MALAYSIA APAA ANTI-COUNTERFEITING COMMITTEE REPORT By Michael Soo and Wong Sai Fong

Transcription

1 MALAYSIA APAA ANTI-COUNTERFEITING COMMITTEE REPORT 2009 By Michael Soo and Wong Sai Fong Part 1 - Legislative Updates There have been no updates or amendments to the Trade Marks Act 1976, Trade Description Acts 1972 and Copyright Act 1987 in Part 2 - Case Updates 1. McLaren Loses Appeal before Federal Court for Not Being an 'Aggrieved Person The issue of what constitutes an 'aggrieved person' for the purposes of rectifying the Register of Trade Marks was brought to light in the recent Federal Court decision in McLaren International Limited v Lim Yat Meen [2008] 1 CLJ 613. The respondent in this case has been the registered proprietor of the trademark MCLAREN in Class 25 in respect of "articles of clothing, including boots, shoes and slippers" since In 1999 the appellant company, claiming to be the bona fide proprietor of the trademark MCLAREN, filed an application for the mark in respect of "articles of clothing, footwear and headgear" in Class 25. The registrar of trademarks rejected the appellant's application on the grounds that the appellant's mark was either identical to the respondent's registered trademark or so similar that it would be likely to deceive or cause confusion. Consequently, the appellant applied for an order to expunge the entry of the respondent's mark from the Trademarks Register. Alternatively, the appellant sought an order to vary the entry by deleting the words 'articles of clothing, including' from the description of the goods to which the respondent's trademark relates. The appellant's application to expunge the respondent's mark was made under Sections 45(1)(a) and 46(1) of the Trademarks Act To succeed under either provision, the party must prove that it is a person aggrieved and that it has a case under either section. The appellant failed to prove this before both the High Court and the Court of Appeal. Among other things, the Court of Appeal held that: "Even if the respondent had appropriated the appellant's trademark knowingly when filing the trademark in 1992, that move broke no law. So long as the appellant had not used it prior to the respondent's registration, the respondent had every right to act as he did. There was no necessity for the respondent to do the impracticable like scouring the globe and enquiring from those carrying that name or trade name whether they intended to come to Malaysia and register the mark here. A faultless respondent need not have to step aside and fold up his business merely because some foreign company had made radical demands on the Registrar of Trademarks." 1

2 The appellant was granted leave to appeal to the Federal Court on the following two issues: (i) whether a party whose application for registration of a trademark is obstructed under Section 19 of the Trademarks Act by the prior registration of an identical or similar mark on the Trademarks Register is an 'aggrieved person' with the appropriate locus standi within the meaning of that term in Sections 45 and 46 of the Trademarks Act; and (ii) whether, in the face of uncontroverted evidence of non-use of a registered mark in relation to only some of the registered goods, such goods may be rectified by their removal or expunged pursuant to the entitlements in law under Sections 45 and 46 of the Trademarks Act. With regard to the first issue, the Federal Court overruled the High Court decision in Fazaruddin bin Ibrahim v Parkson Corp Sdn Bhd ([1997] 4 MLJ 360), and held that a party whose application for registration of its trademark is jeopardized by Section 19(1) of the Trade Marks Act cannot, without more evidence, qualify as a person aggrieved, because it could be a mere busybody. The Federal Court relied on the case of Re Arnold D Palmer ([1987] 2 MLJ 681), which stated that: "Registration of a trademark in the name of a proprietor, once effected, ought not to be disturbed by persons who have no trading interest in the goods concerned. If an applicant for rectification has no such interest to begin with, and therefore cannot suffer any damage at all by the existence of a conflicting trademark on the register, it cannot be right, in principle, that the mere filing of his application can confer the necessary locus standi on the applicant for the purpose of rectifying proceedings. Otherwise, the test of grievance propounded in Powell's Trade Mark (1984) 11 R.P.C. 7; [1984] A.C. 8 would be completely nullified by resorting to the simple expediency of applying to register the very mark the applicant seeks to expunge." The Federal Court proceeded to state that were the appellant to succeed in this appeal on the question of locus standi, it would allow the appeal, but only to the extent of granting the alternative request under the second issue above. It has been observed that this case has raised the threshold of 'aggrieved person' to new heights. This may be unfavourable for foreign proprietors or investors, which now must satisfy the strict approach formulated by the Federal Court in this case. 2. Pirated dics seized in night market On June officers from the Ministry of Domestic Trade and Consumer Affairs in Chong Kak Hau v PP [2009] 8 CLJ 10 conducted a raid at a night market in Penang. During the raid the officers arrested Chong Kak Hau and seized copies of pirated discs and a record book from an unnumbered stall at the market. At first instance the Sessions Court found Hau guilty of 10 charges under Section 41(1)(b) of the Copyright Act 1987 (ie, offering for sale infringing copies of films and sound recordings), and sentenced him under that section. He appealed to the High Court in respect of four issues and the High Court held as follows: Hau argued that there were three conflicting versions of evidence given by the prosecution witnesses. The court found that the differences were in respect of witnesses' 2

