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15th January, 2018

In case of Low Chi Yong (Reynox Fetichem Industries) (hereinafter referred to as the “Appellant”) filed a suit against Low Chi Hong and Reynox Sdn. Bhd., (hereinafter referred to as the “Respondents”) at the High Court of in Alor Setar for the infringement and passing off of his registered trade mark “Reynox” claiming liquid fertilizers.

There are several essential points to be noted in this case:

  1. The dispute is between family members on the rights to use the trade mark “Reynox”. The first respondent is the brother of the appellant.
  2. The name “Reynox” was also carried as a business name between the appellant and the first respondent. The appellant and 1st respondent were shareholders in the 2nd The appellant was also a director of the 2nd respondent.
  3. The appellant registered the trade mark “Reynox” in his name as early as year 2005 and allowed the trade mark to be used in the family business including the 2nd defendant without any objection.
  4. In year 2002, upon a family dispute, the appellant left the 2nd defendant’s business and immediately sent a notice directing the respondents to refrain from using the trade mark “Reynox”.

The respondents alleged that the registration of the trade mark “Reynox” had been obtained by the appellant by fraud committed against the 1st respondent. The respondent further alleged that the trade mark was to be registered in both the names of the appellant and the 1st respondent subsequently transferred to the 2nd respondent. By way of a counterclaim, the respondents alleged that the appellant had registered the trade mark “Reynox” in mala fide and by deception and therefore, the rights of the appellant to register the trade mark in question was disputed.

Following a full trial at the High Court in Alor Setar, the Court ruled in the favour of the appellant and dismissed the respondents’ counterclaim with a cost of RM20, 000.00. The High Court decided that the trade mark “Reynox” had been registered in the name of the appellant and therefore is the registered owner of the trade mark. The appellant therefore has the exclusive right to use the trade mark in pursuant to Section 35(1) of the Trade Mark Act 1976 (the TMA 1976) and the respondents have in fact infringed the trade mark.

Being displeased over the decision of the High Court, the respondents then filed an appeal to the decision of the High Court to the Court of Appeal. In April 2015, the Court of Appeal overthrew the decision of the High Court and allowed the respondents’ appeal. The Court was in view that the respondents have used the trade mark with the full consent and approval of the appellant. The Court of Appeal further added that the appellant’s decision to refrain the respondents from using the trade mark “Reynox” was unjust and also oppressive as the appellant took it upon himself to terminate the use of the trade mark any reasonable notice.

Dissatisfied by the ruling of the Court of Appeal, the appellant brought the case to the Federal Court. In his submission, the appellant highlighted that he is the sole registered proprietor of the trade mark since 13 May 2005 and had not committed any crime in acquiring the trade mark registered in his name as the business under the trade mark was initiated by him. The appellant also submitted that he had never assigned his trade mark to the 2nd respondent and no assignment or license was granted to the respondents. The appellant further argued that although he permitted for the trade mark “Reynox” to be used by the 2nd respondent, he did not assign the mark to be use for an infinite amount of time. The respondent ceases the right to use the trade mark after having been served with a Notice of Withdrawal from the appellant dated 20 December 2012. In the respondents’ defence, the counsel argued that the appellant had compromised the exclusivity of the use of “Reynox” when he permitted the respondents to use it without any restrictions or conditions. The counsel also highlighted the Court that the 1st respondent was under the impression of a co-ownership of the mark but the mark as only registered under the name of the appellant.

Further evidence pointed out that the respondents did use the trade mark “Reynox” on their business marketing necessities and products despite the withdrawal of the consent by the appellant in his notice dated 20 December 2012. This has led to the confusion amongst the consumers that the products produced by the appellant and respondent are the same and/or associated although both parties have separated. The Court ruled that the appellant has established a prima facie case of infringement of his trade mark by the respondents.

In conclusion, the Federal Court decided the appellant holds the exclusivity over the trade mark in question as it was registered under his name only. It is not disputed that consent was given to the 2nd respondent to use the mark when the appellant was still a shareholder in the company but that consent was withdrawn after the appellant left the 2nd respondent. The Federal Court proceeded to rule in the favour of the appellant by setting aside the decision of the Court of Appeal and reinstated the High Court’s decision.