Ortus Expert White Sdn. Bhd. v 1) Nor Yanni Binti Adom (22IP-25-06/2017)

The plaintiff company (Plaintiff) is in the business of distributing, among others, “Royal Expert” beauty products (Plaintiff’s Goods). The Plaintiff’s Goods bear a “Royal Expert White” trade mark (Plaintiff’s Registered Trade Mark) which has been registered in the Register of Trade Marks (Register) under the Trade Marks Act 1976 (TMA) for 2 goods in Class 3 (among others, creams for wrinkles and skin whitening). Attached to this judgment are -

a photograph of the packaging in which the Plaintiff’s Goods are sold (Annexure A); and

Plaintiff’s Registered Trade Mark (Annexure B).

The first defendant (1st Defendant) had applied to be a dealer of the Plaintiff’s Goods (Application Form). In the Application Form, the 1st Defendant stated that she was an employee of a sole proprietorship, “Rafica Resources” (RR).

In the records of “Suruhanjaya Syarikat Malaysia” (SSM’s Records), the sole proprietor of RR is the second defendant (2nd Defendant). The 1st Defendant is the wife of the 2nd Defendant.

On 9.9.2015, the 1st Defendant entered into a dealership agreement with the Plaintiff regarding the Plaintiff’s Goods (Agreement).

The Plaintiff filed this suit on the ground that the Defendants had sold skin whitening cream (Real Expert White Goods) bearing “Real Expert White” mark (Real Expert White Mark). Attached to this judgment in Annexures C(1) and C(2) are photographs of the packaging of Real Expert White Goods.

The following questions arise in this matter: 3

what is the effect when the Defendants elect not to adduce oral evidence in this case?;

whether the Defendants have breached the Agreement by selling Real Expert White Products. In this regard, can the Defendants rely on a press release from the Ministry of Health (Ministry’s Press Release). This concerns the application of reg. 18A of the Control of Drugs and Cosmetics Regulations 1984 (CDCR). I am not able to find any previous Malaysian case which has construed reg. 18A CDCR;

have the Defendants infringed the Plaintiffs’ Registered Trade Mark under s 38(1)(a) TMA by selling Real Expert White Products? In deciding this question -

pursuant to ss 18(2), 35(1) and 40(2) TMA, what is the effect of a “Disclaimer/Condition” in the Plaintiff’s Registered Trade Mark (the Plaintiff has no right to the exclusive use of the words “Royal” and “Expert White”)?; and

can the Defendants rely on s 14(1)(a) and (b) TMA when there is no counterclaim by the Defendants under s 45(1)(a) TMA to remove the Plaintiff’s Registered Trade Mark from the Register. In this regard, is there a distinction between the use of a registered trade mark and the contents of goods bearing the registered trade mark?; and 4

whether the Defendants have committed the tort of passing off Real Expert White Products as the Plaintiff’s Goods. C. Trial

The Plaintiff called the following three witnesses to testify in this case:

Mr. Gurdev Singh A/L Jagit Singh (SP1), a director of the Plaintiff;

Ms. Durka Devi A/P Vellavtham (SP2), the Plaintiff’s accountant; and

Ms. Pritam Kaur A/P Cham Singh (SP3).

SP1 testified as follows, among others:

since the Plaintiff’s incorporation in 2011, the Plaintiff has distributed the Plaintiff’s Goods. In 2015, the Plaintiff has expanded its business to Singapore;

the Defendants are distributors of the Plaintiff’s Goods but they distributed Real Expert White Products. As such, the Defendants have breached the Agreement, infringed the Plaintiff’s Registered Trade Mark and passed off Real Expert White Products as the Plaintiff’s Goods (3 Causes of Action). The Plaintiff had experienced increases in its gross profit from 2012 to 2016. Due to the 3 Causes of Action, the Plaintiff’s gross profit suffered a substantial drop in 2017 (as compared to 2016) (Decrease in Plaintiff’s Profit); and 5

the Plaintiff’s solicitors sent a demand dated 30.5.2017 to the Defendants regarding the 3 Causes of Action (Plaintiff’s Demand). The Defendants did not reply to the Plaintiff’s Demand.

Based on the Plaintiff’s records, SP2 gave the following evidence, among others -

expenses had been incurred by the Plaintiff in marketing the Plaintiff’s Goods (Plaintiff’s Promotion Expenses); and

there was a Decrease in Plaintiff’s Profit.

SP3 testified, among others, as follows:

SP3 has been an authorized distributor of the Plaintiff’s Goods for the past 10 years; and

the introduction of Real Expert White Products has adversely affected SP3’s sales of the Plaintiff’s Goods.

