MALAYSIA – THE VELLUX FIGHT

December 13th, 2016

 

In the case of NCTech Int Bhd v NCV Technologies Sdn Bhd & Ors, the dispute in issue was over a trade mark infringement. The Plaintiff, NCTech Int Bhd, claimed that the Defendant, NCV Technologies Sdn Bhd and Other Parties, have infringed their trade mark “Vellux“ which they acquired through the law of passing off.

The trade mark “Vellux” and “NCCvellux” were registered under the Second Plaintiff in the Counter Claim, who was assigned by the Plaintiff to hold the shares of the Plaintiff. Both trade marks were registered under Class 9. The mark “NCCvellux” was assigned to the plaintiff in a Deed of Assignment, while the Plaintiff claimed that “Vellux” was assigned through a Deed of Trust.

The Defendant is the registered proprietor of the trademark “NCV" under registration in Class 9 for "Wireless calls system, wireless data transmission system for button (calling) watch pager and transmitter monitor RX". The Defendant also distributed wireless network communication device. These products are distributed under the trade mark "VELLUX" or "NCV" ("Defendant's Products"). These products are manufactured and supplied by one Korean company by the name of Dunan Co Ltd. Dunan claims that it is the proprietor of the "VELLUX" trade mark in Malaysia since Dunan is the exclusive distributor of the products bearing the trade mark "VELLUX" since November 2011.

the Plaintiff seeks several injunctive orders against the Defendant for using the trade marks 'NCTECH', 'Vellux' and any other corresponding marks or goods which the Plaintiff claims to be theirs.

In the trial, there were eighteen issues that were discussed. Most notably, the court discussed how Plaintiff was not the registered owner of the trade mark “Vellux”. The Court cited Tohtonku Sdn Bhd v. Superace (M) Sdn Bhd (1992) 1 CLJ (Rep) 344, where the Supreme Court said that …under Section 38 of the Trade Marks Act 1976, a registered trade mark is infringed by a person who uses a mark which is identical with it; or so nearly resembling it as is likely to deceive; or so nearly resembling it as is likely to cause contusion.

Because the Plaintiff was not the owner of the mark, the Plaintiff cannot seek protection under Section 35 read with Section 38 of the Act in seeking injunctive reliefs and damages against the Defendant.

The Court then took into consideration of the Deed of Trust and Deed of Assignment, whether they signify that the Plaintiff was the owner of the mark “Vellux”. There was no indication in the Deed of trust that claimed the owner of the mark “Vellux” was the Plaintiff. In fact, the Deed of Trust only touched on units of shares.

For the Deed of Assignment, there was held to be no assignment for the mark “Vellux”. Section 55 of the Act allows the assignment and transmission of registered trademarks, with or without goodwill of the business. However, Subsection (5) to this Section provides that "the assignment shall not be deemed to have taken effect unless the assignment has been advertised in the prescribed manner and the application for the assignment without goodwill, accompanied by the advertisement, has been sent to the Registrar”. The Assignment was also deemed unlawful on certain factors.

Based on these reasons, the Plaintiff, who is not the registered proprietor of the “Vellux” mark cannot hold an action against the Defendant for trademark infringement.

On the issue of passing off, the Plaintiff relied on Section 82(2) of the Act, which said “nothing in this Act shall be deemed to affect the right of action against any person for passing off goods or services as those of another person or the remedies in respect thereof”. The Court refers to Halsbury Law of Malaysia (2007 issue) Vol 22 where the law of passing off is explained as the common law action that enables owners of unregistered marks or common law marks and trade names to protect their exclusive right to use a trade mark or name. The common law marks may include trade marks pending registration, trade marks which are not registrable under the Act and trade names”.

Hence, the issue now is whether the Plaintiff is a common law owner to the trade mark “Vellux”. The Plaintiff claimed ownership over the mark using the Deed of Trust and the Deed of Assignment. The Plaintiff did not claim to be the common law owner of the 'VELLUX' trademarks. Therefore, based on the Plaintiff's pleaded case, the Plaintiff has no locus standi to sue the Defendant for the tort of passing off.

On another note, The Plaintiff is also seeking to expunge the Defendant's 'NCV' trade mark from the Register of Trade Marks and to injunct the Defendant from using the trade mark 'NCV'. However, the Plaintiff did not plead if the application to expunge the mark according to section 45 or 46 of the Act. The court then considered this as a non-pleaded issue.

Next, the court looked at whether “NCV” is confusingly similar to “NCTech”. They referred to a Supreme Court case of Tohtonku Sdn Bhd v Superace (M) Sdn Bhd (1992] 2 MLJ 63, where the Court held that "The 'test' which Wan Adnan J was referring to were contained in Parker J's judgment in The Pianotist Co Ltd in the following terms: You must take two words. You must judge them, both by their look and by their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods. In fact you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those trademarks is used in a normal way as a trade mark for the goods of the respective owners of the marks”.

It was held in this case that “NCV” and “NCTech” were pronounced differently. The only similarity in the marks were the letter N and C. The Plaintiff had not registration for the word NC. In Fif Trade Mark [1979] RPG 355, it was held that “FIF” was not similar to 'JIF”. As can be seen in the case of Elba Group Sdn Bhd v Pendaftar Cap Dagangan dan Paten Malaysia [1998] 4 MLJ 105, the Court held that 'DAX was not confusingly similar with 'OAKS'. Looking at the marks as a whole, there were no similarity between “NCV” and “NCTech”.