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27th July, 2016

In the case of Liwayway Marketing Corporation v Oishi Group Public Company Limited, Liwayway Marketing Corporation, appealed against the High Court’s decision to expunge their trade mark “Oishi”.

Readers of our newsletters will surely recall that we have previously reported that in the High Court, Oishi Group Public Company Limited had succeeded in their application to expunge the Oishi trade mark belonging to Liwayway Marketing.

In the High Court, the arguments put forward by Oishi Group Public were “Oishi” was a name of a person, hence not in accordance of Section 10(1)(a) of Trade Marks Act 1976, “Oishi” was a word having a common dictionary meaning and that meaning had a direct reference to the character or quality of the goods and services of Liwayway Marketing and therefore it is not in accordance with Section 10(1)(d) of the Act and “Oishi” was not an invented word and therefore it is not in accordance with Section 10(1)(c) of the Act.

Oishi Group Public claimed to be the common law owner of the trade mark and alleged that Liwayway Marketing had never used or intended to use the trade mark in relation to their goods and services up to the time of the filing of the legal action in the High Court. Oishi Group Public also alleged that Liwayway Marketing’s trade mark would prejudice the Plaintiff’s legitimate business expectations since both of them were dealing in goods and services in a similar trade.

Oishi Group Public also showed to the High Court a survey report conducted by a third party that there was no usage of the trade mark by Liwayway Marketing in Malaysia.

Even though Liwayway Marketing claimed that the non-usage was due to the application of the Halal certificate, the High Court held that this non-usage was a commercial choice, and could not fall under special circumstances. Furthermore, the continued presence of the Liwayway Marketing’s trade marks in the Register would provide the Defendant a monopoly over a well-known and non-invented word.

In the Court of Appeal, Liwayway Marketing (hereinafter referred to as “the Appellant”) pleaded based on three issues. The first issue is whether Oishi Group Public (hereinafter referred to as “the Respondent”) had shown it was aggrieved to enable it to make an application under Sections 45 and 46 of the Act. The second issue is whether the Respondent had proved non-use. The third issue is whether the Respondent had sufficiently pleaded the relevant Sections of the Act that needed to be pleaded.

For the first issue, the issue of aggrieved person was discussed. The Court of Appeal cited the case of LB (Lian Bee) Confectionary Sdn Bhd v QAF Ltd (2012) 3 CLJ 661 which explained that an aggrieved person under Section 46(1) of the Act need not be a person with any specific right. “An aggrieved person” in this context may include someone with simply a bona fide intention to use a trade mark that is registered but which has not been used by the registered proprietor for a continuous period of not less than three years up to one month before the date of an application under Section 46(1)(b) of the Act to expunge the trade mark. The Court of Appeal held that it was not an issue of “competing rights” as in the way the question posed by the Appellant.

Here, the Respondent was not using a trade mark that resembled the Appellant’s trade mark. The only similarity was the word “Oishi”. There was a visual difference between the two marks. It was held that a genuine intention on the part of the Respondent to use the Appellant’s trade mark in Malaysia since the goods that were imported had a similar trade mark. Hence, it was reasonable that the Respondent requested for the trade mark to be expunged since not doing so would open the possibility for the Appellant to take action against the Respondent’s use of the trade mark in Malaysia. With these reasoning, the Court of Appeal held that the Plaintiff was indeed an aggrieved person.

For the second issue, the issue of non-use was discussed. The Appellant challenged the validity of the survey conducted a third party commissioned by the Respondent that showed that there was no product bearing the Appellant’s trade mark being sold at those premises. The Court of Appeal held that the market survey met the guidelines set out in Imperial Group Plc v Philip Morris Ltd [1984] RPC 293, most commonly known as the Whitford Guidelines. It lays out seven criteria in order to conduct a comprehensive survey report and the Respondent had fulfilled these criteria in all the questions, methods and process of the survey.

The Court of Appeal also upheld the decisions of the High Court that dismissed the invoices as prove for usage of trade mark. This is because the invoices were used not according to the period of the last three years as required under Section 46(1)(b) of the Act. The Appellant had proposed prove to show that there was use through affidavits. But the Court of Appeal held that there was no evidence of “use” within the meaning of paragraphs Sections 3(2)(a) and (b) of the Act of the trade mark within the relevant period.

The Appellant added that there was a suspension of the usage of the trade mark due to special circumstances. As such, the Appellant pleaded under Section 46(4) of the Act where special circumstances can allow the Appellant to abandon usage of trade mark for continuous period of not less than three years before one month of the date of the application. The special circumstance provided by the Appellant was an application process for Halal certificate. The Court of Appeal held that the Appellant’s reason was not “abnormal external event” but a commercial choice, upholding the decision of the High Court. As the Appellant proposed to expand into the Halal market, the non-use of the Appellant’s trade mark was not due to special circumstances. Hence, the Respondent had established a prima facie case of non-use by the Appellant.

For the third issue, the issue of Section 37 of the Act was discussed. The Court of Appeal accepted that a trade mark which had been in the Register for seven years or more was presumed to be valid and that the presumption would apply for the benefit of a registered proprietor in the case of an application under Section 45 to challenge the validity of the trade mark. The Court of Appeal agreed with the Appellant t that the High Court has erred in finding that Appellant’s trade mark had not complied with Section 14 of the Act and was “not distinctive of the goods and services of the registered proprietor” and there was also error in applying Section 37. In Section 37 of the Act, the original trade mark registration is not valid after the expiration of seven years from the date thereof. However, in Section 37(b) of the Act, such a trade mark is valid if the trade mark had not complied with Section 14 of the Act. In short, Section 14 of the Act acts as the exception to Section 37 of the Act. However, the Court of Appeal held that this case did not touch on the issue of validity of the registration, but instead the non-use of the trade mark.

In conclusion, the Appellant’s appeal was dismissed and the Respondent’s application to expunge the defendant’s trade mark “Oishi” was allowed.