LEUNG KAI FOOK MEDICAL CO. PTE LTD v NINSO GLOBAL SDN. BHD. (Dahulunya dikenali sebagai “TCT Home Centre (Sarawak) Sdn Bhd) (WA-22IP-13-03/2023)

LEUNG KAI FOOK MEDICAL CO. PTE LTD [Company No.: 197803359R]

LEUNG KAI FOOK MEDICAL SDN BHD …PLAINTIFFS [Company No.: 654195-K] AND NINSO GLOBAL SDN BHD [Formerly known as “TCT Home Centre (Sarawak) Sdn Bhd”] [Company No.: 200801004330 (805614-T] …DEFENDANT GROUNDS OF JUDGMENT (Assessment of Damages pursuant to Orders 37 and/or 34, Rules of Court 2012 – Enclosure 68) A. INTRODUCTION [1] These are my grounds of judgment in respect of the Plaintiffs' application for the assessment of damages pursuant to the Judgment of this Court dated 8.3.2024 ("the Judgment") entered in favour of the Plaintiffs against the Defendant for trademark infringement and passing off of the Plaintiffs' well-known "Arm & Axe" trademarks ("the Arm & Axe Marks"). The Judgment was affirmed by the Court of Appeal on 9.10.2024, and no further appeal or application for stay was pursued by the Defendant. The Defendant's liability is therefore final and conclusive. [2] Following the disposal of the Defendant's appeal, the Plaintiffs filed Enclosure 68, a Notice for Directions on Assessment of Damages, on 6.11.2024. On 19.6.2025, the Plaintiffs filed their Affidavit in Support and elected, via Enclosure 104, to proceed with an account of profits in respect of compensatory damages relating to the Defendant's infringing sales. The Plaintiffs also advanced claims for loss of goodwill and reputation, additional damages, exemplary damages, and general damages. [3] Having considered all the affidavit evidence filed by both parties, the written submissions, and having heard the oral arguments of learned counsel for both sides, I made the following orders:

Account of Profits in the sum of RM20,904.24;

(ii) Loss of Goodwill and Reputation in the sum of RM250,000.00;

(iii) Additional Damages in the sum of RM25,000.00;

(iv) General Damages in the sum of RM25,000.00; and

Exemplary Damages in the sum of 25% of the total award for compensatory damages, amounting to RM75,000.00. B. BACKGROUND FACTS [4] The Plaintiffs are the common law owners and registered proprietors of the Arm & Axe Marks in Malaysia, which are and have at all material times been valid and subsisting. These marks are registered in Class 5 and cover, inter alia, the well-known heritage medicinal oil product marketed as "Axe Brand" or "Minyak Cap Kapak." The Arm & Axe Marks include the following registered trademarks: Trademarks Class Registration No. (“the said Trademark”) 5 S/012806 5 M/004859 Arm & Axe Logo with the words “AXE Brand” 5 89001581 Arm & Axe Logo with the words “CAP KAPAK” 5 89001582 Arm & Axe (Word Mark) 5 88000334 Axe Oil (Word Mark) 5 88000335 [5] The Defendant, Ninso Global Sdn Bhd (formerly known as TCT Home Centre (Sarawak) Sdn Bhd), operates a large retail chain in Malaysia with approximately 99 to 100 outlets or branches throughout the country. At all material times until the issuance of the Writ herein, the Defendant had, without the license or authority of the Plaintiffs, been importing, supplying, distributing, selling, and/or offering for sale goods bearing a double axe trademark ("the Offending Sign") which was confusingly similar to the Plaintiffs' said Trademark. These goods were not manufactured or authorised by the Plaintiffs ("the Infringing Goods"). [6] On 16.6.2022, 14.6.2023 and 5.7.2024, the First Plaintiff obtained a registrar’s verification in respect of one of the Plaintiffs’ trademarks, bearing trademark registration number: S/012806 (the said Trademark) whereby the Registrar of Trademarks of the Intellectual Property Corporation of Malaysia has declared that the Offending Sign as shown below, is confusingly similar to and/or likely to be mistaken for the said Trademark. The said Trademark The Offending Sign [7] On or around 25.7.2022, officers from the Ministry of Domestic Trade, Cooperatives and Consumerism, Johor ("KPDNHEP Johor" / "MDTC") conducted a raid and seizure exercise at one of the Defendant's business premises located at No. 83, Jalan Tampoi, Kawasan Perindustrian Tampoi, 81200 Johor Bahru. A total of 34 units of the Infringing Goods bearing the Offending Sign were identified, seized, and removed from the said premises. [8] Notwithstanding the raid and seizure on 25.7.2022, the Defendant continued to sell and supply the Infringing Goods after that date. The Defendant's own records, furnished in compliance with the Judgment, reveal that the Infringing Goods were sold across at least 63 of the Defendant's outlets over a period of approximately 20 months, and a total of at least 19,429 units of the Infringing Goods were sold during the material period. The Defendant also supplied the Infringing Goods to other companies, including Vmax Group Sdn Bhd and Lt Retail Sdn Bhd, which in turn offered them for sale to the public. [9] Following the raid and seizure, representatives of the Plaintiffs carried out a detailed inspection and verification of the seized Infringing Goods and confirmed that they did not originate from the Plaintiffs, nor were they manufactured or authorised by the Plaintiffs. [10] It was then discovered that the Offending Sign used on the Infringing Goods is confusingly similar and likely to be mistaken for the Plaintiffs Arm & Axe Marks. [11] The Plaintiffs’ initiated this action by way of a Writ of Summons and Statement of Claim dated 20.3.2023 for trademark infringement and passing off. The Plaintiffs then filed a Notice of Application for summary judgment (enclosure 59). On 8.3.2024, summary judgment was entered against the Defendant. The terms of the Judgment included, inter alia, orders for an assessment of damages, loss of goodwill and reputation, general damages, exemplary damages, and additional damages. [12] On 4.4.2024, the Defendant filed an appeal against the Judgment. On 9.10.2024, the Court of Appeal dismissed the Defendant's appeal in its entirety. No further appeal was pursued. The Defendant's liability for trademark infringement and passing off is therefore final and beyond dispute. [13] In view thereof, the Plaintiffs had, on 6.11.2024, filed Enclosure 68 (Notice for Directions) to assess, inter alia, the damages, loss of goodwill and reputation, general damages, exemplary damages and additional damages in paragraphs 5 and 6 of Enclosure 59. On 19.6.2025, the Plaintiff filed Enclosure 108 (Notice of Appointment for Assessment of Damages). [14] Separately, the Plaintiffs initiated committal proceedings (Enclosure 95) against the directors of the Defendant for alleged non-compliance with the Judgment. C. THE GOVERNING LEGAL PRINCIPLES [15] The general rule governing damages for infringement of intellectual property rights is well settled. In General Tire & Rubber Co v Firestone Tyre & Rubber Co Ltd [1975] 2 All ER 173, the House of Lords held that (save for exceptional cases where exemplary damages may be awarded) the purpose of damages is compensatory. The measure is therefore, so far as money can do it, the sum that would place the injured party in the position it would have been in had the wrong not occurred, as stated in Livingstone v Rawyards Coal Co (1880) 5 App Cas 25 per Lord Blackburn: "As in the case of any other tort (leaving aside cases where exemplary damages can be given) the object of damages is to compensate for loss or injury. The general rule at any rate in relation to 'economic' torts is that the measure of damages is to be, so far as possible, that sum of money which will put the injured party in the same position as he would have been in if he had not sustained the wrong.(Livingstone v Rawyards Coal Co ((1880) 5 App Cas 25) per Lord Blackburn).” [16] This principle was adopted and approved by the Federal Court of Malaysia in Taiping Poly (M) Sdn Bhd v Wong Fook Toh (t/a Kong Wah Trading Co) & Ors [2018] supp MLJ 312, where Richard Malanjum CJSS held: "[19] Damages for the infringement of intellectual property rights are tortious in nature. Their objective is to restore the claimant to the position he would have been in had the defendant not infringed. Thus, where the claimant is in the business of manufacturing goods, so that they are in competition with the defendant, then the measure of damages will be lost of profits." [17] The Federal Court also observed that damages in intellectual property cases are to be assessed liberally. This is an important principle, as the exact quantification of loss in passing off and trademark infringement cases is seldom amenable to precise mathematical calculation. As was stated in Taiping Poly: "And while it is quite easy to state the general principle the mechanics of ascertaining damages actually sustained by the plaintiff are not simple to determine. There is no hard and fast rule to follow which is foolproof and universally accepted… It depends on the facts of each case. It is basically facts driven." [18] In AG Spalding & Bros v AW Gamage Ltd (1918) 35 RPC 101, Swinfen Eady LJ (as his Lordship then was) held that Defendants are liable for all loss actually sustained by the Plaintiff which is the natural and direct consequence of the unlawful acts of the Defendants. This will include any loss of trade actually suffered by the Plaintiff, either directly from the acts complained of, or properly attributable to injury to the Plaintiff’s reputation, business, goodwill, and trade and business connections caused by the usual course of things, from the wrongful acts. [19] Drawing strength from the salient authorities I have referred to above, it is a well-established principle that an award of damages must fulfil two primary objectives that is to fairly compensate the injured party and to deter future acts of infringement. The Court bears the responsibility of ensuring that justice is achieved between the parties. In this regard, the plaintiff must receive adequate compensation for the harm suffered, while care must be taken to avoid an award so excessive as to amount to an unwarranted windfall. Furthermore, the Court acknowledges that in instances of deliberate and egregious infringement, the law provides for the imposition of additional and exemplary damages, underscoring the imperative of deterrence. [20] Guided by the above principles, I proceed to consider the appropriate award for each of the heads of damages claimed by the Plaintiff in this present notice of assessment. D. ACCOUNT OF PROFITS – RM20,904.24 [21] The Plaintiffs have elected to proceed by way of an account of profits. An account of profits is an equitable remedy which requires the infringer to surrender to the proprietor the profits made as a result of the infringing activity. It is based on the principle that the infringer should not be allowed to retain a benefit derived from wrongful conduct. [22] Section 56(3)(c) of the Trademarks Act 2019 (TMA 2019) explicitly grants the Plaintiff the right to seek the remedy of an account of profits, stipulating the following:

The registered proprietor shall have the right to institute Court proceedings against any person who has infringed or is infringing the registered trademark.

The registered proprietor shall have the same right of action in subsection (1) against any person who has performed acts which will make it likely that an infringement will occur.

In an action for an infringement, the Court may grant relief including the following:

an injunction subject to such conditions as the Court thinks fit which includes to prevent goods that involve the infringement from entering into the channels of commerce;

damages;

an account of profits; or

in any case to which subsection (7) applies, the award of such additional damages as it considers appropriate in the circumstances by the Court. [23] As stated in Taiping Poly (supra), the alternative remedies available in an action for infringement are an assessment of the profit made by the infringer or an award of damages representing the lost profit suffered by the proprietor. In cases where the plaintiff elects an account of profits, the inquiry focuses on the profit actually made by the defendant from the infringing activity, rather than on the loss suffered by the plaintiff. [24] In Organo Gold Holdings Ltd & Ors v Infigrams Sdn Bhd & Anor [2019] 11 MLJ 172, the High Court observed at paragraph 65: "The plaintiffs have in my view utilised their best endeavours to establish the sales and consequently the estimated fair and temperate average profit margin of the defendants in respect of the Gourmet Coffees. The evidential burden to show otherwise shifted to the defendants to satisfy me as to the actual profit margin by computing the same from a reasonable sample size substantiated with cogent costs documentation since these are all within the knowledge of the defendants including custody of the relevant documentary evidence. The defendants however failed to do so adequately by their mere adduction of exhs D20 to D21 which are rudimentary and simplistic estimates." [25] This passage is of particular significance to the present case and I shall revert to it in the later part of this judgement. [26] It is trite law that in cases of passing off, once liability is established, damage is presumed. The plaintiff need not prove actual loss. As held by the English Court of Appeal in Draper v Trist and Tristbestos Brake Linings Ltd [1939] 3 All ER 513 at 526: "In a passing off case, once the plaintiff has shown a probability of confusion, he is entitled to damages without proof that any particular customer has been deceived." [27] This principle is founded on the common-sense recognition that where an infringer trades on the plaintiff's goodwill by means of a confusingly similar mark, the plaintiff inevitably suffers injury to its business, reputation, and the distinctiveness of its brand. It would be impractical and unjust to require the plaintiff to adduce evidence of each and every confused customer. [28] I pause here to emphasise an important point. The Defendant's liability for trademark infringement and passing off has been conclusively determined by the Judgment dated 8.3.2024, which was later affirmed by the Court of Appeal on 9.10.2024. The Defendant is therefore estopped from re-litigating issues of confusion, deception, or causation in the present proceedings. The only issue before this Court at this stage of the proceedings is the quantum of damages. The Defendant's submissions, insofar as they sought to re-argue the merits of the underlying liability by contending that consumers would not have been confused or that the Defendant's goods would not have been mistaken for the Plaintiffs' products, are entirely misconceived and I reject them. The finding of infringement and passing off necessarily imports a finding of likelihood of confusion and misrepresentation, and this Court is bound by those findings. [29] The Plaintiffs computed the account of profits based entirely on the Defendant's own disclosed records, namely the sales records provided in Enclosures 69 and 70. According to these records, the Defendant sold a total of at least 19,429 units of the Infringing Goods across at least 63 outlets during the material period of approximately 20 months. The Plaintiffs arrived at a figure of RM20,904.24 for the account of profits, which represents the gross profit derived from the infringing sales based on the difference between the Defendant's purchase price and selling price of the Infringing Goods. [30] The Plaintiffs submitted that their calculation was based on the best available evidence, being the Defendant's own disclosed documents, and that it represents a fair and temperate estimation of the profits arising from the infringing sales. [31] It is not in dispute that the Offending Acts commenced as early as January 2021 and continued until August 2022, as acknowledged by the Defendant in its own affidavits. The Defendant disclosed sales records and delivery notes from its supplier, TCT Trading Sdn Bhd, for the years 2021 and 2022 (collectively referred to as “the Defendant’s own evidence”), detailing the quantity and sale price of the Infringing Goods obtained and sold. [32] From the Defendant’s own evidence, it disclosed that: a) In 2021, the Defendant sold 8,643 units, with a purchase cost of RM10,559.48 and sales revenue of RM18,304.80, resulting in a profit of RM7,745.32; and b) In 2022, the Defendant sold 10,786 units, with a purchase cost of RM12,727.48 and sales revenue of RM25,886.40, resulting in a profit of RM13,158.92. [33] Accordingly, the total profit for the year of 2021 and 2022 amounts to RM20,904.24 (RM7,745.32 + RM13,158.92). [34] It is the Plaintiff’s position that this amount represents a fair and reasonable estimate of the profits earned by the Defendant, as calculated based entirely on the Defendant’s own evidence. Such estimation is consistent with the equitable remedy of an account of profits. Learned counsel for the Plaintiff highlighted that this amount is conservative and relies wholly on the limited financial documentation disclosed by the Defendant. [35] The Defendant raised two principal objections to the Plaintiffs' computation:

First, the Defendant contended that the Plaintiffs' formula was fundamentally flawed because it relied on the Defendant's gross profits without deducting operational or business expenses. The Defendant argued that its actual net profits, after accounting for operational expenses, would be only about half the amount claimed; and

