Nor Yanni Binti Adom v Ortus Expert White (W-02(IPvC)(W)-1808-09/2018)

NOR YANNI BINTI ADOM … PERAYU-PERAYU (No. K/P: 801202-05-5174)

NOORFAEZAL BIN ROMLI (No/ K/P: 820503-14-5599) 15 (Berdagang dalam nama dan gelaran Rafica Resources) (No. Pendaftaran Perniagaan: SA0205639-D) DAN 20 ORTUS EXPERT WHITE … RESPONDEN (No. Syarikat: 951378-H) [DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR DALAM WILAYAH PERSEKUTUAN KUALA LUMPUR 25 GUAMAN NO: WA-22IP-25-06/2017 ORTUS EXPERT WHITE … PLAINTIF (No. Syarikat: 951378-H) 30

NOR YANNI BINTI ADOM … DEFENDAN-DEFENDAN (No. K/P: 801202-05-5174) 35

NOORFAEZAL BIN ROMLI (No/ K/P: 820503-14-5599) (Berdagang dalam nama dan gelaran Rafica Resources) (No. Pendaftaran Perniagaan: SA0205639-D) 40 CORAM HAMID SULTAN ABU BACKER, JCA HANIPAH FARIKULLAH, JCA KAMALUDIN MD SAID, JCA 45 2 GROUNDS OF JUDGEMENT 5 INTRODUCTION [1] This is the Appellants’ appeal against the decision of the High Court judge in finding the Appellants liable on all three causes of 10 action i.e. for breach of Dealership Agreement, infringement of Respondent’s Registered Trade Mark and passing off. [2] For convenience, the Appellants will continue to be referred to a s t h e Defendants and the Respondents will be referred to as the 15 Plaintiff according to their description in the High Court. SALIENT FACTS [3] The Plaintiff is a company in the business of distributing beauty 20 products (“Plaintiff’s Products") with the trademark of "Royal Expert White" registered in the Register of Trade Marks under the Trade Marks Act 1976 ( “ TMA ” ) ("Plaintiff’s Registered Trademark"). 25 [4] The 1st Defendant who is the wife of the 2nd Defendant had applied to be the dealer of the Plaintiff’s products by entering into a Dealership Agreement dated 9.9.2015 ("the Dealership Agreement") with the Plaintiff. 30 3 5 [5] The 2nd Defendant is the sole proprietor of Rafica Resources and has distributed together with the 1st Defendant at the material times the Plaintiff’s products and the skin whitening cream bearing the Plaintiff’s Registered Trademark. 10 [6] The Plaintiff brought an action against the Defendants for breach of contract i.e. a dealership agreement, trademark infringement and passing off in relation to a whitening cream under brand “Real Expert White” sold by the Defendants. In consequences thereof, the Plaintiff claimed general damages for losses to be assessed by 15 the Registrar. The Defendants were also required to give the Plaintiff the account of all profit made by the Defendants by manufacturing and/or distributing and/or selling whitening cream under brand “Real Expert White” and injunction to restrain the Defendants, whether by themselves or through their servants, 20 agents, employees and/or otherwise, howsoever from manufacturing and/or distributing and/or selling whitening cream under brand “Real Expert White”. [7] After a full trial (on liability only) the High Court held that the 25 Defendants were liable on all three causes of action and assessment of damages was ordered. 30 4 GROUNDS OF APPEAL 5 [8] The Defendants’ grounds of appeal in the Memorandum of Appeal dated 29.10.2018, stated as follows -

that the High Court had wrongly decided that the Plaintiff had 10 discharged their burden of proof in respect of the breach of the Dealership Agreement, infringement of trademark and the tort of passing off;

(ii) that the High Court had wrongly decided that the 2nd 15 Defendant who was not a party of the Dealership Agreement to have breached the dealership Agreement;

(iii) that the High Court had wrongly decided that the Plaintiff had the good will to be protected despite that the Plaintiff’s goods 20 were banned by Kementerian Kesihatan Malaysia (“KKM”);