3 descriptions of the appellant's conduct at the stall. Nevertheless, all versions of the evidence indicated that the appellant was offering pirated discs for sale. The court affirmed the inference made by the Sessions Court judge that the record book with the word 'Hau' written on its cover, and containing records of sales of pirated discs, belonged to the appellant. The court found that each infringing pirated disc was identified and marked by the ministry officers and there was no doubt as to the identity of the exhibits. It rejected Hau's argument that the police report lodged by the leading officer had referred only to "DVDs of various titles", while the exhibit tendered before the Sessions Court contained detailed information of the title and number of units of pirated discs seized. Under Section 42 of the act a statutory declaration or affidavit made by or on behalf of a person claiming to be the copyright owner with a true copy of work annexed thereto is admissible in evidence in proceedings and is prima facie evidence of the facts contained therein. The prosecution tendered statutory declarations which did not annex true copies of the films. The true copies of films were tendered separately during trial. The court held that when comparing the pirated disc with a true copy of the film, it should refer to the true copy of the film annexed to the statutory declaration, and not to a true copy of film tendered separately during trial. It was mandatory to annex a true copy of work in the statutory declaration. Failure to do so rendered the statutory declaration defective and was inadmissible as prima facie evidence. As a result, the court allowed the appellant's appeal and quashed the conviction on seven charges. The court upheld the conviction for the other three charges. The court did not accept the evidence of a trader at the night market who said that the appellant was not the stall owner. With the exception of quashing the conviction on seven charges where the prosecution had relied on the defective statutory declarations, the High Court affirmed the findings of the Sessions Court as the appellant had failed to raise reasonable doubt on the prosecution case. 3. High Court found copyright infringement in anti-theft system In Megnaway Enterprise Sdn Bhd v Soon Lian Hock (Performance Audio & Car Accessories Enterprise) [2009] 8 CLJ 130 the plaintiff, a manufacturer and distributor of anti-theft systems for a certain brand of cars sold under the trademark THEF-PRO since 1991, asserted that it was the owner of copyright subsisting in certain drawings of the metal components of the anti-theft system and three-dimensional reproductions of the drawings. The plaintiff adduced evidence that the defendant, a sole proprietor selling car accessories, had infringed the copyright in the plaintiff's works by selling and offering for sale metal components of an anti-theft system which were entire or substantial reproductions of the works without the plaintiff's licence or consent. The plaintiff had previously obtained consent judgment against other parties for infringement of its works. 3