After the close of the Plaintiff’s case, the Defendants elected not to adduce any oral evidence in this case (Defendants’ Election). D. Effect of Defendants’ Election

The first question concerns the effect, if any, of the Defendants’ Election. O 35 r 4(3) of the Rules of Court 2012 (RC) provides as follows: 6 “If the defendant elects not to adduce evidence, then, whether or not the defendant has in the course of cross-examination of a witness for the plaintiff or otherwise put in a document, the plaintiff may, after evidence on his behalf has been given, make a second speech closing his case and the defendant shall then state his case.” (emphasis added).

It is to be noted that O 35 r 4(3) RC does not provide for any consequence which may flow from the Defendants’ Election.

The Supreme Court case of Jaafar Shaari & Anor v Tan Lip Eng & Anor [1997] 4 CLJ 509 concerns the previous O 28 r 16(3) of the Subordinate Court Rules 1980 (SCR) [repealed by O 94 r 1(b) RC] which is identical to O 35 r 4(3) RC. The following judgments have been delivered in Jaafar Shaari:

Peh Swee Chin FCJ decided as follows, at p. 518-519 - “Order 28 r 16(1), (2), (3) [SCR] regulate the order of speeches when an action comes up for hearing in the ordinary way in the absence of any contrary or other directions from the court and provide that where the defence elects not to adduce evidence, a plaintiff may make his closing speech. These rules do not deal with the matter of making a submission of no case to answer by a defendant at the close of a plaintiff’s case. It will be noticed that in the instant case, the defence counsel did not say that he wished to make a submission of no case to answer, for if the defence had wished to make it, then the trial 7 court would be under an obligation to put to the election of the defence counsel that he would not call any evidence because the same court would not rule on such submission of no case to answer in the absence of such declared election. Otherwise, the court would make its ruling or decision only after hearing the entire evidence (and submission) of the defence, if any. See the case of Simirah v. Chua Hock Lee and Anor [1963] MLJ 239 CA. The reason for such obligation by the trial court is that no judge should be asked for his conclusion or opinion on the evidence until such evidence is concluded. Thus should a defendant make a submission of no case to answer without being asked by the trial court to make such an election, and if the trial court then makes its ruling or decision on such submission, the defendant would still be entitled to call evidence as if he had not made such a submission, see Yuill v Yuill [1945] P 15 CA. Thus, should the trial court deliver its decision on such submission without performing such obligation and should the case go to an appellate court, which is unable to agree with such ruling or decision of the trial court, the appellate court would be without the benefit of whole of evidence of the case which the defendant would have been entitled to adduce and to use the words of Devlin JA in Young v. Rank [1950] 2 All ER 166, 169 CA “the appellate court would be prevented from exercising its power of re-hearing”, leaving the appellate court with no alternative but to order a retrial.” ” (emphasis added). 8 The above judgment has been concurred by Wan Adnan FCJ (as he then was), at p. 527; and

Gopal Sri Ram JCA (as he then was) held as follows, at p. 528 - “The first respondent being away from the country and therefore being unable to testify was a fact. It had, in the absence of an agreement between counsel, to be established like any other fact by calling evidence. Once established, certain consequences would ensue in respect of the admissibility of the statements by him to the police officer who reduced them into writing in the form of a police report. It was only after evidence was led tending to prove the first appellant’s absence as a fact, or an agreement as to that fact having been secured from his opponent, that counsel would have been entitled to inform the court that he was not calling any evidence. Once he had done this, it was incumbent for the learned Sessions judge to have put counsel to his election, namely, that if he did not call evidence, he would stand or fall on his submissions. The rule of procedure, which requires these steps to be followed, is not a mere formality but one of essential justice. For, once a defendant in civil proceedings elects not to call evidence, then all the evidence led by the plaintiff must be assumed to be true. In this context it is sufficient to refer to the following passage in the judgment of Elphinstone CJ Wasakah Singh v. Bachan Singh [1931] 1 MC 125, 128: If the party on whom the burden of proof lies gives or calls evidence which, if it is believed, is sufficient to prove his case, then the judge is bound to call upon the other party, and has no power to hold that the first party has failed to prove his case merely because the judge does not believe his evidence. At this stage the truth or falsity of 9 the evidence is immaterial. For the purpose of testing whether there is a case to answer, all the evidence given must be presumed to be true.” (emphasis added).

In the Federal Court case of Takako Sakao v Ng Pek Yuan & Anor [2009] 6 MLJ 751, at paragraphs 4 and 5, Gopal Sri Ram FCJ decided that there are two consequences which flow from the Defendants’

the Court may presume the evidence adduced by SP1, SP2 and SP3 (Plaintiff’s Evidence) to be true; and

the Court may draw an adverse inference under s 114(g) of the Evidence Act 1950 (EA) against the Defendants.

