Antara1. Bonia International Holdings Pte Ltd(Company No. 199000201 D)2. Cr Boutique Sdn Bhd(Company No. 742416-H) … Plaintif-PlaintifDan1. Simson Trading Sdn Bhd(Company No. 465371-U)2. Bolton Optical Sdn Bhd(Company No. 494895-T)3. Bolton Visioncare Sdn Bhd(Company No. 614614-H)4. Bolton Optical Retail Sdn Bhd(Company No. 863130-W)5. Sim Eng Peng (Ic No. 650416-05-5289)(Ic No. 650416-05-5289)

  

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DALAM MAHKAMAH TINGGI MALAYA DI KUALA LUMPUR

 

(BAHAGIAN DAGANG)

 

GUAMAN NO: 22IP- 11- 03 TAHUN 2014

 

ANTARA

 

1. BONIA INTERNATIONAL HOLDINGS PTE LTD (COMPANY NO. 199000201 D)

 

2. CR BOUTIQUE SDN BHD

 

(COMPANY NO. 742416-H) … PLAINTIF-PLAINTIF

 

DAN

 

1. SIMSON TRADING SDN BHD (COMPANY NO. 465371-U)

 

2. BOLTON OPTICAL SDN BHD (COMPANY NO. 494895-T)

 

3. BOLTON VISIONCARE SDN BHD (COMPANY NO. 614614-H)

 

4. BOLTON OPTICAL RETAIL SDN BHD (COMPANY NO. 863130-W)

 

5. SIM ENG PENG (IC NO. 650416-05-5289)

 

(IC NO. 650416-05-5289)

 

(TRADING AS SIMSON TRADING)

 

(BUSINESS REGISTRATION NO. 000878214-U) … DEFENDAN-DEFENDAN

 

Grounds of Judgment

 

Azizah Nawawi, J:

 

Introduction

 

[1] The Plaintiffs’ action is registration No. 93002741

 

to expunge the Fifth Defendant’s for ■ ¡n Q|ass g which is

 

1

 

registered for “optical included in Class 9″ that is in respect of eyewear, on the basis that the entry of the Offending Registration was:

 

(i) made in the Register without sufficient cause or any entry wrongfully remaining in the Register under Section 45 Trade Marks Act 1976 (‘TMA 1976’); and/or

 

(ii) on grounds of non-use under section 46, TMA 1976

 

[2] The Plaintiffs’ other claims against the Defendants are premised on the common law tort of passing off, trade mark infringement and unlawful interference with the Plaintiffs’ trade as a result of the use of the Fifth Defendant’s registered trade mark

 

by

 

the Defendants.

 

[3] In response, the Defendants have also filed a counterclaim for trade mark infringement and passing off of the Fifth Defendant’s trade mark against the Plaintiffs.

 

[4] At the end of the trial, this Court has dismissed the Plaintiffs’ claim and allowed the Defendants’ Counterclaim.

 

The Salient Facts

 

[5] From the submission of the parties, the facts disclosed that the Plaintiffs dealt in fashion goods, predominantly ladies footwear and leather goods under the ‘CARLO RINO’ mark and have several registered trademarks in various styles and fonts which

 

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were registered over the years beginning in 1988. ‘CARLO RINO’ is essentially a second-tier mark after their main brand known as ‘BONIA’.

 

[6] The Second Plaintiff is a wholly-owned subsidiary of Bonia Corporation Berhad whereas the First Plaintiff is a company which is incorporated in Singapore and wholly owned by Mr Chiang Sang Sem (“PW3”), the founder and chief executive officer of Bonia Corporation Berhad.

 

[7] The Plaintiffs are the registered proprietors for the CARLO RINO Mark for goods in Classes 3, 14, 18, 25 and services in Class 35 as follows:

 

T rade Mark Registration Goods/Services

 

No.

 

Carlo rino 05021395 Class 3

 

CARLO RINO 94011780 Class 14

 

CARLO RINO 01000402 Class 25

 

CARLO RINO 90002164 Class 18

 

CARLO RINO 05007850 Class 35

 

CARLO RINO 05007849 Class 18

 

3

 

0100400

 

Class 25

 

88004906

 

Class 18

 

08002265

 

Class 25

 

08002266

 

Class 18

 

88004905

 

Class 25

 

a

 

Carlo Rino

 

05011946

 

Class 18

 

 

Carlo Rino

 

05011947

 

Class 25

 

[8] The first trade mark for ‘CARLO RINO’ was applied for on 22.9.1988 in Class 25 in respect of clothing and footwear as well as in Class 18 in respect of leather goods by CB Marketing Sdn Bhd.

 

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[9] The Fifth Defendant (DW1), trading as Simson Trading (the First Defendant), is the founder of the Bolton Optical Group of Companies (Second, Third and Fourth Defendants) which specialized in the optical and eye care business. DW1, by himself or through companies incorporated by him, had been selling eyewear products since 1992, amongst them brands which are

 

personally owned by him, including

 

and

 

[10] On 21.4.1993, the Fifth Defendant had sought to protect his trade marks by applying for their registration at the Trade Marks Registry under Class 9 for “Optical included in Class 9” bearing registration no. 93002741 and 93002746 respectively. The applications were accepted and the registration certificates were issued on 7.2.2007.