4 The High Court allowed the plaintiff's claim after finding copyright subsisted in the works on the grounds that the author (i.e. the artist) had expended sufficient effort and skill in the creation of the works. The Court found that the author of the works, who was the managing director of the plaintiff, was also the plaintiff's employee. Since the works were made in the course of his employment, copyright in the works were deemed to have been transferred to the plaintiff. The High Court took the view that the fact that the author was the managing director of the plaintiff did not mean that he was not an employee of the plaintiff, reasoning that (i) he was paid a salary to create the works, and (ii) in a typical small-scale family business, it was common for a managing director or an executive director to manage the entire business by him or herself. The Court also found that there was infringement as the defendant's metal components had copied a substantial part of the plaintiff's works. The Court also held that the defendant had committed the tort of unlawful interference with trade. The defendant had interfered with the plaintiff's trade unlawfully by selling and offering for sale an anti-theft system which infringed the plaintiff's copyright. This had resulted in injury to the plaintiff's goodwill and reputation and consequently had adversely affected sales of the plaintiff's products. The Court granted the plaintiff an injunction, an order for delivery up and an order for disclosure, damages, interest and costs. Damages were assessed at RM644,400 with interest at 8% per annum from the date of judgment (December ) to the date of realization. 4. McDonald's loses exclusive right to prefix 'Mc' In September 2006 the Kuala Lumpur High Court ruled that fast-food company McDonald's had an exclusive right to use the prefix 'Mc'. The court ordered McCurry Restaurant to stop using the prefix as part of its trade name and awarded damages and costs to McDonald's. McCurry Restaurant appealed to the Court of Appeal. On April the Court of Appeal overturned the High Court's decision. The Court of Appeal held that McCurry Restaurant did not misrepresent itself or confuse the public when carrying out its business under the name 'Restoran McCurry'. The court pointed out the following distinguishing features between the manner in which the two parties conducted their business: - McDonald's logo consists of a distinctive 'M' shaped as golden arches with the word 'McDonald's' in the background, while McCurry Restaurant's signboard comprises the words 'Restoran McCurry' in white and grey lettering against a red background, with a picture of a chicken giving the thumbs up and the phrase 'Malaysian Chicken Curry'. - The food items sold by McDonald's carry the prefix 'Mc', while the food items sold by McCurry do not. 4

5 - McCurry serves only Indian food, while McDonald's serves fast food. - The majority of McCurry's patrons are adults and senior citizens, while McDonald's is mainly patronized by children. The Court of Appeal held that the High Court had overlooked these material facts when ruling in favour of McDonald's and that this amounted to a serious misdirection resulting in a miscarriage of justice. The court held that based on the evidence, the inference to be drawn was that reasonable people seeing McCurry Restaurant's signboard would not be misled into believing that McDonald's was associated with McCurry Restaurant. The Court of Appeal stated that the High Court had wrongly concluded that McDonald's had a monopoly over the use of the prefix 'Mc' for signage or in the course of conducting its business, and that McDonald's had failed to establish that McCurry Restaurant had committed the tort of passing off. McDonald s filed an application for leave to appeal to the Federal Court (the final appellate court in Malaysia). On 8 th September 2009, the Federal Court unanimously dismissed McDonald s leave application. It was reported in a local newspaper that the Federal Court dismissed the application on the ground that McDonald's had failed to properly frame its questions when applying to challenge the Court of Appeal s decision. According to local press TheStar Online, the two questions framed by McDonald s counsel were, (1) whether once the prefix Mc was used by McCurry, the public in their mind, would associate McCurry with McDonald s; and (2) whether the usage of Mc would reduce the importance of Mc to McDonald s. McCurry s counsel argued that McDonald s had failed to show that its questions were related to the Court of Appeal s findings. Hence, the questions did not come under Section 96 of the Courts of Judicature Act 1964 and the application should therefore be dismissed. The Federal Court agreed and held that McDonald s lawyers were unable to point out the faults in the judgment of the Court of Appeal which said there was no evidence to show that McCurry was passing off McDonald s business as its own. The ruling by the Federal Court ended all legal avenues for McDonald's claims based on trade mark infringement and passing-off. 5. Alfa Laval ( M) Sdn Bhd v Ng Ah Hai & Ors [2008] 5 MLJ 344 The Plaintiff is a manufacturer and supplier of plate heat exchangers and plate under the Alfa Laval brand. The Plaintiff filed an action for, inter-alia, passing-off against the Defendant alleging that that the Defendants manufactured and sold heat plate exchangers and plate with distinctive features identical to those of the Plaintiff s plate heat exchangers and plate as follows:- (a) (b) a single step process. The Plaintiff claimed to be the first to use the process in the manufacture of their plates. the chocolate and herringbone pattern / design found at the corrugated distribution areas which the Plaintiffs claim were not common in the industry as 5