Based on Takako Sakao, I decide as follows:

this Court presumes the Plaintiff’s Evidence to be true. Furthermore, I find as a fact that SP1, SP2 and SP3 are credible witnesses because their cross-examination by the Defendants’ learned counsel has not undermined their credibility in any manner; and

an adverse inference is made against the Defendants under s 114(g) EA for not adducing any evidence to rebut the Plaintiff’s Evidence. E. Have Defendants breached Agreement? 10

Firstly, I find as a fact that the Agreement has been made between the Plaintiff and the 1st Defendant (not the 2nd Defendant). This is because the 1st Defendant (not the 2nd Defendant) signed the Agreement with the Plaintiff. I have not overlooked the following two facts (2 Facts):

the Agreement stated that the 1st Defendant traded under RR’s name; and

the 1st Defendant stated in the Application Form that she was an employee of RR. The 2 Facts cannot prove that the 2nd Defendant is a party to the Agreement because -

clause 20 of the Agreement, an “entire agreement clause”, provided as follows (with grammatical and typographical errors) - “This Agreement constitute [sic] the entire agreement of the Parties about the subject matter detailed herein and supersede [sic] all previous and contemporaneous negotiations, representations, promises, undertakings, agreements, understandings [sic] and representations [sic] on the subject, all of which have been finally integrated into this Agreement.” (emphasis added). According to Court of Appeal’s judgment delivered by Nik Hashim JCA (as he then was) in Master Strike Sdn Bhd v Sterling Heights 11 Sdn Bhd [2005] 2 CLJ 596, at 607-608, the effect of an entire agreement clause in a contract is that the contract “constitutes a binding agreement between [the parties] with regard to all matters mentioned in the contract and … the contract does not permit any term to be implied or import any other consideration not in the contract”. As such, based on Clause 20, the Court cannot consider the Application Form in the enforcement of the Agreement; and

the mere fact that the Agreement stated that the 1st Defendant traded under RR’s name did not mean the 2nd Defendant was a party to the Agreement. Hence, the 2nd Defendant could not be liable under the Agreement by reason of the doctrine of privity of contract - please see the Privy Council’s decision delivered by Lord Wilberforce in an appeal from Malaysia, Kepong Prospecting Ltd & Ors v Schmidt [1968] 1 MLJ 170, at 174. If otherwise, there will be an absurdity wherein a person who is not a party to a contract, is bound by the contract solely because the person’s name is mentioned in the contract.

I am satisfied that the 1st Defendant (not the 2nd Defendant) has breached the Agreement as follows:

clause 7.4 of the Agreement (Clause 7.4) reads as follows - “The Dealer [1st Defendant] shall at all times conduct its business in such a manner as to enhance the reputation and credibility of the [Plaintiff] and Products [Plaintiff’s Goods]. …” 12 (emphasis added). The 1st Defendant’s sales of Real Expert White Goods have breached Clause 7.4 because such sales do not enhance the reputation and credibility of the Plaintiff and the Plaintiff’s Goods;

clause 14.4 of the Agreement (Clause 14.4) provides as follows - “The Dealer [1st Defendant] must promptly and fully notify the [Plaintiff] of any actual, threatened or suspected infringement in the Territory [Malaysia] of any intellectual property of the [Plaintiff] that comes to the Dealer’s notice, …” (emphasis added). Clause 14.4 has been breached by the 1st Defendant when she failed to notify promptly the Plaintiff regarding the “actual, threatened or suspected” infringement of the Plaintiff’s Registered Trade Mark and the tort of passing off - please see Parts G and H below;

clause 14.3.5 of the Agreement (Clause 14.3.5) states as follows - “14.3 The Dealer [1st Defendant] must not: …

14.3.5 use in the Territory [Malaysia] any trade marks or trade marks so resembling any trade mark or trade names of the [Plaintiff] as to be likely to cause confusion or deception; …” (emphasis added). 13 The Real Expert White Mark so closely resembles the Plaintiff’s Registered Trade Mark as is likely to cause confusion or deception - please see paragraph 28 below. Consequently, the 1st Defendant’s use of Real Expert White Mark (by way of sales of Real Expert White Goods) has infringed Clause 14.3.5;

in view of the Defendants’ Election, the Plaintiff’s Evidence is considered to be true and an adverse inference under s 114(g) EA is drawn against the 1st Defendant - please see the above paragraph 16; and

the 1st Defendant did not deny the Plaintiff’s Demand - please see Gopal Sri Ram JCA’s (as he then was) judgment in the Court of Appeal case of David Wong Hon Leong v Noorazman bin bin Adnan [1995] 4 CLJ 155, at 159. F. Can Defendants rely on Ministry’s Press Release?

The Defendants submitted that according to the Ministry’s Press Release, among others, the “Royal Expert Whitening Cream” imported by Ortus Expert Cosmetics Sdn. Bhd. (OEC), contained mercury which is harmful to human health.

