Skin Renew Professional Solution Sdn Bhd v Beaute Refine Marketing (M) Sdn Bhd (WA-22IP-74-11/2020)

BEAUTE REFINE MARKETING (M) SDN. BHD.

KWAN MEI KIM

BEAUTE REFINE MARKETING

LEE KAH CHOON

IMS BEAUTY SUPPLY ENTERPRISE (NO. DAFTAR PERNIAGAAN: 002562038-P) … DEFENDAN-DEFENDAN ! JUDGMENT A. Introduction [1] The plaintiff filed a claim against the defendants for infringement and passing off of the plaintiff’s trademark. In response to the claim, the defendants filed a counterclaim to invalidate the plaintiff’s trademark, and to seek reliefs for groundless threats of infringement proceedings. [2] After a full trial, the court dismissed the plaintiff’s claims for infringement and passing off. The defendants’ counterclaim for invalidation of the plaintiff’s trademark was also dismissed. However, the counterclaim for reliefs for groundless threats of infringement proceedings was allowed. B. Background Facts [3] The plaintiff, a company that has been carrying on business in Malaysia since 1995, provides beauty and skincare products and services. From 2006, the plaintiff offered the sale and services of cosmetics and skincare products through its website at www.skin-renew.com (“Plaintiff’s Website”). [4] The plaintiff claimed to be the owner of the “ ” mark (“Skin Renew Mark”) registered under registration number 2013050962 (in Class 35) since 21 July 2016, and registration number 2013050961 (in Class 44) since 18 July 2016. ! [5] The defendants also carry on a beauty business, using the “ ” mark (“Skin Refiner Mark”). [6] The defendants are connected in the following manner: a. The 3rd defendant carried out its beauty business from 9 April 2015 until 8 April 2017. b. The 1st defendant was incorporated on 19 September 2016, to take over the 3rd defendant’s business. The 1st defendant markets its products only to distributors, through two channels i.e. via Facebook and via its website at www.skinrefiner.my (“1st Defendant’s Website”). c. The 2nd defendant owned the 1st defendant and is a director of the 3rd defendant. d. The 5th defendant is the 1st defendant’s authorised distributor. It sells the 1st defendant’s products online. The 5th defendant obtains the 1st defendant’s products on a consignment basis, and sells them via its website at www.srbeauty.com.my (“4th and 5th Defendants’ Website”). e. The 4th defendant owns the 5th defendant. ! [7] The plaintiff contends that the Skin Refiner Mark resembles or is similar to the Skin Renew Mark. Thus, the plaintiff filed this claim seeking inter alia an injunction to restrain the defendants from using the Skin Refiner Mark, and from selling or offering for sale cosmetics products using the Skin Refiner Mark. The plaintiff also sought general and exemplary damages against the defendants. [8] The defendants claimed they are the bona fide owners of the Skin Refiner Mark, and the 1st defendant had sold and promoted products using the Skin Refiner Mark since 2012. The stand taken by the defendants is that the Skin Refiner Mark is not similar to the Skin Renew Mark. [9] The defendants filed a counterclaim, seeking inter alia, a declaration that the Skin Refiner Mark does not infringe and does not pass off as the Skin Renew Mark. The defendants also sought to invalidate the Skin Renew Mark, and sought reliefs for groundless threats of infringement proceedings. C. Issues [10] From the facts of this case, the following issues are relevant for the determination of the dispute between the parties: a. The first is the issue in the counterclaim, namely whether the registration of the Skin Renew Mark in Class 35 and Class 44 ought to be invalidated under section 47(1) of the Trademarks Act 2019 (“TMA 2019”) (Issue 1). If the invalidation is allowed, section 47(8) of the TMA 2019 provides that the registration of the Skin Renew Mark ! shall be deemed never to have been made. As such, the defendants cannot be said to have infringed an invalid trademark. b. If the invalidation is not allowed, the second issue arises, namely whether the Skin Refiner Mark infringes the Skin Renew Mark, under section 38 of the Trade Marks Act 1976 (“TMA 1976”) and section 54 of the TMA 2019 (Issue 2). c. Third is the issue of whether the defendants are entitled to reliefs under section 61 of the TMA 2019, which provides for remedies for groundless threats of infringement proceedings (Issue 3). d. The final issue is whether the defendants committed the tort of passing off of the Skin Renew Mark (Issue 4). D. Issue 1: Should The Registration Of The Skin Renew Mark Be Invalidated? The relevant provisions [11] The claim for invalidation of the Skin Renew Mark is made under section 47 of the TMA 2019. Section 47(1) provides that: “The registration of trademark may be declared invalid by the Court upon the application by an aggrieved person on the ground that the trademark was registered in breach of section 23.” ! (emphasis added) [12] Thus, the first condition that the defendants are required to meet is that they are aggrieved persons with the capacity to file an application to invalidate the registration of the Skin Renew Mark. [13] Further, it is not in dispute that the applications for registration of the Skin Renew Mark were made on 6 September 2013, more than five years from the filing of this action and the counterclaim. [14] In this regard, section 53 of the TMA 2019 provides that: “In all legal proceedings relating to a trademark in the Register, the original registration of the trademark shall, after the expiration of five years from the date of registration be taken to be valid in all respects unless it is shown that –

the original registration was obtained by fraud;