 

[11] Since 1992, the Defendants had continued distributing/selling the

 

eyewear over the next 20 years without any interference or interruption from any party, including the Plaintiffs herein. The sales were through wholesale, franchise and also retail in 87 chain of retail outlets owned or franchised by him in the whole of Malaysia today. The same goods were also exported to Singapore, Brunei and Thailand.

 

and

 

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[12] In 2011, the Defendants also filed and obtained an Order dated 8.11.2011 under the Trade Description Act 2011 to protect their

 

mark.

 

[13] Sometime in 2011- 2012, the Plaintiffs had discovered that the Defendants had employed the trade mark CARLO RENO or the

 

stylised version of the same in relation to

 

eyewear. The Plaintiffs maintained that the CARLO RENO Marks are closely similar, if not almost identical to the Plaintiffs’ CARLO RINO Mark.

 

[14] Vide a letter dated 7.1.2014, the Plaintiff’s solicitors issued a letter to the Defendants demanding the Defendants to cancel their

 

trade mar|<_

 

[15] When the Defendants refused to cancel the registration, the Plaintiffs commenced this action. As a result, the Defendants,

 

being the registered proprietor of the mark,

 

also commenced a counterclaim against the Plaintiffs to assert their legal rights in the said mark.

 

Agreed Issues to be Tried

 

[16] The parties have agreed to the following issues to be tried:

 

(i) whether the Plaintiff’s are persons aggrieved in law and have the locus standi to commence the present cause of

 

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(ii)

 

(iii)

 

(iv)

 

(v)

 

action for the expungement of the Fifth Defendant’s Trade

 

Mark Registration No. 93002741 for

 

(highly stylized) in Class 9 (‘the registration’);

 

whether the mark is closely and

 

deceptively similar to CARLO RINO at the commencement of this expungement proceeding and/or at the date of filing of the CARLO RENO application;

 

whether the Fifth Defendant was a bona fide proprietor of

 

the mark ¡n re|ation to optical and

 

eyewear products at the date of the application and at all material time;

 

whether the Plaintiffs have passed off their CARLO RINO eyewear products as or for the Defendant’s

 

eyewear products and vice versa; and

 

whether the ^ registration has been

 

entered in the Register without sufficient cause or is wrongfully remaining on the Register of Trade Marks.

 

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Findings of the Court

 

[17] It is the Plaintiff’s contention that as the Plaintiffs’ suit is premised on section 45 of the TMA 1976, the onus is on the Plaintiffs to establish the following conditions:

 

(i) that the Plaintiffs are ‘aggrieved persons’; and

 

(ii) that the offending “ ” registration is an

 

entry made in the Register without sufficient cause or entries wrongfully remaining on the Register.

 

[18] However, on the factual matrix of this case, since the

 

registration has been on the Register since 21.4.1993, seven (7) years has since lapsed and pursuant to section 37 of the TMA 1976, the registration in respect of the

 

trade mark is conclusive and any challenge to the said registration is only limited to three (3) grounds laid down in section 37, which reads as follows:

 

“37. Registration conclusive

 

In all legal proceedings relating to a trade mark registered in the Register (including applications under section 45) the original registration of the trade mark under the Act shall, after the expiration of seven years from the date

 

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thereof, be taken to be valid in all aspects unless it is shown that –

 

(a) that the original registration was obtained by fraud;

 

(b) that the trade mark offends against section 14; or

 

(c) that the trade mark was not, at the commencement of the proceedings, distinctive of the goods or services of the registered proprietor

 

Issue (i) whether the original registration was obtained by fraud

 

[19] The issue of fraud in section 37 of the TMA 1976 was considered in Tiga Gajah Cho Heng Sdn Bhd v Majuperak Tepung Beras Sdn Bhd [1997] 4 MLJ 504 where the Court held:

 

“Coming to the issue of fraud, I hold that fraud as stated in s 37 of the TMA 1976 must and ought to reflect the ordinary meaning ascribed to it and therefore show conduct involving dishonesty or deception, by word or deed or omission by word or deed. The dishonesty must not be assumed solely by reason of knowledge of an unregistered interest. ”

 

And having quoted a line of Australian cases, the Court has identified the following three elements which will together constitute as fraud: –

 

(1) An actual deception and intention to deceive;

 

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(2) An actual injury or possible injury by means of deceit; and

 

(3) Actual knowledge that the act was calculated to injure one’s neighbour.

 

[20] The test of fraud in Tiga Gajah (supra) was followed in subsequent cases by Low Hop Bing J (as he then was) in Leo Pharmacuetical Products Ltd A/S (Lovens Kemiske Fabrik Produktionsaktieselskab) v Kotra Pharma (M) Sdn Bhd [2009] 5 MLJ 703 and by Justice Ramly Ali J (as he then was) in ELBA SpA v Fiamma Sdn Bhd [2008] 3 MLJ 713, where His Lordship held:

 

“It is now well settled law that the standard of proof required for an allegation of fraud in civil proceedings must be one of beyond reasonable doubt and not on balance of probabilities (see Asean Security Paper Mills Sdn Bhd v CGU Insurance Bhd [2007] 2 MLJ 301 (FC); and Yong Tim v Hoo Kok Chong & Anor [2005] 3 CLJ 229 (FC). In the present case, the applicant has to discharge the onus of proof that the respondent is not the proprietor of the said trademarks and that the said registered trademarks were obtained by fraud (beyond reasonable doubt).” (emphasis added)

 

[21] Justice Ramly then adopted the three elements test to be satisfied as laid down in Tiga Rajah in order to prove fraud beyond reasonable doubt and held:-

 

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“For the purpose of the present case, the court adopts the three elements to be satisfied in order to prove fraud on beyond reasonable doubts as stated in Tiga Gajah case, namely:

 

(a) an actual deception and intention to deceive;

 

(b) an actual injury or possible injury by means of deceit;

 

(c) actual knowledge that the act was calculated to injure one’s neighbor.