6 every manufacturer has its own specific pattern / design at the distribution area or corrugation on their respective plates. (c) dimensions of the plate. The Plaintiff claimed that every other manufacturer in the industry has it respective set of measurements and dimensions for its plates and no single manufacturer of the plates in the industry would have the same or exact replication of the specific dimension identical to the Plaintiff. The Plaintiff claimed that these features distinguished the Plaintiff s plate heat exchangers and plate from those belonging to the Defendant and / or other manufacturers in the industry. The plate heat exchangers sold by the Defendants bore the alphabets AL. In addition, the exterior of the Defendant s plate heat exchanger was blue in colour, similar to that of the Plaintiff s. After perusing affidavit evidence filed by both parties, the High Court held on the facts that the Plaintiff s plate heat exchangers were of a purely functional design:- (i) (ii) (iii) the single step pressing process is a technical step and has no relevance in the manufactured form of the plate heat exchangers. both the chocolate pattern and the herringbone pattern were in place to ensure high heat transfer efficiency and eliminate dead spots that can lead to scaling or corrosion and thus were functional. the specific dimensions of the plates in terms of width, length, position of inlets and outlets parts and the pressing depth are functional areas to enable the plates to be assembled and stacked together in the plate heat exchanger, and was not used as a source identifier to distinguish the Plaintiff s products from those of other manufacturers. The Court further held that the Plaintiff failed to establish any goodwill attached to the abovementioned technique, processes and / or dimensions of its plate heat exchangers, and also failed to show actual or likelihood of damage occasioned by misrepresentation. Any goodwill in the Plaintiff s plate heat exchangers would be attached to the brand Alfa Laval under which the Plaintiff s plate heat exchangers were marketed and sold. The Court held as follows:- such purely functional designs cannot form the basis for a valid distinctive getup for passing off. Functional or utilitarian characteristics of an article of manufacture are not protectable under passing off law for they cannot be legally distinctive in fact and in Law. Such articles are purchased because they perform a function and purpose required by the purchaser and not because these functional attributes proclaim that the plate heat exchangers and plates are manufactured by the plaintiff. That source identifying function is performed by their trade mark Alfa Laval. Accordingly, the action was dismissed. 6

7 6. Forwarding agent and importer found liable for trade mark infringement and passing-off for transshipped counterfeit Philip Morris cigarettes in Free Zone in Port Klang, Malaysia. In Philip Morris Products SA v Ong Kien Hoe & 2 Ors [2009] 1 LNS 498, the plaintiff was the manufacturer and distributor of cigarettes and tobacco products under the trade mark MARLBORO and was the registered proprietor of the MALBORO trade mark in Malaysia and worldwide. The Customs Department detained and seized 2 containers containing MARLBORO cigarettes in Free Zone intended for transshipment. The cigarettes were found to be counterfeits. The second defendant was the forwarding agent and the first defendant was the consignor of the cigarettes. The plaintiff instituted proceedings against the defendants for infringement of the MARLBORO trade mark and passing off the counterfeit cigarettes as and for the products of the plaintiff. The second defendant contended that it was merely carrying out its duties as a forwarding agent for a named principal and hence was not liable. It also contended that seizure of the cigarettes was wrongful since the cigarettes were within the Free Zone they were in transit and not being imported into Malaysia, they were not subjected to payment of import duties and Malaysian laws. The High Court held that the seized cigarettes were infringing goods which were not authorised by the plaintiff and found that the second defendant was not a mere forwarding agent because the evidence tendered revealed that there was active participation on the part of the second defendant. The Court also held that Free Zone area is not free of all laws. Enforcement agencies such as the Customs department has jurisdiction to enforce the applicable law in the zone. In any event, the issue of the validity of seizure was not relevant in relation to the plaintiff s claims which were based on registered trade mark rights which are rights in rem. 7. Thye Huat Chan Sdn Bhd v Thye Shen Trading Sdn Bhd & Anor [2008] 6 MLJ 99 The applicant is the registered proprietor of two trade marks (ABC trade marks). The first trade mark was registered in respect rice and sago flours and the second mark was registered in respect of rice flour, sago flour and tapioca flour. The applicant alleged that the respondents had infringed the ABC trade marks by selling tapioca starch bearing a mark which was confusingly similar to the ABC trade marks. The applicant applied by an ex-parte notice of motion for a trade description order (TDO) under Section 16 of the Trade Descriptions Act The High Court held that on a comparison of the ABC trade marks and the trade marks on the alleged infringing goods in the photographs exhibited in the applicant s affidavit that the second ABC mark was 7