the trademark offends paragraph 23(5)(a), (c), (d) or (e); or

the trademark was, at the commencement of the proceedings, devoid of distinctiveness of the goods or services of the registered proprietor.” (emphasis added) ! [15] Based on the above provision, the registration of the Skin Renew Mark is taken to be valid unless the exceptions in section 53 apply. Are the defendants “aggrieved persons”? [16] On the first requirement, I am of the view that the defendants do not qualify as “aggrieved persons” under section 47(1) of the TMA 2019. [17] In McLaren International Ltd v Lim Yat Meen [2009] 5 MLJ 741, the Federal Court held at paragraph [22] of the judgment that an aggrieved person is a person: a. Who has used a trademark in the course of trade, which is the same as or similar to the trade of the owner of the registered trademark; or b. Who has a genuine and present intention to use a trademark in the course of trade, which is the same as or similar to the trade of the owner of the registered trademark. [18] The defendants contend that they had used and/or had genuine intention to use the Skin Refiner Mark in the same or similar trade as the plaintiff. In this regard, the defendants claim: a. The 1st, 2nd and 3rd defendants had used the Skin Refiner Mark in the course of their business in the beauty industry, which is the same or similar to the plaintiff’s trade. They provided evidence of packaging, promotion ! and advertisement of products containing the Skin Refiner Mark; and b. The 4th and 5th defendants had used the Skin Refiner Mark in the course of their business in the beauty industry, which is the same or similar to the plaintiff’s trade. Further, they have a genuine and present intention to use the mark in the course of their business. They provided evidence of the 4th and 5th Defendants’ Website, which contains the Skin Refiner Mark. [19] My assessment of the reasoning in McLaren (supra) – that an aggrieved person must be a person who has used a trademark (first limb) or has a genuine and present intention to use a trademark (second limb) in the course of trade – is that the use of the mark must be current and ongoing, or there must be a genuine and present intention to use the mark. Thus, if the mark had been used but will no longer be in use, the first limb would not apply. The Federal Court could not have intended for a person who has used the mark, but no longer uses the mark, to be able to initiate proceedings to invalidate a registered trademark. On this basis, the second limb would also not apply, as the person would not have an intention to use the mark. [20] In the present case, the evidence before the court shows that: a. The 3rd defendant had filed an application to register the Skin Refiner Mark on 9 October 2015, but the application was rejected by the Registrar of Trademarks on 12 April !

