Dabur India Limited &4lagi V Nagasegi Sdn Bhd

  

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IN THE HIGH COURT OF MALAYA DI KUALA LUMPUR

 

(COMMERCIAL DIVISION)

 

CIVIL SUIT NO: D5(IP)-22-1055-2006 BETWEEN

 

DABUR INDIA LIMITED … PLAINTIFF

 

AND

 

1. NAGASEGI SDN BHD.

 

(Company No: 197874-U)

 

2. GISSCO SDN. BHD.

 

(Company No: 25592-P)

 

3. AIMIL (M) SDN. BHD.

 

(Company No: 228214-X)

 

4. DAWOOD ABBASI

 

(NRIC No: 480215-75-5079)

 

5. MOHAMMAD RASHID BIN HAJI MOHD. FAHMI (NRIC No: 510915-71-5275)

 

[Both Trading Under the Name And

 

Style of TEKSTIL NINA DURANI] … DEFENDANTS

 

JUDGMENT

 

DABUR INDIA LIMITED (the Plaintiff) is a public limited company based in India. The Plaintiff’s causes of action against the Defendants are for the tort of passing off and copyright infringement.

 

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The claim by the Plaintiff is also based under section 70B of the Trade Marks Act 1976 (the Act). Section 70B of the Act, which came into force on 1.8.2001, grants protection to proprietors of well-known trade marks against the registration and use of well-known trade marks.

 

The Plaintiff is a manufacturer of various products. This includes, among other things, toothpaste marketed under the trade mark PROMISE. The Plaintiff has won international recognition and accolades for their toothpaste marketed under the trade mark PROMISE. These include, among other things, the Certificates/Letters of Recommendation given by an Institute based in Paris, France known as La Monde Selection in the years 1981 and 1982 and accreditation from British Dental Health Foundation on 25.9.1994. On 6.7.1995, the Plaintiff filed an application with the Intellectual Property Corporation of Malaysia (IPCM) for the registration of trade mark PROMISE under the Act. Their application has been allocated as the Trade Mark Application No. 95/06641 and the application is currently pending. The Plaintiff has marketed and advertised PROMISE toothpaste on an extensive scale since its introduction. Substantial expenses were incurred in its advertising

 

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and promotion. The Plaintiff also manufactures and markets toothpaste under the trade mark MISWAK. On 19.12.2002, the Plaintiff also filed an application with the IPCM for the registration of MISWAK. The application is now pending. The Plaintiff has also marketed and advertised MISWAK on an extensive scale since its introduction. Substantial expenses were incurred in its advertising and promotion.

 

Now, one Mr. Devicharan, the Plaintiff’s first distributor in Malaysia sometime between 1988 and 1989, initiated the entry of the toothpaste products marketed under the trade mark PROMISE into Malaysia. The Plaintiff was paid USD 1,800.00 by Mr. Devicharan as a consideration to import from India the toothpaste to be marketed under PROMISE via Singapore for the purpose of distribution and sale. Subsequently, on 9.2.1989, one Mr. Dawood Abbasi (the 4th Defendant) has approached and requested the Plaintiff to give him an exclusive distributorship of the toothpaste marketed under the trademark PROMISE in the South East Asian region. In the course of business with the Plaintiff, the 4th Defendant had acted through several entities, i.e. the 1st to 3rd Defendants and Tekstil Nina Durani, which corresponded with the Plaintiff over the years in respect of the

 

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distributorship of PROMISE. Sometime in 1997, the Plaintiff introduced the toothpaste product under the trade mark MISWAK into the Malaysian market by granting the 4th Defendant its distributorship through the 1st to 3rd Defendants and Tekstil Nina Durani. The relationship between the Plaintiff and the Defendants was purely on distributorship basis.

 

The Plaintiff terminated the 4th Defendant’s right for distributorship through the other Defendants on 26.2.2003 due to the breach of the Distributorship Agreement by the 4th Defendant. The 1st Defendant had submitted an application to IPCM to register the trade mark PROMISE in Malaysia as its proprietor under the application no. 91/02322 on 15.5.1991.

 

Upon realizing the 1 Defendant’s application to register the trade mark PROMISE, the Plaintiff had asked the 1st Defendant and 4th Defendant to either assign or withdraw the application in order for the Plaintiff to proceed with its application.