8 being infringed in the course of trade by the alleged infringing goods. Accordingly, the High Court granted a TDO on the ground that a registered trade mark was being infringed in the course of trade within the meaning of the Trade Marks Act Following grant of the TDO, the applicant s solicitors filed a draft order in accordance with the terms granted by the High Court. The wording of the draft order as amended by the Registrar, became an order that get-ups were being infringed instead of a registered mark. Thus, the draft order that was amended and approved by the Registrar was not in the terms granted by the High Court. The High Court said that the applicant s solicitors should have noticed this error and taken steps to correct it which they failed to do. The High Court pointed out that a TDO is a formidable instrument in that it creates an offence in that an act that may not be capable of being proved to be an offence, namely, applying a false trade description to goods, or to supply or offer to supply goods bearing a false trade description, can be proved by relying on a TDO. Pursuant to the TDO, the enforcement officers seized goods from the respondents premises. The respondents applied to intervene in the action in order, to inter alia, set aside the TDO. The TDO was set aside by the High Court on technical grounds which are as follows. Firstly, the TDO which was extracted and acted upon was in a form which was never granted by the Court and therefore had no basis for its existence. Secondly, photographs of the infringing trade mark were merely annexed to the TDO and the infringing trade marks were not described in the TDO. The Court in relying on an earlier Court of Appeal decision held that the TDO is bad in law because it does not give a description of the infringing trade marks. Thirdly, the applicant failed to make a full and frank disclosure when applying for the TDO. The applicant did not disclose the fact that it was aware that the respondents and other traders had been importing and selling tapioca starch with the ABC trade mark and that they knew of their identities and particulars. The applicant had in fact sent cease and desist letters to them. The Court said that if the particulars of the respondents had been disclosed, the Court would have ordered the application for TDO to be served on them. The Court observed that seizure of the respondents goods and prosecution could have been avoided if the application had been dealt with inter partes at the outset. The respondents had also averred on a substantive ground, that the applicant is not the common law proprietor of the ABC trade mark. The Court found that the applicant had adduced evidence to prove that it is the first user of the trade mark in Malaysia and held that the respondents failed on this substantive ground to set aside the TDO. The TDO was set aside with damages to be assessed and costs to the respondents. 8. Aspect Synergy Sdn Bhd v. Banyan Tree Holdings Ltd [2009] 8 CLJ 97 The Plaintiff, Aspect Synergy Sdn Bhd ( Aspect ), was a subsidiary of OSK Property Holdings Berhad and a property developer of middle / high class residential properties. In or around 2006, Aspect commenced development of a high-end residential area with the name Taman Sri Banyan ( the said development project ). The Defendant, Banyan Tree Holdings Ltd ( BTHL ) operator of a chain of exclusive resorts known as the Banyan Tree Resorts, is the registered proprietor of the mark Banyan Tree & Device 8

9 mark in Malaysia in various classes. However, BTHL does not have any registration for services related to property development in Malaysia. BTHL issued cease and desist letter to Aspect in 2007 demanding Aspect to cease use of the word Banyan in the name of the said development project, claiming inter alia that such use of the mark Banyan amounts to passing off likely to cause confusion amongst the trade and public that the said development project as connected to or associated with BTHL. Aspect filed an application at the High Court in December 2007 for, inter-alia, a declaration that Aspect s conduct in developing, promoting and marketing the said development project does not infringe BTHL s intellectual property rights, as the word Banyan is a common word, and that the Taman Sri Banyan mark is visually and phonetically different from BTHL s Banyan Tree & Device mark. Aspect also alleged that BTHL are not involved in property development in Malaysia, and that any reputation or goodwill would only be in relation to hotel accommodation and related services. BTHL counterclaimed for passing-off and trade mark infringement. BTHL contended that even though it did not operate any of its resorts in Malaysia, its Banyan Tree & Device is a well known mark in Malaysia and Aspect s use of the name Banyan would likely lead to confusion on the minds of the public into thinking that the said development project was associated with or connected to BTHL, and if not stopped, may cause damage to the Defendant goodwill and reputation, including by way of dilution of the Defendant s mark. The High Court, after reviewing affidavit evidence filed by both parties, held on the facts that BTHL had failed to establish goodwill and reputation in relation to the word Banyan in Malaysia in relation to property development. The High Court also held on the facts that BTHL s Banyan Tree & Device mark was not a well-known mark as provided under the Trade Marks Act 1976 / Trade Marks Regulation 1997.The High Court also observed there is no likelihood of confusion. The High Court also distinguished the present case with that of Amanresorts, relied upon by BTHL and held that the concept of dilution of trade mark was applicable in Singapore by virtue of amendments to its legislation, whereas there were no corresponding amendments to the Malaysian legislation in this respect. As such the Court held that the concept of dilution of trade marks and the decision of Amanresorts is not applicable. In view of the above the High Court granted the declaration sought by Aspect and dismissed BTHL s counterclaim. 9. Papparoti (M) Sdn Bhd v Roti-Roti International Sdn Bhd & 2 Ors [2009] 5 AMR 326 The Plaintiff had earlier on 5 March 2009 obtained an ex-parte order to restrain the Defendants from dealing with goods bearing the Papparoti mark. The Plaintiff had also obtained an Anton Piller Order to permit the search and seizure at the premises of the Defendants of any product bearing the trade mark of the Plaintiff. The Defendants applied to set aside the ex-parte order. The Plaintiff is a company manufacturing and selling butter-filled buns under the brand name Papparoti, and the owner of said trademark. An agreement was entered between the Plaintiff and the 2 nd and 3 rd Defendants to start a joint venture Company named 9