There is no evidence to show that the 3rd defendant had appealed against this decision. b. The defendants had instead applied to register several other trademarks, including “ ” and “ ” (collectively, the “Defendants’ Rebranded Marks”). c. The defendants’ witness, Kwan Mei Kim (“DW1”) testified at paragraph 20 of her witness statement (“WS-DW1”), that the 1st defendant had, in response to threats of infringement by the plaintiff, started to use the Defendants’ Rebranded Marks for their products: “A.(1) BRM went through a major rebranding exercise. BRM removed most of its products which bore the Teardrop Mark. BRM also switched to using the following ! marks: and on its products.” d. DW1 also testified at paragraph 11 of WS-DW1, when asked to compare the 1st Defendant’s Website with the Plaintiff’s Website, that one of the Defendants’ Rebranded Marks was used for the 1st Defendant’s Website: “A.(1) First, there is a difference in the branding used on the websites. The Plaintiff’s website uses the brand name “Skin Renew” whereas BRM’s website uses BRM’s mark as follows “ ” …” [21] Thus, the evidence before the court indicates that more likely than not, the defendants were no longer using, nor were they intending to use the Skin Refiner Mark. It is on this basis that I find that the defendants are not “aggrieved persons” under section 47(1) of the TMA 2019, and have no locus standi to make an application to invalidate the Skin Renew Mark. ! [22] Further, in my view, the claim by the defendants that they had used or had a genuine and present intention to use the Skin Refiner Mark in the same or similar trade to the plaintiff is inconsistent with the defences they raised in the main action, namely that the Skin Refiner Mark does not infringe the Skin Renew Mark as the Skin Refiner Mark is not similar to the Skin Renew Mark, and the 1st defendant is not in the same business of beauty services as the plaintiff. This will be elaborated below when the addresses the plaintiff’s claim of infringement of the Skin Renew Mark. [23] Having taken the position that the Skin Renew Mark and the Skin Refiner Mark are not similar, the defendants cannot now put forward an argument that the Skin Renew Mark should be invalidated, as the main reason behind the defendants’ application for invalidation is that the registration of the Skin Renew Mark is likely to deceive or cause confusion to the public. Is the registration of the Skin Renew Mark conclusive? [24] It is not in dispute that the defendant’s claim for invalidation was made more than five years after the date of the registration of the Skin Renew Mark. [25] Section 53 of the TMA 2019 provides that a registration is conclusive after five years from the date of registration, unless the exceptions in section 53 apply. The defendants relied on the exceptions in sub-section (b) and (c), namely that the Skin Renew Mark: a. Offends sections 23(5)(a) of the TMA 2019; and ! b. Is devoid of distinctiveness. [26] I find the defendants’ reliance on these exceptions to be misguided. [27] Section 23(5) sets out the absolute grounds for refusal of registration of a trademark, including sub-section (a), which reads: “(a) if the use of the trademark is likely to deceive or cause confusion to the public or contrary to any written law;” [28] In Lim Yew Sing v Hummel International Sports & Leisure A/S [1996] 3 MLJ 7, the Court of Appeal held that the time frame that would apply in considering whether a trademark was likely to deceive or cause confusion to the public is from the date the proceedings were commenced until the time of trial. In the present case, the relevant time frame would be the date of filing of the counterclaim (17 December 2020) until the time of the trial (which started on 7 November 2022 and went on for four days, and continued on 5 May 2023). [29] In their attempt to show that the Skin Renew Mark is likely to deceive or cause confusion to the public, the defendants put forth the following evidence of other traders using marks which the defendants considered to be similar to the Skin Renew Mark: a. In a Facebook post dated 1 November 2021, a trader by the name of Farmasi Remedi promoted a product with the name “Skin Renewing Serum”; and ! b. On 4 November 2022, a trader by the name of Cosway Prolin promoted a product with the name “Skin Renew Therapy” on the Lazada platform. [30] To support their contention of the likelihood of deception and confusion, the defendants relied on the House of Lords case of Berlei (UK) Ltd v Bali Brassiere Co Inc [1969] 1 WLR 1306. This case was cited with approval in Yong Teng Hing b/s Hong Kong Trading v Walton International Ltd [2012] 6 MLJ 609. In Yong Teng Hing (supra), the Federal Court considered the interpretation of section 14(1)(a) of the TMA 1976, which contains almost identical wordings as that of section 23(5)(a) of the TMA 2019. The court held that: “[26] As regards the test of confusion and deception it is now well settled. The decision of the House of Lords in the case of Bali Trade Mark [1969] RPC 472 in interpreting s 11 on the UK Trade Marks Act which is equivalent to our s 14(1)(a) of the Act is highly instructive. Lord Upjohn held in that case at p 496 on the test of likelihood of confusion and deception, as follows: What then, is the test? This must necessarily be a question of fact and degree in every case … It is not necessary in order to find that a mark offends against section 11 to prove that there is an actual probability of deception leading to passing off or (I add) an infringement action … It is sufficient if the result of the registration of the mark will be that a number of persons will be caused to wonder whether it might not be the case that the two products came from the same source. ! [27] Confusion and deception as envisaged by s 14(1)(a) of the Act in our view is a question of fact and degree.” (emphasis added) [31] Thus, guided by these cases, the issue of whether the use of the Skin Renew Mark causes deception and confusion is a question of fact and degree. In this regard, I find that the material distinction between the cases cited and the current case before this court is that in the former cases, the marks alleged to have caused deception or confusion are similar to the marks in use. In Berlei (supra), the mark “Bali” was compared to the mark “Berlei” (which is phonetically similar to “Bali”), while in Yong Teng Hing (supra), identical marks, “Giordano” were in used, albeit in different classes. [32] The following passage at page 1323H of Berlei (supra) is of guidance: “… Section 11 is, as I have said, for the protection of the public and any one may object, but if he relies only on similarity he must prove the practical, likelihood of confusion to the public and this he can