This recent case provides food for thought by enforcing once again that the first user of a trademark in good faith in Malaysia is the rightful common law owner of the mark. Attempts to noodle around with the core principles of trademark and copyright law do not mix well with the Courts’ stand to uphold justice, and will surely reach a stale ending!
In this case, the Plaintiff, Hakubaku Co. Ltd., is a Japanese company which manufactures noodles and other products. They claimed to own the trademark “Hakubaku Combination Device” as well as the copyright in the “Hakubaku Combination Device” mark, the “Hakubaku Device” mark and the “Japanese Hakubaku Combination Device” mark (“Plaintiff’s marks”).
The Plaintiff applied to register the “Hakubaku Combination Device” mark on 15 October 2015 in Classes 30 and 31 but their applications were not allowed by the Malaysian Registrar of Trademarks as the applications conflicted with the trademark of the Defendant, Asiamega Food Manufacturers Sdn. Bhd., which was filed on 23 September 2013 in Class 30. The Defendant also sold noodles under their trademark, had the same target customers and retailers, and both parties used the trademark “Hakubaku” in red as part of their trademark. In light of this, the Plaintiff applied to expunge Defendant’s trademark on 13 December 2017.
The Defendant objected to the Plaintiff’s application for expungement on several grounds. Amongst the objections put forth by the Defendant was that the Plaintiff’s affidavits should be inadmissible. In this case, the Plaintiff’s affidavits were affirmed in English before a Japanese Notary Public. The Notary Public’s seal was affirmed as genuine by an Officer of Japan’s Ministry of Foreign Affairs (“Japan Government Officer”), and the Japan Government Officer’s affirmation signature was certified as genuine by a Consular Officer of the Malaysian Embassy in Japan (“Malaysian Consular Officer”).
The Defendant argued that the affidavits should have been affirmed before a person authorised to administer oath from a Commonwealth country or a Malaysian Consular Officer, and the translator should have been named in the affidavits. The Court considered a few statutes in relation to this matter, i.e. the National Languages Act 1963/1967 (“NLA”), the Rules of Court 2012 (“RC”), and the previous Rules of the High Court 1980 (“RHC”), and decided in line with the RC, in the interests of justice, that the Plaintiff’s affidavits were admissible.
The Defendant also argued that the Plaintiff was estopped from filing the application to expunge their mark as the Plaintiff had failed to oppose the registration of the Defendant’s mark during the prescribed opposition period. However, the Court disagreed with this argument and upheld precedents which ruled that a trademark which has been wrongfully registered must be expunged from the Register once grounds for revocation have been made out.
In addition, the Defendant also claimed to be the first user of the Defendant’s trademark on the basis that they had filed the application to register the trademark in Malaysia first. They did not, however, provide any documentary evidence of use of their trademark. In reply, the Court reiterated that an application to register a trademark did not constitute use of the mark, and to allow a mere application for registration to be considered as use of a trademark would encourage the undesirable practice of “trademark squatting”. The Court instead looked with favour upon the Plaintiff’s evidence (amongst others) of sale of noodles under their “Hakubaku Combination Device” mark on 6 June 2013 in Isetan (a big departmental store in Malaysia), as adduced in the Plaintiff’s affidavits.
It is interesting to note that the Defendant did attempt to contend that no weight should be attached to the Plaintiff’s evidence, as the documents exhibiting the evidence were not submitted in their first affidavit, but were only submitted in a subsequent affidavit. Nevertheless, the Court did not entertain this argument and were of the view that whether the Court attaches weight to a particular piece of evidence is a question of fact and does not depend on which affidavit contains the exhibit.
The Court also considered the meaning of the word “Hakubaku”, which is a Japanese character meaning “white barley”. The Court viewed that the Defendant would not have any reason to use this term in their trademark as they did not create the trademark, they had no business in Japan, they were a Malaysian company without any Japanese director or shareholder, and there was no commercial nexus between the Defendant and their trademark.
To make matters even more incriminating against the Defendant, on 25 April 2017, the Plaintiff sent a letter of demand to the Defendant stating, amongst others, that the Plaintiff is the proprietor and copyright owner of the “Hakubaku Combination Device” mark and had been using the mark in Malaysia since 2008. The Plaintiff alleged that the Defendant was not the owner of the Defendant’s mark and demanded for the Defendant to voluntarily cancel the registration of their mark. However, the Defendant ignored the Plaintiff’s demand, an act which the Court found to be suspicious and showed that the Defendant had “hijacked” the Plaintiff’s trademark to unlawfully pass off the Defendant’s goods as the Plaintiff’s goods in Malaysia.
Finally, on the issue of copyright ownership, the Court was satisfied that the Plaintiff was indeed the rightful owner of the copyright in the Plaintiff’s marks. In contrast, the Defendant did not adduce any evidence to prove that Defendant had created their trademark independently and without copying the Plaintiff’s marks.
In light of the above, the Court decided that the Plaintiff was the first user and common law owner of the “Hakubaku Combination Device” mark, and the Defendant had no right to register their mark in Malaysia. Further, in view of the similarity of the marks, the use of the Defendant’s trademark was likely to deceive or cause confusion to the Malaysian public. The Court also found the Defendant’s use of the Defendant’s mark amounted to infringement of the Plaintiff’s copyright. Accordingly, the Court allowed the Plaintiff’s expungement application.
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