10 PappaRoti International Limited ( PIL ) incorporated in Hong Kong. An agreement was entered into with a Korean investor to incorporate PappaRoti Korea Limited ( PappaRoti Korea ). PIL was to supply PappaRoti Korea the necessary dough and toppings required ( the Ingredients ), which in turn was procured from the Plaintiff. The Plaintiff subsequently ceased supplying the Ingredients due to a dispute. PIL then requested the 3 rd Defendant to supply the Ingredients, which were manufactured by the 1 st then the 2 nd Defendants. It was found that the trade mark of Papparoti was only registered on 12 August Under Section 82(1) Trade Marks Act 1976 the owner of a trademark is only allowed to bring any action for infringement when said trademark is registered. As the original suit and injunction were filed on 3 July 2008 it would appear that the Plaintiff had no right to seek any legal redress for trade mark infringement. In addition, the Plaintiff s claim related to the purported infringement of the Ingredients i.e. dough and toppings. The Class 30 and Class 43 registrations were for inter-alia finished bakery products and food outlets respectively and thus are irrelevant and inapplicable to the Plaintiff s present claim. Further, the agreement to supply the Ingredients to PappaRoti Korea was not a franchise agreement as alleged by the Plaintiff. The Court considered the difference between the Plaintiff s trade mark and the mark used by the Defendants on the packaging of the ingredients, and considered them sufficiently distinct to be incapable of deceiving or causing confusion in the course of trade, and therefore there was no infringement under Section 38 Trade Marks Act The Court also found that the Plaintiff s trademark was registered only in Malaysia, and such registration would not extend to other countries particularly where there exist a foreign registered proprietor of a similar mark. It was held that tort of passing-off is to protect the goodwill of the business rather than the trade mark. Any goodwill attached to the Papparoti brand in Korea belonged to the Korean investor and/or Papparoti Korea. The Plaintiff was unable to establish the first element of passing-off. It was further held that the second element of passing-off was not established as there was no evidence to suggest that the Defendants misrepresented to PappaRoti Korea that the Ingredients supplied were the Plaintiff s goods. Therefore there is no necessity to determine if the third element of passing off was present. On the issue of non-disclosure, the Court found that there was material non-disclosure on the part of the Plaintiff in its failure to disclose that the principal parties for the purported claim of infringement and/or passing off are PappaRoti Korea and PIL, which were not made parties to the action. After considering the facts in totality, the Court held that the balance of convenience in this instance lay in refusing injunctive relief due to the potential harm caused to the Defendants business and the potential loss from breach of contract with PappaRoti Korea. The Plaintiff s was application dismissed and the Defendant s application was allowed. 10