Second, the Defendant submitted that the Plaintiffs failed to demonstrate that their loss was directly attributable to the Defendant's sales, and that customers would not have confused the Infringing Goods with the Plaintiffs' products given the price differential and the nature of the Defendant's business. My Findings on the Account of Profits [36] I shall deal first with the Defendant's second objection. As I have already observed, the question of liability has been conclusively determined. The Judgment, affirmed by the Court of Appeal, necessarily found that the Offending Sign was confusingly similar to the Plaintiffs' Arm & Axe Marks and that the Defendant's activities amounted to infringement and passing off. The Defendant cannot, at this assessment stage, re-open the question of whether consumers were actually confused. This objection is accordingly dismissed. [37] Turning to the Defendant's first objection regarding the failure to account for operational costs, I have given this matter careful consideration. The principle governing an account of profits is well settled: the inquiry is directed at the actual profit earned by the infringer from the infringing activity. "Profit" in this context means net profit, after deduction of expenses properly attributable to the earning of that profit. However, the burden of proving such deductible expenses lies squarely on the infringer. [38] This principle was clearly enunciated in Organo Gold (supra), where the High Court held that once the plaintiff has utilised best endeavours to establish the sales and estimated profit margin of the defendant, the evidential burden shifts to the defendant to satisfy the court as to the actual profit margin. This must be done by reference to cogent costs documentation, since these matters are within the defendant's knowledge and custody. As the defendant in that case failed to do so, and the court relied on the plaintiff's calculation. [39] In the present case, I find that the Plaintiffs have discharged their initial burden by computing the profits based on the Defendant's own disclosed sales records. The Plaintiffs had no access to the Defendant's internal accounting records or operational cost data. The Defendant, being a large retail chain with approximately 100 outlets, is the sole custodian of its detailed financial statements, records for cost-of-goods-sold, overhead allocation schedules, and other relevant accounting documents. [40] Despite this, the Defendant failed to produce any audited financial statements, any cogent accounting records, or any documentary evidence whatsoever of the operational costs it now claims should be deducted from the gross profits. The Defendant's assertion that its operational expenses reduce its profits by approximately half is entirely unsubstantiated. With respect, I find this to be a bare assertion from the Bar, devoid of any supporting documentation. [41] I further note the Defendant's conduct in these proceedings. The Defendant did not, at any point, produce proper accounts despite being in sole custody of the relevant records. The Defendant had the opportunity, and indeed the obligation under the terms of the Judgment requiring an account, to make full and proper disclosure. The Defendant's failure to do so must be viewed in context. In my judgement, it is the Defendant who was in the best position to adduce evidence of its operational expenses, and it chose not to do so. [42] In these circumstances, applying the principle in Organo Gold, I am satisfied that the evidential burden shifted to the Defendant to establish, with cogent documentation, the operational expenses it claims should be deducted. The Defendant has failed to discharge this burden. Accordingly, the Defendant cannot now be heard to complain that the Plaintiffs' formula fails to account for operational costs which the Defendant itself has neither quantified nor documented. [43] I am also mindful that the Plaintiffs' approach was deliberately conservative. The Plaintiffs computed the profits based strictly on the Defendant's disclosed records. The Plaintiffs did not speculate or inflate the figures. The amount of RM20,904.24 represents a fair and temperate calculation of the profits earned by the Defendant from the sale of 19,429 units of the Infringing Goods. [44] The Defendant further argued that any award based on gross profits would unjustly enrich the Plaintiffs and constitute double compensation. I do not accept this submission. An account of profits is not a punitive remedy; it is a restitutionary one. It seeks to strip from the infringer the benefit it wrongfully obtained. Where the infringer fails to provide proper evidence of its costs, the court is entitled to base its assessment on the best available evidence, which in this case is the Defendant's gross profit margin as disclosed in its own records. The risk of any consequent overestimation falls on the Defendant, not on the Plaintiffs, because the Defendant failed to provide proper accounts. [45] I also note the Defendant's argument that the Plaintiffs did not make any formal or informal requests for documents relating to operational expenses and did not file any post-trial discovery applications. I find this argument to be misconceived. The Judgment required the Defendant to render an account. An account of profits, by its very nature, requires the infringer to come to court with clean hands and to lay bare the financial consequences of its infringing conduct. It was incumbent upon the Defendant, as the party ordered to render an account, to provide full and complete information, including any expenses it wished to claim as deductions. Its failure to do so is not a matter that can be laid at the Plaintiffs' door. [46] Accordingly, I allow the Plaintiffs' claim for an Account of Profits in the sum of RM20,904.24. E. LOSS OF GOODWILL AND REPUTATION – RM250,000.00 [47] Loss of goodwill and reputation is a well-recognised head of damages in trademark infringement and passing off cases. As I have already noted, the law presumes damage to goodwill once liability for passing off is established. The plaintiff is not required to prove actual loss to its goodwill with mathematical precision. The Court is entitled, and indeed required, to assess such loss using "ordinary business knowledge and common sense," as recognised in Draper v Trist (supra). [48] It is appropriate to have regard to what “goodwill” means. Lord Lindley in The Commissioners of Inland Revenue v Muller & Co.’s Margarine Limited [1901] AC 217, aptly summed it up at p. 235 as follows: “Goodwill regarded as property has no meaning except in connection with some trade, business, or calling. In that connection I understand the word to include whatever adds value to a business by reason of situation, name and reputation, connection, introduction to old customers, and agreed absence from competition, or any of these things, and there may be others which do not occur to me. In this wide sense, goodwill is inseparable from the business to which its adds value, and, in my opinion, exists where the business is carried on. Such business may be carried on in one place or country or in several, and if in several there may be several businesses, each having a goodwill of its own.” [49] The Commissioners of Inland Revenue v Muller & Co.’s Margarine Limited (supra) was referred to and followed by the Court of Appeal in Yong Sze Fun & Anor v Syarikat Zamani Hj Tamin Sdn Bhd & Anor [2012] 1 MLJ 585 at p. 639 where Abdul Malik Ishak JCA (as he then was) summarized the features of goodwill as defined by Lord McNaghten at pp. 223-224 as follows: “[114] In The Commissioners of Inland Revenue v Muller & Co.’s Margarine Limited at pp. 223-224, Lord McNaghten defined “goodwill” in this way: What is goodwill? It is a thing very easy to describe, very difficult to define. It is a benefit and advantage of the good name, reputation, and connection of a business. It is the attractive force which brings in custom. It is the one thing which distinguishes an old established business from a new business at its first start. The goodwill of a business must emanate from a particular centre or source.” [115] Four discerning features of goodwill may be listed:

that goodwill is the benefit added to the business through extensive trading operations which attracts custom;

that trademark or get up is the badge and indicia that signifies, indicates and identifies the goodwill and the business;

that goodwill is created through and by means of trading activities; and

that the more extensive the trading activities are, which must necessarily include sales and promotion, the more value that would be attached to the goodwill.” [ Underlined Emphasis Mine] [50] The rationale for this approach is self-evident. Goodwill, by its nature, is intangible. It represents the magnetic quality of the brand that draws customers to it. When an infringer passes off inferior, counterfeit, or unauthorised goods as being the plaintiff's goods or as being connected with the plaintiff, the inevitable consequence is a dilution of the plaintiff's brand exclusivity, an erosion of consumer confidence, and a diminishment of the distinctiveness that the plaintiff has built up over years (often decades) of honest trading and investment. [51] The difficulty of precise quantification is no reason to deny the claim. As observed by the Federal Court in Taiping Poly (supra), damages must be assessed liberally. The assessment is a matter of judgment, guided by the evidence, the scale and nature of the infringement, and the standing and reputation of the plaintiff's brand. [52] In this regard, I agree with the submission of learned counsel for the Plaintiffs in that it is not necessary for the Plaintiffs to prove that they had suffered actual damages. In Draper v Trist and Tristbestos Brake Linings Ltd [1939] 3 All ER 513, at page 526, Goddard LJ was of the view that: - ‘the law assumes… that if the goodwill of a man’s business has been interfered with by the passing-off of goods, damage results therefrom. He need not wait to show that damage has resulted. He can bring his action as soon as he can prove the passing-off, because it is one of the classes of cases in which the law presumes that the plaintiff has suffered damage’. [53] Relying on the above legal proposition, the Plaintiffs submitted that they have established their goodwill and reputation based on the following unchallenged evidence:

The Plaintiffs produce/manufacture one of the leading brands of medicated oil in Asia known as the Axe Brand or Minyak Cap Kapak which is a recognized heritage brand in Singapore and Malaysia with 5 GMP certified factories that possess all boasting state-of-the-art technology;

The Plaintiffs have used the Arm & Axe Marks in Malaysia and worldwide in the business of the Medicated Oil for more than 90 years and are still using it substantially and extensively. The Arm & Axe Marks is and has been at all material times valid and existing in Malaysia. The Arm & Axe Marks was specially and exclusively created by the Plaintiffs and substantially and extensively used and promoted by the Plaintiffs over the years;

The Plaintiffs have expended a substantial amount of monies on advertising and promoting its business, and goods and services by reference to the Arm & Axe Marks. The annual advertising and promotional expenditures for the goods bearing the Arm & Axe Marks in Malaysia from 2019 until 2023 are as follows: Year Annual Expenditure on Advertisement & Marketing (RM) 2019 1,798,361.60 2020 1,310,192.71 2021 350,305.69 2022 394,933.16 2023 498,890.62 TOTAL 4,352,683.78

The average annual expenditure on the advertising and marketing expended by the Plaintiffs was RM870,536.76 from 2019 to 2023 (RM4,352,683.78÷5);

The revenue in respect of the Axe Brand Medicated Oil 56ml, 10ml, 5ml and 3ml is RM50,632,294.97 in 2021 and RM67,150,508.58 in 2022;

Further, Arm & Axe brand as a well-known and valuable brand in Malaysia, has been and is still recognised as one of the most trusted brands, namely:

An award for a famous brand with a heritage of more than 50 years given by the IPOS TM (Intellectual Property Office of Singapore Trade Mark) dated 5.8.2015;

(ii) Brand of the Year given by the World Branding Forum at Kensington Palace, London on 14.11.2019; and

(iii) A Health Supplement/Product Brand award given by the Hong Kong Medical Association in year 2019.

Given the Arm & Axe Brand’s fame, goodwill and reputation, it has also attracted great attention where the Plaintiffs’ directors have been interviewed by various newspapers/magazines, amongst others, such as South China Morning Post, The CEO Magazine, The Business Times, The Sunday Times and others. [54] Learned counsel for the Plaintiffs submitted that, given the substantial effort, time, and financial investments expended by the Plaintiffs, they have cultivated confidence and positive recognition regarding the quality of their goods, ensuring their usage in the medical and related industries. As such, learned counsel asserted that the Plaintiffs' goodwill and reputation are demonstrably established, and the Defendant's infringing acts have detrimentally impacted them. Learned counsel emphasized that the Plaintiffs' revenue in 2023 significantly declined following the infringing acts perpetrated in 2021 and 2022. [55] The Plaintiffs contended that, as a direct result of the Defendant's aforementioned acts of infringement and passing off, the Plaintiffs have suffered, and will continue to suffer, loss and damages, as well as injury to their goodwill and reputation. This is due to the erroneous belief, engendered by the Defendant's misrepresentation, that the Defendant's goods and/or services are associated with, or originate from the same source as, the Plaintiffs'. [56] The Defendant opposed the claim for loss of goodwill and reputation on several grounds, namely:

The claim was exorbitant and unjustified;

The Plaintiffs' own sales records showed an increase in sales of approximately RM1 million during the relevant period (2021- 2022), which negated any suggestion of loss to goodwill and reputation;

The Plaintiffs were relying on the same evidence to seek compensation across multiple proceedings involving other infringers, which would result in unjust enrichment and double compensation;

Any alleged damage to goodwill could not be attributed solely to the Defendant, given the existence of other infringers; and

The allegation that the Infringing Goods were of inferior quality or potentially harmful was speculative and unsupported by evidence. My Findings on Loss of Goodwill and Reputation [57] I accept the Plaintiffs' submission that loss of goodwill is presumed once liability for passing off is established. This is settled law, as affirmed in Draper v Trist (supra). The Defendant's contention that the Plaintiffs must adduce specific evidence of loss to their goodwill and reputation, over and above what is inherent in the finding of infringement and passing off itself, is inconsistent with the authorities. [58] The severity of the harm is further reflected in the fact that the Defendant had sold 19,429 units of the Infringing Goods over a span of 20 months. This volume of sales, when coupled with the Defendant’s extensive retail network of 100 branches, demonstrates a large-scale and sustained commercial exploitation of the Plaintiffs’ goodwill. Considering also the Plaintiffs’ longstanding business history of approximately 100 years, it is evident that the claim for the loss of goodwill and reputation is reasonable. [59] In Seet Chuan Seng & Anor v Tee Yih Jia Foods Manufacturing Pte Ltd [1994] 2 MLJ 770, the Supreme Court held that: “In an action for passing off, the damage is an essential element of the tort and it is necessary for the plaintiff to establish that he had suffered damage. However, like in this case, where the goods were in direct competition with one another, the court would readily infer the likelihood of damage to the respondent’s goodwill through the loss of sale and loss of the exclusive use of his name. Here, the court was satisfied that passing off had been established by the respondent.” [60] In Taiping Poly (supra), the Federal Court in awarding damages for loss of goodwill held that: “…the greater the reputation, the more vulnerable it is to damage. The quantum of award in respect of goodwill is essentially a matter of discretion depending on the facts of the particular case.” [61] In Perusahaan Otomobil Kedua Sdn Bhd & Anor v Lee Lap Kee (Sole Proprietor of and Trading as Eco Auto Supply) [2024] MLJU 2797, this Honourable Court awarded RM500,000.00 as loss of goodwill and reputation to PERODUA on the grounds that PERODUA has developed substantial goodwill in Malaysia and enjoyed a significant turnover. [62] In Mohammad Hafiz bin Hamidun v Kamdar Sdn Bhd [2023] 10 MLJ 391, the High Court awarded loss of goodwill at the sum of RM200,000.00 for a Malaysian celebrity for passing off of merely 72 days: “[31] Having considered all the above, and also taking into account the 72-day period (31 January 2017–12 April 2017) involved in the defendant’s commission of the tortuous act of passing off, and bearing in mind that the said period was not a festive period (Hari Raya Aidil Fitri in 2017 fell on 25–26 June 2017), I find a sum of RM200,000 as an award for the damage to the plaintiff’s goodwill as a reasonable and just amount.” [63] It is also pertinent to note that in Schwan-STABILO Marketing Sdn Bhd & Anor v S & Y Stationery & Ors [2018] 3 MLJU 319 where a sum of RM300,000.00 being the loss of goodwill and reputation was awarded to the 2nd Plaintiff. The High Court held as follows: “[48] As regards loss of the 2nd plaintiff ’s goodwill, I acknowledge that STABILO Trade Marks are world-renowned. As held in Taiping Poly, at para 37, the court will presume that there is damage to the 2nd plaintiff ’s goodwill due to the defendants’ passing off. Based on “ordinary business knowledge and common sense”, I assess loss of the 2nd plaintiff ’s goodwill as RM300,000.00 - please see Draper, at p 524.” [64] I also take judicial notice of the fact that the Plaintiffs had previously been awarded loss of goodwill in the sum of RM200,000.00 in two