I am of the view that the Defendants cannot rely on the Ministry’s Press Release for the following reasons: 14

the Ministry’s Press Release concerned OEC and not the Plaintiff. It is trite law that the Plaintiff is a legal entity which is different from OEC - please see Singham Sulaiman Sdn Bhd v Appraisal Property Management Sdn Bhd & Anor [2018] 10 MLJ 187, at paragraph 54;

in Singham Sulaiman, at paragraphs 56 and 57, it was decided that the Court can only pierce or lift the corporate veil of certain companies to reveal a single entity controlling all those companies if the following two cumulative conditions (2 Conditions) are fulfilled -

there exists special circumstances to pierce or lift the corporate veil, such as -

there has been commission of actual fraud or Common Law fraud;

(ii) equitable fraud or constructive fraud has been committed;

(iii) to prevent an evasion of liability; or

(iv) to prevent an abuse of corporate personality; and

the piercing or lifting of a corporate veil is in the interest of justice. In this case, I am unable to lift the corporate veil of the Plaintiff and OEC because firstly, the Defendants have not pleaded in their Amended Defence that the Plaintiff and OEC are part of a single 15 group entity. Secondly, the Defendants have not adduced any evidence in this trial regarding the 2 Conditions;

the relevant parts of reg. 18A(1)(a), (2), (8) and (12) CDCR provide as follows - “18A Prohibition to manufacture, sell, supply, import, possess or administer cosmetic

No person shall manufacture, sell, supply, import, possess or administer any cosmetic -

unless the cosmetic is a notified cosmetic; …

For the purpose of subregulation (1), “notified cosmetic” means a cosmetic as specified in the notification note issued by the Director of Pharmaceutical Services, in the manner as he deems fit. …

The Director of Pharmaceutical Services may, at any time and without assigning any reason, cancel the notification note of any cosmetic and may amend any conditions to which the notification note is subject. …

Where any notified cosmetic is found to have contravened or reasonably suspected to have contravened any provision of these Regulations, the Director of Pharmaceutical Services may, by directive in writing, order the person responsible for placing the notified cosmetic in the market, or the authorized person to recall, remove, or withdraw the notified cosmetic from 16 any premises within such time as may be specified in the directive.” (emphasis added). The Plaintiff has adduced a list of “Registered/Notified Products” (p. 34 of Bundle D) which includes the Plaintiff’s Goods. As the Plaintiff’s Goods are a “notified cosmetic” within the meaning of reg. 18A(1)(a) and (2) CDCR, the Plaintiff is entitled to “sell, supply, import, possess or administer” the Plaintiff’s Goods. No evidence has been tendered by the Defendants to show that the Director of Pharmaceutical Services (Director) has cancelled the notification of the Plaintiff’s Goods pursuant to reg. 18A(8) CDCR. Nor is there evidence that the Director has by a written directive under reg. 18A(12) CDCR, order the Plaintiff to recall, remove, or withdraw the Plaintiff’s Goods from the market; and

there is no evidence to prove that the Plaintiff has been -

investigated by the Director for any offence under CDCR;

prosecuted by the Public Prosecutor under reg. 30(1) CDCR for any contravention of CDCR; and

convicted of any offence under CDCR - regarding the Plaintiff’s Goods. 17 G. Whether Defendants’ sales of Real Expert White Products have infringed Plaintiffs’ Registered Trade Mark

The five elements of trade mark infringement under s 38(1)(a) TMA have been explained by Suriyadi Halim Omar FCJ in the Federal Court case of Low Chi Yong (Berniaga sebagai Reynox Fertichem Industries) v Low Chi Hong & Anor [2017] 6 MLRA 412, at paragraphs 35-37, as follows:

the Defendants have used Real Expert White Mark which so nearly resembles the Plaintiff’s Registered Trade Mark as to cause a likelihood of confusion or deception (Likelihood of Confusion/Deception) between the consumers of the Plaintiff’s Goods and Real Expert White Goods (1st Element);

the Defendant are neither the registered proprietors nor the registered users of the Plaintiff’s Registered 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 Expert White Goods 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 used 18 as a trade mark or as importing a reference to the Plaintiff or the Plaintiff’s Registered Trade Mark (5th Element). G(1). 1st Element

The unrebutted testimony of SP1 clearly proved the 2nd to the 5th Elements. The question that arises is whether the Plaintiff has established the 1st Element.

The 1st Element does not require the Plaintiffs to prove that there is an actual confusion or deception between the Plaintiff’s Registered Trade Mark and Real Expert White Mark - please see Syarikat Faiza Sdn Bhd & Anor v Faiz Rice Sdn Bhd & Anor [2017] MLJU 1595, at sub-paragraph 99(2). The 1st Element is satisfied if the Plaintiff can prove a Likelihood of Confusion/Deception. G(2). Can Court consider “Disclaimer/Condition” in Plaintiff’s Registered Trade Mark?

There is a “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).

