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InsiderTAPS (18 November 2019)

Trademarks Act 2019 – Part 2

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18 November 2019

“… in the course of this case, I have heard it read many times, but, despite this iteration, I must confess that, reading it through once again, I have very little notion of what the section is intended to convey, and particularly the sentence of 253 words, … I doubt if the entire statute book could be successfully searched for a sentence of equal length which is of more fuliginous obscurity.”

In Part 1, we spotlighted some of the age-old new concepts (no pun intended) introduced by the Trademarks Act 2019 such as multiple-class filings, non-traditional trademarks, priority dates which would no longer function as filing dates, absolute and relative grounds of refusal and the accession to the Madrid Protocol, amongst others.

In this part two of the article, we highlight the major changes in the new Act in respect of oppositions, invalidations, infringements and offences.

Oppositions
The new Act provides greater clarity by setting out the circumstances in which a party may oppose a trademark application. These include:

  • the party has prior use of the trademark;
  • the trademark comes within one of the absolute and relative grounds of refusal in Sections 23 and 24; and
  • the trademark is identical or similar to a well-known trademark in Malaysia and is to be registered for similar goods or services.

Save for the above, the opposition provisions in the new Act remain substantially the same.

Invalidations

The old Act states that an aggrieved person may apply to rectify the trademark register for, among other grounds, any entry made without sufficient cause and any entry wrongfully remaining in the Register. These phrases often gives rise to ambiguity as they lack any statutory explanation. The new Act replaces these phrases and specifies that a trademark registration may be invalidated if it was registered in breach of Section 23 or 24 or was registered by fraud or misrepresentation.

The new Act preserves the right of an aggrieved person to invalidate a trademark based on non-use but enlarges the scope in which a non-use invalidation may be filed:

  • the trademark for no proper reasons has not been used in good faith for a period of three years from its registration;
  • the use of goods or services using the trademark for no proper reasons has been suspended for a continuous period of three years;
  • the trademark has become a common name in the trade due to the owner’s inactivity; and
  • the use of the trademark by the registered proprietor would mislead the public.

It is notable that the new Act removes the one-month window which is seen to prevent trademark owners, who have not used their trademark, to use it just to stave off invalidation actions. It has now been replaced with a slightly more sophisticated mechanism which is that if the use is begun or resumed after the expiry of the three-year period but it falls within the period of three months before the application for revocation is filed, the use will be disregarded unless preparations of such use began before the proprietor became aware that the application for revocation might be made. There is a subjective element to the test of the proprietor’s knowledge which would presumably be established by objective evidence.

Thus, although under the new Act, it appears that trademark owners may use or resume using their trademark solely to pre-empt a non-use invalidation action as long as the use predates the action, they would need to deal with this subjective element. Where the ground of invalidity exists only for certain goods or services, the new Act allows for partial invalidation where the trademark would only be invalidated for those goods and services.

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Infringements

Acts Amounting to Trademark Infringement

The most desirable change brought by the new Act may perhaps be the substantial simplification of what amounts to trademark infringement. The new definition under Section 54 replaces the dreaded Section 38(1) in the old Act which derived itself from the UK Trade Marks Act 1938. The distaste for the section being so great that Mackinnon LJ, a decade shy of a century ago had this to say about it in Bismag Ltd v Amblins (Chemists) Ltd [1940] 2 All ER 608:

“That section seems to be primarily in substitution for s 39 of the Act of 1905, and in the course of this case, I have heard it read many times, but, despite this iteration, I must confess that, reading it through once again, I have very little notion of what the section is intended to convey, and particularly the sentence of 253 words, as I make them, which constitutes sub-s (1). I doubt if the entire statute book could be successfully searched for a sentence of equal length which is of more fuliginous obscurity.”

Under Section 54, trademark infringement occurs where a person uses a sign in the course of trade:

  • that is identical with the registered trademark for identical goods or services;
  • that is identical with the registered trademark for similar goods or services; or
  • that is similar to the registered trademark for similar goods or services

which results in the likelihood of confusion on the part of the public.

Section 54 further sets out the meaning of “use” which includes the following:

  • applying the sign to goods;
  • offering or exposing for sale goods bearing the sign;
  • putting goods bearing the sign on the market;
  • stocking goods bearing the sign with an intent to sell or put them on the market;
  • offering or supplying services under the sign;
  • importing or exporting goods under the sign;
  • using the sign on commercial documents; and
  • using the sign in advertising.

