Malaysia: It’s tough to SOCIALize

January 29th, 2013

 

In the case of Tan Mei Li & Ors v Golden Regal Restaurant Sdn. Bhd., the High Court of Malaya at Kuala Lumpur adjudged Golden Regal Restaurant Sdn. Bhd. to have committed the tort of passing-off their business as that of Tan Mei Li & Ors.

Tan Mei Li & Ors (hereinafter referred to as ‘the Plaintiffs’) are the proprietors of restaurants and manage and operate the business of restaurants in Malaysia under the names ‘the Social’ and ‘the Social@’ (hereinafter known as ‘the Marks’) since 2001. The Plaintiffs’ restaurants serve Asian fusion and local cuisines, western dishes as well as various type of alcoholic and non-alcoholic beverages.

Golden Regal Restaurant Sdn. Bhd. (hereinafter referred to as ‘the Defendant’) is a company incorporated in Malaysia which, in 2010, launched a new restaurant under the name ‘Social KL’ and ‘Social@KL’ (hereinafter known as ‘the Signs’) offering various types of food and beverages.

The Plaintiffs alleged that since the Marks and the Signs are confusingly similar, their use by the Defendant makes a representation to the public that the Defendant’s business is connected to or associated with that of the Plaintiffs.

The Plaintiffs’ first witness testified that the name ‘the Social’ was chosen in keeping with the general concept of food and drinks in a friendly environment where people come to network or get together either formally or informally. The Plaintiffs’ have also testified that they have spent a significant amount of money on advertising and promotional activities through newspapers, magazines and their domain names over the Internet. Hence, the High Court adjudged that the Plaintiffs have obtained substantial goodwill and reputation over the Marks and such names or marks have substantially acquired distinctiveness through use by the Plaintiffs’ restaurants and services.

The High Court further stated that the word ‘Social’ or ‘the Social’, although being English words, had acquired a secondary meaning through long usage and now qualify as a trade mark especially associated with the Plaintiffs.

The High Court stated that the Marks and the Signs are phonetically and visually similar. The Plaintiffs first witness pointed out that both the Marks and the Signs used very minimalistic and confusing stylization and font. The Plaintiffs’ also testified of receiving many delivery of goods, such as wines, liquor, kitchen rolls, toilet rolls etc. meant for the Defendant’s restaurant. Further, the Plaintiff witnesses testified that many friends, acquaintances and customers of the Plaintiffs assumed that the Defendant’s restaurant was the Plaintiffs’ new branch and sent them congratulatory text messages and inquired about the new “branch”. During cross examination, the Defendant’s witness admitted that the Defendant had hosted an event called ‘Beach Party’ which was an event that was previously held by the Plaintiffs. Hence the High Court adjudged that as both the Plaintiffs and the Defendant were using the same or identical names and trade marks in relation to identical goods and services, the Defendant had in fact misrepresented and passing of the Plaintiffs’ common law rights and interest through use of the Signs over its restaurants.

The Defendant contented that the Defendant’s restaurant was of higher standard than the Plaintiffs’ restaurants. However, the High Court nullified this claim stating that anything that dilutes the distinctiveness of the Plaintiffs’ Marks causes damages to the Plaintiffs’ image. The public may begin to question or compare the quality of products and services provided by the Plaintiffs and the Defendant. Hence, there was a real likelihood of damage being done to the Plaintiffs.

On such grounds, the High Court ruled that the Defendant had committed the actionable wrong of passing off and subsequently ordered an inquiry as to the damages suffered by the Plaintiffs.