 

In the meantime, the business between the Defendants and Plaintiff continued as usual, as the 1st Defendant had through the 4th Defendant, assured the Plaintiff that their application to IPCM to register the trade mark PROMISE would be transferred/assigned in

 

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favour to the Plaintiff. In spite of this, the IPCM advertised the 1st Defendant’s application in Warta Kerajaan No. 1947 Jilid 50 No. 2 Tambahan No. 3 dated 19.1.06. In view of that, the Plaintiff instructed its trademark agent to commence opposition proceedings against the 1st Defendant’s application.

 

At this point, it would be appropriate take note that sometime in 2005, the Plaintiff’s Marketing Manager, one Mr. Maneck Katpitia while in Malaysia came across toothpaste offered for sale by the 1st Defendant under a label mark INTAN PROMISE. He purchased the same. According to the Plaintiff, the said toothpaste sold by the 1st Defendant under the label mark INTAN PROMISE comprises substantially of the Plaintiff’s trade mark PROMISE and consists significantly of the get-up of the Plaintiff’s toothpaste products under the trade mark PROMISE. Mr. Maneck Katpitia also came across a toothpaste product sold by the 1st Defendant under the label mark MISZWAK. It is the case of the Plaintiff that the toothpaste product sold by the 1st Defendant under the label mark MISZWAK also comprises substantially of the Plaintiff’s trade mark “MISWAK” and consists significantly of the get-up of the Plaintiff’s toothpaste product under the trade mark “MISWAK”. At no time did the Plaintiff consent

 

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to the use by the 1st Defendant of the trade marks “PROMISE” and “MISWAK” in the course of business.

 

Subsequently, the Plaintiff learnt that one Personna Cosmetics, a partnership firm in India, manufactured the toothpaste products under the trade mark INTAN PROMISE and MISZWAK and exports the same to the 1st Defendant in Malaysia for distribution or sale. This is when the Plaintiff commenced legal proceedings against Personna Cosmetics, its directors, the 1st Defendant, 3rd Defendant and the 4th Defendant of the present case in the High Court of Judicature at Bombay, vide Petition No. 2731 of 2005. The High Court of Bombay, India granted the Plaintiff ad interim injunction against all the above-mentioned parties on 7.10.2005 from manufacturing, importing and distributing the sale of toothpaste bearing the label INTAN PROMISE in Malaysia pending disposal of the suit.

 

After that, the Plaintiff had through their solicitors caused a letter dated 20.1.2006 issued to the Defendants in Malaysia to demand them from importing and/or distributing and/or selling toothpaste bearing the label INTAN PROMISE. Nevertheless, the Defendants did not respond to the demand. Not surprisingly, the

 

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Plaintiff filed this action on 17.7.2006. The Plaintiff prays, among others, for the following orders from this Court:

 

1. An injunction to restrain the Defendants, whether by themselves, it’s directors, officers, servants or agents or any of them or otherwise howsoever from doing the following acts or any of them, that is to say:

 

(a) Passing off and/or attempting to pass off and/or causing, enabling, procuring or assisting others to pass off whether by manufacturing, importing, distributing, selling or offering for sale or for any other purpose of trade, toothpaste products not of the Plaintiff’s manufacture or distribution as and for the toothpaste products of the Plaintiff’s manufacture and distribution by the adoption and use of the trade marks “PROMISE” and “MISWAK” or any other trade mark which is confusingly, deceptively or colourably similar thereto or in combination with “Intan” or any other word;

 

(b) Infringing the Plaintiff’s right to its Well Known Trade Marks of “PROMISE” and “MISWAK” as provided for under Section 70B of the T rade Marks Act 1976;

 

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(c) Infringing the Plaintiff’s copyright subsisting in the artistic and literary works concerning the toothpaste products “PROMISE” and “MISWAK” and its descriptions.

 

2. An order for the obliteration, from all or any goods as are in the Defendants’ possession, power, custody and control which bear the trade marks “PROMISE” and “MISWAK” or any other trade mark which is confusingly, deceptively or colourably similar thereto or in combination with “Intan” or any other word;

 

3. An order for delivery up of all relevant documents, including import documents, bills, invoices, contracts, customer records, delivery orders, prosecution orders and other documents relating to the manufacture, importation, distribution, sale or offer for sale by the Defendants of products which bear the trade mark “PROMISE” and “MISWAK” or any other trade mark which is confusingly, deceptively or colourably similar thereto or in combination with any other words are in the possession, power, custody or control of the Defendants;

 

4. An order for delivery up for destruction on oath of all bottles, cartons or boxes of toothpaste products as are in the Defendants’ possession, power, custody or control which bear the trade marks “PROMISE” and “MISWAK” or any other trade mark which is confusingly, deceptively or colourably similar thereto or in combination with any other word and verification