(iv) that the High Court had decided that there was a likelihood of confusion or deception in the course of trade in relation to the products concerned despite that the trademarks differed 25 visually and aurally to a great extent;

that the High Court had failed to hold that in order passing off action to succeed, the Plaintiff must establish first that the particular get-up which it has been using has become 30 5 associated exclusively with its goods;

(vi) that the High Court failed to appreciate that the KKM ban is the material and effective cause of the losses suffered by the Plaintiff and the Plaintiff’s losses were not caused by the Defendants; and 10

(vii) that the High Court had failed to decide that there is no intent to deceive by the Defendants who were merely distributing another manufacturer’s product. 15 SUBMISSIONS ON THIS APPEAL [9] We heard the oral submissions from the Defendants’ counsel and the Plaintiff’s counsels and we had also referred to their written submissions filed herein. We thanked counsels for their good 20 submissions and assistance. [10] The grounds of appeal mainly against the finding of the High Court judge (“the learned judge”) against the Defendants for breach of the dealership agreement, infringement of trademark and passing 25 off. [11] The Defendants’ counsel in her opening speech highlighted to us the difference between the Plaintiff’s products and the Defendants’ products. She submitted that the Defendants’ product was never 30 6 similar to the Plaintiff’s products that can cause a likelihood of 5 confusion or deception between the consumers of the Plaintiff’s products and Defendants’ products as held by the learned judge. [12] In appreciating her submissions, we required parties to show us the samples of Plaintiff’s products and the Defendants’ products for 10 us to examine the difference between the Plaintiff’s Registered Trade Mark on the Plaintiff’s products and the Defendants’ mark on the Defendants’ products which was alleged to have infringed the Plaintiff’s Registered Trade Mark. 15 [13] The Plaintiff handed to us few samples of the Plaintiff’s products and the Defendants’ products. We examined the samples of the products and the marks appear on the products are as follows – The Plaintiff’s products with its Registered Trade Mark is shown 20 below- 7 The Defendants’ products with its mark is shown below- 5 10 [14] We paused for a moment and it was our unanimous view that since we had seen the difference in these two products, it is best that we investigate the decision of the learned judge in respect of cause of action on infringement of Trade Mark first. 15 THE HIGH COURT FINDING [15] The learned judge having dealt with the trade mark infringement elements under section 38 (1) (a) of the TMA and having heard the 20 Plaintiff’s witnesses’ evidence and relying on the Federal Court case of Low Chi Yong (Berniaga sebagai Reynox Fertichem) v Low Chi Hong & Anor [2017] 6 MLRA 412, in his judgment held as follows - 25 “(1) the Defendants have used Real Expert White Mark which so nearly resembles the Plaintiff’s Registered Trade Mark as to 8 cause a likelihood of confusion or deception between the 5 consumers of the Plaintiff’s Product and Real Expert White Products (1st element);

the Defendant are neither the registered proprietors nor the registered users of the Plaintiff’s Trade Mark (2nd element);

the Defendants have used Real Expert White Mark in the course of trade (3rd element)’

the Defendants have used Real Expert White Mark on Real 15 Expert White Products within the scope of registration of Plaintiff’s Registered Trade Mark (4th element); and

