Demystifying Trademark Disclaimers in the Branding Universe: What Unauthorised Users & Trademark Owners Need to Know

You may be surprised to learn that not all elements in a trademark can be protected or monopolized by a registered trademark owner. Just as a superhero may have its Achilles’ heel, a vulnerability or weakness that threatens its invincibility, some trademarks may have their limitations too. Such limitations are often attributable to the disclaimers imposed on the trademark registration.

The following are examples of a trademark disclaimer:

“Registration of this trademark shall give no right to the exclusive use of the word ‘SUSHI’ and a letter ‘Q’, except as shown in the representation on the form of application.”

“Registration of this trademark shall give no right to the exclusive use of a refrigerator device, except as shown in the representation on the form of application.”

“Registration of this trademark shall give no right to the exclusive use of the Chinese characters ‘电子报’ meaning ‘electronic newspaper’, except as shown in the representation on the form of application.”

What are Trademark Disclaimers?

Trademark disclaimer is a statement which serves to clarify or delineate the scope and limitation of the rights associated with a trademark. By succumbing to a disclaimer, a trademark owner is essentially acknowledging that its exclusivity or monopoly does not extend to cover a certain element in the trademark, thereby potentially allowing others to use the element disclaimed in its trademark or branding.

Disclaimers are often imposed on part (or parts) of a trademark which is common in the trade, descriptive of the goods and/or services applied for, a laudatory epithet, a geographical name, an alphabet or a numeral which is not represented in a distinctive manner, or in a broad sense, elements which are non-distinctive and not registrable. For illustration purposes:

• The word ‘sushi’ is not distinctive of goods related to sushi;
• An ordinary representation of a refrigerator image is not distinctive of goods in that category.

Effect of Disclaimers on Assessment of Trademark Similarity

As stipulated in Section 48(5) of the Trademarks Act 2019, if a trademark is registered subject to any disclaimer, the rights of the proprietor will be restricted by the disclaimer. At first blush, a disclaimer may appear unappealing to some trademark owners as it seemingly restricts their rights, leaving them with no recourse in the event that an unauthorized party incorporates the disclaimed elements into its trademark or branding. Well, yes, but actually no.

The Federal Court case of Ortus Expert White Sdn Bhd v Nor Yanni bt Adom & Anor [2022] 2 MLJ 67 provides illuminating insights into this matter:

“… it is our judgment that the court can consider disclaimed words in juxtaposition or in combination with the essential features in determining the likelihood of confusion in a trademark infringement action. However, to determine the applicable test for likelihood of confusion and/or deception in a trademark infringement action, it is pertinent to look at the nature and legal position of essential features.”

The following are valuable principles gleaned from the Federal Court judgment:

(a) In a trademark infringement context, disclaimed elements ought to be considered in juxtaposition or in combination with the essential features in the registered trademark in order to decide whether there is a likelihood of confusion;

(b) However, the disclaimed elements cannot be considered essential feature of the trademark alleged to be infringed;

(c) The issues of infringement and likelihood of confusion cannot be decided based solely on the use of the disclaimed elements. In other words, the cause of action does not arise for the trademark owner merely due to the imitation of the disclaimed elements;

(d) The court can consider the disclaimed elements in terms of their appearance, sound, and how they are used in the relevant industry to determine if there is a likelihood of confusion;

(e) When assessing the trademarks, the court should consider them as a whole in a holistic manner, factoring in the disclaimed elements. The arrangement and positioning of the elements within the trademarks should be considered to determine if the overall similarity is likely to cause confusion.

The Federal Court judgment has cleared the previously murky waters, providing a degree of clarity.

Key Takeaway for Unauthorised Users

It is crucial to understand that adopting a disclaimed element from a registered trademark does not automatically ensure immunity from legal consequences. The court will still evaluate the trademarks in dispute based on the overall impression they create to determine whether there is infringement.

Vital Tips for Trademark Owners

• Although a trademark disclaimer curtails exclusivity over the disclaimed element, a trademark owner will still retain exclusivity over the mark as a whole.
• While a disclaimer may be a useful tool for circumventing non-distinctiveness objection, it is important to avoid needlessly restricting or compromising your own rights. When in doubt, it is advisable to seek advice from trademark experts.
• A trademark applicant has the option to disclaim exclusive rights over any specific elements within a trademark during the filing of a trademark application. Alternatively, one may choose to offer a disclaimer later in response to a provisional refusal, if any, by the Registrar of Trademarks. In some cases, the Registrar may issue a conditional acceptance, stipulating that the trademark will be accepted for registration only if the applicant agrees to disclaim a specified element within the trademark. It is important to note that in the latter two scenarios, additional official fees will be incurred to amend the trademark application by adding the disclaimer. For cost-saving purposes, the applicant may opt for the first approach in appropriate cases.  
• A disclaimer offered or agreed to cannot be revoked once the application has been accepted by the Registrar.
• If an applicant is minded to amend the trademark application to disclaim any exclusive right over a specific element within a trademark pursuant to an opposition proceeding, the Registrar, before accepting the voluntary disclaimer, is required to take into consideration the opponent’s consent.

Ng Kim Poh
Partner
T: +603 2050 1870
kimpoh.ng@taypartners.com.my

Lim Jing Xian
Senior Associate
jingxian.lim@taypartners.com.my