 

In this case the applicant has failed to show the three elements required to found its case on fraud. The applicant’s allegation on ownership of the ‘ELBA’ mark is not consistent with its decision to abandon registration for the ‘ELBA’ mark in its country of origin, Italy and in Malaysia …”

 

[22] However, in paragraph (53) of the Plaintiffs’ Written Submission, the Plaintiffs take this position:

 

“Now, we move on to the Offending Registration and ask whether on the balance of probability, was the application for the Offending Registration made in good faith on 21.4.1993 and of course, this question is to be answered taking into account the factual circumstances on 21.4.1993.”

 

li

 

[23] But unfortunately the Plaintiff did not refer to any case authority for the above test. As such, I am of the considered opinion and I agree with the Defendants that the test in which the Plaintiffs must establish fraud is the three (3) elements in Tiga Gajah case.

 

[24] Having considered the evidence and the submission of the parties, I am of the considered opinion that the Plaintiffs have failed to establish the three elements of fraud as in Tiga Gajah case.

 

[25] The Plaintiffs have failed to prove that there was actual deception and intention to deceive by the Fifth Defendant. The Plaintiffs are relying on their contention that they have used the “CARLO RINO” brand in relation to fashion goods such as handbags and shoes since 1985. But the Plaintiffs cannot simply assume that everyone in Malaysia, including the Fifth Defendant knew about their CARLO RINO brand since 1985. On this, I accept the evidence of the Fifth Defendant himself, who gave evidence that he only came to know about the “CARLO RINO” mark in late 2000’s, that is, in 2007, 2008 onwards, in respect of the Plaintiffs’ products in handbags and shoes.

 

[26] I also agree with the Defendants that there is no evidence from the Plaintiffs to show that DW1 (the Fifth Defendant) had registered the mark in 1993 for Class 9 deceptively with a view to injure the Plaintiffs. Added to that, even if there was knowledge that the Plaintiffs’ mark had existed in 1993 in respect of the other classes and products, it must be emphasized that fraud must not be assumed simply by mere suspicion or speculation.

 

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[27] Therefore, I find that the Plaintiffs had also failed to produce any evidence to show that DW1 had acted dishonestly/deceptively with knowledge that the act was calculated to injure the Plaintiffs. Added to that, I agree with the Defendants that the Plaintiffs do not have a monopoly over Italian sounding names, and the mere fact that both are similar Italian sounding names alone does not prove that there is an element of deception or confusion. As held by his Lordship Ramly Ali J (as he then was) in Consitex SA v TCL Marketing Sdn Bhd [2008] 3 MLJ 574, in relation to an action brought by the owner of the ‘Ermenegildo Zegna’ mark against ‘Emmer Zecna’ mark for infringement at 593-594:

 

“The plaintiff should not have monopoly of Italian sounding names for clothing. It is an open market in Malaysia and it should be left as such. ”

 

Issue (ii) whether the trade mark offends Section 14 of the TMA 1976

 

[28] The Plaintiffs are relying on section 14 of the TMA 1976 as a ground for expunction of the Defendants’ trade mark, which reads as follows:

 

“ 14. Prohibition on registration

 

A mark or part of a mark shall not be registered as a trade mark –

 

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

 

13

 

(b) …

 

(c) …

 

(d) if it is identical with or so nearly resembles a mark which is well known in Malaysia for the same goods or services of another proprietor”

 

[29] In paragraph (70) of the Written Submission of the Plaintiffs, the Plaintiffs relied on section 14(1)(a) and (d) of the TMA 1976. The Plaintiffs submission reads:

 

“Thus

 

(a) the use of for eyewear is likely to

 

deceive or cause confusion to the public and is contrary to law since it would be tantamount to passing off vis-à-vis the Plaintiffs’ CARLO RINO Mark (as would be addressed in the second half of this submission -contrary to Section 14(1)(a) Trade Marks Act 1976

 

(b) [M/m ¡s identical with or so nearly

 

resembles the CARLO RINO Mark which is well known in Malaysia for fashion goods including eyewear -contrary to Section 14(1)(b) Trade Marks Act 1976″

 

[30] However, the Plaintiffs’ pleaded cases at para 31.8 and 31.9 of the Amended Statement of Claim reads as follows:

 

“31.8 By virtue of the facts referred in paragraphs 31.1 to 31.6 above, the adoption of the Offending mark

 

14

 

is likely to deceive and/or cause confusion to the public thinking that there is a trade connection between the Plaintiffs and the Defendants.

 

31.9 As a result, the interests of the Plaintiffs in the CARLO RINO mark are likely to be damaged by such use by the Defendants and the Offending Mark offends against Section 14 of the Act.”