the Defendants have used Real Expert White Mark in such a manner as to render its use likely to be taken either as being 20 used as a trade mark or as importing a reference to the Plaintiff or the Plaintiff’s Registered Trade Mark (5th element). [16] The Plaintiff’s witness, SP1 had given evidence that the Defendants are distributors of the Plaintiff’s products but they 25 distributed Real Expert White Products. As such, the Defendants had breached the Agreement, infringed the Plaintiff’s Registered Trade Mark and passed off Real Expert White Products as the Plaintiff Products (3 causes of action). The Plaintiff had experienced increases in its gross profit from 2012 to 2016. Due 30 9 the 3 causes of action, the Plaintiff’s gross profit suffered a 5 substantial drop in 2017 (as compared to 2016 (Decreased in Plaintiff’s profit) and the Defendants did not reply to the Plaintiff’s Demand letter dated 30.5.2017 sent to them by the Plaintiff’s solicitor regarding the 3 causes of action. 10 [17] The Plaintiff’s witness, SP2 gave evidence that expenses had been incurred by the Plaintiff in marketing the Plaintiff’s products (Plaintiff’s promotional expenses) and there was a decrease in Plaintiff’s profit. 15 [18] The Plaintiff’s witness, SP3 testified that she has been an authorised distributor of the Plaintiff’s Products for the past 10 years and the introduction of Real Expert White has adversely affected SP3’ s sales of the Plaintiff’s products. 20 [19] It was not disputed that after the close of the Plaintiff’s case, the Defendants elected not to adduce any oral evidence in this case. [20] Applying the case of Jaafar Shaari & Anor v Tan Lip Eng & Anor [1977] 4 CLJ 509, Takako Sakao v Ng Pek Yuan & Anor [2009] 25 6 MLJ 751, the learned judge presumed the Plaintiff’s evidence to be true. He found as a fact that SP1, SP2 and SP3 are credible witnesses and an adverse inference is made against the Defendants under section 114 (g) of Evidence Act 1950 for not adducing any evidence to rebut the Plaintiff’s evidence. 30 10 OUR VIEW 5 [21] Firstly, on the effect of Defendants’ election not to adduce any oral evidence, we agreed with the learned judge reference to the above cases as the applicable law. It was also held in Syarikat Kemajuan Timbermine Sdn. Bhd v Kerajaan Negeri Kelantan 10 Darul Naim [ 2015] 2 AMR 142 that once a defendant elects not to call for evidence, apart from him being bound by that election, the effect is also that all the evidence led by plaintiff must be assumed to be true. See also Mohamed Junus v Rahman Shah Alang Ibrahim & Anor [2008] 2 CLJ 369; [2008] 3 MLJ 81. 15 [22] However, Azahar Mohamed FCJ further held that by reasons of the legal principles, the fact that the Defendant led no evidence or call no witnesses did not absolve the Plaintiff from discharging its burden in law. The evidence adduced by the Plaintiff must still be 20 sufficient to prove the claim. “It is true that in the present case the Defendant elected not to call any witnesses. However, it is imperative to bear in mind that from the outset the legal burden of the existence of the 25 settlement agreement was with the Plaintiff as the claimant in the present action. By reasons of the legal principles, the fact that the Defendant led no evidence or call no witnesses did not absolve the Plaintiff from discharging its burden in law. In this regard, in adopting the approach of the case of Storey v 30 11 Storey [1961] P 63, Suriyadi JCA (as His Lordship then was) 5 in Mohd Nor Afandi Mohamed Junus v Rahman Shah Alang Ibrahim & Anor [2008] 2 CLJ 369 recognised this to be the case as can be seen from the following passage of His Lordship's judgment: 10 “There are, however, two sets of circumstances under which a defendant may submit that he has no case to answer. In the one case there may be a submission that, accepting the plaintiff's evidence at its face value, no case has been established in law, and in the other that the 15 evidence led for the plaintiff is so unsatisfactory or unreliable that the Court should find that the burden of proof has not been discharged.” [57] We therefore agree with the submission of learned 20 counsel for the Defendant to the effect that despite the fact the Defendant did not call any witness and that even if the Plaintiff's evidence is unopposed (and therefore presumed to be true), this does not automatically equate to that evidence satisfying the burden of proving the existence of 25 the settlement agreement borne by the Plaintiff, or mean that the burden of proving on the balance of probabilities no longer applies, or that a case to answer is automatically made out. The evidence adduced by the Plaintiff must still be sufficient to prove the existence of the settlement 30 12 agreement. This crucial point was overlooked by the 5 learned High Court judge. On the factual