Sections 18(2), 35(1) and 40(2) TMA provide as follows: “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. 19 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 shall, if valid, give or be deemed to have been given to that 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. 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 traded in in a place or in relation to goods to be exported to a market or in relation to 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.” (emphasis added)

I have decided in Jyothy Laboratories Ltd v Perusahaan Bumi Tulin Sdn Bhd [2018] 1 LNS 272, at sub-paragraph 54(1), as follows: “54. I am of the following view regarding the effect of a condition, disclaimer, amendment, modification or limitation imposed by our Registrar on a registered trade mark pursuant to ss 18(1) and 25(3)

according to ss 18(2) and 35(1) TMA, a Disclaimer restricts the exclusive right of an owner to use a registered trade mark. Such a restriction will in turn limit the right of the proprietor of a registered trade mark to commence an action for trade mark 20 infringement under s 38(1) TMA - please see 40(2) TMA. This is clear from the following cases -

in the Singapore High Court case of British-American Tobacco Co Ltd v Tobacco Importers & Manufacturers 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 possibly be regarded as an 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 of the law: The effect of a disclaimer is that the proprietor of the registered trade mark cannot claim any trade mark rights in respect of the parts of the mark to which the disclaimer relates, so that, for instance, no action for infringement lies in respect of the use or imitation of the disclaimed particulars.”;

the above judgment in British-American Tobacco has been followed by Ramly Ali J (as he then was) in the High Court in Sanbos (M) Sdn Bhd v Tiong Mak Liquor Trading (M) Sdn Bhd [2008] 10 CLJ 538, at paragraphs 26 and 27. According to Sanbos, at paragraph 25 - 21 “[25] It is pertinent to point out at this juncture that each of the plaintiff's registrations for "CLUB 99" and "CLUB 999" is expressly subject to a disclaimer that the registration does not have an exclusive right over the use of the numerals "99" and "999". ... The plaintiff only has an exclusive right on the word "CLUB" in both registrations. Therefore, the court should disregard the 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.”; and

in the High Court case of Tint Shop (M) Sdn Bhd v Infinity Audio Marketing Sdn Bhd [2017] 1 LNS 612, at paragraph 22, Gunalan Muniandy JC (as he then was) held as follows - “[22] From the unrebutted evidence in this case, it was patently clear that [the Plaintiff] could not claim ownership of the words “First Shop” as both the words “tint” and “shop” had been expressly disclaimed ...” ” (emphasis added). Based on my understanding of ss 18(2), 35(1) and 40(2) TMA as applied in Jyothy Laboratories, the Court cannot consider the Words in 22 deciding the existence of a Likelihood of Confusion/Deception for the purpose of the 1st Element. G(3). Whether there is a Likelihood of Confusion/Deception

In determining the issue of a Likelihood of Confusion/Deception, it is decided in Syarikat Duasama Sdn Bhd v Abdul Aziz bin Ibrahim (trading as Radiant Star Enterprise) and Third Parties [2018] MLJU 5, at paragraph 38, as follows: “38. To decide whether there is a Likelihood of Confusion/Deception in a Trade Mark Infringement action -

the court shall first ascertain the “distinguishing” or “essential” feature of the registered trade mark which can be remembered by customers and traders of the goods or services in question in the sense that this feature “strikes the eye and fixes itself in the recollection” - please see Nik Hashim JCA’s (as he then was) judgment in the Court of Appeal case of Sinma Medical Products (M) Sdn Bhd v Yomeishu Seizo Co Ltd & Ors [2004] 4 MLJ 358, at paragraph 23, which followed Wilfred Greene MR’s decision in the English Court of Appeal in Saville Perfumery Ltd v June Perfect Ltd & Anor (1941) 58 RPC 147. It is to be noted that Wilfred Greene MR’s judgment in Saville Perfumery has been affirmed by Viscount Maugham in the House of Lords (at p. 171- 176 of the law report which reported Wilfred Greene MR’s judgment);

based on the registered trade mark’s distinguishing or essential feature, the court shall then consider whether the “use” of the mark [which is alleged to have infringed the registered trade 23 mark (Impugned Mark)] gives rise to a Likelihood of Confusion/Deception; and

in deciding whether there exists a Likelihood of Confusion/Deception in a Trade Mark Infringement action, the court can only consider the registered trade mark and Impugned Mark. The court cannot consider the get-up of the goods in determining whether there is a Likelihood of Confusion/Deception in a Trade Mark Infringement suit. This is unlike a Passing Off action where the court should not only consider the marks but should also take into account the get-up of the goods in question.” (emphasis added).

