Malaysia: Court considers validity of trade description order in trademark infringement case
Contributed by Shook Lin & Bok Kuala Lumpur
In Thye Huat Chan Sdn Bhd v Thye Shen Trading Sdn Bhd ( 6 MLJ 99) the applicant was the registered proprietor of two trademarks - the first registered for rice and sago flours, and the second for rice, sago and tapioca flours. The applicant alleged that the respondent had infringed its trademarks by selling tapioca starch bearing a confusingly similar mark.
The applicant applied for an ex parte trade description order under Section 16 of the Trade Descriptions Act 1972. The court held that, on a comparison of the applicant's marks and the mark on the alleged infringing goods, the applicant's second mark was infringed. Accordingly, the court granted a trade description order on the grounds that a registered trademark was being infringed in the course of trade within the meaning of the Trademarks Act 1976.
Following the grant of the trade description order, the applicant filed a draft order in accordance with the terms granted by the court. The registrar amended the wording of the draft order to state that get-ups were being infringed, rather than a registered mark. The draft order amended and approved by the registrar did not accord with the terms granted by the court. The court stated that the applicant's solicitors should have noticed and corrected this error.
The court observed that a trade description order creates an offence, in that an act that may not be capable of being proved to be an offence (eg, applying a false trade description to goods) can be proven by relying on the trade description order. Pursuant to the trade description order, the enforcement officers seized goods from the respondent's premises. The respondent applied for the trade description order to be set aside. The court set aside the trade description order on the following technical grounds:
- The trade description order was in a form not granted by the court and was therefore invalid.
- Photographs of the infringing trademark were merely attached to the trade description order and the infringing marks were not described in the order. Relying on an earlier Court of Appeal decision, the court held that the order was invalid as it did not describe the infringing marks.
- The applicant failed to make full and frank disclosure when applying for the trade description order. It did not disclose the fact that it was aware that the respondent and other traders had been importing and selling tapioca starch bearing its trademark, and that it had sent cease-and-desist letters to them. The court stated that if the respondent's particulars had been disclosed, it would have ordered the application for the trade description order to be served on it.
The court observed that seizure of the respondent's goods and prosecution could have been avoided if the application had been dealt with inter partes from the start. The trade description order was set aside on technical grounds with damages to be assessed and costs.