11 10. Koh Chui Ngoh berniaga sebagai Perniagaan Lily v Magicboo Beauty Sdn Bhd [2009[ 4 AMR The plaintiff was an importer, manufacturer, marketer of beauty products and supplies and had since 1995, imported glue for eyelashes with the marks EYE PUTTI and CECIL ( the Product ). Packaging of the Product was registered as an industrial design and identifiable by a FMM bar-code. The plaintiff claimed for damages against the defendant for passing off under Section 82(2) Trade Marks Act 1976, that the defendant had been misrepresenting to the public that its products are that of the plaintiff s. It was for the plaintiff to prove that (i) there was goodwill or reputation in the get-up attached to the Product; (ii) there was misrepresentation by the defendant to the public leading to or likely to lead the public to believe that its products are the Product; and (iii) the plaintiff had suffered or is likely to suffer damage by reason of the erroneous belief caused by the defendant s misrepresentation. The Court found that the Product was sold in Malaysia since 1995, and its packaging was plainly distinctive that its use will be understood by the trade and public as meaning that the Product was the plaintiff s. By using the mark or get-up of the Product since 1995 the plaintiff had succeeded in causing it to be associated with the Product, and thus acquired a quasi-proprietary right to the exclusive use of the mark or get-up in relation to the Product. Goodwill and reputation in the get-up attached to the Product was thus established. The plaintiff had 3 witnesses who, between 2005 and 2006 made trap purchases of the infringing products at the premises of the defendant. The defendant admitted that said products were sold with the plaintiff s name, address and barcode on the packaging, but attributed it to a mistake on the part of the Chinese supplier. However, no representation from the Chinese supplier was called on as a defendant witness. The Court found that the defendant must have known or ought to have known that the products sold infringed on the plaintiff s rights, and despite that sold and continued to sell them. Misrepresentation by the defendant was established. The Product and the infringing product were in competition with each other, and despite defendant s assertion to the contrary, the infringing products were still on sale in defendant s premises. The Court found that there was a likelihood of diversion of customers which would inevitably result in loss to the plaintiff. Court inferred the likelihood of damage to the plaintiff s goodwill through loss of sales. The Court granted judgment in favor of the plaintiff. Part 3 News Updates Below are some of the more notable news / articles in relation to anti-counterfeiting measures in the past year (October 2008 October 2009):- 1. Anti-Piracy Pup Sniffs out 35,000 illegal DVDs 11

12 In June 2009, enforcement officials employed a dog given by the Motion Picture Association ( MPA ), which uncovered in Johor Bharu warehouses a cache of 35,000 pirated film DVDs destined for export to Singapore. 2. Pirated DVD ring crippled, 20,000 discs seized in factory raid On 7 June 2009, enforcement officers of the Domestic Trade and Consumers Affair Ministry raided 2 factories portrayed as plastic factories in Subang Jaya and Kampung Jaya. 4 DVD processing machines and 20,000 DVDs worth RM 8 million were seized. 82 bags of polycarbonate to manufacture DVDs were also seized. 3. Dept Counterstrikes at Internet Café On 24 June 2009, enforcement officers of the Perak Domestic Trade, Cooperative and Consumerism Department raided an Internet café in Taiping. RM270,000 worth of pirated computer games were seized and the café owner arrested ,000 pirated songs at Karaoke outlet In July 2009, a task force comprising of officials of Public Performance Malaysia ( PPM ), Recording Industry Association of Malaysia ( RIM ) and the Domestic Trade, Cooperative and Consumerism Ministry raided a Kuala Kangsar karaoke outlet and seized AV equipments, including a digital karaoke system containing 10,000 unlicensed copies of karaoke recordings. Owner faces fines of at least RM20 million for owning infringing copies of karaoke recordings for business purposes. 5. Malaysian Police Smash Major Pirate CD Ring On 8 July 2009, police officers from the Commercial Crime Division of the Royal Malaysian Police seized 170,000 pirate CDs in a house in the Kuala Lumpur district of Pandan Indah. Anti-piracy experts supplied by the Recording Industry Association of Malaysia ( RIM ) assisted the raid. 6. Woman faces RM40mil copyright fines On 8 July 2009, a karaoke set preloaded with 20,000 pirated songs was recovered from an electrical appliances shop in Bukit Mertajam. The owner could be fined up to RM40mil, one of the highest copyright fines in the country. 7. Kiwi Operation smashed On 16 July 2009, Domestic Trade and Consumer Affairs Ministry enforcement officials arrested a man who had been operating an online pirated DVD business using his New Zealand connections, and had been raking in an average monthly income of RM14,160 (NZ$6,000) for 9 months. 8. New Officers Strengthen Anti-Piracy Policing in Malaysia On July , 285 more anti-piracy enforcement officials were added to the 722- strong unit to bring piracy rates under tighter control. Regular control would be carried 12