The Plaintiff bears the legal and evidential burden under ss 101(1), (2) and 102 EA to satisfy the Court that there exists a Likelihood of Confusion/Deception. I am of the view that the Plaintiff has discharged the legal and evidential onus to prove the existence of a Likelihood of Confusion/Deception. This decision is based on the following evidence and reasons:

there are two “distinguishing” or “essential” features of the Plaintiff’s Registered Trade Mark which strike the eye and fix themselves in the recollection of the users of the Plaintiff’s Goods (2 Distinguishing Features) as follows -

a crown device (Crown Device); and

two rectangles; and 24

there is a Likelihood of Confusion/Deception because -

a visual comparison between the Plaintiff’s Registered Trade Mark and Real Expert White Mark reveals that the latter has the 2 Distinguishing Features as follows -

Real Expert White Mark has a diamond-shaped device (Diamond Device) which is similarly confusing and/or deceptive as the Crown Device. This is because the Diamond Device is placed at the top and the middle of Real Expert White Mark (the same position as the Crown

(ii) Real Expert White Mark has two rectangles (same as the Plaintiff’s Registered Trade Mark);

both the Plaintiff’s Goods and Real Expert White Goods are cosmetics. Hence, there is a similarity of description between the Plaintiff’s Goods and Real Expert White Goods - please see Romer J’s (as he then was) judgment in the English High Court case of Re Ladislas Jellinek (1946) 63 RPC 59, at 70;

the consumers of the Plaintiff’s Goods and Real Expert White Goods are the same - please see Mohd. Yusoff Mohamad SCJ’s judgment in the Supreme Court in Tohtonku Sdn Bhd v Superace (M) Sdn Bhd [1992] 1 CLJ (Rep) 344, at 347; 25

the distributors of the Plaintiff’s Goods and Real Expert White Goods are the same - Re Ladislas Jellinek, at p. 70. In fact, the 1st Defendant distributes both the Plaintiff’s Goods and Real

there is a similarity of idea or concept between the Plaintiff’s Registered Trade Mark and Real Expert White Mark as both marks are applied on the box packaging of those goods - please see the Privy Council’s judgment delivered by Lord Fraser in an appeal from New Zealand, Solavoid Trade Mark [1977] RPC 1, at 30; and

applying the “general recollection test” as explained by Thomson LP in the Federal Court case of MI & M Corporation & Anor v A Mohamed Ibrahim [1964] 1 MLJ 392, at 294, a reasonable consumer with an average memory and an imperfect recollection, is likely to be deceived and/or confused between the Plaintiff’s Registered Trade Mark and Real Expert White Mark. G(4). Can Defendants rely on s 14(1)(a) and (b) TMA?

Based on the Ministry’s Press Release, the Defendants contend that the Plaintiff’s Registered Trade Mark should not have been registered by the Registrar of Trade Marks on the following grounds:

the use of the Plaintiff’s Registered Trade Mark is contrary to law as provided in the third limb of s 14(1)(a) TMA; and 26

the Plaintiff’s Registered Trade Mark is not entitled to protection by the Court under the third part of s 14(1)(b) TMA.

I reproduce below the relevant parts of ss 14(1)(a), (b), 36 and 45(1)(a) TMA: “Prohibition on registration 14(1) A mark or part of a mark shall not be registered as a trade mark -

if the use of which is likely to deceive or cause confusion to the public or would be contrary to law;

if it contains or comprises any scandalous or offensive matter or would otherwise not be entitled to protection by any court of law; … Registration prima facie evidence of validity 36 In all legal proceedings relating to a registered trade mark (including applications under s 45) the fact that a person is registered as proprietor of the trade mark shall be prima facie evidence of the validity of the original registration of the trade mark and of all subsequent assignments and transmissions thereof. Rectification of the Register 45(1) Subject to the provisions of this Act -

the Court may on the application in the prescribed manner of any person aggrieved by the non‐insertion in or omission from the Register of any entry or by any entry made in the Register without sufficient cause or by any entry wrongfully remaining in the Register, 27 or by any error or defect in any entry in the Register, make such order for making, expunging or varying such entry as if thinks fit; …” (emphasis added).

Firstly, as explained in the above paragraph 20, the Defendants cannot rely on the Ministry’s Press Release.

Secondly, the Plaintiff’s Registered Trade Mark is prima facie valid under s 36 TMA. In view of the Defendants’ Election, no evidence had been adduced by the Defendants to disprove the prima facie validity of the Plaintiff’s Registered Trade Mark pursuant to s 36 TMA.

Thirdly, s 14(1)(a) and (b) TMA provide for certain conditions for the registration of a trade mark. If a trade mark has been registered and it is subsequently proven that the registered trade mark does not comply with either s14(1)(a) and (b) TMA, a party aggrieved by the registered trade mark, may apply to the Court under s 45(1)(a) TMA to expunge the registered trade mark from the Register. In this case, the Defendants did not counterclaim to remove the Plaintiff’s Registered Trade Mark from the Register. Hence, the Defendants cannot avail themselves of s 14(1)(a) and (b) TMA in this case.

Lastly, a registered trade mark is a form of intellectual property which confers rights on its owner under s 35(1) TMA. A registered trade mark and the statutory rights attached to the registered trade mark are different from the goods and services which bear the registered trade mark. Even if it is assumed that the Plaintiff’s Goods have contents 28 which are contrary to CDCR or any other law, the manufacture, distribution, supply, sale and use of the Plaintiff’s Goods may be prohibited but such a fact in itself does not mean that the use of the Plaintiff’s Registered Trade Mark is contrary to law under the third limb of s 14(1)(a) TMA. Nor does this mean that the Plaintiff’s Registered Trade Mark is not entitled to protection by the Court under the third limb of s 14(1)(b) TMA. H. Have Defendants passed off Real Expert White Products as Plaintiff’s Goods?

