MALAYSIA: USA PRO SUCCEEDS IN CANCELLING USAPRO TRADE MARK

September 1st, 2015

 

This article relates to USA PRO IP Limited v Monfort Services Sdn. Bhd. and Registrar of Trade Marks is a trademark dispute in the Kuala Lumpur High Court.

USA PRO IP Limited (hereinafter be referred as “the Plaintiff”) is a company incorporated in England and is in the business of manufacturing, distributing, supplying, selling and offering for supply various goods around the world. The goods of interest to the Plaintiff broadly include bags, pouches, cases, articles of clothing, sports and leisurewear, footwear, headgear, games and plaything and sporting and fitness equipment. The Plaintiff has applied for and secured registration of the said mark in various countries around the world. In order to protect its trade mark in Malaysia, the Plaintiff has applied for the mark “USA PRO” (hereinafter be referred as “the Plaintiff’s marks) to be registered in classes 18, 25 and 28.

Monfort Services Sdn. Bhd. (hereinafter be referred as “the first Defendant”) is a company registered in Malaysia. The first Defendant is the registered proprietor of the “USAPRO” trademarks registered in classes 18, 25 and 28.

The Plaintiff filed a suit to expunge the above-mentioned marks from the Register of Trade Mark on the ground of non-use. The Plaintiff’s application is premised on Section 46(1)(b) of the Trade Marks Act 1976.

For the purpose of Section 46(1) of the Trade Marks Act 1976, the Plaintiff has to prove that the Plaintiff must establish that it is an “aggrieved person” and that there has been non-use by the first Defendant of its trademark “USAPRO” for a continuous period of 3 years up to one month before this application (dated 4 March 2014) to expunge the trade mark, that is, for the period between 4 February 2011 to 4 February 2014.

The Judge has referred to the judgment of the Federal Court in LB (Lian Bee) Confectionary Sdn. Bhd. v QAF Ltd. [2012] 3 CLJ 661 where it was concluded that a “person aggrieved” may have no rights at all but merely a genuine interest to use a trade mark that is registered but which has not been used by the registered proprietor. Accordingly, the Judge concluded that the Plaintiff is an aggrieved party as the Plaintiff has been using its trademark “USA PRO” in many jurisdictions with the intention of expanding its business in Malaysia under the said mark.

However, the Defendant submitted that the Plaintiff is not an “aggrieved person” because the Plaintiff’s “USA PRO” marks are registered and used in other countries and therefore, the Plaintiff does not enjoy goodwill and reputation in the marks in Malaysia. However, the Judge rejected this line of argument as the Plaintiff only need to show an intention to use or a genuine trading interest to use its mark in Malaysia.

The first Defendant further submitted that the Plaintiff’s act of applying for the USAPRO mark constitutes an act of trade mark infringement and/or passing off. The first Defendant relied on the principle of in bonam partem discussed in the case of LB (Lian Bee) Confectionary Sdn. Bhd. where in reference was made to Bennion on Statutory Interpretation, 5th edn, Lexis Nexis, 2005. The pricinciple of in bonam partem is a technique of construction which is premised on the principle that if a statutory benefit is given on a specified condition being satisfied, it is presumed that Parliament intended the benefit to operate only where the required act is performed in a lawful manner. The construction is related to three specific legal principles. The first is that a person should not benefit from his own wrong. Next is the principle that if a person had to prove an unlawful act in order to claim the statutory benefit, this maxim would preclude him from succeeding. The third related principle is where a grant is in general terms there is always an implied provision that it shall not include anything which is unlawful or immoral.

The first Defendant stated that that products bearing the USAPRO marks had and are being sold at outlets called ‘Sportsdirect.Com’ and adduced receipt of sales of the said products issued by ‘Sportsdirect.Com'. The first Defendant, relying on the report of a company search, further submitted that the outlet ‘Sportsdirect.Com’ is owned by a company registered as Sports Direct MST Sdn. Bhd. and the majority shareholder of Sports Direct MST Sdn Bhd is SportsDirect.com Retail Limited. The first Defendant stated through an affidavit that the Plaintiff is a company that is subsidiary of Sports Direct International PLC together with SportsDirect.com Retail Limited. Accordingly, applying the in bonam partem principle, the first Defendant submitted that the Plaintiff had committed the acts of trade mark infringement and would then not fall under the scope of an "aggrieved person".

