In the recently decided case of JOST CRANES Gmbh & Co. KG v. JOST CRANES SDN BHD which was heard at the Kuala Lumpur IP Court, Judge Dato’ Azahar bin Mohamed decided in favour of the German company, Jost Cranes GmbH & Co. KG and expunged the registered
trademark from the Trademark Register.
The JOST mark was registered by Jost Cranes Sdn Bhd (the Respondent) on 22 July 2003, in Class 7 for cranes including parts and accessories thereof.
The German company (the Applicant) initiated an expungement action in 2009 on the grounds that the JOST mark was wrongfully entered into Register. The Applicant argued that the Respondent could not be the owner of the mark since the Applicant is the first user of the JOST mark in Malaysia.
On the other hand, the Respondent contended that Franc Jost, the inventor of the JOST Cranes entered into an agreement with the Respondent, one on 21 June 2001 and another on 28 November 2001. As Franc Jost sold the rights of the mark to the Respondent through the agreement, the Respondent claims that the ownership of the mark never resided in the Applicant. Based on the two agreements, the Respondent had purchased all rights to the cranes and the right to use the mark. Due to the ownership rights it claims to have, the Respondent argues that it is the first user of the JOST mark.
Before deciding on the ownership of the JOST mark, the IP Court first assessed whether the Applicant is a person aggrieved and has the locus standi to initiate this action. This is due to the recent decision in a Federal Court case in Malaysia, which laid out a stringent test for an “aggrieved person” – only a person with trading interest in the mark can apply for a rectification action. In the current case, as the Applicant had shown a commercial interest in the JOST mark even before the Respondent had submitted an application for the registration of the mark, the Court found that the Applicant had the locus standi, being the ‘person aggrieved’.
The IP Court then considered whether the Applicant was the first user of the JOST mark in respect of construction cranes with reference to various case laws. From the evidence adduced, it was found that: (i) the Applicant is the manufacturer of the construction cranes bearing the JOST mark, (ii) the Respondent is the importer of the cranes manufactured by the Applicant, (iii) the construction cranes bearing the JOST mark were widely advertised, published and promoted extensively in Malaysia by the Respondent and (iv) there was no direct binding relationship between the Applicant and the Respondent although both parties dealt with another party, Franc Jost.
Based on the Court’s judgment, the first agreement the Respondent entered into with Franc Jost relates only to the designs of the specified “Luffer and Topless” tower cranes, designs which were created by Franc Jost. It makes no mention of the JOST mark. Thus, it is not an agreement on the sale of the JOST mark, as contended by the Respondent. Instead, the sale was in relation the designs of the cranes. The Applicant was in fact the actual manufacturer and supplier of these construction cranes (having the “Luffer and Topless” design) during the subsistence of the first agreement and the Applicant had used the JOST mark as an indicator of origin on these manufactured construction cranes.
The Respondent did not produce any evidence to the effect that it had manufactured the construction cranes of the “Luffer and Topless” designs. The Applicant produced correspondences between itself and the Respondent as proof of manufacture. The correspondences which included letters between both parties were made prior to the filing date of the JOST mark on 22 July 2003 by the Respondent. The letters proved that the JOST mark was first used by the Applicant in relation to the cranes it manufactured in the course of trade before the priority filing date of 22 July 2003 and the Respondent was the importer of construction cranes manufactured by the Applicant bearing the JOST mark.
From the evidence, the Judge found that although the Respondent had incurred various expenses in its efforts to promote and sell the construction cranes bearing the JOST mark, such goodwill resided with the Applicant as the manufacturer of the cranes bearing the mark. The Respondent merely acted as a conduit that distributed the Applicant’s cranes. The usage of the JOST mark by the Applicant preceded the priority filing date of 22 July 2003 and therefore, the Court is unable to accept the contention that the Respondent was the one that manufactured the construction cranes and owned the JOST mark before the Applicant.
The Judge found that (i) the Applicant is the first user of the mark in Malaysia, (ii) the Respondent had unlawfully applied to register the JOST Mark and (iii) the JOST mark wrongfully remains on the Register. The expungement of the JOST mark was thus ordered.
The author views that this decision comes as a relief to foreign companies that have yet to register their trademarks in Malaysia. Fret not, as first users have better rights to a mark than the first party to file the mark. Importers and distributors of a product have no right in claiming ownership in the mark affixed to the product. Should they be interested in owning rights to the mark, they should seek for an assignment before embarking on a heavy marketing and promotion exercise.
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