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15th January, 2018

The Federal Court of Malaysia recently had the opportunity to clarify two questions of law regarding Trade Description Order.

What is a Trade Description Order (TDO)?
A registered owner of a trade mark may apply for a TDO pursuant to the Trade Descriptions Act 2011 (the Act) to declare that another mark or get-up is being used by someone else in the course of trade to infringe his statutory rights. Therefore, a TDO has the effect of creating an offence and by the conclusive proof declaration it also imposes criminal liability.

The two questions of law answered by the Federal Court in the case of Tan Kim Hock Product Centre Sdn Bhd & Anor v Tan Kim Hock Tong Seng Food Industry Sdn Bhd are as follows:

  • Whether a TDO could be applied on an ex parte basis given the criminal consequences imposed by the Order?
  • Whether the Act empowers the High Court to determine and declare goods as imitation good?

The first question: Whether a TDO could be applied on an ex parte basis given the criminal consequences imposed by the Order
It must be noted that the Act does not state explicitly whether an application for a TDO may be made by way of an ex parte application or otherwise. The appellants argued that the general legislative practice in drafting of statutory provisions or subsidiary legislations is to specifically state that an application can be made ex parte if it is so intended, citing a few Acts of Parliament where the provisions state whether an ex parte order may be applied for.

The appellants further argued that it is against all norms of criminal justice that an ex parte order imposing criminal liability should ever be imposed on a person affected without him being given notice of or being heard in the proceedings.

In dismissing the appeal, the Federal Court noted that that the Act is aimed at combating the menace of counterfeit goods in the market. The Court further noted that until a TDO is made, there would have been no evidence on which to prosecute a case for infringement and it would be virtually impossible for the authorities to identify and seize the imitation goods. Therefore, unless a TDO is obtained swiftly by way of an ex parte application, any effort to curtail the problem of imitation good flooding the market would be seriously hampered as evidence would in danger of destruction by the infringer.

The Court took a purposive approach stating that an ex parte application would certainly achieve the very purpose for the enactment of the relevant provision in the Act. It is also further stated that there is no denial of justice as the right of an affected person to apply to set aside an ex parte order is a right which exists over and above the other civil remedies available to him.

The second question: Whether the Act empowers the High Court to determine and declare goods as imitation good
The appellants submitted that the Section 9 of the Act only empowers the court to determine whether the trade description by the use of the mark is false and that the provision does not empower the court to determine if the goods are an imitation of the goods of the respondent. The appellants argued that the “dodol” (a food item) sold by the appellants uses genuine coconut flavor and therefore, it does not become an imitation just because it is marked under false mark as the respondent claims. The appellants went on to submit that the “dodol” would be an imitation if a genuine coconut flavor is not used or if synthetic components other than genuine coconut flavor is used and passed off to the public as genuine coconut flavor.

The Federal Court did not agree with the appellants’ submission and stated that when a court pronounces that there is an infringement, it is in effect to declare that the goods bearing or using that mark are imitation goods.