The first Defendant’s claim for trade mark infringement is premised on Section 38(1) of the Trade Marks Act 1976. The Judge referred to Justice Low Hop Bing in Leo Pharmaceutical Products v. Kotra Pharma (M) Sdn Bhd [2002] 6 CLJ 465 opined that in order to prove infringement, the alleging party must prove that:

  1. The person using the mark is neither the registered proprietor nor the registered user of the trademark;
  2. The person used a mark identical with or so nearly resembling the plaintiff’s registered trademark as is likely to deceive or cause confusion;
  3. The person was using the offending mark in the course of trade;
  4. The person was using the offending mark in relation to goods or service within the scope of the registration; and
  5. The person used the offending mark in such a manner as to render use likely to be taken either as being used as a trademark or as importing a reference to the registered proprietor or the registered user or to their goods or services

The Judge stated that the first Defendant failed to show trade mark infringement against the Plaintiff. This conclusion was based on the reason that the use of the mark must be the physical use of the marks by the Plaintiff, as the registered proprietor of the Plaintiff’s international trade marks or by its registered user. There was no evidence to establish that the goods were the goods of the Plaintiff or were produced by the Plaintiff. There was also no evidence to suggest that it was the Plaintiff who had affixed the USA PRO (stylized) trade mark on the said products found in the Sports Direct outlets. Additionally, there was also no evidence to show that the products were placed in the Malaysian market by the Plaintiff. The Judge stated that all the first Defendant did was to try to allege a connection between the Plaintiff and Sport Direct. The Judge further stated that, even if there is a case for trade mark infringement, it should be directed to Sports Direct and not the Plaintiff.

The first Defendant’s further submission that the Plaintiff had committed or threatened to commit acts of passing off was also dismissed as there was undisputed evidence that the first Defendant was dormant and did not engage in any business or trading activities. It thus has to follow that since they did not engage in trade, no goodwill and reputation could have been generated. As goodwill is the property protected in a passing-off action, the lack of goodwill would have to mean that there is no property to be protected and hence no cause of action in passing-off.

The Judge concluded the first Defendant failed to show that the principle of in bonam partem is applicable in this case and stated that the Plaintiff has the requisite locus standi to commence this action, thus satisfying the first condition of section 46(1)(b) of the Trade Marks Act 1976.

The Judge highlighted that the burden of proof is on the Plaintiff to establish prima facie evidence that there was a continuous non-use of the Defendant’s mark of three years up to one month before the filing of this suit.

The Plaintiff adduced a private investigator’s report which states that the first Defendant Company has been dormant for at least the last five years and that the first Defendant has not been using its trademarks in relation to any of its goods during the relevant statutory period. It was found that the only available address based on a company search was the first Defendant’s company Secretary’s office. The investigation also reveals that there is no operation or business base of the first Defendant’s company except for its company Secretary’s office. A market survey was carried out at 12 business outlets in Klang Valley with the findings that the first Defendant’s marks had not been seen or used on any products at these outlets.

The first Defendant did not challenge the conclusion of the private investigator’s report in its affidavit in reply. Accordingly, it is concluded that the Plaintiff has established a prima facie evidence of non-use and the Defendant did not produce any evidence to deflect or disprove the prima facie position but merely submitted that the investigations relied upon by the Plaintiff did not meet the standard required of the survey. However, the Judge found in favour of the Plaintiff that the market survey merely supplement the investigations into the activities of the Defendant which was the principal evidence of non-use.

The Judge found that the Plaintiff is an “aggrieved party” and that there has been non-use of the first Defendant’s marks during the statutory period. Accordingly, the Plaintiff’s application was allowed with costs.