Malaysian case law has recognised the following three tests regarding the tort of passing off (3 Tests):

Lord Diplock’s test in the House of Lords case of Erven Warnink v Townend & Sons (Hull) Ltd [1979] AC 731 (Lord Diplock’s Test) has been accepted by our apex courts as follows -

the majority judgment of the Supreme Court delivered by Gunn Chit Tuan CJ (Malaya) in Seet Chuan Seng & Anor v Tee Yih Jia Food Manufacturing Pte Ltd [1994] 3 CLJ 7, at 15; and

the decision of Richard Malanjum CJ (Sabah & Sarawak) (as he then was) in the Federal Court case of Maestro Swiss Chocolate Sdn Bhd & Ors v Chocosuisse Union Des Fabricants Suisses De Chocolat (a co-operative society formed under title XXIX of the Swiss Code of Obligations) & 29 Ors and another appeal [2016] 2 MLJ 359, at paragraphs 41-

According to Lord Diplock’s Test, the five elements of the tort of passing off are as follows -

there is misrepresentation by a defendant;

(ii) the defendant’s misrepresentation is made in the course of trade;

(iii) the defendant’s misrepresentation is made to prospective or ultimate consumers of goods or services supplied by the defendant;

(iv) the defendant’s misrepresentation is calculated to injure the plaintiff’s business or goodwill in the sense that this is a reasonably foreseeable consequence; and

the defendant’s misrepresentation causes actual damage to the plaintiff’s business or goodwill;

Seet Chuan Seng (the majority decision) and Maestro Swiss Chocolate (at paragraph 45) have also affirmed Lord Fraser’s test as laid down in Erven Warnink (Lord Fraser’s Test). Lord Fraser’s Test expounds the following five ingredients of the tort of passing off - 30

the plaintiff’s business consists of, or includes, selling in England a class of goods to which the particular trade name applies;

the class of goods is clearly defined, and that in the minds of the public, or a section of the public, in England, the trade name distinguishes that class from other similar goods;

because of the reputation of the goods, there is goodwill attached to the name;

the plaintiff, as a member of the class of those who sell the goods, is the owner of goodwill in England which is of substantial value; and

the plaintiff has suffered, or is really likely to suffer, substantial damage to his property in the goodwill by reason of the defendant selling goods which are falsely described by the trade name to which the goodwill is attached; and

Nik Hashim JCA (as he then was) in the Court of Appeal case of Sinma Medical Products (M) Sdn Bhd v Yomeishu Seizo Co Ltd & Ors [2004] 3 CLJ 815, at paragraph 33, has applied Lord Oliver’s test in the House of Lords in Reckitt & Colman Products Ltd v Borden Inc & Ors [1990] 1 All ER 873, at 880 (Lord Oliver’s Test) as follows - 31

the plaintiff has goodwill or reputation attached to the 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 labeling or packaging (which is distinctive of the plaintiff’s goods or services);

the defendant has misrepresented to the public which 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 action, he is likely to suffer damage by reason of the defendant’s misrepresentation

The 3 Tests require a plaintiff in a passing off action based on a mark or get-up to prove that the plaintiff enjoys goodwill in the business regarding the mark or get-up - please see Warmal Wil Heavy Duty Pumps Sdn Bhd v Pump Matrix Engineering Sdn Bhd [2018] 10 MLJ 99, at paragraph 15.

I am satisfied that the Plaintiff’s Registered Trade Mark and get-up of the Plaintiff’s Goods (Plaintiff’s Get-Up) attract business and customers. This is clear from -

the evidence of SP1 and SP2 regarding the sales of the Plaintiff’s Goods and the gross profit enjoyed by the Plaintiff therefrom; and 32

the Plaintiff’s Promotion Expenses. Premised on the above evidence, the Plaintiff has goodwill in the business attached to the Plaintiff’s Registered Trade Mark and the Plaintiff’s Get-Up (Plaintiff’s Goodwill). H(2). Misrepresentation

According to the 3 Tests, the Plaintiff has to prove that the Defendants have misrepresented Real Expert White Goods as the Plaintiff’s Goods (Defendants’ Misrepresentation) - Warmal, at paragraph 20. The Defendants’ Misrepresentation is proven by the existence of a Likelihood of Confusion/Deception - Sinma Medical Products, at paragraph 37. The Plaintiff is not required to prove that the public is actually confused or deceived between the Plaintiff’s Goods and Real Expert White Goods - Sinma Medical Products, at paragraph 37.

