MALAYSIA: COLLIERS TRADE MARK IN DISPUTE

May 29th, 2015

 

Colliers International Property Consultants Inc. v Colliers International Property Consultants Sdn. Bhd. is a trade mark dispute before the High Court of Malaya in Kuala Lumpur.

The Plaintiff (Colliers International Property Consultants Inc.) is the owner of two registered trade marks, “Colliers” and the Collier Logo colliers01 in class 36 (hereinafter be referred as “the Collier’s trade marks). The Plaintiff initiated a cause of action against the Defendant for trade mark infringement and the tort of passing off of the Collier’s trade marks on the basis that the Defendant is using the Colliers name “Colliers International Consultants” and logo colliers02 which is identical to the Plaintiff’s registered trade marks.

The Plaintiff contends that the Defendant operated as part of the Colliers Group regime in Malaysia, being the real estate agency division of Colliers Jordan Lee and Jaafar (‘CJLJ’), the Malaysian Member of the Colliers Group in Malaysia. Therefore, the Defendant’s use of the Colliers trade marks (with the word International) was derived from and was subject to and limited by the terms governing the rights of CJLJ to use the Colliers trade marks as set out in the in three different affiliation, license and assignment agreements. In 2003, Colliers International Property Consultants Inc. terminated CJLJ’s membership in the series of agreements and as the result of which CJLJ were obliged to cease use of the Colliers trade marks and to cease representing itself as having any connection to Colliers. Therefore, the Defendant, being the estate agency arm of CJLJ was equally obliged to cease use of the Colliers trade marks and to cease representing itself as having any connection to Colliers. Nevertheless, the Defendant continued to use “Colliers” without the authority and consent of the Plaintiff resulting in the commencement of this action against the Defendant.

The Defendant, on the other hand, contends that it has been carrying out the business of, inter alia, estate agency in using the "Colliers" and "Colliers International" and logos incorporating the Colliers Name ("Colliers Name and Logo") since its incorporation in 1982. The Defendant further contends that it is an independent estate agency, a separate entity from CJLJ and also that it is not a signatory to any of the material agreements and therefore it is not bound by those agreements. The Defendant filed a counterclaim for rectification or expungement under Section 45 and Section 46 of the Trade Marks Act 1976.

The counterclaim of the Defendant

The Judge stated that the core issue here is whether the Defendant had used Colliers and Colliers Logo (with the word International) as the agency arm of CJLJ (the Plaintiff’s former licensee) and as part of CJLJ’s regime in Malaysia or whether the Defendant’s use of the same was independent and prior to the Plaintiff and its predecessor. If the Defendant was part of the CJLJ regime in Malaysia then it will be bound by the agreements and will therefore be prohibited from using the Colliers name and trade mark. However, if the Defendant is not part of the CJLJ regime but an independent entity, then the Defendant will not be bound by the agreements and the Court will have go on to ascertain whether the requirements for orders under Section 45 and Section 46 of the Trade Marks Act 1976 are satisfied.

The Judge concluded that Defendant is not the common law owner of the Colliers trade mark/name in Malaysia and that it was only permitted to use the trade mark / name by virtue of the consent given to CJLJ pursuant to the agreements. The Judge found that the Defendant’s sole witness cannot confirm in evidence if the Defendant had started its business in 1982 and concluded that the Plaintiff’s account of formation and incorporation of the Defendant company to be more credible i.e. Colliers International Property Consultants Sdn. Bhd. is an agency arm of CJLJ, which had derived its rights to use the “Colliers” name and logo from the Plaintiff and its predecessor, pursuant to the affiliation agreements.

Grounds to expunge under Section 45 of Trade Marks Act 1976

The Defendant submitted that the Plaintiff’s marks should be expunged as they are wrongfully registered following a misleading statement to the Registrar in the Statutory Declaration. The Defendant states that a representative of the Plaintiff in applying to register the marks in 1998 that “the marks has not been used in Malaysia” is clearly misleading as the Defendant had been using the “Colliers” name and logo in rendering its agency services. However, the Plaintiff submits that the registration in respect of Colliers name and logo is conclusive pursuant to Section 37 of the Trade Marks Act 1976 unless the Defendant can prove that the registration was obtained by fraud, the marks should not be registered pursuant to Section 14 or that the marks are not distinctive of the goods or services of the Plaintiff at the commencement of the proceedings.

The trial Judge concluded that the Defendant was unable to prove the Plaintiff’s marks were obtained by fraud. The Judge stated that the statement in the Statutory Declaration can only make feeble allegation of misrepresentation and not proof of fraud. Accordingly, it was concluded that the application to expunge was without any merit and it was dismissed.