other trademark infringement suits, namely Kuala Lumpur High Court Suit No. WA-22IP-19-04/2021 (judgment dated 22.5.2023) and Court of Appeal Civil Appeal No. W-02(IM)(IPCv)-617-04/2024 (judgment dated 18.11.2024). In both cases, the Defendant is small-scale retailer and the number of infringing goods sold was less than 1,000 units. [65] In stark contrast, the present case involves large-scale commercial exploitation, as the Defendant operates 100 retail branches and had sold at least 19,429 units of the Infringing Goods over 20 months. The scale and reach of the infringement are significantly greater, thereby causing more substantial harm to the Plaintiffs’ goodwill and reputation. [66] Another material aspect of the damages caused to the Plaintiffs is that Infringing Goods bearing the Offending Sign are not produced by the Plaintiffs and/or any authorised parties and manufacturers. Therefore, they do not meet and/or conform with the specification, quality and standard prescribed by the Plaintiffs for goods and/or services bearing the Arm & Axe Marks. [67] The reputational harm in this case is aggravated by the fact that the infringing goods are consumer health products. Any inferior or unsafe quality of these goods risks not only economic loss to the Plaintiffs but also potential harm to the consuming public, thereby magnifying the erosion of trust in the Plaintiffs’ brand. This goes beyond mere diversion of trade, and strikes at the core of the Plaintiffs’ century-old goodwill. [68] As such, members of the trade and public, the customers and/or prospective customers of both the Plaintiffs as well as the Defendant will attribute such lack of quality and standard to the Plaintiffs and thereby causing further serious and irreparable harm and damage to the Plaintiffs’ valuable goodwill and reputation in the said Arm & Axe Marks. The inferior quality of the Infringing Goods further exposes unsuspecting customers to danger as the Infringing Goods may malfunction. [69] In Chelsea Man Menswear v Chelsea Girl Ltd [1987] RPC 189, the Court of Appeal recognised that confusion of this nature is inherently damaging. The Court held that the defendant’s use of the name or mark was likely to cause substantial confusion between the parties’ businesses, and thereby damage the plaintiff’s business. The Court of Appeal held as follows: - “In my judgment, it clearly shows that the use by the defendants of this name or mark even outside such areas would be likely to cause substantial confusion between the plaintiffs’ and defendants’ respective businesses, and thus to cause damage to the plaintiffs’ business within those areas, in one or more of three ways, namely:

by diverting trade from the plaintiffs to the defendants;

by injuring the trade reputation of the plaintiffs whose men’s clothing is admittedly superior in quality to that of the defendants; and

by the injury which is inherently likely to be suffered by any business when on frequent occasions it is confused by customers or potential customers with a business owned by another proprietor or is wrongly regarded as being connected with that business.” [70] I also reject the Defendant's argument that the increase in the Plaintiffs' sales during 2021-2022 negates any loss of goodwill and reputation. The Defendant's reasoning is with respect, misconceived. The fact that the Plaintiffs' overall sales may have increased during a given period does not mean that the Plaintiffs did not suffer damage to their goodwill and reputation. Sales may increase for a variety of reasons which would include market growth, increased marketing expenditure, expansion into new markets — and yet the plaintiff's brand may simultaneously suffer damage from the circulation of unauthorised, uncontrolled products bearing confusingly similar marks. As was recognised in Draper v Trist, the court is entitled to assess damage using ordinary business knowledge and common sense, including recognising that infringement by an unauthorised trader undermines consumer confidence and weakens brand exclusivity, regardless of fluctuations in overall sales. [71] Moreover, the Plaintiffs have adduced evidence that their revenue in 2023 dropped significantly. While I do not attribute this drop entirely to the Defendant's acts, it is consistent with the kind of delayed damage to goodwill that arises when counterfeit or unauthorised products circulate in the market. Consumers who purchase inferior products bearing a confusingly similar mark to the Plaintiffs may lose confidence in the genuine brand, and this loss of confidence may not manifest immediately in sales figures but may take time to crystallise. [72] I turn to the Defendant's argument regarding the other suits. The Defendant submitted that the Plaintiffs are relying on the same evidence to seek compensation across multiple proceedings and that this would result in unjust enrichment. I do not accept this submission. The other suits involved entirely different infringers operating in different locations. Each infringer is independently liable for the damage it causes. There is no principle in law that an infringer may escape or reduce its liability merely because other infringers exist or because the plaintiff has taken enforcement action against them. On the contrary, the necessity for multiple enforcement actions underscores the seriousness of the threat to the Plaintiffs' goodwill and the persistent vulnerability of the Arm & Axe Marks to counterfeiting and passing off. [73] I also note the significant difference in scale between the earlier suits and the present case. In the earlier cases, the infringers were single small-scale retailers who sold 100 and 276 units respectively. In those cases, RM200,000.00 was awarded for loss of goodwill. In the present case, the Defendant operates approximately 100 retail outlets and sold at least 19,429 units of Infringing Goods over 20 months. The scale and geographical reach of the infringement are exponentially greater. [74] Having regard to all these considerations, I accept that the Plaintiffs have suffered substantial damage to their goodwill and reputation as a result of the Defendant's infringing acts. The Arm & Axe Marks are a heritage brand with decades of established goodwill. The Defendant's large-scale distribution and sale of Infringing Goods bearing a confusingly similar mark, through a nationwide retail chain, over a period of 20 months, and continuing even after regulatory intervention, constitutes a serious assault on the Plaintiffs' goodwill and the distinctiveness of their brand. [75] However, I am of the view that the sum of RM500,000.00 claimed by the Plaintiffs is, on the facts of this case, on the high side. While I accept that the scale of infringement here is significantly greater than in the earlier cases involving awards of RM200,000.00, I must exercise the Court's discretion to arrive at an amount that is fair and proportionate, taking into account all the circumstances, including the fact that the Plaintiffs' sales did increase during part of the relevant period (2021-2022) before declining in 2023, and that the loss of goodwill, while presumed, must be assessed with reference to the evidence as a whole. [76] Exercising my discretion and having regard to the scale and duration of the infringement, the Defendant's nationwide retail presence, the heritage status of the Arm & Axe Marks, the deliberate continuation of sales after the MDTC raid, and the awards made in comparable cases (while recognising the significantly greater scale here), I award the Plaintiffs the sum of RM250,000.00 for loss of goodwill and reputation. [77] I am satisfied that this sum represents a fair, reasonable, and proportionate assessment of the damage to the Plaintiffs' goodwill and reputation, having regard to the principles enunciated in Draper v Trist, Taiping Poly, and the comparable Malaysian authorities cited by the Plaintiffs. F. ADDITIONAL DAMAGES – RM25,000.00 [78] Section 56(7)(c) of TMA 2019 provides: “In any action for infringement of a registered trademark where the infringement involves the use of a counterfeit trademark in relation to goods or services, the plaintiff shall be entitled, at his election, to - …

additional damages as it considers appropriate in the circumstances.” [79] Section 56(8) of the TMA 2019 further provides that, in exercising its discretion under section 56(7)(c), the Court shall have regard to:

the flagrancy of the infringement of the registered trademark;

any benefit shown to have accrued to the defendant by reason of the infringement;

the need to punish the defendant for such act of infringement; and

all other relevant matters.” [80] Section 56(8) also makes clear that additional damages may be awarded regardless of whether criminal proceedings have been pursued. Such damages are therefore not purely compensatory. They serve a punitive and deterrent function, signalling that deliberate and flagrant infringement of intellectual property rights will attract consequences. [81] In Syarikat Faiza Sdn Bhd & Anor v Faiz Rice Sdn Bhd & Another and Another Suit [2019] 8 CLJ 564, Wong Kian Kheong J (now JCA) referred to the following three cases which explained the meaning of the word “flagrant”:

Creative Purpose Sdn Bhd & Anor v. Integrated Trans Corporation Sdn Bhd & Ors [1997] 2 ML J 429, in which Kamalanathan Ratnam JC (as he then was) said: “Flagrancy implies scandalous conduct, deceit including deliberate and calculated infringement where a defendant reaps a pecuniary advantage in excess of the damages he would have been found liable for”.