matrix of the case, it is patently clear that the Plaintiff has not discharged the burden.” [23] In an earlier case of UN Pandey v Hotel Marco Polo Pte Ltd 10 [1980] 1 MLJ 4, Sinnathuray J cited the case of Storey v Storey [1961] P 63 which held that - “There are, however two sets of circumstances under which a defendant may submit that he has no case to answer. In the 15 one case, there may be a submission that, accepting the plaintiff’s evidence at face value, no case has been established in law and in the other that the evidence led for the plaintiff is so unsatisfactory or unreliable that the court should find that the burden of proof has not been established’ 20 Sinnathuray J further held that- “….it would be desirable practice in our courts to allow a submission of no case to answer at the end of the plaintiff’s 25 case, without putting the defendant to his election, whether to call evidence or not, if his submission fails….” [24] The Plaintiff in this case alleged that the Defendants had infringed the Plaintiff’s Registered Trademark of Royal Expert White 30 13 products and passed off Real Expert White Products as the 5 Plaintiff Products. The learned judge accepted the Plaintiff’s witness SP1 evidence which was unrebutted as conclusive prove that the Plaintiff had proved that there is a likelihood of confusion/deception. 10 [25] Be that as it may, despite the fact the Defendants did not call any witness and that even if the Plaintiff's evidence is unopposed (and therefore presumed to be true) the law requires the evidence adduced by the Plaintiff must be sufficient to prove the Defendants had infringed the Plaintiff’s registered trade mark. 15 [26] The Defendants submitted that there is specific disclaimer attached together with the register that the registration shall give no right to the exclusive use of the word “ROYAL” and ‘EXPERT WHITE” (see page 63 of the Common Bundle of Documents). Further, in the 20 registration of the Plaintiff’s trademark has the express condition of the Type of Trademark is “Combined”. This means the words use, the picture or logo used combined together make up the Registered Trademark. When the Type of Trademark is combined, the registration will not protect the words only or the 25 picture only in isolation. This a combined trademark. They must appear in this same combination for the protection against infringement of trademark. 30 14 [27] It was submitted that the products sold by the Defendants under 5 the “REAL EXPERT WHITE” trademark does not infringe the above trademark as alleged. [28] Based on the submissions, we noted that the crux of the Defendants’ case is that the burden of proof has not been 10 discharged in that the trademarks are neither identical nor similar in a way to cause deception or confusion. [29] The Defendants showed us the different of the two marks in the table below – 15 Royal Expert White Real Expert White Visually Symbol of Crown with the words “ROYAL” in capital letters embossed on the crown itself. Geometric Design and/or Stylised letter “R” in a leaf shape. Bold Capitalized Font The word “ROYAL” in capital letters enclosed within a solid rectangle. Curvy Small Font Fully Blue Packing with Silver Rectangular White Packaging with Blue Font and Blue Rectangular 15 Royal Expert White Real Expert White The disclaimed or non-exclusive words “Expert White enclosed within a rectangle “The disclaimed word Expert White” enclosed within a rectangle in one version and not in another version. 5 [30] It was submitted that the actual products tendered as evidence in Court did not carry the combined registered trademark but was instead marked as: “ROYAL EXPERT” and “WHITENING CREAM” and the crown 10 symbol above the word “ROYAL” is noticeably missing. See Exhibits P2 to P12. The exhibits are at pages 32 to 51 of the Additional Common Bundles of Documents. [31] Further, the only similarity if any was in respect of the words 15 “EXPERT WHITE”. However, the Disclaimer and/or Condition of their trademark registration establishes that words “EXPERT WHITE” itself is not protected by way of registration. This is confirmed by the Learned Judge himself at paragraph 26(a) of his Grounds. The learned judge held that there is a 20 “Disclaimer/Condition” in the Plaintiff’s Registered Trade Mark, namely the Plaintiff has no right to the exclusive use of the words “Royal” and “Expert White” (Words). 16 [32] Sections 18(2), 35(1) and 40(2) TMA provide as follows: 5 “18(2) No disclaimer on the Register shall affect any right of the proprietor of a trade mark except a right arising out of the registration of the trade mark in respect of which the disclaimer is made. 10 35(1) Subject to the provisions of this Act, the registration of a person as registered proprietor of a trade mark (other than a certification trade mark) in respect of any goods or services hall, if valid, give or be deemed to have been given to that 15 person the exclusive right to the use of the trade mark in relation to those goods or services subject to any conditions, amendments, modifications or limitations entered in the Register. 