Grounds to expunge under Section 46 of Trade Marks Act 1976

It was the contention of the Defendant that since CJLJ’s membership in the agreement was terminated and since it is the Plaintiff’s claim that the use of the Colliers name and logo were through CJLJ, the Plaintiff could not have used the marks in good faith for 3 years up to one month before the filing of the Defendant’s counterclaim. The Defendant submitted that the registered marks should be expunged for non-use. However, the Plaintiff submitted that, the Defendant is not entitled to rely on s. 46(1)(b) as the failure of non-use is due to special circumstance, and is not an intention not to use or abandon the trade mark. The Court followed the interpretation of Ramly J in Godrej Sara Lee Ltd v Siah Teong Teck & Anor [2007] 7 MLJ 164, where His Lordship had applied the principle in BULOVE Trade Mark [1967] RPC 29 and held as follows:
………..
Two conditions thus have to be satisfied which are as follows:
(i) the special circumstance must be peculiar or abnormal and must be external in nature; and
(ii) the non-use must be as a result of those circumstances.

The judge accepted the Plaintiff’s submission that the non–use of the registered marks by the Plaintiff is due to the unlawful use of the Colliers marks by CJLJ, its affiliates, including the Defendant and because of the Defendant’s use of the “Colliers” name and logo, the Plaintiff cannot appoint a new licensee to use the registered mark. Furthermore, the Judge also concluded that the Plaintiff conduct of applying for a judicial review proceeding against the Board and the Defendant with regard to the issuance of an Authority to Practice in the name of “Colliers” by the Defendant clearly shows that the Plaintiff has no intention of abandoning its registered marks. Accordingly, the Judge concluded that the application to expunge was without any merit and it was dismissed with costs.

The Plaintiff’s claim for trade mark infringement by the Defendant

The Plaintiff’s claim for trade mark infringement is premised on Section 38(1) of Trade Marks Act 1976. The Judge concluded that the Defendant had infringed the registered trade marks of the Plaintiff as the Defendant’s logo is nearly identical to the Plaintiff’s logo so as to cause confusion or deception and the Defendant had wholly incorporated the Plaintiff’s registered word mark “Colliers” in its logo.

The Plaintiff’s claim for Passing Off

Following the case of Reckitt & Colman Products v. Borden Inc [1990] 1 All ER 873 as applied in Ho Tack Sien & Ors v Rotta Research Laboratorium [2012] 8 CLJ 645, the judge stated that in order to establish an action for passing-off, the Plaintiff must prove that:

  1. That he has sufficient reputation or goodwill in the mark, trade mark, get-up or other indicia in question under which his particular goods or services or offered to the public;
  2. He must demonstrate a misrepresentation by the Defendant to the public (whether or not intentional) leading or likely to lead the public to belief that goods or services offered by him are the goods services of the Plaintiff; and
  3. He must demonstrate that he suffers or had suffered or is likely to suffer damage or injury to his business or goodwill by reason of the erroneous belief and engendered by the Defendant’s misrepresentation that the source of the Defendant’s good or services is the same of the source offered by the Plaintiff.

The Court concluded that pursuant to the agreements signed by the CJLJ and affiliates the goodwill accruing from the use of the Colliers name and logo accrues to the Plaintiff. The Defendant submitted that no goodwill accrues to the Plaintiff since the Plaintiff had not been issued with Authority to Practice in Malaysia following the termination of the agreements with CJLJ. The Judge stated that since CJLJ and the Defendant continued to use the logo after the termination of the agreements, the goodwill that accrued CJLJ and the Defendant must accrue to the Plaintiff as the use of the logo by CJLJ and the Defendant was illegal.

The Judge also found that the Defendant had misrepresented the public through various means, specifically by name cards and the description of the Defendant in its website. During the trial the Defendant’s witness conceded that the public would assume that the Defendant is connected with the Plaintiff and the Collier group of companies.

With regards to damages, the Judge highlighted that actual damage need not be proven and a probability of damage is sufficient following the case of Syarikat Zamani Hj Tamin Sdn Bhd & Anor v. Yong Sze Fun & Anor (2006) 5 MLJ 262. The Judge stated that the Plaintiff clearly suffered damage as a result of the Defendant’s unauthorized use of the logo and concluded that the Plaintiff has established the element of damages.

The Judge concluded that the Plaintiff has proven its case on the balance of probabilities and the claim against the Defendant was allowed with cost.