 

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upon oath that the Defendants do not have in its possession, power, custody or control any such items;

 

5. An order directing that the Defendants, its directors, officers, servants or agents do forthwith destroy or cause to be destroyed all packaging, printed matter, stationery, letter heads, signboards, business cards and all advertisement and promotional materials which are in the possession, power, custody or control of the Defendants, its directors, officers, servants or agents which bear the trade mark “PROMISE” and “MISWAK” or any other trade mark which is confusingly, deceptively or colourably similar thereto or in combination with any other word and verification on oath that the Defendants do not have any such articles in its possession, power, custody or control;

 

6. An inquiry as to damages or at the Plaintiff’s option, an account of profits of the Defendants.

 

Against such a background, there are five issues for consideration. I shall deal with each of them in turn.

 

1. Passing Off

 

The elements of passing off are: (i) goodwill and reputation of the Plaintiff (ii) misrepresentation by the defendants in the course of trade (iii) damage or the likelihood of damage will arise as a result

 

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(see: Meidi (M) Sdn Bhd v Meidi-ya Co Ltd, Japan & Anor [2008] 1 CLJ 46 and McCurry Restaurant (KL) Sdn Bhd v McDonald’s Corporation [2009] 3 CLJ 540,.

 

Now, it cannot be disputed that the first party, which marketed the toothpaste products under the trade marks PROMISE and MISWAK was the Plaintiff through Mr. Devicharan. Thus, since the Plaintiff was the initial user of the trade marks PROMISE and MISWAK, based on the Meidi Ya’s case, the Plaintiff is in fact the rightful owner of the PROMISE and MISWAK trade marks.

 

In addressing this issue, I have had the benefit of seeing and examining the Plaintiff’s PROMISE and MISWAK trade mark, get-up and packaging and the Defendants’ INTAN PROMISE and MISZWAK trade mark, get-up and packaging. In comparison and taken as a whole and based on my observation, it is my finding that the Defendant’s INTAN PROMISE and MISZWAK trade mark, get-up and packaging are confusingly and deceptively similar to the Plaintiff’s PROMISE and MISWAK trade mark, get-up and packaging. In my view, the striking similarities render the trade and public to be confused as they are identical goods. More so, as they are offered for sale to consumers side either by side or at the same section of

 

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supermarkets and other retail outlets. The significance lies in that the likelihood of confusion between the two products is extremely high. The Defendants’ products are sold alongside the Plaintiff’s products and appeal to precisely the same segment of customers; purchasers who recognize a product by reference to the general get-up, colour and shape of a product, will be misled. In my view, the Plaintiff’s trade mark, get-up and packaging have become distinctive of the Plaintiff’s product and the use by the Defendants of similar trade mark, get-up and packaging are likely to deceive or cause deception or confusion to a potential buyer of toothpaste. In this case, where the product of the Plaintiff and Defendants are in direct competition with one another, the court will infer likelihood of damage to the Plaintiff’s goodwill through the loss of sale. Therefore, I find that the Defendants have passed off their products as the products of the Plaintiff.

 

2. Copyright Infringement

 

The Copyright Act 1987 (the Copyright Act) grants a person and/or an entity the exclusive right to do, and to authorize others to do, in Malaysia, certain acts in relation to literary and musical works, in relation to artistic works. In the cases of Tavener Rutledge Ld. v Specters Ld. [1959] RPC 355 and Charles Walker & Co. Ltd. v The

 

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British Picker Co. Ltd [1961] RPC 57, the Courts have held that labels of products are artistic works within the meaning of the Copyright Act to be capable of forming the subject matter of copyright.

 

In the present action, the copyright subsisting in the artistic and literary works concerns the labels of the toothpaste products PROMISE and MISWAK. These works were created by the Plaintiff and/or are works created by parties who were commissioned by the Plaintiff and as such, the Plaintiff is the lawful proprietor of all the copyright subsisting in the said works.

 

By virtue of Malaysia’s accession to the Berne Convention for the Protection of Literary and Artistic Works 1886 (hereinafter referred to as the “Berne Convention”), works published in the state parties to the Convention may enjoy copyright protection in Malaysia even if there has been no first publication in Malaysia. The Copyright (Application to Other Countries) Regulations 1990 came into force on 1.10.1990 and gave effect to the provisions of the Berne Convention. The case of Peko Wallsend Operations Ltd & Ors v Linatex Process Rubber Bhd and another action [1993] 1 MLJ 225 is the authority, which recognised the rights arising under the Copyright

 

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(Application to Other Countries) Regulations 1990. For that reason, the Plaintiff being an entity incorporated in India, which is a contracting party to the Berne Convention, is entitled to copyright protection in Malaysia.