I find as a fact that the Defendants’ Misrepresentation has been committed based on the following evidence and reasons:

there exists a Likelihood of Confusion/Deception between the Plaintiff’s Registered Trade Mark and Real Expert White Mark - please see the above paragraph 28;

a phonetic comparison of the marks in question should be undertaken - please see Sinma Medical Products, at paragraphs 37-39. A pronunciation of the Plaintiff’s Registered Trade Mark and 33 Real Expert White Mark sounds confusingly similar and/or deceptively alike;

a visual comparison of the Plaintiff’s Get-Up (exhibit P2) and the get-up of Real Expert White Goods (exhibit P13A) shows that both get-ups have the same white and blue colours. Such similarities support the existence of a Likelihood of Confusion/Deception; and

sub-paragraph 2(g) of the Plaintiff’s Demand had alleged regarding the Defendants’ Misrepresentation and such an allegation had not been denied by the Defendants. H(3). Whether Plaintiff has proven likelihood of damage

A plaintiff in a passing off action is only required to prove that there is a probability or likelihood of damage to the goodwill attached to the plaintiff’s business which has been caused by the defendant’s misrepresentation - please see Abdul Malik Ishak JCA’s judgment in the Court of Appeal case of Yong Sze Fun & Anor (t/a Perindustrian Makanan & Minuman Layang-layang) v Syarikat Zamani Hj Tamin Sdn Bhd & Anor [2012] 1 MLJ 585, at paragraph 240.

I have no hesitation to find that the Plaintiff has proven a probability or likelihood of damage caused by Defendants’ Misrepresentation to the Plaintiff’s Goodwill. It is decided in Seet Chuan Seng, at p. 15, that if the goods in question are in direct competition with one another, the Court will readily infer the likelihood of damage to the plaintiff’s goodwill through loss of sales and loss of exclusive use of the plaintiff’s trade 34 name. In this case, the Plaintiff’s Goods and Real Expert White Goods are in direct competition with each other. Consequently, there is a likelihood of damage caused by the Defendants’ Misrepresentation to the Plaintiff’s Goodwill in the form of -

loss of sales of the Plaintiff’s Goods; and

loss of the Plaintiff exclusive use of the Plaintiff’s Registered Trade Mark and the Plaintiff’s Get-Up.

I must add that in this case the 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 - please see the evidence of SP1, SP2 and SP3. H(4). Whether 3 Tests have been fulfilled

I find as a fact that the 3 Tests have been satisfied as follows:

Lord Diplock’s Test is fulfilled as follows -

the Defendants’ Misrepresentation has been proven - please see the above paragraph 39;

the Defendants’ Misrepresentation has been made in the course of trade;

the Defendants’ Misrepresentation has been made to the Defendants’ prospective or ultimate customers; 35

the Defendants’ Misrepresentation is calculated to injure the Plaintiff’s Goodwill in the sense that this is a reasonably foreseeable consequence; and

the Defendants’ Misrepresentation has caused actual damage or will probably cause damage to the Plaintiff’s Goodwill - please see the paragraphs 41 and 42;

Lord Fraser’s Test is satisfied as follows -

the Plaintiff’s business includes the selling of the Plaintiff’s Goods and the Plaintiff’s Goods is a class of goods to which the Plaintiff’s Registered Trade Mark and the Plaintiff’s Get-Up apply;

the Plaintiff’s Goods is a class of goods which is clearly defined in the minds of the Malaysian public and the Plaintiff’s Registered Trade Mark and the Plaintiff’s Get-Up distinguish the Plaintiff’s Goods from other cosmetics;

because of the reputation of the Plaintiff’s Goods, there exists the Plaintiff’s Goodwill - please see the above paragraph 37;

the Plaintiff is the owner of the Plaintiff’s Goodwill in Malaysia which is of substantial value - please see the above paragraph 37; and 36

the Plaintiff has suffered, or is really likely to suffer, substantial damage to the Plaintiff’s Goodwill by reason of the Defendant’s sale of Real Expert White Goods - please see the above paragraphs 41 and 42; and

Lord Oliver’s Test is fulfilled as follows -

the Plaintiff’s Goodwill has been proven - please see the above paragraph 37;

the Defendants’ Misrepresentation has been committed - please see the above paragraph 39; and

the Plaintiff has suffered or is likely to suffer damage by reason of the Defendants’ Misrepresentation - please see the above paragraphs 41 and 42. I.

Premised on the above evidence and reasons, the Plaintiff has proven the 3 Causes of Action on a balance of probabilities. Judgment is therefore entered for the Plaintiff against the Defendants. WONG KIAN KHEONG Judge High Court (Commercial Division) Kuala Lumpur DATE: 10 DECEMBER 2018 37 Counsel for Plaintiff: Mr. Arun A/L Kasi, Ms. Esther Ong Hui Chuen & Mr. Ong Kay Jin (Messrs Esther Ong Tengku Saiful & Sree) Counsel for Defendants: Mr. Lingswaran Singh (Messrs Lingswaran Singh & Associates)