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MALAYSIA: MERCK LOST ITS APPEAL AT FEDERAL COURT

7th June, 2018

Recently, the Federal Court of Malaysia in the case of MERCK KGaA vs Leno Marketing Sdn Bhd has clarified an important question of law relating to the Trade Marks Act 1976 (TMA).

The Appellant in this case, MERCK KGaA, is a pharmaceutical company based in Germany has registered the trade marks “BION” and “BION 3” in Classes 5, 29 and 30 in Malaysia. The Appellant opposed to the acceptance of the Respondent’s trade mark “Bionel” in Class 5 upon the publication of the Respondent’s application in the Malaysian Trade Mark Gazette on the ground that the Respondent’s mark was confusingly or deceptively similar to the Appellant’s mark. After having heard submission from both parties the Registrar of Trade Marks has dismissed the Appellant’s opposition and allowed the registration of the Respondent’s trade mark “Bionel” in Class 5. The Appellant appealed against the Registrar’s decision to the High Court and the appeal was dismissed by the High Court which agreed to the findings of the Registrar. The Appellant’s appeal to the Court of Appeal was also dismissed on the same ground.

The Appellant then appealed against the decisions of the High Court and Court of Appeal to the Federal Court. However, there was a hurdle for the Appellant as the TMA is which provides for appeal against the decision of the Registrar to the High Court is silent on whether any further appeal lies to the Federal Court. Therefore, Section 96 of the Courts of Judicature Act 1964 (CJA) which limits the appellate jurisdiction of the Federal Court to matters decided by the High Court in the exercise of its original jurisdiction (as opposed to appellate jurisdiction) would apply in this instance. This provision of the CJA is aimed to limit the levels of appeal to balance between the requirement to dispense justice and the requirement to reach finality in litigation.

Therefore, the primary question of law is whether the High Court was acting in its original jurisdiction or in its appellate jurisdiction when it heard the Appellant’s “appeal” against the decision of the Registrar to allow the registration of the Respondent’s mark. It must be noted that the High Court was exercising its powers under Section 28(5), (6) and (7) of the TMA 1976. These provisions state that a decision of the Registrar is subject to appeal to the Court. “Court” is defined in Section 3 of TMA 1976 to mean the High Court.

The Federal Court stated that reference must be made to the relevant statutes in determining the nature of jurisdiction exercised by the High Court in hearing “appeals” from tribunals. The Federal Court in this case took the approach that the words used in a statute best declare the intention of the Parliament and where the words are unambiguous, the courts are bound to give effect to them.

The Federal Court perused through the relevant provisions of the TMA and found that the choice of words used in the relevant provisions infers that the power exercised by the High Court under those provisions is consistent with its appellate jurisdiction. The Federal Court noted that Section 28(7) of TMA states that the parties may not introduce further materials or additional grounds of objection that were previously raised in the proceedings before the Registrar, on appeal to the High Court without the Court’s leave. Also, Section 69 of TMA states that the High Court has the same discretionary powers as the Registrar in determining the appeal. The Federal Court opined that the provisions of the TMA display that the nature of the
High Court’s role under Section 28 of TMA to be an appellate jurisdiction as opposed to original jurisdiction.

Since the Federal Court decided that the High Court was exercising its appellate jurisdiction in hearing the appeal against the decision of the Registrar under Section 28 of TMA, the Appellant’s appeal does not meet the statutory conditions under Section 96 of CJA. Therefore, the Appellant’s appeal ends at the Court of Appeal and no further appeal lies to Federal Court.