MALAYSIA: TRADE MARK BATTLE BETWEEN MANUFACTURER AND DISTRIBUTOR

July 2nd, 2014

 

This is an interesting case about trade mark registration involving a manufacturer based in Germany and its’ distributor in Malaysia.

Wieland Electric GmbH (hereinafter referred to as “the Plaintiff”) filed an originating summons in the High Court of Malaya at Kuala Lumpur seeking several declaratory orders against the Industrial Automation (M) Sdn. Bhd., (hereinafter referred as “the 1st Defendant”) with regards to registration of Malaysian trade mark no. 05016795 for the mark Wideland (hereinafter referred to as “the Trade Mark”) by the 1st Defendant which the Plaintiff claimed was wrongly obtained. The Registrar of Trade Mark, Malaysia was named as a Defendant (hereinafter referred to as “the 2nd Defendant”).

The Plaintiff had argued that it was established in since 1910 and subsidiaries for Wieland Group have been established over 70 countries around the world and that it has been trading under the name of Wieland since the interception. Moreover, the Plaintiff submitted that they have been using the mark Wieland with the “W” device together since 1997 in most of the countries. The Plaintiff argued that the similar signs and logos (“W”) together with the work mark “WIELAND” has been used over 40 years. Plaintiff is not willing to relinquish their “WIELAND” trade marks as it has a long, continuous and extensive worldwide use and it has been well known over the years.

The 1st Defendant is sole distributor as well as manufacturer of the most reputable and leading names of different ranges of electrical and automation products in Malaysia.

The Plaintiff and 1st Defendant entered into an Agency Agreement for the Wieland products in Malaysia. According to clause (1), the 1st Defendant must sell products of WIELAND within Malaysia. Meanwhile clause (2), the 1st Defendant is ‘not to sell, produce or have produced any goods directly or indirectly which are competitive’ to “WIELAND”. Clauses (12) and (12a) of the Agreement state that the 1st Defendant able to ‘operate in the territory’ and ‘observe the market situation, guard the interest’ of “WIELAND”.

The 1st Defendant had then applied to register the Trade Mark in Malaysia on 6 October 2005 and it was registered on 14 December 2011.

The Plaintiff had then written an email to the 1st Defendant and had demanded that the Trade Mark is assigned back to the Plaintiff. In response, the 1st Defendant had confirmed that it has filed for the trade mark application in Malaysia for the Trade Mark without consulting the Plaintiff and the 1st Defendant will take necessary steps to assign the registration of the Trade Mark back to the Plaintiff.

However, the 1st Defendant had failed to assign the registration of the Trade Mark back to the Plaintiff. They had argued that that Plaintiff should have opposed the registration of the Trade Mark since they had the full knowledge of the registration. The 1st Defendant submitted that fraud must be proved beyond reasonable doubt.

The Plaintiff had argued that the 1st Defendant cannot be considered to be a rightful owner of the Trade Mark as it is merely a distributor of products bearing the Trade Mark at the time of registration and it was never authorised by the Plaintiff to register the Trade Mark.

The Plaintiff also argued that the 1st Defendant had obtained the registration of Trade Mark by fraud.

The Plaintiff had also argued that since both the Plaintiff and 1st Defendant having an identical trade mark, it may cause confusion to public and this should not be allowed.

The Plaintiff had pointed out to the Court that it had obtained an international trade mark registration no. IR No. 686241 for Wieland under Madrid System on 6 December 1997 i.e. way before the application date for the Trade Mark which was filed in Malaysia on 6 October 2005.

The Court in its decision, had found that the Plaintiff must be an aggrieved person under section 45(1) (a) of the Trade Marks Act 1976 to establish locus standi and therefore it is the rightful party to get the Trade Mark revoked. The Court had noted that the Plaintiff will not be able to expand their business operations to sell Wieland Products if the 1st Defendant was given the right for registration of the Trade Mark.

Considering all the arguments put forward by the Plaintiff and 1st Defendant, the Court stated that the 1st Defendant is not the right owner of the Trade Mark and had ordered the 2nd Defendant to expunge the Trade Mark from the Register of Trade Marks, Malaysia.