13 out in hotbed areas such as Klang Valley and Penang. 90 raids are carried out daily against pirating factories nationwide, and regular inspections of unlicensed factories are made. 9. Police nab five, seize pirated DVDs worth RM 1.3 billion On 5 August 2009, Penang police seized 80,000 pirated DVDs including 20,000 pornographic DVDs worth RM1.3 billion in a raid on a house in Bagan Jermal. Five persons were arrested. The house was discovered to be a centre for the packaging process of pirated DVDs for the past 2 months. 10. Pregnant Woman among 5 held in RM1m VCD raid On 5 August 2009, police seized RM1 million worth of pirated DVDs from a house in Raja Uda and arrested 5 persons. 11. RM50,000 worth of fake walkie-talkies seized in raid On 26 August 2009, 30 enforcement officers from the Domestic Trade and Consumer Affairs Ministry and legal advisers of Kenwood Corporation in Malaysia raided 7 mobile phone and communication outlets in Low Yat Plaza and Bukit Bintang Plaza in Kuala Lumpur. More than 100 units of fake Kenwood transceiver products were seized. 12. HP Malaysia seized more than 370 counterfeit products On 28 Aug 2009, Law enforcement offices assisted by HP Malaysia-appointed contractors raided a warehouse and manufacturing centre in Johor on 30 July. More than 370 counterfeit toner packager and cartridges were seized and 3 individuals detained. 13. Nearly RM 1m worth of software, computers seized Raids conducted by the Penang state Domestic Trade and Consumerism Ministry enforcement officials over 2 and 3 September 2009 were conducted against 3 companies, including one listed on the Bursa Malaysia. More than RM1 million worth of software and computers were seized. Several board of director and senior management members from the companies were arrested. The business and its senior management may face criminal prosecution and fines up to RM20,000 per infringing copy, a maximum term of five years imprisonment, or both. 14. 'Spidey' pirated DVD peddlers arrested On 5 September 2009, enforcement officers seized 40,000 pirated DVDs in the room of 2 pirated DVD vendors. The 2 men attempted to balance on the outer ledge of a 20-storey apartment tower to escape arrest. They balanced. Enforcement officers observed, then arrested them. 15. RM794,300 worth of pirated software seized from college On 8 October 2009, enforcement officers from the Domestic Trade, Cooperative and Consumerism Ministry raided a private institution of higher learning in Kota Kemuning, 13

14 Selangor and seized RM794,300 worth of pirated software alongside RM24,000 worth of computers. RM125,800 worth of pirated software and 8 computers worth RM21,000 were also seized from an IT solution provider in Kuala Lumpur. As of Oct 2009, 30 companies were raided, with pirated/unlicensed software and computers seized worth RM 7.6 million. 2 pirated software factories also raided in March and May. Business Software Alliance Asia Pacific Anti-Piracy senior director Tarun Sawney was quoted as stating that Malaysia had a 59% piracy rate, which was lower than the 61% regional average in the Asia Pacific. 16. Anti-Piracy campaign switches to Malaysian malls On 28 Oct 2008, The Malaysian Ministry of Domestic Trade and Consumer Affairs ( MDTCA ) has launched the Sikap Tulen IT Mall campaign to create an optimal environment for trading of genuine IT goods and promoting honesty among consumers. The campaign is backed by Business Software Alliance ( BSA ) and Microsoft among others. KL Mall Plaza Low Yat is committed to be the first IT Mall supporting the campaign. Part 4 - Statistics The following statistics were obtained from the Ministry of Domestic Trade and Consumer Affairs s websites:- Number of Actions on Eradicating Counterfeit Goods From 2004 to Year Total Cases Value of seizure (RM) ,914 78,166, ,606 12,212, ,018 42,686, ,936 56,169, ,528 23,463, (as at ) 137 1,146,

15 Source : Number of Actions on Eradicating Infringement of Copyright From 2004 To Year Total Premises Total Value of seizure Checked KES (RM) ,508 4,390 59,216, ,069 3, ,370, ,166 3, ,001, ,863 2,720 54,907, ,310 1,942 20,680, (As at ) 53, ,383, Source: Report prepared by : Michael Soo Shook Lin & Bok (Estd. 1918) 20th Floor, AmBank Group Building, No. 55 Jalan Raja Chulan, Kuala Lumpur Kuala Lumpur Tel : Tel : Wong Sai Fong Shearn Delamore & Co. 7th Floor, Wisma Hamzah Kwong-Hing, 1, Leboh Ampang Fax : /8/9 Fax : / michaelsoo@shooklin.com.my saifong@shearndelamore.com 15