20 40(2) Where a trade mark is registered subject to conditions, amendments, modifications or limitations, the trade mark is not infringed by the use of the trade mark in any manner in relation to goods to be sold or otherwise trade in a place or in relation goods to be exported to a market or in relation to 25 services to be provided in a place or in any other circumstances to which having regard to those conditions, amendments, modifications or limitations the registration does not extend”. 30 17 [33] In Singapore High Court case of British-American Tobacco Co 5 Ltd v Tobacco Importers & Manufactures Ltd & Ors [1963] MLJ 196, at 198, Ambrose J decided as follows- “The exclusive use of those words was specifically disclaimed by the Plaintiffs. I decided that a disclaimed feature cannot 10 possibly be regarded as essential particular. I agreed with the view expressed by Lloyd-Jacob J. in the Taw case cited above that “A disclaimed feature is the antithesis of an essential particular.” I accepted the following passage from Kerly’s Law of Trade Marks, 8th edition, page 150, as a correct statement 15 of the law: The effect of a disclaimer is that the proprietor of the registered trade mark cannot claim any trade marks rights in respect of the parts of the mark to which the disclaimer 20 relates, so that, for instance, no action for infringement lies in respect of the use or imitation of the disclaimed particulars.” [34] The above judgment was followed by Ramly Ali J (as he then was) 25 in the High Court in Sanbos (M) Sdn Bhd v Tiong Mak Liquor Trading (M) Sdn Bhd [2008] 10 CLJ 538] which held as follows - “[25] It is pertinent to point out at this juncture that each of the plaintiff’s registration for “CLUB 99” and “CLUB 999” is 30 18 expressly subject to a disclaimer that the registration does not 5 have an exclusive right over the use of the numbers “99” and “999” …. The plaintiff only has an exclusive right on the words “CLUB” in both registrations. Therefore, the court should disregard the 10 numerals “99” and “999” in the plaintiff’s registration when comparing whether the defendant’s “TRIPLE 999” mark is confusingly similar to the plaintiff’s marks.” [35] Based on sections 18 (2), 35 (1) and 40 (2) of the TMA and the 15 above cited cases, the learned judge held that the Court cannot consider the Disclaimed Words in considering deciding on the existence of a likelihood of confusion and deception. We agreed with the learned judge’s opinion on this point. The Plaintiff has no right to the exclusive use of the words “Royal” and “Expert White” 20 (Words). [36] The Defendants submitted that the registered trademark and the alleged infringing trademark also differed in other senses/features. Namely: - 25 Royal Expert White Real Expert White Phonetically Two syllables that starts with the sound “Ro”. Single syllable that starts with the sound “Ray”. 19 Royal Expert White Real Expert White Idea or Concept Royal connotes ideas of kings queens, majestic, royalty and regal grandiosity etc. and in Bahasa Malaysia our national language diraja, sultan keagungan, kerabat diraja Real mean true, actual authentic genuine and physical and in Bahasa Malaysia our national language “benar”, “betul”, “sebenar” etc. 5 [37] Justice Ramly Ali (as he then was) in the case of Consitex SA v. TCl Marketing Sdn Bhd [2008] 2 MLRH 380; [2008] 3 MLJ 574; [2008] 8 CLJ 444 held: that the “Literacy level in Malaysia TS high and consumers are more demanding, discerning and observant than before and therefore are able to distinguish the plaintiff’s and 10 defendant’s trademark businesses”. [38] Based on the above case, we agreed with the Defendants that the ideas and the concepts of the two words are of complete distinct and different and cannot be confused with each other. 15 [39] In the case of Keep Good Feel Corporation Sdn Bhd & Anor v Pharma World (M) Sdn Bhd & Ors [2009] 10 MLRH 630, the Court reviewed the position on law of several case and held as follows: 20 20 “In Consitex SA v. TCL Marketing Sdn Bhd [2008] 2 MLRH 5 380; [2008] 3 MLJ 574; [2008] 8 CLJ 444, the court observed as follows: - “The test as laid down by Parker J in Re Pianotist Co Application (supra) has been adopted by our Supreme 10 Court in Tohtonku Sdn Bhd v. Superace (M) Sdn Bhd [1992] 1 MLRA 350; [1992] 2 MLJ 63; [1992] 1 CLJ (Rep) 344 and Elba Group Sdn Bhd v. Pendaftar Cap Dagangan dan Paten Malaysia & Anor [1998] 4 CLJ Supp 24. 15 Subsequent case law has developed further tests and principles which are widely accepted and applied and which may be summarised as follows: - 20

