Who has the final say?

By Rebecca Chong

In the race to secure the registration of their trademarks, many think that once the trademarks are in the Register, they are “safe”. Although registration grants you certain rights and protection, it does not guarantee immunity from being cancelled or expunged from the Register. In other words, registration cannot be used as a defense in an infringement or cancellation suit.

Such a defense was attempted in a recent appeal case. In the Malaysian High Court earlier on, an infringement action was brought by Rotta Research Laboratorium S.p.A, owner of the registered trademark “Viartril-S” for glucosamine sulphate based drug and its distributor (henceforth collectively known as “Rotta”), against Ho Tack Sien, Advanced Pharma Sdn Bhd (registered owner of the trademark “Atril-250”) & Others (henceforth collectively known as “Ho Tack Sien”). Rotta contended that the product bearing the name of “Atril-250” bears a colourable and deceptive imitation of its trademark “Viartril-S” and get-up. Hence, Ho Tack Sien had infringed Rotta’s trademark.

The learned Judge of the High Court found that there was confusing similarity between the trademarks “Viartril-S” and “Atril-250”. Based on the finding of facts, the learned Judge held that there was passing off by Ho Tack Sien of Rotta’s product as Rotta had successfully established the necessary criteria for passing off in relation to its goodwill and reputation in the trademark. There was also misrepresentation by Ho Tack Sien and consequential to that Rotta had suffered damage to its goodwill and reputation.

Subsequently, the matter was brought before the Court of Appeal. The Appeal Court disagreed with the learned Judge when he exercised his discretion and allowed Rotta’s claim to expunge an existing trademark registered by Ho Tack Sien. The Court of Appeal held that Ho Tack Sien’s mark was registrable as a trademark under section 10 of the Trade Marks Act, asserting that the Act “does not prohibit the registration of two or more trademarks which are identical or so nearly resembling each other”.

Further, the Appeal Court went on to say that since the Registrar of the Trademark Office has allowed the registration of two marks that are substantially identical, not only does it afford a defence to the subsequent registered mark, the registration was prima facie evidence of the validity of the “Atril-250” trademark. In light of this, the Court of Appeal agreed with Ho Tack Sien’s submission and opined that the High Court Judge ought to have received the evidence of the Registrar before exercising his discretion to order the expungement of “Atril-250” trademark.

However, the Federal Court disagreed with the findings of the Court of Appeal. No doubt the Registrar has the right to appear if necessary or if the Court requires his assistance, but it is not mandatory or compulsory to bring in the Registrar as a party to the suit where there is no cause of action against the Registrar. In fact, making the Registrar a party to the suit or calling upon the Registrar to be heard in evidence would place the Registrar in the unenviable position of participating in the proceedings in favour of one side or the other, and would destroy the neutrality of his office. Furthermore, the determination of whether there is real likelihood of confusion and deception of the public is ultimately for the Court to decide. Once the grounds for revocation or removal of a mark have been made out, the mark must be removed or expunged from the Register. Therefore, registration is not a defence in relation to marks that have been wrongfully entered onto the Register. Accordingly, the appeal by Ho Tack Sien is dismissed with costs whereas the appeal by Rotta is allowed with costs.

So what led the Court of Appeal to such erroneous findings? The Federal Court opines that this was due to a misconstrued view of the Phantom Trade Mark case [1978] RPC 245 decision where under the old English law, “there was no statutory provision governing the assignment of associated marks, and everything depended on the Registrar’s practice”. However, the law has changed. We are no longer fully dependant on the Registrar’s practice as in the days of old but everything is now governed by statutory provisions.

Another ground that was wrongfully interpreted by the Court of Appeal was their reliance on section 40(1)(f) of the Act, which provides that “the use of a trademark, which is one of two or more registered trademarks which are substantially identical, in exercise of the right to use of that trademark given by registration”, does not constitute an infringement of a trademark. However, the Federal Court viewed otherwise. Ho Tack Sien could only rely on this provision provided the trademark was validly registered. As such, section 40(1)(f) of the Act did not afford a defence in relation to marks which were wrongfully entered on the Register, as in this present case.

This case sets another great reminder to all especially before registering your trademarks, be sure to ascertain the availability of your marks. Most importantly, be original and be a trendsetter. Steer clear of any imitation of others’ trademarks because having registration in your hands may not win you the war.

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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.