 

[31] Therefore, the Plaintiffs’ pleaded case is premised only on section 14(1)(a) and not on section 14 (1)(d) of the TMA 1976. The Plaintiff further submit in paragraph (72) as follows:

 

“We reiterate that in fact, there is really no need to consult the Federal Court’s decision in Yong Teng Hing (supra) [Tab 5 PBA] because at all material times whether at the date of the filing of this suit (30.3.2014), the date of the hearing (now fixed on 7.4.2015) or the time of the filing of the application (21.4.1993) the CARLO RINO Mark has been used in relation to eyewear, such use commencing in a prolonged, continuous and significant manner since 1990.” (emphasis added)

 

[32] However, from the evidence before me I find that the Plaintiffs have failed to show confusion as at 21.4.1993. There is no evidence that the Plaintiff had used its marks in respect of eyewear products under Class 9 before 21.4.1993 that causes the likelihood of confusion. This is especially so when the law provides that with its registration, it is prima facie evidence of the

 

15

 

validity of the original registration of the defendant’s marks. I agree with the Defendant that mere allegation is not enough.

 

[33] Next I deal with the issue of confusion as ‘at the date of the filing of this suit (30.3.2014), the date of the hearing (now fixed on 7.4.2015)’. On the issue confusion, the same can arise even if the goods are in respect of different classes, as eyewear is of different class from the Plaintiffs’ products. This is based on the decision of the Federal Court in Yong Teng Hing d/s Hong Kong Trading Co. & Anor v Walton International Ltd [2012] 6 MLJ 609, where the Court held at p. 624:

 

“Confusion and deception as envisaged by s 14(1)(a) of the Act in our view is a question of fact and degree. The likelihood of confusion and deception can never be ruled out in the present case simply because the goods sought to be registered by the appellant fall in class 9 whilst the goods that have been sold and traded by the respondent fall in other classes such as class 25. Further, the more well known or unusual a trademark, the more likely is that consumers might be confused into believing that there is a trade connection between goods or services bearing the same or a similar mark.”

 

[34] However, as conceded by learned Counsel for the Plaintiff, they will not be relying on the case of Yong Teng Hing. This is because the case of Yong Teng Hing is with regards to an opposition proceeding to object the registration of a trade mark,

 

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whereas this case involves an application to expunge a trade mark that was registered since 1993.

 

[35] Therefore, the relevant case here is the decision of the Court of Appeal in Lim Yew Sing v Hummel International Sports & Leisure A/S [1996] 3 MLJ 7. In actual fact, the case of Hummel International (supra) was distinguished by the Federal Court in Ying Teng Hing (supra) at page 618:

 

“[8]   With respect, we could not agree with the

 

contention of the appellant as Hummel’s case can be distinguished on the facts from the present case. We noted that the Hummel’s case did not decide the first user of the trademark at all in Malaysia prior to the application date in respect of different but related goods unlike in the present case. The Hummel’s case involved an application to invalidate the Hummel trademark registration which had been registered for more than seven years pursuant to s 45 of the Act.’’

 

At page 19, the Court added:

 

“[12] It is to be noted in the present case the respondent filed its notice of opposition before the appellant’s mark could be registered. On this point it is our judgment that the onus is on the appellant to prove that he is entitled to register the ‘GIORDANO’ trademark. This is different from the onus on the foreign company in the Hummel’s case to challenge the registration of the

 

17

 

Hummel’s mark that has been on the register for more than seven years and enjoys the presumption of validity. The Court of Appeal in the present case was right in its finding that the appellant had not adduced evidence to show that he had commenced using the ‘GIORDANO’ trademark in relation to optical and sunglasses as of the application date bearing in mind that the appellant as the applicant bears the burden of proving his entitlement to register the said trademark. ”

 

[36] In Hummel’s case, which seeks to challenge the registration of the Hummel’s mark that has been on the register for more than seven years and enjoys the presumption of validity, the Court of Appeal made reference to the GE Trademark [1973] RPC 297/ GEC v The GE Co. Ltd. [1972] 2 All ER 507, which is applicable in determining whether the Plaintiffs can successfully apply to have the Defendant’s trade mark, which have been on the register for more than 7 years, expunged.

 

[37] In GE Trademark/GEC case, an English company registered its trade mark for various classes of electrical goods under GEC mark in 1906. An American company, General Electric Company registered its trade mark GE enclosed in ornamental circle in 1907 (‘the rondel mark’). Until 1952, the volume of sales by the American company was small. However, from 1965 to 1967 the volume of sales has increased. This prompted the English company to file an application to remove the rondel mark registration in 1967. The issue before the House of Lord is at page 511:

 

18

 

“My Lords, it follows that there was nothing wrong with the original registration of the rondel mark. At the time when the entry was first put on the register it was not an entry made in the register without sufficient cause’ within the meaning of s 32(1) of the Trade Marks Act 1938. The main question in this appeal is whether as a results of events which have occurred since 1907, it had become an ‘entry wrongfully remaining on the register’ within the meaning of that section on 20th July 1967, when the English company started proceedings to expunge it from the register.” (emphasis added)

 

[38] In expounding what is meant by ‘likely to deceive or cause confusion’ in s. 11 of the Trade Marks Act 1938 (which is the equivalent of our s. 14 of the TMA 1976), Lord Diplock held at p. 526:

 

“As respects the main ground of appeal, the legal status under the Act of 1938 of a registered trade mark the use of which is likely to cause confusion can be summarised as follows: (1) The fact that the mark is entered on the register is prima facie evidence of the validity of the original registration and of the right of the registered proprietor to the exclusive use of the mark, subject however to the rights of concurrent user by any registered proprietor of an identical mark or one nearly resembling it. (2) If the mark was likely to cause confusion at the time when it was first

 

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[39]

 

registered it may be expunged from the register as an ’entry made in the register without sufficient cause’ unless the proprietor of the mark at that time would have been entitled to have it entered on the register by reason of his honest concurrent use of the mark as a trade mark before the original registration of the mark. (3) If the likelihood of causing confusion did not exist at the time when the mark was first registered, but was the result of events occurring between that date and the date of application to expunge it, the mark may not be expunged from the register as an entry wrongly remaining on the register, unless the likelihood of causing deception resulted from some blameworthy act of the registered proprietor of the mark or of a predecessor in title of his as registered proprietor. (4) Where a mark is liable to be expunged under (2) or (3) the court has a discretion whether or not to expunge it and as to any conditions or limitations to be imposed in the event of its being permitted to remain on the register.”

 

In respect of point (1) of Lord Diplock’s judgment, the registration of the Defendants’ mark on 21.4.1993 is prima facie evidence of the validity of the original registration and of the right of the

 

Defendants to the exclusive use of the mark

 

in Class 9, subject to the use of the ‘CARLO RINO’ mark by the Plaintiffs in the other classes which were registered at the time.

 

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[40] By applying common law usage, the Defendants were also the first user of their mark in eyewear from 1992, as opposed to the Plaintiffs from 1994, at the earliest.

 

[41] In respect to point (2) by Lord Diplock, the question to be answered is whether there was any likelihood of confusion at the date of registration, ie. 21-4-1993. In this regard, the Court of Appeal in Bata Ltd v Sim Ah Ba @ Sim Teng Khor & Ors (trading as Kheng Aik Trading) [2006] 6 MLJ 445 at p. 457 held as follows:

 

“In considering whether there would be confusion and deception to the public by the existence of two allegedly similar trade marks, it is necessary, at the outset, to state that similarity per se is acceptable, so long as it does not lead to a likelihood of confusion or deception – see Kerly on law of Trade Marks and Trade Names, 13th edn paras. 16-32. And confusion and deception here should be precipitated to those probable customers or purchasers of goods who may be misled into purchasing one party’s goods sold under that party’s trade mark for that of the other. A possibility of confusion is not sufficient. There must be “a real tangible danger of confusion”.

 

Further down the judgment, his Lordship James Foong JCA (as he then was) speaking for the Court of Appeal held at p. 462:

 

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“Much associated with this issue is the type of goods for which a trade mark is registered. Here we would like to point out that the appellant’s trade mark is not registered for goods sold by the respondents under their trade mark. The appellant’s trade mark is never registered for: socks and underwear. To reiterate, the appellant’s trade mark is only for: shoes, boots and parts thereof, slippers and sandals. ”

 

[42] As such, I am of the considered opinion and I agree with the Defendants that there was no likelihood of confusion or real tangible danger of confusion at the date of registration, as there is no evidence that the Plaintiffs had used the ‘CARLO RINO’ trade mark for eyewear products under Class 9 prior to the date of the

 

registration of the Defendants’ mark. Neither

 

is there any evidence that the Defendants used their

 

mark for goods in other classes such as shoes or handbags at the time the Fifth Defendant made his trade mark application in 1993.

 

[43] The Plaintiffs had also failed to adduce any evidence to substantiate its allegation on confusion and/or deception in the minds of the public/consumers in 1993. The Plaintiffs had failed to call on any independent witness to establish the likelihood of confusion. In fact, the only ‘independent’ witness called by the Plaintiffs who was not a director/employee of the Plaintiffs was PW4, a salesman from Performance Eyewear. When questioned

 

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by learned Counsel of the Plaintiffs, PW4 was readily able to distinguish the two different marks from the Plaintiffs and the Defendants and did not testify that he was confused about the

 

origin of the eyewear.

 

[44] The Plaintiffs had also failed to produce any independent survey report carried out by an independent third party to show that consumers or the Malaysian public would be confused with the

 

origin of the Defendants’ eyewear in 1993.

 

Bearing in mind that the onus is on the Plaintiffs to prove their case, mere allegation of reputation is simply not enough. (See Hummel’s case at p. 26-27).

 

[45] With regards to point (3) formulated by Lord Diplock, the likelihood of confusion arose as the Plaintiffs had, since the registration of the Defendants’ mark, expanded their range of goods into eyewear products. In this instance, as held by his Lordship, the mark may not be expunged unless the likelihood of causing deception resulted from some blameworthy act of the registered proprietor.

 

[46] I agree with the Defendants that to hold otherwise would lead to absurdity and injustice. By way of an analogy, in a scenario where A has been using his registered trade mark for a particular type of goods for a number of years. B, on the other hand, has a similar mark and has a much larger business compared to A. However, it is in respect of various other kinds of products

 

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different from B’s. One day, B suddenly chooses to venture into A’s line of business and sells the same type of goods. It would be most illogical and unjust to expunge A’s mark on B’s argument that ‘now that we also sell the same goods, there is a likelihood of confusion’ – unless there was some blameworthy conduct on the part of A as laid down by Lord Diplock in GE Trademark (supra).