However, it is regrettable that there is no transitional provision or exception for the present non-infringing use of a registered trademark upon similar goods or services which is permitted under the Trade Marks Act 1976 in the new Act. It remains to be seen how the courts will deal with this category of users.

Acts Not Amounting to Trademark Infringement

The new Act updates the provisions in the old Act on acts that do not constitute trademark infringement. The exempted acts are set out in Section 55 and include using the mark for non-commercial purposes and news reporting or commentary.

In relation to using a trademark solely in a descriptive manner, Section 55(1) expands the subject matter from just character or quality to kind, quality, quantity, intended purposes, value, geographical origin, time of production, time of rendering of services or other characteristics of goods or services. The Section goes on to state that such use has to be in accordance with honest practices in industrial or commercial matters, affording Courts the necessary flexibility to adapt to prevailing commercial practices in rapidly changing times.

As regards articles that are manufactured under a patent, Section 51 provides that there is no infringement if the sign that is being used:

  • is the name of, or describes, an article that was formerly exploited under a patent or a service that was formerly provided as a patented process;
  • is used after two years of expiry of the patent; and
  • is the only commonly known way to identify or describe the article, substance or service.

Statutory Remedies

The usual remedies in a suit for trademark infringement are now given statutory recognition under Section 56. They include:

  • prohibitory injunction;
  • mandatory injunction;
  • damages;
  • account of profits (if there are profits from infringment which have not been considered in computing damages);
  • erasure of offending signs or destruction of goods bearing the offending sign; and
  • delivery up and disposal of infringing offending goods.

In what is seen as a step towards effectively combating counterfeiting activities, a plaintiff in cases where counterfeits are involved may opt for additional damages instead of the usual damages or account of profits, where the Court in determing the appropriate amount would consider all relevant factors such as flagrancy of the infringement, benefit accrued to the defendant and the need for punishment.

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Groundless Threats

Not to be all swords and no shields, Section 61 of the new Act provides an avenue for persons who receive groundless threats of trademark infringement suits to seek the following reliefs:

  • a declaration that the threats are injustifiable;
  • an injunction against the continuance of the threats; and
  • damages for any loss suffered due to the threats.

Section 61 prevents itself from being taken too far by exempting mere notifications that a trademark is registered or being applied for registration from being a threat of proceedings.

In addition, solicitors who act in their professional capacity for a client would not be liable for issuing groundless threats of trademark infringement suits. Rejoice, lawyers!

Offences

Counterfeiting

The new Act refines the counterfeiting provisions from the old Trade Descriptions Act 2011 (TDA 2011) and places them under its roof. It follows that future enforcements against counterfeiting will be pursued under the new Act and not the TDA 2011. The Trade Description Order under the TDA 2011 has been replaced with the Registrar’s notification that the offending mark is a counterfeit mark under the new Act.

The new Act provides for four separate offences relating to counterfeiting, namely:

Offence

Offence committed by

 

1.       Counterfeiting a trademark

-         making a sign identical or similar to a registered trademark with the intent to deceive; or

-      falsifying a genuine registered trademark by alteration, addition, effacement, partial removal or otherwise.

 

2.      Falsely applying a registered trademark

-         applying the registered trademark or a sign likely to be mistaken for that trademark. In cases of goods, the goods are not genuine goods of the registered proprietor

 

3.   Making or possessing of article for committing offence

-         making an article designed or adapted for making copies of a registered trademark or a sign likely to be mistaken for that trademark; or

-        having in possession or control the above article.

 

4.   Importing or selling goods with falsely applied trademark

-     importing goods bearing falsely applied trademark into Malaysia for trading or manufacturing purposes;

-          selling or exposing for sale the said goods; or

-         having in possession or control of the said goods for trading or manufacturing purposes (a person having three or more of the goods in his possession is deemed to have them in possession for trading or manufacturing purposes).


Other Offences

The new Act further provides for other new offences such as the following:

  • making false entries to the Trademarks Office or in the Register;
  • falsely representing a trademark as a protected international registration designating Malaysia;
  • misusing the title “Trademarks Office”; and
  • practising as a trademark agent without being registered as one under the new Act.

Conclusion

The new Act heralds a new era in the Malaysia’s trademark landscape and brings about greater uniformity with the trademark practices of other jurisdictions. Trademark proprietors and corporations should seek necessary advice to ensure compliance with the new Act.

If you have any queries or require more information, please feel free to get in touch with us.

LLL
Lee Lin Li
Partner
T: +603 2050 1898
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LBY
Lim Bee Yi
Partner
T: +603 2050 1875
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KJL
Low Kok Jin
Associate
T: +603 2050 1870
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