Danone Biscuits Manufacturing (M) Sdn Bhd V. Hwa Tai Industries Bhd
FOOD manufacturers would stand to gain from paying close attention to a recent High Court decision on a case involving claims of trademark infringement and passing off. On 29 October 1990, Danone Biscuits Manufacturing (M) Sdn Bhd (“the Plaintiff”) applied to register their “ChipsMore” trademark in Malaysia, for, amongst others, chocolate chip cookies. The trademark was registered and renewed up to 20 October 2007. The Plaintiff has been manufacturing, distributing and selling these cookies in Malaysia since 1990, and has also exported the same to other countries in the region.
In early April 2001, the Plaintiff discovered that the Defendant, Hwa Tai Industries Bhd, had been manufacturing and selling chocolate chip cookies bearing the trademark “Chipsplus”. The Plaintiff subsequently requested that the Defendant cease the manufacture and sale of cookies bearing this trademark, on the basis that the trademark, as well as get-up and packaging of the product, were confusingly similar to their registered “ChipsMore” mark. However, the Defendant refused to do so, and as such, the Plaintiff sued the Defendant for trademark infringement and passing off.
The Plaintiff argued that the Defendant’s “Chipsplus” trademark infringed upon its registered trademark, while the similar get-up and packaging of the cookies amounted to the Defendant passing off its “Chipsplus” cookies as the Plaintiff’s “ChipsMore” cookies, and this affected their business, reputation and goodwill in Malaysia. The Defendant however denied the Plaintiff’s claims, and further contended that the “ChipsMore” registration had lapsed, and was therefore invalid.
The High Court decided in favour of the Plaintiff, ruling that there was infringement of the Plaintiff’s trademark, as well as passing off of its get-up and packaging. The court found that the Defendant was liable for infringement because the Plaintiff had a registration certificate and renewal certificate evidencing a valid trademark, and the Plaintiff had not given the Defendant permission to use their trademark. Further, as “Chipsplus” was similar to “ChipsMore”, there was a possibility of confusion or deception amongst the public.
An important issue considered by the Court was the meaning of the phrase “likely to deceive or cause confusion” in Section 38 of the Trade Marks Act 1976. The word “likely” was interpreted to mean that only probability or possibility of confusion needed to be established. The Court found it necessary to take into account the meaning conveyed by the words in question, or the ideas suggested by them. The Court therefore viewed that although the words “Plus” and “More” are two different words, there is a sufficient resemblance in idea. Additionally, in deciding the similarity between two words, the words have to be considered as a whole. Thus, the descriptive element “Chips” cannot be disregarded and focus only paid on the words “Plus” and “More”. Rather, the words must be compared as a whole, and in doing so, the Court found the marks sufficiently similar to constitute trademark infringement on the Defendant’s part. As for passing off, as the “ChipsMore” trademark, get-up and packaging had become distinctive of the Plaintiff’s products, the use by the Defendant of a similar trademark, get-up and packaging was held to be likely to cause deception or confusion to a potential buyer of chocolate chip cookies, and such misuse is likely to damage the Plaintiff’s reputation and goodwill through the loss of sales of its products.
Azahar Mohamed J, in arriving at the above conclusions, conducted a very interesting comparison of the Plaintiff’s and Defendant’s trademarks, get-up and packaging (refer to previous page).
His Lordship took into account factors such as the larger “C” and “P” in the “Chipsplus” mark as similar to the larger letter “C” and “M” in the “ChipsMore” mark, the rectangular packaging shape containing the chocolate chip cookie in both products, the similar placing of the “ChipsMore” mark in a wavelike manner and “ChipsPlus” in a curvy manner, the fact that both house marks are positioned on the upper left hand side of the packaging, the fact that there is a blue swathe present in both packaging and so forth, and when considered as a whole, His Lordship opined that the trademark, get-up and packaging of both products are indeed confusingly and deceptively similar.
This decision is important as the court affirms that for infringement to be established there only needs to be a probability or possibility of confusion, whilst for a passing off action, proof that the mark has acquired substantial goodwill is crucial. It also shows how serious courts are in protecting trademark owners from misappropriation of their commercial advantage through the use of substantially identical marks by other traders. Business owners are encouraged to first seek advice from intellectual property professionals before registering their trademark, as the courts have shown willingness to dismiss the trademark – even if the company has spent a lot of time, effort and money on what they believe is a legitimate trademark – if it infringes a valid registered trademark.
Note: The trademarks identified in this article belong to their respective owners. KASS does not claim any proprietary right whatsoever; they are used solely for educational purposes.
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