 

[47] Applying the Lord Diplock’s ratio in GE Trademark, the Court of Appeal in Hummel’s case held as follows at page 30:

 

“In NSW Dairy Corp v Murray Goulburn Co-operative Co Ltd [1991] AIPC 37,031 one of the questions raised by the appellant was:

 

(ii) whether the operation of s 28(a) is governed by s 28(d) and if so, whether a mark which has become likely to deceive or cause confusion is liable to be expunged only if its registered proprietor is guilty of blameworthy conduct; (emphasis added)

 

The Australian s 28 is similar to our s 14 (see page 37034) and the courts answered at p. 37033:

 

2(a) Per Mason CJ, Brennan, Dawson, Toohey and Gaudron JJ: a trade mark is only liable to be expunged under s 28(a) if the use of it becomes likely to deceive cause confusion and that likelihood is due to the fault or blameworthy conduct of the registered proprietor. (emphasis added)

 

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There is no evidence of any blameworthy conduct on the part of the appellant. Indeed there is no evidence whatsoever that Elson Moey made any statement of the effect that his goods were the respondent’s…” (emphasis added)

 

[48] On the ‘blame worthy conduct’, the Lord Diplock in the GEC case held at page 527:

 

“The question whether the American company is entitled to succeed on the main ground of appeal thus depends on whether the likelihood that the use of the rondel mark simplicitor on electric goods would cause confusion on 20th July 1967, the date of the application to expunge, resulted from some blameworthy conduct on the part of the American company….On the fact ..it seems to me to be impossible to hold there was any such blameworthy conduct by the American company as would amount to an equitable ground for disentitling them to protection for the use of the mark. There is therefore no ground in law for expunging the mark and no question of the exercise of the discretion of the court can arise.” (emphasis added)

 

[49] In the present case, I find that the Defendants have not been guilty of any blameworthy act since the registration of their

 

trademark. The Defendants had continuously used the said trade mark within the class it was registered for

 

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over the last 20 years, since 1992. The Defendants had asserted

 

vigorously by bringing an action under the Trade Description Act 2011 which was also not challenged by the Plaintiffs. The Defendants had also not attempted to use the mark for goods for which the Plaintiffs had registered their ‘CARLO RINO’ mark, i.e. leather goods and shoes under Class 18 and 25.

 

[50] Based on the reasons above, I am of the considered opinion that that the Plaintiffs had failed to prove any danger of confusion or deception at the time of registration. As for the likelihood of confusion, if any, in the supervening years, that is either at the date of filing the suit (30.3.2014) or at the date of hearing (7.4.2015), I am of the considered opinion that it is not due to the Defendants’ fault and therefore their existing registered mark should not be expunged. The likelihood of confusion is caused by the Plaintiffs themselves who want to expand the use of their trade mark on eyewear, thereby infringing into the business of the Defendant.

 

[51] Therefore, as at the date of the filing of this suit, I am of the considered opinion that any confusion did not resulted from some blameworthy conduct on the part of the Defendants. There is

 

and defended their rights in the

 

mark

 

therefore no ground in law for expunging the mark.

 

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[52] Added to that, I am of the considered opinion and I agree with the Defendant contention that the conduct of the parties are also relevant considerations. The Plaintiffs knew or ought to know, through their trade marks agent, of the existence of the Defendants’ trade mark from as early as December 1995. Upon being notified of the existence of the Defendants’ trade mark, the Plaintiffs were accorded with the full opportunity of presenting their evidence to the Registrar which, at that point in time, was the best opportunity for the Plaintiffs to show that they had prior use of the ‘CARLO RINO’ trade mark in Class 9 products, or there was a possibility of confusion arising from the Fifth Defendant’s mark.

 

[53] Instead of doing anything to assert their right in Class 9 for ‘CARLO RINO’, the Plaintiffs chose to simply allow their application to be abandoned and did nothing until 2011 before they sought to refile a fresh application. From the Plaintiffs’ own evidence, they had even stopped selling any ‘CARLO RINO” eyewear between 1999 and 2003. Thereafter it was only in 2014 that, the Plaintiffs had for the very first time, assert their right in their ‘CARLO RINO’ mark for Class 9 against the Defendants. Even that was the result of the earlier cease and desist letter issued by the Defendants to the Plaintiffs’ distributor.

 

[54] Bearing in mind that the Plaintiffs are part of a public listed company, and all the resources which were at their disposal, their dilatoriness and lackadaisical attitude ought to be construed as an active abandonment of their ‘CARLO RINO’ mark due to the existence of the Defendants’ mark. In this regard, I agree with the

 

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Plaintiffs that any reasonable person, in viewing the Registrar’s letter dated 26.5.2004 and the status of abandon’ in a search would have inferred that the Plaintiffs have chosen to abandon the use of the “CARLO RINO” trade mark in Class 9 arising from being notified of the Fifth Defendant’s mark.

