the use of the same prefix by McCurry Restaurant, as

well as the combination of red and white on its signage, would inevitably misrepresent, deceive and

confuse the public into the false belief that McCurry Restaurant was somehow associated with

McDonald’s. Following the extensive publicity undertaken worldwide by McDonald’s for the “Mc”

prefix, it claimed that McCurry Restaurant had knowingly intended to appropriate its goodwill,

3 Report available from http://www.kehakiman.gov.my/judgment/coa/latest/2009/Capp%20388%20Mc%20Curry%20Restaurant%20Sdn%20Bhd%20v%20Mc%20Donalds%20Corporation%20_W-02-1037-2006_.pdf

reputation and commercial advantage through a false trade association.

In its defense, McCurry Restaurant denied McDonald’s monopoly over the prefix “Mc” and asserted

that the similarities between the marks were to be considered as a whole (i.e. “McCurry” and

“McDonald’s”), which did not create confusion. Moreover, McCurry Restaurant was engaged in a

completely different range of food and drinks distinct from fast food, serving mainly typical Malaysian

or Indian cuisine. In any case, the “McCurry” trade mark was created based on the abbreviation of

“Malaysian Chicken Curry” and thus it was never the intention of McCurry Restaurant to misrepresent

or ride on McDonald’s goodwill and reputation.

In the High Court agreed that McDonald’s had acquired immense goodwill and reputation from its

extensive and consistent use of the prefix “Mc” and the colours red and white, which had become well

known worldwide. Accordingly, when “Mc” is used in conjunction with a food item, the first

impression is an association with McDonald’s. On this basis, the High Court held that McCurry

Restaurant’s use of the same prefix amounted to a misrepresentation and if allowed to continue, would

result in the loss of exclusivity of McDonald’s prefix “Mc”.

In addition, the High Court also held that there was an extended form of passing off, which results from

the erosion to the distinctiveness of a brand name which occurs by reason of its degeneration into

common use as a generic term that is not dependent on the likelihood of confusion. As such, the use of

the prefix “Mc” by McCurry Restaurant would certainly erode the exclusivity of McDonald’s over the

same.

In reversing the High Court’s decision, the Court of Appeal held that there was no evidence to show

that McCurry Restaurant was passing off McDonald’s business as its own. The Court of Appeal held

that the judge had erred in holding that McDonald’s had a monopoly in the use of the prefix “Mc” and

based on the totality of the evidence, reasonable persons would not associate the business of McCurry

Restaurant with McDonald’s.

The court of Appeal held that in relation to allegation of passing off the pertinent question to be asked

is “Did the defendant represent his business to be that of the plaintiff?”, which is a question of fact and

to which the Court of Appeal answered in the negative for the following reasons : Firstly,The allegedly

infringed mark or get up logo must be looked at as a whole and not merely one element in it.

McDonald’s trade mark as a whole consisted not only of the prefix “Mc” but also the distinctive golden

arched ‘M’. In contrast, McCurry Restaurant’s signboard carried the words ‘Restoran McCurry’ in

white and grey lettering against a red background with a picture of a chicken giving a thumbs up and

the words ‘Malaysian Chicken Curry’.Further, McCurry Restaurant’s representation of its business was

of a style, getup and cuisine distinctly different from McDonald’s as none of its food items carried the

prefix “Mc”, unlike the items sold by McDonald’s.Thirdly, it is beyond dispute that the type of

customers who patronised each restaurant was different: adults and senior citizens for McCurry

Restaurant and children for McDonald’s. Following the Court of Appeal’s assessment of the above, it

held that there was no passing off by McCurry Restaurant in its use of the prefix “Mc”.

IV. CONCLUSION

In conclusion, well-known marks can be protected for goods and services through normal application

and registration of a trade mark in Malaysia (i.e. there is no special trademark regime governing them).

It is recommended that precautionary measures are taken by the proprietors of well-known marks by

filing a defensive trade mark application for their well-known mark in all classes of goods and services,

to ensure no future identical or similar trade mark applications are filed in Malaysia. This would

certainly be the first step to deter infringement against their well-known mark as well as at the same

time create awareness of the well-known status of its marks. Despite its well known status, trademark

jurisprudence in Malaysia still require the owner of well known trademark to prove likelihood of

confusion to establish infringement or passing off.

Both cases cited above show judicial trend in Malaysia whereby a proprietor cannot claim infringement

or passing off by reason of its monopoly, fame and well known status of a particular mark. In other

words, well known marks notwithstanding, the courts have shown extreme reluctance in finding

passing off in the absence of likelihood of confusion. To put it simply the concept of dilution of

reputation has no place in Malaysia's trademark jurisprudence. Rather, based on the assessment of

elements constituting infringement and passing off, the owner of a well-known trademark must still

prove that there is a likelihood of confusion to make out a case of trademark infringement or passing

off.

REFERENCES

Text of the Paris Convention for the Protection of Industrial Property. Available from

http://www.wipo.int/treaties/en/ip/paris/trtdocs_wo020.html

Text of the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS).Available

from http://www.wto.org/english/tratop_e/trips_e/t_agm0_e.htm

The Malaysian Trade Marks Act 1976

Consitex SA vs TCL Marketing Sdn Bhd [2008] 8 CLJ 444 [HC]

McCurry Restaurant (KL) Sdn Bhd v. McDonald’s Corporation [2009] 1 LNS 309