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.com
Marks 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 noncompeting 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. i)

CONCEPTUAL AND LEGAL FRAMEWORK OF PROTECTION OF WELL KNOWN Malaysia's obligations under international treaties to protect well-known mark

TRADEMARKS IN MALAYSIA 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) (e) ........................ ....................... ....................... 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; 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

proprietors consent of the trade mark which, or the essential part of which, is identical with or nearly resembles the proprietors 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) (b) the degree of knowledge or recognition of the mark in the relevant sector of the public; 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 (d) (e) (f) III. mark applies; 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; 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; the value associated with the mark. 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. Consitexs 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 Consitexs 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, Consitexs 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 Consitexs 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 class supermarkets. who shopped at departmental stores and

consumers who purchased designer brands, whilst TCL Marketing catered to middleconsumers (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. McDonalds Corporation3 [2009] 1 LNS 309 (b) McCurry Restaurant (KL) Sdn Bhd v. McDonalds Corporation

The plaintiff, McDonalds, 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.McDonalds, the wellknown 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, McDonalds 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 McDonalds. Following the extensive publicity undertaken worldwide by McDonalds for the Mc prefix, it claimed that McCurry Restaurant had knowingly intended to appropriate its goodwill, reputation
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

and

commercial

advantage

through

false

trade

association.

In its defense, McCurry Restaurant denied McDonalds monopoly over the prefix Mc and asserted that the similarities between the marks were to be considered as a whole (i.e. McCurry and McDonalds), 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 McDonalds goodwill and reputation. In the High Court agreed that McDonalds 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 McDonalds. On this basis, the High Court held that McCurry Restaurants use of the same prefix amounted to a misrepresentation and if allowed to continue, would result in the loss of exclusivity of McDonalds 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 McDonalds over the same. In reversing the High Courts decision, the Court of Appeal held that there was no evidence to show that McCurry Restaurant was passing off McDonalds business as its own. The Court of Appeal held that the judge had erred in holding that McDonalds 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 McDonalds. 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. McDonalds

trade mark as a whole consisted not only of the prefix Mc but also the distinctive golden arched M. In contrast, McCurry Restaurants 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 Restaurants representation of its business was of a style, getup and cuisine distinctly different from McDonalds as none of its food items carried the prefix Mc, unlike the items sold by McDonalds.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 McDonalds. Following the Court of Appeals 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. McDonalds Corporation [2009] 1 LNS 309