(ii) Megnaway Enterprise Sdn Bhd v. Soon Lian Hock (No 2) [2009] 8 CLJ 130 in which Low Hop Bing J (as he then was) said: “‘flagrancy’ means ‘the existence of scandalous conduct, deceit and such like’, including ‘deliberate and calculated copyright infringements, infliction of humiliation and loss, and dishonesty”.

(iii) In Kohwai & Young Publication (M) Sdn Bhd v Lembaga Pengelola Dewan Bahasa dan Pustaka [2013] 10 CLJ 365, Abang Iskandar J (as His Lordship then was) observed that there were no local decided cases interpreting the relevant statutory provision, and that guidance could therefore be drawn from common law principles and comparative authorities. His Lordship noted that, even at common law, exemplary damages are ordinarily awarded where a defendant has engaged in conscious wrongdoing in contumelious disregard of another’s rights (see Gray v Motor Accident Commission [1998] 196 CLR 1). His Lordship further held that the “additional damages” sought by the plaintiffs were statutory in nature, and that assistance in construing the breadth of the discretion could be derived from Australian authorities. In Sullivan v FNH Investments Pty Ltd [2003] 57 IPR 63, Jacobsen J stated that the assessment of additional damages is “at large” and not fettered by any arithmetic or mathematical formula. His Lordship also noted that “flagrancy” is not defined in the statute, and referred to Scientific International Pty Ltd v SC Johnson & Sons Pty Ltd [1998] 43 IPR 275 for the proposition that “flagrancy” involves a calculated disregard of the plaintiff’s rights, or a cynical pursuit of benefit. His Lordship added that awards of further damages are intended to deter infringing conduct, such that an element of penalty is acceptable, and that the interpretation of “flagrancy” should be given an open-textured, rather than restrictive, meaning—consistent with its intended statutory function.

(iv) Further, in Sambaga Valli a/p KR Ponnusamy v Datuk Bandar Kuala Lumpur & Ors and another appeal [2018] 1 MLJ 784, Zawawi Salleh JCA (as he then was) explained that exemplary (or punitive) damages are additional damages awarded by reference to the defendant’s conduct, to signify disapproval and to punish. His Lordship held that such damages may be awarded where the defendant has acted with vindictiveness or malice, or in contumelious disregard of the plaintiff’s rights. The primary purpose of exemplary damages may be deterrent, or punitive and retributory, and such an award may also serve to vindicate the plaintiff’s rights (see Rookes v Barnard [1964] 1 All ER 367; AB and others v South West Water Services Ltd [1993] 1 All ER 609; Broome v Cassell & Co Ltd [1971] 2 QB 354; Laksmana Realty Sdn Bhd v Goh Eng Hwa and another appeal [2006] 1 MLJ 675). Applying the approach in Sin Heap Lee Marubeni Sdn Bhd— that exemplary damages may be calculated at 25% of compensatory damages—the Court awarded exemplary damages of RM703,025. [82] The Plaintiffs claimed RM100,000.00 as additional damages, relying principally on the following circumstances:

The Defendant's decision to continue selling the Infringing Goods even after the MDTC raid on 25.7.2022, which the Plaintiffs characterised as evidence of deliberate and flagrant infringement;

The large scale of the infringement — at least 19,429 units across at least 63 outlets over 20 months;

The Defendant's conduct in the post-judgment period, including what the Plaintiffs alleged to be non-compliance with the Judgment and the need for committal proceedings; and