only do, for the purposes of the section, by proving the existing user by another, not necessarily by himself, in respect of which the mark in suit is likely to cause deception or confusion; but if he does not establish likelihood of deception or confusion with some present user of a similar mark the court would not treat that as sufficient to disentitle the mark in suit to protection …” ! (emphasis added) [33] Based on the above passage, the defendants will need to prove a likelihood of deception or confusion with a mark that is similar to the Skin Renew Mark. In this case, I find that that the marks identified by the defendants as similar to the Skin Renew Mark are not in fact similar. The only similarities identified by the defendants appear to lie in the use of the words “skin renewing” and “skin renew”. Apart from these words, the marks used on these products are not similar to the Skin Renew Mark. [34] Further, in considering the likelihood of deception and confusion between two marks, the court must consider and compare the marks as a whole, and not part by part (see Bata Ltd v Sim Ah Ba @ Sim Teng Khor (trading as Kheng Aik Trading) [2006] 6 MLJ 445). It is therefore insufficient for the defendants to identify only the words in the Skin Renew Mark with words used in other marks, and allege similarities between the marks, without considering the marks as a whole. [35] From the considerations above, it follows that the defendants have failed to prove that the Skin Renew Mark is likely to deceive or cause confusion to the public. The exception in section 53(b) of the TMA 2019 does not apply. [36] The second exception relied on by the defendants, under section 53(c) of the TMA 2019 is that the Skin Renew Mark is devoid of distinctiveness. [37] In Bata Ltd (supra), the Court of Appeal held that the time frame to assess distinctiveness is at the time of the commencement of ! proceedings. In the present case, the relevant time frame would commence on the date of the filing of the counterclaim, which is 17 December 2020. [38] The defendants are seeking to invalidate the Skin Renew Mark on the basis of the lack of distinctiveness, and as such, the burden to prove that the Skin Renew Mark is not distinctive lies with them (see Bata Ltd (supra) and Munchy Food Industries Sdn Bhd v Huasin Food Industries Sdn Bhd [2018] MLJU 407). [39] The defendants have in this regard relied on the products referred to in paragraphs [29] above as evidence of the lack of distinctiveness of the Skin Renew Mark. These products, named “Skin Renewing Serum” and “Skin Renew Therapy”, were promoted on different platforms on 1 November 2021 and 4 November 2022 respectively. [40] The defendants also provided evidence of the use of the word “skin” by traders at the International Beauty Expo in May 2019, to prove the lack of distinctiveness of the Skin Renew Mark. However, the date of the expo falls before the date of the filing of the counterclaim and outside the time frame for assessment of distinctiveness according to Bata Ltd (supra). [41] In Bata Ltd (supra) the concept of distinctiveness was examined and the court held as follows: “[45] Lockhart J in the Australian case of Dodds Family Investments Pty Ltd (formerly Solar Tint Pty Ltd) v Lane ! Industries Pty Ltd and Ors 25 IPR 197 explained the meaning of distinctive: ‘Distinctive’ means distinctive in the sense that the mark distinguishes the registered proprietor’s goods or services from others of the same type in that market, though it does not mean that the goods or services must specifically identify the plaintiff as the source of those goods or services. Often the identity of the supplier will be unknown, but what is important is that a significant number of consumers in the relevant market identify the plaintiff’s goods or services as coming from one trade source: see Johnson & Johnson at FCR 336 and the other references there cited. [46] And in Lim Yew Sing v Hummel International Sports & Leisure A/S [1996] 3 MLJ 7 at p 19, Mahadev Shankar JCA declared: That distinctiveness has to be gauged by the extent to which the trade mark is adapted to distinguish the goods with which its proprietor is connected in the course of trade from goods with which no connection subsists. For the purpose of establishing distinctiveness, therefore, one must look to the use of the mark in the course of trade. (Emphasis added.)” (emphasis added) ! [42] From the above cases, for the Skin Renew Mark to be distinctive, it must be capable of distinguishing the plaintiff’s products with the products of other proprietors in the same market. The burden is on the defendants to show that the mark lacks distinctiveness. Having considered the evidence provided by the defendants – namely, the use of the words “Skin Renewing Serum” and “Skin Renew Therapy” in products promoted in November 2021 and November 2022 – I find this evidence to be insufficient to show that the Skin Renew Mark is not distinctive. The Skin Renew Mark must be considered as a whole, and in this regard, I observed that the marks relied on by the defendants do not contain the brushstroke present in the Skin Renew Mark. [43] Thus, the exception relied on by the defendants under section 53(c) of the TMA 2019 does not apply to this case. [44] As the exceptions under section 53(b) and (c) of the TMA 2019 do not apply to this case, the registration of the Skin Renew Mark is therefore conclusive. [45] As such, I find there to be no justification to invalidate the registration of the Skin Renew Mark. E. Issue 2: Did The Skin Refiner Mark infringe The Skin Renew Mark? [46] The plaintiff’s allegation of infringement of the Skin Renew Mark arises from acts of infringement, namely the use of the Skin Refiner Mark, both before and after the enforcement of the TMA 2019. As such, by section 167(2) of the TMA 2019, section 38 of the TMA 1976 applies to ! acts of infringement before the enforcement of the TMA 2019 and section 54 of the TMA 2019 applies to acts of infringement after the enforcement of the TMA 2019. [47] Section 38 of the TMA 1976 provides that: “(1) A registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or registered user of the trade mark using by way of permitted use, uses a mark which is identical with it or so nearly resembling it as is likely to deceive or cause confusion in the course of trade in relation to goods or services in respect of which the trade mark is registered …” (emphasis added) [48] Section 54 of the TMA 2019 provides that: “(1) A person infringes a registered trademark if he uses a sign which is identical with the trademark in relation to goods or services which are identical with those for which it is registered, in the course of trade, without the consent of the registered proprietor.