the idea conveyed by both trademarks must be compared;

the marks as a whole must be compared 25

the 1st syllable of the trade marks is of importance;

the ear as well as the eye must be considered;

the imperfect recollection of customers/potential 30 customers must be considered; 21

the essential features of the trade marks must also 5 be compared. … The High Court in Tohtonku Case [1989] 3 MLRH 79; [1989] 2 CLJ 575; [1989] 1 CLJ 1128 at p. 575 held: - 10 ... there is no close similarity between the two words “ MISTER" and "SISTER" as to be likely to cause deception or confusion. The words are different. There is similarity in the second syllable but as a whole the similarity is not close enough as to be likely to cause deception or 15 confusion. The above High Court decision in Tohtonku case was confirmed by the Supreme Court as reported in [1992] 1 MLRA 350; [1992] 2 MLJ 63; [1992] 1 CLJ (Rep) 344. 20 Based on the decision, it is clear that mere similarity phonetically in one of two words marks is not sufficient to make a case of infringement of trade mark." [40] We also noted that in the same Keep Good Feel case the Court 25 also placed on the guideline on the essential feature concept as follows: 22 "Useful guidelines, particularly the essential feature 5 concept, for the comparison of trademark in an infringement and passing off case were set out by the Supreme Court in JS Steadtler & Anor v. Lee & Sons Enterprise Sdn Bhd [1993] AIPR 365. In that case, Mohamed Dzaiddin SCJ (as he then was) observed: - 10 "in an action for infringement, the comparison was to be made between the mark as registered, taking into account any disclaimer, and the defendants' mark as it appeared in actual use. It is the marks themselves 15 that must be compared (Saville Perfumer). If the registered mark is inherently likely to lead the public to rely on a particular feature or to ask for the goods by using the name of some device, that is the circumstances to be considered... in the instant case, in my opinion, the 20 presence of the name 'Steadtler Noris' or 'Nikki' or '120- 28' on the pencil was not relevant, but what matters was the essential features of the competing marks. Hence, the comparison must be made of the essential features, which are the striking black and yellow colours. 25 Identification of these features depended partly on the court's own judgment and partly on the burden of the evidence that was placed before the court (de Cordove v. Vick Chemical Co [1951] 68 RPC 103 at 106) 30 23 [41] Following the guidelines particularly the essential feature concept, 5 we made comparison between the mark as registered and the Defendants' mark as it appeared in actual use. Our visual comparison between the Plaintiff’s Registered Trade Mark and Real Expert White Mark reveals that they are not similar. The Real Expert White Mark has a diamond-shaped device (Diamond 10 Device) but the Plaintiff’s Royal Expert White (the Plaintiff’s Registered Trade Mark) has a Crown Device. [42] Based on the above comparison between the Plaintiff’s Registered Trade Mark of Royal Expert White and the Defendants’ mark 15 of Real Expert White taking into account the disclaimer of the words “Royal” and “Expert White”, and the Defendants' mark as it appeared in actual use, we did not find any clear evidence that the Defendants have used Real Expert White Mark which resembles the Plaintiff’s Registered Trade Mark and neither we believed that 20 the Defendants’ mark can cause a likelihood of confusion or deception between the consumers of the Plaintiff’s products and Real Expert White products. In other words, the ingredient of identical or similarity to cause deception or confusion was clearly not made out by the Plaintiff. 25 [43] In our considered opinion, the learned judge's comparison of the essential features is flawed. We were fully satisfied that since the legal and evidential burden of proof was of the mark used by the Defendants being identical or similar was not established by the 30 24 Plaintiff during the trial on the infringement of trademark, the 5 Defendants’ counsel was correct in making a no case to answer submission at the close of the Plaintiff's case. [44] On the issue of passing off, it is trite that the law of passing off is a tort which essentially consists of some sort of invasion of the 10 Plaintiff's goodwill. [45] The following cases have explained the meaning of goodwill:

