Non-Use Revocation and Trademark Survival

^INTRODUCTION

Over the years, there has been growing awareness among individuals and businesses in Malaysia regarding the importance of safeguarding their trademarks. A considerable amount of time, effort and financial resources would have been invested in obtaining a trademark registration, which confers certain exclusive rights to the registered trademark owner, including the right to use and authorise others to use the trademark, as well as to obtain relief for trademark infringement.

However, it is crucial to note that the achievement of obtaining a trademark registration marks only the beginning of the journey. Failure by a trademark owner to actively use its registered trademark leaves it vulnerable to the risk of non-use revocation.

^{GROUNDS FOR NON-USE REVOCATION}

Under the Trademarks Act 2019 (“Act”), any aggrieved person may apply to the court to revoke registration of a trademark based on the following grounds under Section 46(1) of the Act:

• where the trademark for no proper reasons has not been used in good faith in Malaysia in relation to the goods or services for which it is registered for a period of three years from issuance of notification of registration;
• where the use of goods or services under paragraph (a) above, for no proper reasons has been suspended for an uninterrupted period of three years;
• where the trademark has become a common name in the trade for the product or service for which it is registered due to the owner’s acts or inactivity; or
• where in consequence of the use of the trademark by the registered proprietor or with his consent, the trademark is liable to mislead the public, including in respect of the nature, quality or geographical origin of those goods or services.

The remaining provisions under Section 46 of the Act set out the following qualifications:

• that a trademark registration shall not be revoked on the ground under item (a) or item (b) above if use has begun or resumed after the expiry of the three-year period and before application for revocation is made;
• however, if such use falls within the period of three months before the application for revocation is filed, it will be disregarded unless preparations of such use began before the proprietor became aware that the application for revocation might be made;
• where grounds for revocation exist in respect of only some of the goods or services, the revocation will relate to those goods or services only; and
• where a trademark is revoked to any extent, the rights of the registered proprietor will be deemed to have ceased to that extent as from the date of the revocation application or the date on which the court is satisfied that the grounds for revocation exist, whichever is the earlier.

 This article focuses on the grounds of (a) non-use for a period of three years, and (b) suspended use for a period of three years which is effectively a subset of non-use.

^{PLAINTIFF’S BURDEN OF PROOF}

As can be distilled from the above, in order to substantiate a non-use revocation action in court, the plaintiff has to show the following:

• that the plaintiff is an “aggrieved person”; and

Based on Malaysian authorities, an aggrieved person is defined as a person who has used, or has a genuine and present intention to use, in the course of trade, a trademark which is the same or similar to the registered trademark that he or she wants to be revoked.

• that there is a prima facie case of non-use either by the registered owner or with its consent for no proper reasons for an uninterrupted period of three years.

This initial burden is to be proven by the plaintiff (aggrieved person). Once this burden is discharged, the burden shifts to the defendant (registered owner) to show evidence of use during the material period of time.

^{IN PRACTICE, HOW DOES A PLAINTIFF PROVE NON-USE?}

The evidence of non-use is required to be submitted at the institution of non-use revocation action at the High Court. To procure such evidence to discharge a plaintiff’s initial burden, an intended plaintiff may take the following actions: –

• conduct online preliminary investigation;
• conduct offline/ in-depth preliminary investigation; and
• conduct market survey,

to determine whether there is use of the registered trademark in Malaysia.

• Online Preliminary Investigation

Online preliminary investigation may be conducted by private investigators, and it involves comprehensive background checks on the registered owner and its registered trademark through local public domains or databases. This may include but is not limited to examining company and business names, local directories, industry inquiries, media checks with prominent newspapers’ companies and domain name verification.

Furthermore, the private investigators should search for the availability of websites and social media accounts selling goods or providing services featuring the registered trademark, if any, in order to check whether there has been use of the trademark on the relevant goods or services. These online searches will assist the private investigators to locate address(es) of the registered owner, which will lead to offline investigation, where necessary.

• Offline/ In-depth Preliminary Investigation

If the online preliminary investigation above does not reveal use of the registered trademark, the private investigators should investigate further to determine whether the registered owner or another party with its consent offers or sells the relevant goods or services bearing the registered trademark; this may be done by making visits to the premises of the registered owner in order to capture photos of their outlet visits, purchase sample products with receipts, obtain leaflets, brochures and catalogue of goods or services bearing the registered trademark (where possible) as well as to check whether these goods or services are currently being sold or offered.

In the event the private investigators obtain evidence (whether oral or otherwise), especially if the evidence comes from the registered owner’s side (for e.g., sales representative, manager or senior personnel of the registered owner), during online or offline investigation, that there  is no use of the registered trademark on the relevant goods or services in Malaysia by the registered owner or with its consent, this may be relied upon as prima facie evidence of non-use.

• Market Survey

If the online and/or offline investigations do not disclose use of the registered trademark in Malaysia and there is no affirmation of non-use provided by the registered owner, the intended plaintiff may wish to conduct a market survey (preferably covering the major cities around Malaysia, including Sabah and Sarawak) to determine whether there is use of the registered trademark.

The private investigators should conduct the survey on operators and/or persons in charge of the registered owner’s retail outlets in the locations found, if any. Survey may also be conducted at shopping malls and supermarkets. A market survey may be conducted by way of questionnaires and/or interviews. The private investigators should try to get name cards of these persons, photos of the outlets and photos of the goods or services bearing the registered trademark (if any).

An intended plaintiff who wishes to rely on a market survey to establish a prima facie case of non-use ought to be aware of the minimum criteria or requirements widely known as the “Whitford Guidelines” which were originally laid down by the English High Court in Imperial Group PLC & Another v Philip Morris Limited & Another [1984] RPC 293 and have since been judicially recognised and applied by the Malaysian Courts. Failure to comply with them may lead to the court attaching less weight to or totally disregarding the result of a market survey.

^{CONSEQUENCE OF NON-USE REVOCATION}

If a plaintiff is able to prove that he or she is an aggrieved person and the court is satisfied that there is a prima facie case of non-use which the registered proprietor (defendant) fails to rebut, the plaintiff’s action for non-use revocation will succeed, unless the registered proprietor is able to establish that the non-use is due to a “proper” reason.

It is indeed a significant setback for a registered proprietor if the registration of its trademark is revoked by the court due to non-use. The rights as a trademark owner will be considered to have ceased from the date of the revocation application or, if proven that grounds for revocation existed earlier, from that earlier date. Consequently, the trademark owner loses its rights in the trademark for which considerable dedication might have been invested in securing its registration.

^CONCLUSION

In conclusion, it is imperative for trademark owners to ensure consistent use of their registered trademarks on the goods and/or services for which the trademarks are registered to prevent the possibility of revocation due to non-use. Additionally, it is advisable for trademark owners to maintain documented evidence of their trademark use and promotion to serve as a protective measure to demonstrate use in the event of a non-use revocation action.

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

Veronnie Thu
Associate
veronnie.thu@taypartners.com.my