MALAYSIA: LONGCANE INDUSTRIES’ TRADE MARKS EXPUNGED

July 25th, 2017

 

In the case of Lim Teck Lee (Malaysia) Sdn. Bhd. vs, Longcane Industries Sdn. Bhd., Lim Teck Lee (Malaysia) Sdn. Bhd. (hereinafter referred to as the “Plaintiff”) applied to expunge trade mark registration no. 06023307 in Class 21 and trade mark registration no. 09007210 in Class 09 bearing a distinctive yellow elephant mark in the name of Lonecane Industries Sdn. Bhd. (hereinafter referred to as the “Defendant”) from the Malaysian Register of Trade Marks.

The issues that were raised by the Plaintiff were:
(i) whether the Plaintiff is estopped from applying to expunge the two registered trade marks of the Defendant’s before the Registrar of Trade Marks;
(ii) who is the first user of the mark in debate (yellow elephant mark);
(iii) whether the Plaintiff has proven that the registration of the Defendant’s two registered trade mark was obtained by fraud under Section 37(a) of the Trade Marks Act 1976, thus, in this regard, should the Court lift the Defendant’s corporate veil; and did the Defendant acquired the registered trade mark by cheating the Registrar under Section 415(b) of the Penal Code;
(iv) whether the use of the Defendant’s Registered Trade Mark based on the Defendant’s goods were likely to deceive and/or confuse as well as to give a false impression to the public that the Defendant’s good originated from and/or is associated with the Plaintiff’s goods bearing the Yellow Elephant Mark; and
(v) whether the Defendant’s Registered Trade Mark at the time of filing were distinctive of the goods claimed.

The Plaintiff succeeded to prove on a balance of probabilities that the Plaintiff, and not the Defendant, was the first user of the Yellow Elephant mark. The Court ruled in the favour of the Plaintiff with the following evidence, among others; Plaintiff’s 1st affidavit, an invoice dated 24 May 1991, the earliest documentary evidence regarding the Plaintiff’s use of the Yellow Elephant mark in the course of trade. The Defendant has failed to produce documentary evidence to prove the Defendant’s use of the two registered marks in the course of trade. Furthermore, the Plaintiff has also succeeded to adduce an invoice from the Defendant to the Plaintiff which proved that the Plaintiff has commissioned the Defendant to manufacture the Plaintiff’s goods bearing the Yellow Elephant mark. Thus, the Court dismissed the Defendant’s claim that the Defendant had no knowledge of the Plaintiff’s use of the mark discussed.

The Defendant’s use of the two registered trade marks on the Defendant’s goods has adversely affected the Plaintiff’s legal right to the usage of the Yellow Elephant mark on their goods. Thus, the Plaintiff was indeed entitled to apply for the expungement of the Defendant’s two registered trade mark. Based on the evidence and reasons discussed above, the Court ruled in the favour of the Plaintiff as a person aggrieved by the Defendant’s two registered trade marks.

The Court ruled that the 2 conditions required to pierce or lift the corporate veil were fulfilled. Based on the evidence brought forward by the Plaintiff, the Defendant’s two registered trade marks had been obtained by means of fraud within the meaning of Section 37(a) the Trade Marks Act. Thus, the first condition to piece the corporate veil has therefore been fulfilled. The second condition was satisfied as the Plaintiff succeeded in providing relevant pages from the Plaintiff’s local purchases log book which showed that the Plaintiff’s commissioning of Rivertech to supply the Plaintiff’s goods bearing the Yellow Elephant Mark. The two partners of Rivertech had later become the sole shareholders of Defendant, Longcane Industries. This indicated that the earlier proprietors of Rivertech had actual knowledge of the Plaintiff’s use of the mark on their goods.

The Court also ruled in the favour of the Plaintiff as such that the Defendant’s registered trade marks were likely to deceive and/or confuse the public. Based on the visual comparison between the Yellow Elephant mark and the Defendant’s registered trade mark, it was clear the marks in question were identical. Citing the English High Court case of Re Ladislas Jellinek (1946), in order to determine whether there is a similarity between the Defendant’s and the Plaintiff’s marks, the description, characteristics, and composition of the claimed goods have to be taken into consideration. As such, there was a clear similarity between the Defendant’s goods and the Plaintiff’s goods as both the claimed goods fell within the same classification of Classes 09 and 21.

The Court had ruled for the OS to be allowed and ordered the Defendant’s registered trade marks to be expunged from the Register accompanied by the publication of expungement in the Gazette. The Court also ruled for a cost of RM30,000.00 (approximately USD6,700.00) to be paid by the Defendant to the Plaintiff.