A person infringes a registered trademark if, without the consent of the proprietor of the trademark, he uses in the course of trade a sign – !

that is identical with the trademark and is used in relation to goods or services similar to those for which the trademark is registered; or

that is similar to the trademark and is used in relation to goods or services identical with or similar to those for which the trademark is registered, resulting in the likelihood of confusion on the part of the public.” (emphasis added) [49] From the above provisions, trademark infringement occurs: a. Under section 38 of the TMA 1976, where a person uses in the course of trade, a mark: i. Which is identical with a registered trademark, in relation to goods or services in respect of which the trademark is registered; or ii. Which so nearly resembles a registered trademark that it is likely to cause confusion, in relation to goods or services in respect of which the trademark is registered. b. Under section 54 of the TMA 2019, where a person uses in the course of trade a sign: ! i. Which is identical with a registered trademark in relation to goods or services which are identical to those for which the trademark is registered; ii. Which is identical with a registered trademark in relation to goods or services which are similar to those for which the trademark is registered, resulting in the likelihood of confusion on the part of the public; and iii. Which is similar with a registered trademark in relation to goods or services which are similar to those for which the trademark is registered, resulting in the likelihood of confusion on the part of the public. [50] Although there are some differences between the provisions in the TMA 1976 and the TMA 2019, these differences are in my view immaterial to this case. [51] Thus, taking into account the fact that the Skin Renew Mark and the Skin Refiner Mark are not identical, the court will need to determine: a. For infringements occurring prior to the enforcement of the TMA 2019, in which section 38 of the TMA 1976 applies: Whether the Skin Refiner Mark so nearly resembles the Skin Renew Mark that it is likely to cause confusion in relation to goods or services in respect of which the Skin Renew Mark is registered; and ! b. For infringements occurring after the enforcement of the TMA 2019, in which section 54 of the TMA 2019 applies: Whether the Skin Refiner Mark is similar to the Skin Renew Mark in relation to goods or services which are similar to those for which the Skin Renew Mark is registered, such that it results in the likelihood of confusion on the part of the public. [52] Before considering the merits of the plaintiff’s claim for infringement, it is important to first note that the Skin Renew Mark is registered in the following classes: a. Class 35: “Department store retail services connected with the sale of beauty products; Retail services relating to beauty products; Marketing research in the fields of cosmetics, perfumery and beauty products; Administration of the business affairs of franchises; Assistance in business management within the framework of a franchise contract; Assistance in product commercialization, within the framework of a franchise contract; Provision of assistance [business] in the operation of franchises; Administration of the business affairs of retail stores; All included in class 35.” b. Class 44: “Advisory services relating to beauty treatment; Application of cosmetic products to the face; Application of cosmetic products to the body; Beauty consultancy; Beauty salon services; Beauty therapy treatments; Consultancy services relating to slimming; Cosmetic ! analysis; Cosmetic body care services; Cosmetics consultancy services; Cosmetic dentistry; Cosmetic make-up services; Cosmetic treatment; Cosmetic surgery; Electrolysis for cosmetic purposes; Facial beauty treatment services; Leasing skin care equipment; Make-up services; Medical, hygienic and beauty care; Medical services for treatment of the skin; Pharmacists' services to make up prescriptions; Providing Information about beauty; Rental of machines and apparatus for use in beauty salons or barbers' shops; Services for the care of the skin; Services of a make-up artist; Skin care salons; Skin tanning service for humans for cosmetic purposes; Slimming salon services; Slimming treatment services; All included in class 44.” [53] These classes apply to beauty services. It is then important to note that the defendants do not carry out beauty services. Instead, they sell products that carry the Skin Refiner Mark. [54] Under section 38 of the TMA 1976 and section 54 of the TMA 2019, a finding of trademark infringement can only be made where the likelihood of confusion arise in relation to goods and services for which the registered trademark has been registered. In the present case, for there to be an infringement of the Skin Renew Mark, the likelihood of confusion between the Skin Refiner Mark and the Skin Renew Mark must arise in relation to services in Class 35 and Class 44. ! [55] There are clear distinctions provided for in the TMA 1976 and the TMA 2019 between trademarks used in relation to goods, and those used in relation to services: a. The Third Schedules of the Trade Marks Regulations 1997 and Trademarks Regulations 2019 (read together with the Nice Classification) separate the classes for goods (Classes 1 to 34) and the classes for services (Classes 35 to 45); b. Section 3(2) of the TMA 1976 and section 7(2) and (3) of the TMA 2019 set out different means for how a trademark for goods and a trademark for services are used; and c. Section 35(1) of the TMA 1976 and section 48(1) of the TMA 2019 confer the exclusive right to use a trademark, in relation to goods and services that the trademark was registered for. [56] With the clear distinctions between trademarks registered for goods and trademarks registered for services in the TMA 1976 and the TMA 2019, and taking into account the provisions of section 38 of the TMA 1976 and section 54 of the TMA 2019 which provide that the likelihood of confusion must lie only in relation to goods and services in respect of which a trademark is registered, it must follow that the statutory monopoly conferred over a trademark should be confined to the class for which the trademark was registered. ! [57] In this case, the defendants do not carry out beauty services, but sells products that carry the Skin Refiner Mark. The Skin Renew Mark was registered in Class 35 and Class 44, which apply to services. Thus, the plaintiff’s use of the Skin Refiner Mark for products cannot be an infringement of the Skin Renew Mark, which was registered for services. [58] This finding in itself justifies the dismissal of the claim for infringement of the Skin Renew Mark. However, for the sake of completeness, I will proceed to address the plaintiff’s claim for infringement on its merits, by considering whether acts of infringement under section 38 of the TMA 1976 and section 54 of the TMA 2019 had occurred. [59] Under section 38 of the TMA 1976 and section 54 of the TMA 2019, for the Skin Refiner Mark to infringe the Skin Renew Mark, the Skin Refiner Mark must so nearly resemble the Skin Renew Mark or must be similar to the Skin Renew Mark, that the resemblance or similarity is likely to cause or results in the likelihood of confusion on the part of the public. [60] The test for infringement of a trademark and the likelihood of confusion is set out clearly by the Federal Court in Ortus Expert White Sdn Bhd v Nor Yanni bt Adom & Anor [2022] 2 MLJ 67: “[104] Upon a full consideration of the principles and authorities aforementioned, the test for likelihood of confusion and/or deception would be as follows: !

