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Indefeasibility of Trademark in Malaysia

By Lim Zhi Jian
Posted: 23rd February 2018 09:05
Fundamentally, the purpose of registration of a trade mark is in order to secure exclusive use of the said trade mark.

However, obtaining a trade mark registration certificate neither guarantees perpetual ownership nor indefeasibility of title, as the validity of the registration is a rebuttable presumption and does not preclude its removal by a third party.[1]
There are several ways in which trade mark registration may be challenged and removed from the Register of Trade Marks in Malaysia.
  1. Use it or lose it
The registration of a trade mark may be in risk of removal[2] as a result of two situations of non-use — namely, where the registration was obtained without any intention in good faith to be used and in fact having not been used in good faith, and where the registered trade mark has not been used in good faith for a continuous period of three years.[3]
In an application for removal for non-use, any use by the registrant[4] within one month before the filing of the application will be disregarded.
In USA PRO IP Ltd v Montfort Services Sdn Bhd & Anor, the plaintiff’s investigation revealed that the first defendant company had been dormant for at least the last five years, and had not been using its trademarks in relation to any of its goods during the relevant statutory period of three years. Upon the failure by the defendant to challenge these findings and the failure to rebut the facts made by the plaintiff, a case of non-use was successfully established and the mark was therefore removed.
Protecting a registered mark
It is essential to continuously use and commercially exploit registered trade marks in order to reduce the risk of losing it through non-use. Several factors are relevant in considering whether there is “genuine use”, which is a qualitative and not a quantitative criterion.[6]
In Godrej Sara Lee Ltd v Siah Teong Teck & Anor(Part 2), it was held that the period of use of the mark during the relevant statutory period must be in relation to the goods claimed in the registration. Use included affixing the mark to the goods or use in an advertisement, circular or a catalogue. Obtaining registration did not translate to actual use of the mark in the course of trade. Furthermore, any alleged or purported use by the defendant prior to the relevant three-year statutory period did not constitute use during the material period of time.
Use included the taking of steps necessary for the production of goods as well as their actual placing on the market.[8] Use of the mark must be to such a degree and in a manner that enables the consumers to identify the registrant as the source of the goods and services, which is consistent with the essential function of a trade mark.
The use must not be trivial and has to be to maintain or create a share in the market. Therefore, the sale of goods with the registered mark on a small scale and in a remote location may not amount to ‘use’ of this registered mark.
The registrant himself[9] must use the registered mark on the market or in the course of trade. Therefore, any use of the registered mark internally only or by a party unrelated to the registrant may not be sufficient as “use”.
  1. Registration without sufficient cause or wrongfully remaining in the Register
On the grounds that the registration is without sufficient cause or is wrongful, erroneous or defective, a “person aggrieved” may apply to the court for the removal or to vary any trade mark registration.[10]
Ponni rice[11]
Ponni rice is specially processed rice named after and in tribute to the Kaveri Delta region in India where it is grown. Upon an application to the court, Syarikat Faiza Sdn Bhd’s (“Faiza”) registration of the trade mark PONNI in 2000 was removed, as Faiza’s exclusive claim to the mark would block the use of the name and mark PONNI by others who have trading interests in the Ponni rice, including several entities licensed as distributors of imported Ponni rice since the 1990s.
In 2001, Industrial Automation (M) Sdn Bhd (“IndustrialAutomation”) was appointed the local sales agent forGerman company, Wieland Electric GmbH (“WielandElectric”) in Malaysia.
Industrial Automation refused to stop the registration of the mark WIELAND in its own name and refused to assign the trade mark to Wieland Electric upon a grant of registration, which was filed without authorization from Wieland Electric. The court allowed the application by Wieland Electric to remove the registration and held, among others, that Industrial Automation had obtained the registration of the WIELAND trade mark by fraud and without authority from the rightful proprietor of the mark, being Wieland Electric. Registration of the mark by a mere local distributor appointed by Wieland Electric would cause deception and confusion to the public.
Who can apply for removal?
To apply to court for this relief, the applicant must be a “person aggrieved” and not a mere busybody.[13]
What constitutes a “person aggrieved” would depend on the facts and circumstances of each case.[14] The term may be construed widely to include someone with simply a bona fide or genuine intention to use a trade mark,[15] whose interests will be damaged or injured if a registration were allowed to remain on the Register,[16] or whose trading interest is blocked by the registration of a mark.[17]
The Court’s discretion
The Federal Court has held that once the grounds for removal of a registration have been established, neither the court nor the Registrar has a real discretion to allow the registration to remain on the Register,[18] despite the legislation providing that a court “may order the removal of a registered trade mark”.[19]
“Conclusive” trade mark registration
A trade mark registration is deemed “conclusive” seven years from the date of registration and “shall be taken to be valid in all respects”,[20] unless it is shown that the original registration was obtained by fraud, or that the registered trade mark offends against s 14 of the Trade Marks Act 1976,[21] or if the registered trade mark has become generic or no longer distinctive. Some registered trade marks that have lost their legal status and become generic names for, or synonymous with, a general class of products include ASPIRIN, DRY ICE, ESCALATOR, KEROSENE, TRAMPOLINE and SELLOTAPE.
  1. Conclusion
Mere registration does not guarantee protection of a brand, as it is but the first of many steps that a registrant will need to undertake to preserve ownership. Even a threat of loss of ownership of a trade mark can have serious repercussions on a brand.
Each step in trade mark portfolio management from brand creation to commercial exploitation and any subsequent “face-lift” undertaken must be handled with care. Serious consequences can result from a lack of vigilance ranging from losing a registered trade mark to being liable for trade mark infringement.