 

[55] On the other hand, the Fifth Defendant’s lMW¥ mark

 

had been independently devised and conceptualized in Hong Kong by the Defendants and not copied from the Plaintiffs. The mark was put to use in eyewear products since 1992. Over the course of years, the Defendants had developed their own

 

goodwill and reputation in their in the field of

 

eyewear which are available in one of their many retail optical outlets throughout the country. That being the case, it would be clearly unconscionable for the Plaintiffs to now require that the said mark be expunged when they have actively allowed the mark to be used under their watch and did nothing and even chose to abandon their own trade mark registration for Class 9 previously.

 

[56] In respect of the explanation of the Plaintiffs that the abandonment of the ‘CARLO RINO’ eyewear was due to the economic crisis, SARS, and so on at the material time, I find that it is simply raised as an afterthought, as the Plaintiffs can be seen to have actively pursued the registration of all their other marks in Class 18 and 25 all these years, and PW5 even admitted that the Plaintiffs had never abandoned another product completely, other than for their eyewear. This debunks the Plaintiffs’ explanation that the abandonment of their ‘CARLO RINO’ eyewear was due to

 

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economic downturn, and lends further credence to Defendants’ contention that it was an active abandonment due to the existence of the Defendants’ registered mark.

 

[57] Premised on the reasons enumerated above, I find that the Plaintiff has failed to establish section 37(b) of the TMA 1976.

 

Issue (iii) whether the trade mark is not distinctive when the rectification proceedings began

 

[58] Justice Low Hop Bing in the Leo Pharmaceutical case held at p. 723-724:

 

“[58] The defendant further sought expungement on the ground that the plaintiff’s trademarks were not, at the commencement of the rectification proceedings in 2001, distinctive of the plaintiff’s goods or services.

 

[60] In my judgment, the defendant bears the burden of proving that the plaintiff’s trademarks have lost their distinctiveness at the time when the present suit was launched in 2001.”

 

[59] In paragraph (75) of the written submission of the Plaintiffs, it reads as follows on the issue of distinctiveness:

 

mark is simply incapable of distinguishing eyewear bearing the said mark from eyewear bearing the CARLO RINO Mark in the course of

 

“The

 

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trade. The CARLO RINO Mark of the Plaintiffs have already been used since 1985 in relation to fashion goods and since 1990 in relation to eyewear. Eyewear bearing

 

is likely to be assocated with fashion goods bearing the Plaintiffs’ CARLO RINO Mark. The likelihood of confusion and deception is admittted and asserted by the Defendants in their counterclaim.”

 

[60] Bearing in mind that the burden lies on the Plaintiffs to prove that

 

that the /4^ mark has lost its distinctiveness, I

 

find that the Plaintiffs have failed to establish that the trade mark was not distinctive of the Defendants at the commencement of these proceedings. There was no evidence led by the Plaintiffs’ witnesses making reference to this fact, nor were any independent witnesses who are familiar with the fashion industry called to give evidence or any independent survey evidence tendered. The Plaintiffs have failed to show or prove, either through independent witness and/or market surveyor, to testify

 

that he was of the view that the associated with the Plaintiffs.

 

eyewear is

 

[61] Conversely the Defendants had in fact tendered substantial

 

evidence of their use of the

 

trade mark by way

 

of Exhibits D37, D39, D40, D41, D43, D44, D45, D46, D47, D48,

 

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D49, D53 and D54, which span over a period of the past 22 years.

 

[62] In the premise, I am of the considered opinion and I agree with

 

the Defendants that the ” trade mark for

 

eyewear in class 9 was clearly distinctive of the Fifth Defendant from the time it was registered, and has built up its own reputation in eyewear products by its continuous and uninterrupted use over the least 20 years. The eyewear products, bearing the said trade mark are being sold in the outlets owned by the Defendants and is associated with the Defendants/Bolton group.

 

Section 46 of the Act for Non-Use

 

[63] Next, the Plaintiffs also seek to expunge the Defendants’ mark on alleged non-use of the registered trade mark, premised on section 46 of the TMA 1976, which reads:

 

(1) Subject to this section and to section 57, the Court may, on application by a person aggrieved, order a trade mark to be removed from the Register in respect of any of the goods or services in respect of which it is registered on the ground –

 

(a) That the trade mark was registered without an intention in good faith, on the part of the applicant for registration or, if it was registered under subsection (1) of section 26, on the part of the body corporate or registered user concerned, to use the trade mark in relation to those goods or services and that there has in fact been no

 

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use in good faith of the trade mark in relation to those goods or services by the registered proprietor or registered user of the trade mark for the time being up to the date one month before the date of the application; or

 

(b) That up to one month before the date of the application a continuous period of not less than three years had elapsed during which the trade mark was a registered trade mark and during which there was no use in good faith of the trade mark in relation to those goods or services by the registered proprietor or registered user of the trade mark for the time being.

 

[64] In respect of the burden of proof, it was held in the case of Oishi Group Public Company Ltd v Liwayway Marketing Corporation [2015] 2 CLJ 1121 that:

 

“Since it’s the Plaintiff who is applying to rectify the Register of Trade Marks, the onus of proof is on the Plaintiff to establish prima facie the plaintiff evidence of non-use”.

 

In that case the Plaintiffs had adduced independent survey evidence of non-use and premised on the same, the burden then shifted to the Defendant.