goodwill has been described by Lord MacNaghten in the 15 House of Lords case of The Commissioners of Inland Revenue v Muller & Co’s Margarine Ltd [1901] AC 217, at pp 223-224, as an ‘attractive force which brings in custom’; 20

in AG Spalding Brothers v AW Gamage, Ltd [1914- 1915] All ER Rep 147, at p 150, Lord Parker in the House of Lords held that goodwill is attached to a business and not to a mark or get-up; and 25

LP Thean JA explained in the Singapore Court of Appeal case of CDL Hotels International Ltd v Pontiac Marina Pte Ltd [1998] 2 SLR 550, at paras 45-50, that goodwill, unlike reputation, does not exist on its own but must be attached to a business. 30 25 [46] The learned judge decided that the Plaintiff’s Registered Trade 5 Mark and get-up of the Plaintiff’s products (“Plaintiff’s Get-Up”) attract business and customers based on the evidence of SP1 and SP2 regarding the sales of the Plaintiff’s products and the gross profit enjoyed by the Plaintiff therefrom and the Plaintiff’s Promotion Expenses. Hence, the Plaintiff has goodwill in the 10 business attached to the Plaintiff’s Registered Trade Mark and the Plaintiff’s Get-Up (“Plaintiff’s Goodwill”). The learned judge made his finding that Plaintiff has succeeded to prove actual loss (in the form of the Decrease in Plaintiff’s Profit) to the Plaintiff’s Goodwill due to the Defendants’ Misrepresentation based on the evidence of 15 SP1, SP1 and SP3. [47] The classic case of Reckitt & Colman Products Ltd v Borden Inc [1990]1 WLR 491 'Jif Lemon' lays down the trinity of criteria to be satisfied for the tort of passing off to be made out namely 20 the existence of goodwill, requirements of misrepresentation and damage or loss caused ("Classic Trinity"). The criteria are as follows –

the plaintiff has goodwill or reputation attached to the 25 goods or services which the plaintiff supplies in the mind of the purchasing public by association with the get-up, brand name, trade description or features of labelling or packaging (which is distinctive of the plaintiff’s goods or services); 30 26

the defendant has misrepresented to the public which 5 leads or is likely to lead the public to believe that the defendant’s goods or services are the goods or services of the plaintiff; and