Lim Zhi Jian is currently a member of the IP & TMT Practice at Lee Hishammuddin Allen & Gledhill, handles both contentious and non-contentious matters in the areas of Intellectual Property, Media and Information Technology.

He is regularly engaged in intellectual property litigation, acting for a wide range of clients that include Fortune 500 entities, public listed companies (both domestic and international), government linked companies and tech startups.

He also advises on the commercialisation, exploitation, management and protection of intellectual property rights, including trade marks, copyright, patents, design and confidential information. 

[1]Ho Tack Sien & Ors v Rotta Research Laboratorium SpA[2015] 4 MLJ 166 (FC) at para 27
[2]Bahari Yeow Tien Hong and Eunice Chan Wei Lynn, ‘A Myth in Trade Mark Law: Doctrine of “Use-it-or-lose-it” vs “perpetuity of ownership”’, Intellectual Property Law Guide 2013/14 (LexisNexis) at p 23
[3]Trade Marks Act 1976 [Act 175] s 46
[4]Or registered user: McLaren International Ltd v Lim Yat Meen [2009] 6 AMR 405 (FC) at para 29
[5]USA PRO IP Ltd v Montfort Services Sdn Bhd & Anor[2016] 9 MLJ 258
[6]See Daimler AG v Sany Group Co Ltd [2009] All ER 37; adopted and accepted in Malaysia in Jost Cranes GmbH & Co KG v Jost Cranes Sdn Bhd [2010] 4 MLJ 191 (HC)
[7]Godrej Sara Lee Ltd v Siah Teong Teck & Anor(Part 2) [2007] 7 MLJ 164
[8]Lam Soon Edible Sdn Bhd v Hup Seng Perusahaan Makanan (M) Sdn Bhd[2011] 7 MLJ 366 (HC)
[9]Supra, n 4
[10]Trade Marks Act 1976 [Act 175] s 45(1)
[11]Agricultural and Processed Food Products Export Development Authority of India (APEDA) & Ors v Syarikat Faiza Sdn Bhd[2011] 9 CLJ 394; [2011] 2 MLJ 768 (HC)
[12]Wieland Electric GmbH v Industrial Automation (M) Sdn Bhd & Anor[2014] 7 CLJ 970 (HC)
[13]Supra, n 4
[14]McLaren International Limited v Lim Yat Meen[2007] 7 MLJ 581 (CA) at para 21
[15]LB (Lian Bee) Confectionery Sdn Bhd v QAF Ltd[2012] 4 MLJ 20 (FC) at para 14
[16]Regent Pumps Pty Ltd & Anor v Keylargo Industrial Sdn Bhd[2009] 2 CLJ 303 (HC) per Ramly Ali J (now FCJ) at para 19
[17]Supra, n 11
[18]Ho Tack Sien v Rotta, supran 1 at para 25
[19]Trade Marks Act 1976 [Act 175] s 45(1)
[20]Trade Marks Act 1976 [Act 175] s 37
[21]For example, “if the use of which is likely to deceive or cause confusion to the public or would be contrary to law”

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