 

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[65] In the present case, no survey evidence was tendered on how the Defendants are using their mark in the market. The Plaintiffs have

 

merely submitted that all use of the mark was

 

not made in good faith. The Plaintiffs sought to adduce evidence of individual instances whereby the Defendants had used the mark in a form which is not the same as the registered mark but adopted in a form and/or font which are different. The Plaintiffs submit that the Defendants did not use the mark as registered

 

under No. 93002741

 

but have used a different

 

mark instead, the mark

 

[66] In the first place, I am of the considered opinion that the Plaintiff have failed to establish non-use of the registered mark from any independent survey. Added to that, I find that the slight alteration

 

dogs not substantially affect the identity of the

 

defendant’s si/ww mark. This is premised on section

 

23(1) of the TMA 1976, which reads:

 

“Where under this Act use of a registered trade mark is required to be proved for any purpose, the Court or the Registry may, if and so far as it or he shall think right, accept use of … the trade mark with additions or alterations not substantially affecting its identity as an equivalent of such use.”

 

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[67] In the case of In the Matter of Morny Ltd’s Trade Marks [1951] 68 RPC 55, the Court held as follows:

 

“I understand the trade mark law, the Statute recognized the undesirability of requiring proprietors of registered trade marks to maintain the precise form of embellishments or representations which at the time of application were included in the form of the mark submitted for registration … use of the trade mark with alterations not substantially affecting its identity can be treated by the Court as equivalent to the use required to be proved.” (emphasis added)

 

[68] In any event, the Defendants’ mark is registered for Class 9 ‘optical’ and the Defendants have produced actual sample of the products (spectacle frames) wherein the mark is exactly as per the registered trade mark. The Defendants have also produced photographs taken from actual retail outlets selling or distributing the “CARLO RENO” products. Evidence from the sales figures of the “CARLO RENO” eyewear products from 2011 to 2014 can be seen at Exhibit D-48 (retail) and D-49 (wholesale) and some of the actual invoices marked as Exhibit D-47. These were not challenged by the Plaintiffs’ counsel during the cross-examination of DW1.

 

[69] In the premises, I am of the considered opinion that there is no merit in respect of the Plaintiffs’ case premised on s. 46 as the

 

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evidence clearly shows the use of the Defendants

 

mark and/or with acceptable variations.

 

Infringement, Passing Off and Unlawful Interference with Trade

 

[70] The other causes of actions of the Plaintiffs against the Defendants are premised on infringement, passing off and interference with trade as their cause of action. The action for passing off is premised upon the goodwill and reputation acquired by the Plaintiffs in the business in which the Plaintiffs’ CARLO RINO Mark is used, namely in the manufacture and sale of fashion goods, such as leatherwear, footwear and eyewear.

 

[71] However, in view of my finding that there are no legal ground to

 

expunge the Defendants under s. 45 and 46

 

of the TMA 1976, it follows that the Plaintiffs’ case on these grounds must simply collapse.

 

[72] As the Defendants’ trade mark has remained at all times a conclusive and valid trade mark, pursuant to section 35 of the TMA 1976, all the acts carried out by the Defendants vis-à-vis their registered trade mark, including selling and distributing their

 

eyewear, and asserting their trade mark against infringement by third parties, are all permissible and well within the boundaries of their legal rights.

 

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The Counterclaim

 

[73] The Defendants have counterclaimed that the Plaintiffs’ use of the

 

‘CARLO RINO’ mark in Class 9 for eyewear infringes the

 

Defendants ” registered trade mark.

 

[74] S. 38 of the TMA 1976 provides:

 

(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 in such a manner as to render the use of the mark likely to be taken either –

 

(a) As being use as a trade mark;

 

[75] Section 38 was dealt with by the Supreme Court in Tohtonku Sdn Bhd v Superace (M) Sdn Bhd [1992] 2 MLJ 63:

 

“Under s 38 of the Trade Marks Act 1976, a registered trade mark is infringed by a person who uses a mark which:

 

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(a) Is identical with it;

 

(b) So nearly resembling it as is likely to deceive; or

 

(c) So nearly resembling it as is likely to cause confusion. ”

 

[76] In connection to this, it is the pleaded case of the Plaintiffs that the two marks are closely similar and/or identical as is likely to deceive or cause confusion in the course of trade.

 

[77] In view of my decision to dismiss the Plaintiffs application to

 

expunge the defendants’ trade mark anc| that

 

the same should remain on the register, the net conclusion is that the use of the Plaintiffs’ ‘CARLO RINO’ trade mark for eyewear

 

would be an infringement of the trade mark

 

under section 38, as the Defendants enjoy an exclusive right over the use of their trade mark in relation to the goods for which it was registered pursuant to s. 35 of the TMA 1976.

 

[78] Premised on the reasons enumerated above, I will dismiss the Plaintiffs’ claim and allow the Defendants’ Counterclaim with costs.

 

(AZIZAH BTE HAJI NAWAWI) JUDGE

 

HIGH COURT MALAYA (Commercial Division) KUALA LUMPUR

 

Dated: 23 June 2016

 

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For the Plaintiffs : Timothy Siaw and W R Teng Messrs Shearn Delamore & Co Kuala Lumpur.

 

For the Defendants: Jason Chan Messrs Fadzillah, Ong Chee Seong & Associates Batu Pahat, Johor.

 

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