the plaintiff must prove that he suffers, or in a quia timet 10 action, he is likely to suffer damage by reason of the defendant’s misrepresentation. [47] The Defendants submitted that the primary elements that must be established is the misrepresentation, the existence of goodwill at 15 the material time when the tort and the loss that occurred caused by the Defendants’ passing off. The only evidence in the trial as to when the loss occurred is supplied by the Plaintiff's accountant SP 2 when she gave evidence that the Plaintiff suffer a drop in sales for the REW (Royal Expert White) products in June 2017 (see 20 notes of evidence at page 42 of the Common Bundles of Document). [48] It was not disputed, at the High Court, the Defendants had submitted that according to the Ministry’s Press Release, among 25 others, the Royal Expert Whitening Cream” imported by Ortus Expert Cosmetic Sdn. Bhd (OEC) contained mercury which is harmful to human health. The submission was rejected by the learned judge on the ground that the Press Release concerned 27 OEC and not the Plaintiff. It is trite law that the Plaintiff is a legal 5 entity which is different from OEC. [49] However, we found the Defendants’ submission merit consideration because it is a fact established at trial that on 29.5.2017, there was Press Statement issued by Ministry of 10 Health (“MOH”) (as evidenced on portal of the National Pharmaceutical Regulatory Agency) at pages 70 to 76 of the Common Bundles of Document that the "Royal Expert Whitening Cream" (the actual product which was tendered as evidence (Exhibits P2, P3 (A), P3(B) P5) was banned for containing 15 mercury. There was warning to all sellers and distributors to cease selling and distributing the said cosmetic product with immediate effect (see paragraph 8 of the Press Release). The public was also warned against the said product and to seek immediate medical advice for adverse reactions (see paragraph 20 10 of the Press Release). We agreed with the Defendants that this destroys the element of goodwill for the product of the Plaintiff i.e. "Royal Expert Whitening Cream" at the time the loss occurred and/or the business related to "Royal Expert" branding. 25 [50] Moreover, as submitted by the Defendants, during the trial the Plaintiff produced and tendered as evidence "Royal Expert Whitening Cream" (box, content). Firstly, this is the product that was banned and secondly this product is registered under Ortus Expert Cosmetics Sdn Bhd which is not the Plaintiff. It was further 30 28 submitted that the learned judge wrongfully referred to the CDCR 5 List of Registered Products at page 86 of the Core Bundle to hold that those items were all the Plaintiff's Products. The List however does not include the "Royal Expert Whitening Cream" which was tendered as evidence to the Court. 10 [51] We examined the said CDCR List and agreed with the Defendants that the learned judge had missed the fact that the List contained products of the Plaintiff and of another non-party to the suit namely Ortus Expert Cosmetics Sdn Bhd. In view of that, fundamentally the Plaintiff had failed to prove that Defendants in 15 selling the Real Expert Whitening Cream was passing off a product of the Plaintiff and the goodwill of the Plaintiff. Finally, it is also our view that the findings on misrepresentation is mainly reliant on the alleged infringement of the Registered Trade Mark and get-up. Since it was our finding that there was non- 20 infringement of the Plaintiff’s Registered Trade Mark, then the alleged element of misrepresentation also fails. [52] The learned judge held that the 1st Defendant had breach Clause 14.4 of the Dealers Agreement when she failed to notify promptly 25 the Plaintiff regarding the actual, threatened or suspected infringement of the Plaintiff’s Registered Trade Mark and the tort of passing off. The learned judge also held that the 1st Defendant breached clause 14.3.5 of the Dealers Agreement by using trademarks so resembling Plaintiff’s trademarks which is likely to 30 29 cause confusion or deception i.e. the 1st Defendant’s use of Real 5 Expert White Mark (by way of sales of Real Expert White Products) has infringed Clause 14.3.5. [53] Having done our investigation on this matter, it is our considered view that the failure to prove the trademark infringement nor 10 the passing off by the Defendants lead to the consequence that the Dealership Agreement is also not breached and therefore the liability of breach of contract against the 1st Respondent must also fail. 15 CONCLUSION [54] In conclusion, we found that the Plaintiff had never fully discharged the burden of proving within the requirement of the law (Section 101 and 102 of the Evidence Act 1950) the trademark 20 infringement nor the passing off by the Defendants. It is fundamental that the plaintiff in a claim must establish the basic legal elements of their claim. In this case, Plaintiff had not discharged t h e burden and therefore the submission of no case to answer w as made out. The learned judge was plainly wrong in 25 invoking adverse inference under section 114 (g) of the Evidence Act 1950 against the 1st Defendant. 30 [55] It is our unanimous decision and that the Defendants’ appeal is 5 allowed with Costs of RM 40,000.00 here and below subject to allocator. The High Court’s Order is set aside. Dated this 17 July 2019 10 Sgd KAMALUDIN MD. SAID JUDGE COURT OF APPEAL MALAYSIA 15 PUTRAJAYA Parties 20

Rajashree A/P Suppiah and Kryadarshini A/P Kanapathy Pillai for the Appellants (Messrs Rajashree) 25

Etrus Tan Chen Hee and Esther Ong Hui Chuen for the Respondent (Messrs Esther Ong Tengku Saiful & Sree)