A true trademark conspiracy involving two Malaysian companies and one Indonesian company

By Geetha Kandiah

Again and again, we advise clients that registering a brand that does not belong to you will only backfire. Coin your own brand, it will propel you to success and will keep you out of trouble!

Entrepreneurs, sometimes, prefer to learn the hard way. Here, in the case of GS Yuasa Corporation v GBI Marketing Sdn Bhd, it was not a client of ours, but a local company that faced the consequences. Battery manufacturing giant GS Yuasa Corporation (“Plaintiff”) took on a local company, GBI Marketing Sdn Bhd (“Defendant”), filing an application to expunge the Defendant’s registered trademark “GiSi Premium High Power” (“Defendant’s mark”) (pictured below). The Plaintiff, a public listed joint venture company, is one of the largest battery manufacturers in the world, with around 13, 560 employees and manufacturing plants and sales offices in 16 countries.

The Plaintiff uses the mark “GS” and has registered 2 trademarks in Malaysia for variations of the same (“Plaintiff’s marks”) (pictured below). Both the Plaintiff’s marks and the Defendant’s mark have been registered in Class 9, for batteries. The Plaintiff’s marks were registered in 1998 and 2000 respectively, and the Defendant’s mark was registered in 2005.

A few of the issues raised before the High Court, in this case, were whether the Plaintiff was considered to be an aggrieved party within the ambit of the Trade Marks Act 1976 (“TMA”) so as to entitle the Plaintiff to file their contention, and also whether the Plaintiff was able to expunge the Defendant’s mark on a few grounds, including fraudulent registration of the Defendant’s mark by Osima Batteries Ind Sdn Bhd (“OBI”), and likelihood of confusion in the public by the use of the Defendant’s marks on the Defendant’s goods.

The Plaintiff claimed that it has been using the mark in Malaysia since the 1960s through a Thai subsidiary of one of the initial companies before the joint venture and incorporation of the Plaintiff. Amongst the evidence of use adduced by the Plaintiff was an invoice issued in 1996 to a Malaysian distributor for the sale of storage batteries, under the trademark “GS” for cars and motorbikes. The Plaintiff also exhibited invoices from an Indonesian subsidiary, which evidenced the exportation and supply of the Plaintiff’s goods to East Malaysia through its distributor. However, the Plaintiff had censored the prices and product quantities in their invoices, stating that it was confidential information.

The Plaintiff also put forth, among others, the following allegations:

That the Defendant was part of an international conspiracy which had fraudulently register deceptively similar trademarks in Malaysia and Indonesia, on the basis that a trademark which was similar to both the Plaintiff’s marks and the Defendant’s mark had been registered in Indonesia by a company called PT Gramitrama Battery Indonesia (“PT Gramitrama”), and the Defendant and PT Gramitrama were related companies as they shared a common director. The Plaintiff had successfully expunged PT Gramitrama’s registration at the Supreme Court of Indonesia;

The Defendant’s mark was not distinctive as in addition to the Defendant’s mark, OBI had also previously attempted to register the trademark (“GS Premium mark”) in Malaysia, but subsequently abandoned the application; and

In April 2015, private investigators employed by the Plaintiff investigated a company in the Klang Valley called Loong Sheng Battery & Parts Enterprise (“Loong Sheng”) and purchased products bearing the Defendant’s mark. However, Loong Sheng issued an invoice stating that the Plaintiff’s product had been purchased.

The Defendant, however, denied the Plaintiff’s allegations and stated, among others, that OBI and the Defendant were separate entities, and it did not know why OBI had abandoned registration of the GS Premium mark. The Defendant claimed that OBI had assigned the Defendant’s mark to the Defendant in 2012. In addition, the Defendant argued that the case in Indonesia against PT Gramitrama concerned different trademarks, and the appeal in the Indonesian case was pending (which was later found to be untrue).

The High Court found that the Plaintiff was an aggrieved party in this case based on, amongst others, the evidence of the use of the Plaintiff’s mark in Malaysia since 1996, which clearly proved that the Plaintiff was the first user and common law proprietor of the Plaintiff’s mark for batteries. Further, since the Plaintiff was still using the Plaintiff’s mark for its products in Malaysia, and the Defendant’s mark is registered for the same products, the Plaintiff’s business was adversely affected by the Defendant’s mark. The Defendant’s mark also was likely to deceive or confuse the public into thinking that the Defendant’s goods under the Defendant’s mark originates from or is related to the Plaintiff. Thus, the Defendant’s use of its mark caused grievance to the Plaintiff.

In order to find out whether the Defendant’s registration had been obtained by fraud, the High Court decided to lift the Defendant’s and OBI’s corporate veil. The Court found that the 2 conditions to lift the parties’ corporate veil were satisfied in view of the allegation that the Defendant’s registration was fraudulent in nature, and it was in the interests of justice to determine whether this was true. Upon lifting the corporate veil, the Court discovered that the Defendant and OBI constituted one single entity, as both companies had the same business, registered address and business address, shared common directors and shareholders, and had the same company secretary. In addition, the assignment document was signed by the 2 common directors, had a common witness, and stated the same address for both parties. Worse still, the assignment consideration sum was only RM 10, which did not make commercial sense, and there was no evidence of negotiation between the parties or even proof of payment of the RM 10 consideration by the Defendant to OBI.

Interestingly, in regard to the Plaintiff’s act of redacting certain portions of their evidence, the Court viewed that it would only draw adverse inference against the Plaintiff if the Plaintiff had censored material evidence. In this instance, since the redacted information was irrelevant, it was not contrary to law.

In view of the above, the High Court held that the Defendant’s mark was fraudulently registered, and accepted the Plaintiff’s submission that OBI, the Defendant and PT Gramitrama had conspired to register trademarks which were confusingly similar to the Plaintiff’s mark in Malaysia and Indonesia. The court accordingly, issued orders which included the expungement of the Defendant’s mark from the trademarks register.

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Communications at KASS International Sdn Bhd

KASS International is an established Intellectual Property Firm which offers a one-stop solution for IP matters in Malaysia, South East Asia, and worldwide.