The benefit accruing to the Defendant from the infringing sales. My Findings on Additional Damages [83] I have carefully considered the submissions of both parties. The key question is whether the circumstances of this case warrant an award of additional damages, having regard to the statutory criteria of flagrancy, benefit to the defendant, and the need for deterrence. [84] On the question of flagrancy, I find the following facts to be of critical importance. The MDTC conducted a raid and seizure exercise at the Defendant's premises on 25.7.2022. During this raid, 34 units of the Infringing Goods were identified, seized, and removed. Crucially, the Defendant's own representatives were present during the raid and were made aware that the goods in question were counterfeit and infringed upon the Plaintiffs' trademarks. Despite this clear and unequivocal notice, the Defendant continued to sell and supply the Infringing Goods through its extensive retail network after the date of the raid. This is not the conduct of an innocent or inadvertent infringer. It is the conduct of a party that was put on notice of its wrongdoing and chose, consciously and deliberately, to continue profiting from that wrongdoing. [85] The Defendant sought to excuse its post-raid conduct by arguing that: (a) there was no court order in place prohibiting the continued sale; (b) no prohibition was imposed by MDTC officers; and (c) the Defendant ceased sales within "less than a month," which it characterises as a reasonable timeframe given its operational scale and the time required to seek legal advice. With respect, I do not find these arguments persuasive. [86] First, the absence of a court order does not confer a licence to continue infringing. A party that has been put on notice through a regulatory raid, that goods in its possession and on its shelves are counterfeit and infringe upon a third party's registered trademarks, cannot hide behind the absence of a formal court order to justify the continuation of infringing sales. The law does not require a court order before a party is expected to refrain from unlawful conduct. The raid itself was sufficient notice that the goods were problematic, and any prudent and responsible commercial entity would have immediately ceased all sales pending investigation and legal advice, rather than continuing to sell while seeking advice. [87] Second, the argument that the Defendant ceased sales within "less than a month" does not assist the Defendant. On the contrary, it is an admission that the Defendant continued to sell the Infringing Goods for a period of time after the raid. Given that the Defendant operates approximately 100 outlets and was selling the Infringing Goods across at least 63 outlets, even a single day of continued sales after the raid represents a significant volume of infringing transactions. The fact that the Defendant took up to a month to recall and cease sales during which time further infringing goods were sold to unsuspecting consumers is not a mitigating factor but rather an aggravating one. It demonstrates that the Defendant prioritised its commercial interests over compliance with intellectual property rights. [88] Third, the overall scale of the infringement is itself an indicator of flagrancy. This was not a case of a small trader unknowingly stocking a handful of infringing items. The Defendant is a large, commercially sophisticated retail chain that imported, distributed, and sold at least 19,429 units of Infringing Goods bearing the Offending Sign across at least 63 outlets throughout Malaysia over a period of approximately 20 months. The volume and geographical spread of the infringing activity reflects not less than a sustained commercial operation that was designed to capitalise on the Plaintiffs' well-established brand recognition. [89] Regarding the benefit accruing to the Defendant, the account of profits has definitively established that the Defendant derived a quantifiable financial advantage from the infringing sales. Specifically, the Defendant was able to offer the Infringing Goods, bearing a mark confusingly similar to the Plaintiffs' well-known Arm & Axe Marks, to consumers across its nationwide retail network, thereby attracting customers who otherwise might not have been drawn to the Defendant's stores or who might have purchased the Plaintiffs' genuine product. The commercial benefit to the Defendant extended beyond the mere profit earned from the Infringing Goods. It encompassed the broader advantage of enhanced customer patronage generated by offering a product that traded directly on the recognition and established reputation of a well-known heritage brand. [90] On the question of deterrence, I am of the view that an award of additional damages is necessary and appropriate in the circumstances of this case. Trademark infringement, particularly the large-scale distribution and sale of counterfeit goods through established retail channels, is a serious problem that undermines the integrity of the intellectual property system. This harms legitimate brand owners, and poses potential risks to consumers who may unknowingly purchase products of uncertain quality. The courts must send a clear signal that such conduct will not be tolerated and that the consequences of deliberate and large-scale infringement will be dealt with. [91] Separately, learned counsel for the Defendant submitted that the Plaintiffs' pursuit of both additional damages in these assessment proceedings and separate committal proceedings (Enclosure 95) against the Defendant's directors amounts to "double punishment." With respect, I find no merits in this argument. The two sets of proceedings serve entirely distinct purposes. Committal proceedings are directed at enforcing obedience to a court order; they are concerned with the alleged contumacious disobedience of the Court Judgment. Additional damages, on the other hand, are concerned with the flagrancy and deliberateness of the underlying infringement itself, the benefit derived therefrom, and the need for deterrence. These are different legal proceedings and there is no bar that prevents both from being pursued concurrently. The fact that committal proceedings have been initiated does not preclude or reduce an award of additional damages, just as an award of additional damages does not preclude or supplant committal proceedings. [92] The Defendant further submitted that the absence of criminal proceedings is relevant to the question of flagrancy. I disagree. Section 56(8) of the TMA 2019 expressly provides that additional damages may be awarded regardless of whether criminal proceedings have been pursued. The statutory basis for additional damages is the civil infringement action itself, and the criteria are those set out in Section 56(7)(c) — flagrancy, benefit, and deterrence and not the existence or absence of parallel criminal proceedings. [93] Having considered all the circumstances, I am satisfied that this is an appropriate case for the award of additional damages. The infringement was flagrant, wherein I find that the Defendant continued to sell after being put on notice through the MDTC raid. As I have alluded to earlier, the infringement was conducted on a large scale across a nationwide retail network and the Defendant derived a commercial benefit. For these reasons, and there is a clear need for deterrence. [94] However, I am of the view that the sum of RM100,000.00 claimed by the Plaintiffs for additional damages is, in all the circumstances, excessive. While the infringement was undoubtedly flagrant and deliberate, I must exercise my discretion to arrive at a figure that is proportionate to the degree of flagrancy, the scale of the benefit derived, and the deterrent purpose, without being punitive to the point of being oppressive. I take into account that the total profit derived by the Defendant from the infringing sales, as assessed above, was RM20,904.24, and that additional damages should bear a reasonable relationship to the overall scale of the infringement and its consequences. [95] In the exercise of my discretion, I award additional damages in the sum of RM25,000. I am satisfied that this sum adequately reflects the flagrant nature of the Defendant's conduct, the benefit it obtained, and the need to deter similar infringements in the future, while remaining proportionate and fair. G. GENERAL DAMAGES – RM25,000.00 [96] The Plaintiffs claimed general damages in the sum of RM50,000.00. In support of this head of claim, the Plaintiffs submitted that the Defendant's infringing acts caused the Plaintiffs to incur significant time, effort, and expense in investigating the infringement, gathering evidence, initiating and prosecuting this action, and pursuing enforcement measures. Learned counsel for the Plaintiffs further submitted that the infringement caused disruption to their business operations, diversion of management time and resources from productive commercial activity to the pursuit of legal proceedings, and general inconvenience and distress arising from the need to protect their intellectual property rights against the Defendant's sustained and large-scale infringement. [97] The Defendant contended that the Plaintiffs are not entitled to general damages, arguing that the time and expenses allegedly incurred in these proceedings were "self-inflicted and unnecessarily caused by the Plaintiffs themselves." The Defendant asserted that much of the litigation, including the committal proceedings and the various interlocutory applications, was initiated by the Plaintiffs of their own volition and therefore cannot be characterised as loss flowing from the Defendant's infringement. My Findings on General Damages [98] General damages in trademark infringement and passing off cases compensate the plaintiff for losses that naturally and inevitably arise from the infringement. However, these losses cannot be precisely quantified under a specific head of damage. Such losses may include the diversion of management time and resources to address the infringement's consequences, general disruption to business operations, anxiety and inconvenience caused by the need to protect the plaintiff's brand, and broader consequential effects of the infringement that do not fall neatly under the categories of an account of profits, loss of goodwill, or additional damages. [99] I accept the Plaintiffs' submission that the Defendant's infringement conducted on a large scale, over a prolonged period, through a nationwide retail network, and continuing even after regulatory intervention inevitably caused the Plaintiffs to expend significant time and resources in investigating, monitoring, and taking action against the infringement. The Plaintiffs were compelled to engage solicitors, instruct representatives to attend the raid and verify the seized goods, conduct investigations into the extent of the Defendant's infringing sales, initiate legal proceedings, and pursue the assessment of damages. These are real and tangible consequences of the Defendant's wrongdoing. The Plaintiffs did not bring this litigation upon themselves as they were forced to do so by the Defendant's persistent and large-scale infringement of their intellectual property rights. [100] I do not accept the Defendant's characterisation of the Plaintiffs' litigation activity as "self-inflicted." A trademark proprietor that discovers large-scale infringement of its registered marks is not only entitled but obliged to take steps to protect its intellectual property. The failure to do so may result in the erosion of the distinctiveness of the marks and may even, in time, prejudice the proprietor's rights. The fact that the Plaintiffs found it necessary to pursue multiple avenues of enforcement including the substantive action, the assessment proceedings, and the committal proceedings is a direct consequence of the Defendant's conduct. [101] However, I am mindful that general damages must not overlap with or duplicate compensation already awarded under other heads. To the extent that the Plaintiffs' losses are already compensated by the account of profits, the award for loss of goodwill and reputation, and the additional damages, those losses should not be counted again under the head of general damages. General damages should compensate only for those residual losses which includes the inconvenience, disruption, and expenditure of time and resources that are not captured by the other heads of damage. [102] I am also mindful that the sum of RM50,000.00 claimed by the Plaintiffs appears to be on the higher end of what is reasonable in the circumstances. While I accept that the Plaintiffs incurred real costs and inconvenience, and while I recognise that the scale of the Defendant's infringement necessitated significant enforcement effort, I must ensure that the award is proportionate. [103] Having weighed all the circumstances, including the duration and scale of the infringement, the multiplicity of outlets involved, the need for regulatory and legal enforcement action, the diversion of the Plaintiffs' management time and resources, and the general disruption and inconvenience caused, I award general damages in the sum of RM25,000.00. I am satisfied that this sum provides fair and reasonable compensation for the general losses suffered by the Plaintiffs that are not already addressed under the other heads of damages. H. EXEMPLARY DAMAGES – RM75,000.00 (25% OF TOTAL COMPENSATORY DAMAGES) [104] Exemplary damages, also known as punitive damages, serve a distinct purpose from that of compensatory damages. While compensatory damages (including the loss of goodwill, additional damages, and general damages) aim to restore the plaintiff to the position it would have been in but for the infringement, exemplary damages are designed to punish the defendant for particularly egregious conduct. Exemplary damages is also awarded to deter the defendant and others from engaging in similar conduct in the future. [105] In exercising this discretion, the court must have regard to the totality of the defendant's conduct, including the nature and scale of the infringement, the defendant's state of mind, whether the infringement was deliberate or inadvertent, the defendant's response when put on notice, and the defendant's conduct throughout the proceedings. [106] In the instant case, the Plaintiffs sought exemplary damages in the sum of 25% of the total award for compensatory damages. The Plaintiffs submitted that the Defendant's conduct was characterised by deliberate and calculated infringement, wilful continuation of infringing sales after the MDTC raid, and its conduct throughout the proceedings that demonstrated a disregard for the Plaintiffs' intellectual property rights. [107] The Defendant submitted that exemplary damages are not warranted because: (a) the Defendant was not under an obligation to cease sales at the material time; (b) the Defendant voluntarily ceased sales within a reasonable period; (c) the Defendant demonstrated good faith and a cooperative attitude; and (d) the combined pursuit of exemplary damages and committal proceedings amounts to double punishment. My Findings on Exemplary Damages [108] I have already dealt with several of the Defendant's arguments in the context of additional damages, and I do not propose to repeat those findings at length. However, I shall summarise the key factual findings that are relevant to the question of exemplary damages. [109] First, the infringement was deliberate. The Defendant, a commercially entity operating a nationwide retail chain, imported and distributed goods bearing a mark that was confusingly similar to the Plaintiffs' well-known Arm & Axe Marks. The Registrar of Trademarks had verified on multiple occasions that the Offending Sign was confusingly similar to the Plaintiffs' said Trademark. The Defendant sold at least 19,429 units of the Infringing Goods across at least 63 outlets over approximately 20 months. [110] Second, the Defendant continued to sell the Infringing Goods after being put on notice through the MDTC raid. As I have already found, the raid constituted clear notice that the goods were counterfeit and infringing. The Defendant's decision to continue selling for a further period, rather than immediately halting all sales, demonstrates a conscious choice to prioritise commercial gain over respect for the Plaintiffs' intellectual property rights. [111] Third, the Defendant's conduct in the post-judgment period is relevant. The Plaintiffs initiated committal proceedings against the Defendant's directors, alleging non-compliance with the Judgment. While the committal proceedings are separate and distinct from the present assessment proceedings, the Plaintiffs' need to resort to committal proceedings is indicative of the Defendant's attitude towards compliance with its obligations. I note that the Defendant did file Affidavits of Compliance (Enclosures 69 and 70), and I take that into account. However, the overall picture that emerges from the evidence is one of a defendant that has, throughout these proceedings, sought to minimise its obligations and resist the consequences of its infringing conduct. [112] Fourth, I address the Defendant's argument that the pursuit of both exemplary damages and committal proceedings constitutes "double punishment." I have already rejected this argument in the context of additional damages, and I reject it again here. Committal proceedings and exemplary damages serve different purposes. Committal proceedings are concerned with obedience to court orders. Exemplary damages are concerned with the quality of the defendant's conduct in relation to the underlying infringement. The two are conceptually and legally distinct. The possibility that the Defendant may face consequences in the committal proceedings does not preclude an award of exemplary damages in these assessment proceedings. [113] Fifth, I do not accept the Defendant's submission that it demonstrated "good faith and a cooperative attitude." A party that continues to sell infringing goods after a regulatory raid, that necessitates the bringing of legal proceedings for summary judgment, that appeals the judgment (unsuccessfully), and whose post-judgment compliance is sufficiently questionable to prompt the initiation of committal proceedings, cannot fairly be described as having acted in good faith or with a cooperative attitude. While I acknowledge that the Defendant eventually ceased sales and filed affidavits of compliance, these actions were taken only after sustained pressure from the Plaintiffs and the intervention of the courts. They do not demonstrate the kind of voluntary, proactive, and genuine cooperation that might serve to mitigate an award of exemplary damages. [114] Having considered the totality of the Defendant's conduct which includes the deliberate and sustained nature of the infringement, the continuation of sales after regulatory intervention, the scale and geographical reach of the infringement through a nationwide retail chain, and the Defendant's overall attitude throughout these proceedings, I am satisfied that this is an appropriate case for the award of exemplary damages. The Defendant's conduct demonstrates a calculated disregard for the Plaintiffs' intellectual property rights, and an award of exemplary damages is necessary to mark the Court's disapproval and to serve as a deterrent against similar conduct in the future. [115] The Plaintiffs have claimed exemplary damages at the rate of 25% of the total award for compensatory damages. I consider this to be a reasonable and proportionate measure of exemplary damages in the circumstances of this case. It is neither so low as to be ineffective as a deterrent, nor so high as to be oppressive or disproportionate. [116] The total award for compensatory damages is calculated as follows: Head of Damage Amount (RM) Loss of Goodwill and Reputation 250,000.00 Additional Damages 25,000.00 General Damages 25,000.00 Total Compensatory Damages 300,000.00 [117] Applying the rate of 25% to the total compensatory damages of RM300,000, the exemplary damages amount to RM75,000.00 (being 25% of the total compensatory award as computed based on the total amount of damages awarded). [118] I am satisfied that this sum is proportionate to the gravity of the Defendant's conduct, serves the dual purpose of punishing the Defendant for its egregious behaviour and deterring future infringers, and is consistent with the principles governing the award of exemplary damages in intellectual property cases. [119] Before concluding, I wish to address certain overarching themes in the Defendant's submissions that I have not dealt with specifically in the preceding paragraphs. [120] The Defendant repeatedly urged this Court to exercise restraint in awarding damages, warning against "unjust enrichment" and "overcompensation" of the Plaintiffs. While I accept that the Court must guard against unjust enrichment, I am equally mindful that the Court must guard against the under-compensation of a trademark proprietor whose rights have been deliberately and flagrantly infringed on a large scale. The purpose of the assessment of damages is to do justice between the parties, to ensure that the Plaintiffs are fairly compensated for the loss and damage they have suffered, and to ensure that the Defendant does not retain the fruits of its wrongdoing. In the circumstances of this case, the awards I have made are, in my judgment, fair, reasonable, and proportionate. They do not unjustly enrich the Plaintiffs; they justly compensate them. [121] Finally, the Defendant submitted that it should not be treated as a "deliberate" infringer because it was merely a retailer that sourced the Infringing Goods from a third-party supplier. Even accepting this characterisation at face value, it does not absolve the Defendant of liability or reduce the quantum of damages. A retailer that sells infringing goods is liable for infringement, regardless of its position in the supply chain. Moreover, as a large and commercially sophisticated retail chain, the Defendant had the resources and the responsibility to conduct due diligence on the products it offered for sale. Its failure to do so and its continued sale of the Infringing Goods even after the MDTC raid demonstrates, at the very least, a reckless disregard for the Plaintiffs' intellectual property rights, and at worst, deliberate and calculated infringement. K. CONCLUSION [122] For the reasons set out above, I allow the Plaintiffs' claim for assessment of damages and make the following orders:

The Defendant shall pay to the Plaintiffs the sum of RM20,904.24 as Account of Profits;

(ii) The Defendant shall pay to the Plaintiffs the sum of RM250,000.00 for Loss of Goodwill and Reputation;

(iii) The Defendant shall pay to the Plaintiffs the sum of RM25,000.00 as Additional Damages;

(iv) The Defendant shall pay to the Plaintiffs the sum of RM25,000.00 as General Damages;

The Defendant shall pay to the Plaintiffs the sum of RM75,000.00 as Exemplary Damages, being 25% of the total award for compensatory damages;

(vi) The total sum payable by the Defendant to the Plaintiffs is RM395,904.24;

(vii) Interest at the rate of 5% per annum on the total sum from the date of judgment until full realisation; and

(viii) Costs of RM 10,000 be paid by the Defendant to the Plaintiff. Dated this day of 12th March 2026. -sgd-EDWIN PARAMJOTHY MICHAEL MUNIANDY JUDICIAL COMMISSIONER COMMERCIAL DIVISION (NCC 7) HIGH COURT OF MALAYA KUALA LUMPUR Counsel: For the Plaintiff : Lum Kok Kiong and Kam Li Jie (Messrs. Lum Kok Kiong & Co) For the Defendant : Suaran Singh together with Lucy Lee and Angela Leong Mun Yi (Messrs. Law Partnership)