both side-by-side comparison and the Imperfect Recollection Test must be satisfied;

the comparison is made in terms of phonetic, visual, trade channel, and idea aspects of the marks;

the purpose of such comparison is to determine whether the defendant’s mark contains essential features of the plaintiff’s registered trademark, which strike the eye and fix themselves in the recollection of the users of the plaintiff’s goods;

the court shall then take into account all surrounding circumstances and apply the Imperfect Recollection Test, bearing in mind the outcome of the comparison, in order to determine whether it is likely that ordinary consumer with ordinary memory who would be likely to buy the goods would be deceived and think that the defendant’s mark is the same as the plaintiff’s registered trademark. In other words, the test of whether one trademark is confusingly similar is an objective test and the test is that of an ordinary person with an appropriate level of literacy (Merck KGaA v ! Leno Marketing (M) Sdn Bhd [2017] MLJU 1011; [2017] 1 LNS 1006); and

in determining this test, the court is entitled to give effect to their own opinions, and not confined to the evidence of witnesses.” (emphasis added) [61] In conducting a side-by-side comparison of the plaintiff’s Skin Renew Mark “ ” with the defendants’ Skin Refiner Mark “ ”, I observed several features that distinguish the two marks: a. The phrase “Skin Renew” only capitalises the first letters of each word, while the phrase “SKIN REFINER” is entirely in uppercase. b. The phrase “Skin Renew” is in bold font, while only the first letters in the phrase “SKIN REFINER” are in bold font. c. The phrase “Skin Renew” uses the same font size, while only the letters “S” and “R” in “SKIN REFINER” are in a larger font size compared to the rest of the letters. ! d. The taglines on both marks are different, with the Skin Renew Mark containing the tagline “PROFESSIONAL SOLUTION” while the tagline on the Skin Refiner Mark is “MAXIMUM ACTIVES SKIN CARE”. e. The icons on both marks are different, with the Skin Renew Mark containing a brushstroke icon with a further tagline, “Established since 1995”. The Skin Refiner Mark contains a teardrop icon and inside it, the letters “SR” in uppercase. [62] The distinguishing features of the two marks – in terms of their fonts, phrases, taglines and icons – have led me to believe that on a balance of probabilities, ordinary consumers with ordinary memory would not be deceived and think that the Skin Refiner Mark is the same as the Skin Renew Mark. Following this, the irresistible conclusion must be that the Skin Refiner Mark does not contain any essential features of the Skin Renew Mark. It must be emphasised that the most striking feature of the Skin Renew Mark is the brushstroke icon while the most striking feature of the Skin Refiner Mark is the teardrop icon. [63] With the above considerations, I find that the Skin Refiner Mark does not resemble, nor is it similar to the Skin Renew Mark. The use of the two marks would not likely cause or result in the likelihood of confusion on the part of the public. [64] Thus, the plaintiff’s claim for infringement of the Skin Renew Mark under section 38 of the TMA 1976 and section 54 of the TMA 2019 has not been made out. ! F. Issue 3: Are The Defendants Entitled To Reliefs For Groundless Threats Of Infringement Proceedings? The relevant provision [65] The TMA 2019 introduced remedies for groundless threats of infringement proceedings. These remedies, which were not previously available under the TMA 1976, are set out in section 61 of the TMA 2019, which reads: “(1) Where a person threatens another with proceedings for infringement of a registered trademark other than –

the application of the trademark to goods or to material used or intended to be used for labelling or packaging goods;

the importation of goods to which, or to the packaging of which, the trademark has been applied; or

the supply of services under the trademark, any aggrieved person may bring proceedings for relief under this section.

The relief which may be applied for shall be any of the following: !

a declaration that the threats are unjustifiable;

an injunction against the continuance of the threats; or

damages in respect of any loss he has sustained by the threats.

The plaintiff shall be entitled to the relief in subsection (2) unless the defendant shows that the acts in respect of which proceedings were threatened constitute or if done would constitute an infringement of the registered trademark concerned.

If the defendant shows that the acts in respect of which proceedings were threatened constitute or if done would constitute an infringement of the registered trademark concerned, the plaintiff shall nevertheless be entitled to relief if he shows that the registration of trademark is invalid or liable to be revoked in a relevant respect.” (emphasis added) [66] The above provision allows a legitimate business that receives groundless threats of infringement proceedings from a registered trademark owner to obtain remedies from the registered trademark owner. [67] In Singsung Pte Ltd v LG 26 Electronics Pte Ltd (trading as L S Electrical Trading) [2016] 4 SLR 86, the Singapore Court of Appeal ! examined provisions on groundless threats of infringement proceedings in intellectual property laws across different jurisdictions. The analysis provides a useful understanding of the rationale for these provisions: “124 The groundless threats provisions have a long history. The first of them was introduced in the UK in the Patents, Designs and Trade Marks Act 1883 (c 57) (UK) (“the 1883 Act”), in response to situations where a competitor misused threats of an infringement action to damage a trade rival. 125 Such misuse is exemplified by the decision in Halsey v Brotherhood (1881) 19 Ch D 386. Halsey and Brotherhood both manufactured steam engines. Brotherhood’s business was thriving. However, much of it was built on the back of Brotherhood threatening to sue Halsey’s customers for infringing its patents. When the customers received these threats, they stopped buying Halsey’s products. Halsey then sought an injunction against Brotherhood. However, in the absence of any proof of malice, the court declined to grant the injunction. In response to this perceived lacuna in the law, the UK Parliament enacted s 32 of the 1883 Act, which provided that: Remedy in case of groundless threats of legal proceedings

