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MALAYSIA: THE TORT OF PASSING OFF DEFINED

9th April, 2019

This case was in relation to the tort of passing off whereby both the Plaintiff and Defendant are accountable for the tort of passing off that was originally registered by the Plaintiff upon setting up a partnership business in Malaysia for real estate services. On the other hand, the Defendant is claiming that the Plaintiff has committed the act of passing off as the registered mark was originally owned by Defendant while the Plaintiff was only allowed to use the mark based on their initial licensing agreement.

For the purpose of this article, these two cases have been described together.

Background

Jones Lang Wootton started real estate business as a partnership in London in1783 (hereinafter referred to as “the London Firm”). The London firm expanded its real estate business worldwide, including Malaysia, by operating as partnership with the countries. One William George Wicks (hereinafter referred to as “Mr Wicks”) had first carried on business as Chartered Surveyors and Property Manager in Kuala Lumpur and later sold his business to Jones, Lang Wootton, St Helier, Jersey, Channel Islands (hereinafter referred to as “the Jersey Partners”) and Jones, Lang Wootton, Sydney, Australia (hereinafter referred to as “the Australian Partners”) as well as entered into a partnership agreement (1977).

Under the partnership agreement (1977), it is stated that:” the name and style of JONES, LANG, WOOTTON is the property of the London Firm and that the carrying on of the Malaysian Firm under such style is by license of the London Firm.”

Singham Sulaiman Sdn Bhd (hereinafter referred to as “SSSB”) entered into a sale and purchase agreement with the Malaysian Partners via a deed of sub-license of name which granted the sub-license to SSSB to use Jones Lang Wootton name and JLW mark for a term expiring on 1 December 1990 or such later date as may be mutually agreed. SSSB expressly acknowledged that Jones Lang Wootton name and JLW mark were the property of London Proprietors.

Later on, LaSalle Partners acquired Jones Lang Wootton partnership except in Malaysia which later known as Jones Lang Lasalle and undergoing series of assignment of all intellectual property rights (including trade marks and goodwill) to JLWL (hereinafter referred to as “JLL Group”). SSSB subsequently applied to register Jones Lang Wootton Registered Trademark which was allowed by the Registrar.

SSSB subsequently entered into a “Global Operating Framework” with JLLPC but was terminated two years later. At the same year, JLL Group undertook a rebranding exercise and is now known as JLL.

Whether the tort of passing off is committed

In considering whether the tort of passing off is committed, the Malaysian High Court had taken into consideration of the following three precedents:

  1. i) Lord Diplock’s Test which was applied in the case of Seet Chuan Seng & Anor v Tee Yih Jia Food Manufacturing Pte Ltd (1994) 3 CLJ 7
  2. ii) Lord Fraser’s Test which was applied in the cases of Seet Chuan Seng and Maestro Swiss Chocolate Sdn Bhd & Ors v Chocosuisse Union Des Fabricants Suisses De Chocolat (a co-operative society formed under title XXIX of the Swiss Code of Obligations) & Ors and another appeal [2016] 2 CLJ 359

iii) Lord Oliver’s Test which was applied in the Court of Appeal case of Sinma Medical Products (M) Sdn Bhd v Yomeishu Seizo Co Ltd [2004] CLJ 815

The High Court had further explained the requirement of goodwill for the purposes of passing off suit as explained in the case of Star Industrial Co Ltd v Yap Kwee (t/a New Star Industrial Company)[1976] 1 MLJ 149.

Judgement

The High Court held that the Plaintiff has to prove ownership of goodwill attached to the business with regard to the mark but need not prove that the Plaintiff owns the mark. Therefore, the JLW marks does not confer the right to sue for the tort of passing off. 

The High Court’s decision was appealed by the Defendant (hereinafter referred as “the Appellant”) at the Court of Appeal and the Appeal had been allowed. Case is fixed for retrial before another Judge. The Court of Appeal ordered for the High Court order to be set aside and the amount of MYR315,789.23 (approximately USD78,000.00) paid by the Appellant to be refunded within 2 weeks.