Where any person claiming to be the patentee of an invention, by circulars, advertisements, or otherwise threatens any other person with any legal proceedings or liability in respect of any alleged manufacture, use, sale ! or purchase of the invention, any person or persons aggrieved thereby may bring an action against him and may obtain an injunction against the continuance of such threats, and may recover such damage (if any) as may have been sustained thereby, if the alleged manufacture, use, sale or purchase to which the threats related was not in fact an infringement of any legal rights of the person making such threats: Provided that this section shall not apply if the person making such threats with due diligence commences and prosecutes an action for infringement of his patent. … 127 It may be observed from this that s 32 of the 1883 Act was intended to prevent persons from making threats of infringement in circumstances where they had no real intention of prosecuting an action for infringement. This position, however, developed over time. As explained by Laddie J in Reckitt Benkiser UK v Home Pairfum Ltd [2004] EWHC 302 (Pat) (“Home Pairfum”) (at [10]): … The cost and complexity of patent infringement proceedings were thought to be so high that the issue of such threats might drive competitors from the market. For this reason, unscrupulous patentees with weak cases might be tempted to issue threats even when they had no intention to litigate. To overcome this, the 1883 Act made it actionable to threaten another with patent infringement proceedings. Under ! that legislation, the proprietor could avoid liability if he commenced and pursued patent infringement proceedings with due diligence; thus under that legislation, a patentee could still utter as blood curdling threats as he liked as long as he followed them through. The legislation was subsequently changed. It was no longer a defence to follow up the threats with proceedings. A threat was actionable even if the proprietor had every intention of commencing and pursuing the infringement proceedings and did so. 128 Over time, various groundless threats provisions similar to that found in s 32 of the 1883 Act have been enacted in a broad range of intellectual property legislation. In the United Kingdom, similar provisions may be found in the Copyright, Designs and Patents Act 1988 (c 48) (UK) (“the CDPA”), the UK TMA, the Registered Designs Act 1949 (c 88) (UK) and the Patents Act 1977 (c 37) (UK). They may also be found in the intellectual property legislation of several other Commonwealth countries including Australia (see for example, s 202 of the Copyright Act 1968 (Cth) (“the Australian Copyright Act”) and s 129 of the Trade Marks Act 1995 (Cth)) and Singapore (see [122] above). It is interesting to note that no groundless threats provision in respect of alleged copyright infringement has been enacted in the UK; the threats provision found in the CDPA deals only with design rights. 129 While the contours and language of each piece of legislation may differ, the rationale underlying the groundless threats provisions are broadly aligned. In essence, the groundless threats provision seek to establish a balance between the ! protection of existing intellectual property rights and the prevention of “bullying” tactics where right-holders use the threat of legal proceedings directed at their competitors or their customers to chill their legitimate activities …” (emphasis added) [68] The provisions on remedies for groundless threats of infringement proceedings are intended to strike a balance between the rights of a registered trademark owner with the rights of a legitimate business. This balance should be at the forefront of the court’s mind when considering whether remedies should be granted. [69] From my consideration of section 61 of the TMA, the following requirements must be met in making a claim for groundless threats of infringement proceedings: a. The claim must be made by an aggrieved person, who was threatened with proceedings for infringement of a registered trademark; and b. The infringing acts for which proceedings are threatened do not fall within the exemptions in section 61(1) of the TMA 2019. [70] Additionally, to succeed in this claim, either one of the following must be shown: ! a. The registered trademark owner has failed to prove that its registered trademark was infringed; or b. The aggrieved person has proven that the registered trademark ought to be invalidated or revoked. [71] These requirements were considered in my assessment of whether the remedies sought by the defendants under section 61 of the TMA 2019 ought to be allowed. Requirement 1: The claim is made by an aggrieved person who was threatened with proceedings for infringement of a registered trademark [72] By section 61(1) of the TMA 2019, an aggrieved person is a person who has been threatened with proceedings for infringement of a registered trademark, other than for the infringing acts set out in sub-sections (a) to (c) of section 61(1) of the TMA 2019. [73] On the question of what constitutes a threat, the English Court of Appeal case of Best Buy Co Inc v Worldwide Sales Corporation Espana SL, [2011] EWCA Civ 618 is of persuasive authority. In considering the issue of whether a cease and desist letter contains a threat, the court held that: “[20] It is well established that it is unnecessary for a Claimant in a case such as this: ! “to prove that the Defendant has in so many words said: ‘I intend to issue a writ against you for infringement ...’ The terms of the Act are satisfied if the Defendant in the action is proved to have asserted that he has legal rights in respect of the [intellectual property and that he intends as against the [Claimant] to enforce those rights” – per Romer J in John Summers & Sons Ltd v The Cold Metal Process Company 65 RPC 75, 95. quoting in turn from Bennett J in Wilson & Bates Ltd v Tilley Lamp Co (1943) 61 RPC 8, 11. The notion that s 21 does not require an intimation to be highly specific before it can constitute a threat is to my mind supported by the inclusion of sub-s (4): if a threat was envisaged as having to be clear and express, there would have been no need for such a provision. [21] I also agree with the Judge that the guidance given in L'Oreal (UK) Ltd v Johnson & Johnson [2000] FSR 686, para 12, by Lightman J is helpful as to what constitutes a "threat" in this context: “The policy represented by the first statutory threats provision... was clearly to stop patentees who were (in Pope's words about Addison) ‘willing to wound but afraid to strike’ from holding the sword of Damocles above another's head: see Simon Brown LJ in Unilever p/c v Procter & Gamble Co… In summary, the term threat covers any information that would convey to a ! reasonable man that some person has trademark rights and intends to enforce them against another. It matters not that the threat may be veiled or covert, conditional or future. Nor does it matter that the threat is made in response to an enquiry from the party threatened ...” [22] In my view, the Judge was right in his view that, by the September letter the Defendant did “threaten …. another with proceedings for infringement of a registered trade mark”, within the meaning of s 21(1). The Defendant stated that its registered marks were “reputed and distinctive”, that BBES's actions were already “causing irreparable and irreversible damage” to the Defendant, and that this would entitle the Defendant “to take appropriate legal action to defend its interests”. A reasonable recipient of the September letter would take those statements in particular to indicate not merely that the Defendant was asserting its legal rights, but that it was intending to enforce those rights against BBES.” (emphasis added) [74] In the present case, in the letters dated 19 July 2018 and 15 July 2020, the plaintiff alleged that the defendants had substantially infringed the Skin Renew Mark in using the Skin Refiner Mark. The letters clearly state that the plaintiff will proceed with legal proceedings against the defendants if they do not withdraw or refrain from using the Skin Refiner Mark. ! [75] As such, the court finds that the defendants are aggrieved persons, as they have received threats of infringement proceedings from the plaintiff. Requirement 2: The infringing acts for which proceedings are threatened do not fall within the exemptions in section 61(1) of the TMA 2019 [76] Section 54(3) of the TMA 2019 sets out eight types of infringing acts that a registered trademark owner may take action for. Under section 61(1), three of these infringing acts are exempted from a claim for groundless threats of infringement proceedings. Thus, if the plaintiff’s threats fall under one of these exempted infringing acts, the defendants will not be able to claim for reliefs under section 61(1). [77] These exemptions are: “(a) the application of the trademark to goods or to material used or intended to be used for labelling or packaging goods;

the importation of goods to which, or to the packaging of which, the trademark has been applied; or

the supply of services under the trademark …” [78] It is clear that the plaintiff’s threats in the letters dated 19 July 2018 and 15 July 2020 fall outside the scope of the exemptions under section 61(1), as the defendants’ acts for which the plaintiff threatened ! infringement proceedings are in relation to the production, distribution, marketing and promotion of products using the Skin Refiner Mark. The acts set out in section 61(1) do not apply to this case. Requirement 3: The registered trademark owner has failed to prove that its registered trademark was infringed, or the aggrieved person has proven that the registered trademark ought to be invalidated or revoked [79] Read together, section 61(3) and (4) of the TMA 2019 provides that the aggrieved person is entitled to the reliefs under section 61(2) in either one of the following circumstances: a. If the registered trademark owner fails to prove that its trademark was infringed; or b. Even where infringement is proven, if the aggrieved person proves that the registered trademark ought to be invalidated or revoked. [80] In this case, the court has found that the Skin Refiner Mark does not infringe the Skin Renew Mark, and as such, section 61(3) of the TMA 2019 would apply. Are the defendants entitled to the reliefs sought? [81] From a reading of section 61(3) of the TMA 2019, it appears that once the conditions under section 61 have been met, as they have been in this case, the reliefs in section 61(2) must be granted. ! [82] In considering the grant of the reliefs, I am guided by the Federal Court case of Hong Leong Bank Bhd v Khairulnizam bin Jamaludin [2016] 4 MLJ 302, which deals with the construction of section 5(3) of the Bankruptcy Act 1967. The section states that: “A petitioning creditor shall not be entitled to commence any bankruptcy action against a social guarantor unless he proves to the satisfaction of the court that he has exhausted all avenues to recover debts owed to him by the debtor.” [83] Under the section, to commence a bankruptcy action, the petitioning creditor is merely required to prove that he exhausted all avenues to recover the debt. However, the High Court imposed an additional requirement i.e. that the petitioning creditor also had to apply for leave of court. [84] The Federal Court disagreed with the decision of the High Court (which was affirmed by the Court of Appeal), and held that: [26] There are certain formalities to be observed when filing the bankruptcy notice. It must be accompanied by a request to the registrar to issue a bankruptcy notice. The bankruptcy notice is dated by the registrar and sealed. There must be an endorsement upon the notice stating that if the debtor has any set-off, counterclaim or cross-demand, he must file an affidavit to that effect. [27] After those formalities are complied with by the creditor the court is required to issue the bankruptcy notice. ! [28] With respect, we are unable to agree with the decision of the courts below. If the Legislature has so intended one would expect it to have spelt out that requirement in an express and clear provision to that effect. Such as important requirement cannot, in our view, be inferred from the words used in s 5(3) of the Act. We are not at liberty to brush aside the explicit provisions of s 5(3) of the Act and r 92 of the Rules 1969. There is nothing to say that leave must first be obtained by the creditor before a bankruptcy notice is applied. [29] In interpreting the provisions of a statute, one of the cardinal rules is to adhere as closely as possible to the literal meaning of the words. The duty of the court is limited to interpreting the words used by the Legislature and to give effect to the words used by it. Where the language used is clear and unambiguous, it is not the function of the court to re-write the statute in a way which it considers reasonable. In Chin Choy & Ors v Collector of Stamp Duties [1979] 1 MLJ 69 at p 70, the Federal Court said: It may be apposite at this stage to recall certain basic principles in the interpretation of statutes. Applying the words and phrases of a statute in their ordinary meaning has been said to be the first and most elementary rule of construction and the second is said to be to construe the phrases and sentences according to the rules of grammar. ! It is very desirable in all cases to adhere to the words of an Act of Parliament, giving to them that sense which is their natural import in the order in which they are placed, per Bayley J in R v Ramsgate (Inhabitants).” (emphasis added) [85] In the present case, the words of section 61(1) of the TMA 2019 are clear and explicit. Once an aggrieved person has received a threat of infringement proceedings and the exemptions under section 61(1) do not apply, the only limitation imposed by the TMA 2019 which would disallow the grant of the reliefs sought in section 61(2) would be where one of the following situations apply: a. The trademark owner proves infringement of the registered trademark (section 61(3)); or b. The aggrieved person fails to prove invalidation or revocation of the registration of the trademark (section 61(4)). [86] I must also stress that the provisions state that: a. “The plaintiff shall be entitled to the relief …” (emphasis added) (section 61(3) of the TMA 2019), unless an infringement of the registered trademark is proven; and ! b. “… the plaintiff shall nevertheless be entitled to the relief …” (emphasis added) (section 61(4) of the TMA 2019), if the registration of the trademark is shown to be invalid or is liable to be revoked. [87] The use of the word “shall” in both sub-sections means that the grant of the reliefs sought is mandatory, once the requirements under section 61 have been met. [88] With the clear conditions, exemptions and limitations imposed in section 61 of the TMA 2019, I am unable to see how the section can be can be read in any other manner than as set out above. In particular, it is not the court’s role to impose further requirements in this section, for example, on the extent of the strength of the plaintiff’s claim of infringement, before allowing the reliefs sought. [89] As such, I see it fit, taking into account the facts of the case, to allow the defendants’ counterclaim for groundless threat of infringement proceedings under section 61 of the TMA 2019. G. Issue 4: Did The Defendants Commit The Tort Of Passing Off Of The Skin Renew Mark? [90] The plaintiff also claimed that the defendants had committed the tort of passing off of the Skin Renew Mark and the Plaintiff’s Website. [91] In Skyworld Holdings Sdn Bhd v Skyworld Development Sdn Bhd [2022] 3 MLJ 426, the Federal Court held at page [22] of the judgment that to prove passing off, a plaintiff must establish the following: ! a. goodwill or reputation attached to his goods or services; b. misrepresentation done by the defendant; and c. loss suffered by the plaintiff due to the defendant’s misrepresentation. [92] All three elements above must be met in order to prove passing off. [93] The concept of goodwill was examined in Yong Sze Fun (t/a Perindustrian Makanan & Minuman Layang-Layang) v Syarikat Zamani Hj Tamin Sdn Bhd [2012] 1 MLJ 585, where the Court of Appeal held that: “[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.” (emphasis added) [94] In the present case, I find that the plaintiff has proven that it has established goodwill and reputation for its products bearing the Skin Renew Mark, as it is in evidence that: a. The Skin Renew Mark has been used for more than 20 years; b. The plaintiff had set up beauty centres and outlets in shopping malls throughout Malaysia (including in Berjaya Times Square and Sunway Pyramid in Kuala Lumpur, and in Pulau Pinang and Perak), offering products and services under the Skin Renew Mark; c. The plaintiff has carried on its business online through the Plaintiff’s Website since 2006; d. The plaintiff has carried on marketing, advertising and promotional activities for its products carrying the Skin Renew Mark. This includes being involved in exhibitions and expos such as Cosmobeaute, Vietbeauty and the International Beauty Expo; and ! e. The plaintiff has set up the Skin Renew Academy, offering courses such as “Skin Renew’s Professional Cosmetology Courses” and “Advance Diploma in Beauty Therapy”. [95] Thus, there have been extensive trading operations and trading activities, which are sufficient to establish the goodwill and reputation of the Skin Renew Mark. [96] However, I find that the second element of passing off, that of misrepresentation, has not been established. To prove this element, the plaintiff must demonstrate a misrepresentation by the defendants to the public that would lead (or is likely to lead) the public to believe that the defendants’ products are the plaintiff’s products or services (see Skyworld (supra), at paragraph [21] where the Federal Court cited Reckitt & Colman Products Ltd v Borden Inc and Others [1990] LRC (Comm) 417). [97] In Ortus Expert (supra), the Federal Court held that to establish the tort of passing off, misrepresentation calculated to deceive a substantial segment of the public must be proven: “[119] It is important to take cognisance of the legal position of passing off that, there is a difference between action of trademark infringement and action of passing off. It is easier to prove trademark infringement as compared to the tort of passing off due to the requirement of proving the elements of goodwill, misrepresentation and damage in the latter. The misrepresentation is one which is calculated to deceive a ! substantial segment of the public, which means deception must be proven, not mere confusion as in the case of trademark infringement …” (emphasis added) [98] I had earlier found that the Skin Refiner Mark does not infringe the Skin Renew Mark as it does not cause deception or confusion in relation to the Skin Renew Mark. Following Ortus Expert (supra), to prove misrepresentation, the plaintiff is held to a higher standard in that it must prove not mere confusion, but that the defendants’ misrepresentation is one which is calculated to deceive the public. [99] In Skyworld (supra), it was held that if deception or confusion is not proven for infringement, it will also not be proven for misrepresentation for the purpose of passing off: “[45] … We were of the view that the decision of the learned High Court judge was correct that there was no trademark infringement as the trademarks were not identical or so nearly resembling each other, as they differed visually to a great extent. We were of the view there was no likelihood of confusion or deception in the course of trade in relation to the marks. [46] Earlier on, we explained the elements of passing off. Passing off arises when there is misrepresentation and harm to a plaintiff’s existing product. Misrepresentation will definitely create confusion or deception. In this appeal, it follows that as neither the elements of confusion or deception were ! established, we therefore held that passing off was also not made out.” (emphasis added) [100] As such, with the finding that the Skin Refiner Mark does not cause deception or confusion in respect of the Skin Renew Mark, it follows that there cannot be any misrepresentation by the defendants to the public that would lead (or is likely to lead) the public to believe that the defendants’ products are the plaintiff’s products or services. [101] It is my further finding that the absence of confusion or deception also applies to the 1st Defendant’s Website and 4th and 5th Defendants’ Websites (collectively, the “Defendants’ Websites”), which contain marked features that are distinct and different from the Plaintiff’s Website. The theme of the Defendants’ Websites is nature-based, and this theme is entirely absent from the Plaintiff’s Website. The structures and elements of the Defendants’ Websites are also different from the Plaintiff’s Website, containing different layouts and tabs. A person looking at the Defendants’ Websites is not likely to conclude that they are connected to the Plaintiff’s Website. [102] As such, the Defendants’ Websites would not give rise to any misrepresentation by the defendants to the public that would lead (or is likely to lead) the public to believe that the defendants’ products are the plaintiff’s products or services. [103] With my finding that the plaintiff has not been able to establish misrepresentation on the part of the defendants, the elements of the tort ! of passing off has not been met and the plaintiff’s claim in this regard must necessarily fail. H.

[104] The court finds that the plaintiff has failed to prove its claims for infringement and passing off of the Skin Renew Trademark. As such, the plaintiff’s claim is dismissed. [105] Following the dismissal of the plaintiff’s claim, the court allows defendants’ counterclaim for declarations that the use of the Skin Refiner Mark does not infringe and does not pass off as the Skin Renew Mark, and that the Skin Refiner Mark is used in good faith. [106] The court further allows the defendants’ counterclaim for reliefs for groundless threats of infringement proceedings, with damages to be assessed. [107] However, the defendants’ counterclaim for invalidation of the Skin Renew Mark is dismissed. [108] The court orders costs of RM40,000 to be paid by the plaintiff to the defendants. Dated 31 December 2024 ADLIN ABDUL MAJID Judge High Court of Malaya Kuala Lumpur Counsel: Plaintiff : Alex Gan Yi Yang (together with Vilasiny G.) of Messrs. Vilasiny Gan & Co Defendant : Jonathan Gerard (together with Tan Jit Kai) of Messrs. Ken St James