 

In Hexagon Tower Sdn Bhd v Polydamic Holdings Sdn Bhd & 3 Ors [2005] 4 AMR 384, it was held as follows:-

 

“In order to determine whether an infringement of copyright has occurred, the words of Diplock LJ in Francis Day & Hunter Ltd & Anor v Bron & Anor [1963] Ch 587 are useful. His Lordship stated:

 

It is well established that to constitute infringement of copyright in any literary, dramatic or musical work there must be present two elements: First, there must be sufficient objective similarity between the infringing work and the copyright work, or a substantial part thereof, for the former to be properly described, not necessarily as identical with, but as a reproduction or adaptation of the latter, secondly, the copyright work must be the source from which the infringing work is derived … there must be a casual connection between the copyright work and the infringing work.

 

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In applying the test adopted in the above authority, my findings are as follows:-

 

(i) Objective Similarity

 

Taken as a whole, a visual examination of the Plaintiff’s packaging of the Plaintiff’s toothpaste products sold under the trade marks “PROMISE” and “MISWAK” with the packaging of the 1st Defendants’ toothpaste products sold under the marks “INTAN PROMISE” and MISZWAK in Malaysia shows an uncanny resemblance wherein the said packaging look almost identical.

 

(ii) Casual Connection

 

This fact is established by virtue of the fact that the Defendants were previously the distributors of the Plaintiff’s toothpaste products sold under the trade marks “PROMISE” and “MISWAK” in Malaysia.

 

In the present case, the Defendants were always aware of the Plaintiff’s toothpaste products sold under the Plaintiff’s trade marks “PROMISE” and “MISWAK” as they had purchased the goods as a distributor from the Plaintiff. It is an obvious fact that the Defendants have copied the words PROMISE and MISZWAK and the

 

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colour scheme, which is deceptively similar to the Plaintiff’s toothpaste products, which contains a similar colour scheme, lay out and get-up and the words contained therein.

 

The Plaintiff has therefore sufficiently established the cause of action of infringement of the Plaintiff’s copyright subsisting in its artistic work against the Defendants. In my judgment, the Defendants have infringed the Plaintiff’s copyright subsisting in the artistic and literary works concerning the toothpaste products PROMISE and MISWAK and their descriptions.

 

3. Section 70B (2) of the Act – the protection of well-known trade marks

 

The protection of well-known trademarks is provided under Section 70B of the Act, which came into force on 1.8.2001. This section reads:

 

“… (1) The proprietor of a trade mark which is entitled to protection under the Paris Convention or the TRIPS Agreement as a well-known trade mark is entitled to restrain by injunction the use in Malaysia in the course of trade and without the proprietor’s consent of the trade mark which or the essential part of which, is identical with or nearly

 

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resembles the proprietor’s mark, in respect of the same goods or services where the use is likely to deceive or cause confusion…”

 

As stated by the author of Trade Marks Law in Malaysia, Dr Ida Madieha bt Abdul Ghani Azmi, Section 70B allows the right to exist regardless whether the mark is actually used or registered as the exclusive protection is given whether or not the proprietor carries out the business or has any goodwill in Malaysia. The Trade Marks Regulations 1997 was amended to incorporate the following provision to support the enforcement of Section 70B by the owners of well-known trademarks:

 

“13B. Criteria of well-known mark:

 

In determining whether a mark is well known or not, the following criteria may be taken into account:

 

(a) the degree of knowledge or recognition of the mark in the relevant sector of the public;

 

(b) the duration, extent and geographical area of any use of the mark;

 

(c) the duration, extent and geographical area of any promotion of the mark, including advertising or publicity and the presentation,

 

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at fairs or exhibitions, of the goods or services to which the mark applies;

 

(d) the duration and geographical area of any registrations, or any application for registration of the mark to the extent that they reflect the use or recognition of the said mark;

 

(e) the record of successful enforcement of rights in the mark, in particular, the extent to which the mark was recognized as well-known by competent authorities;

 

(f) The value associated with the mark.

 

In FAMOUS AND WELL KNOWN MARKS AN INTERNATIONAL ANALYSIS, Frederick W. Mostert states that the best evidence to show such recognition is by unsolicited request from potential licensees, manufacturers, distributors, importers, retailers and consumers or also by third parties. In this regard, the 4th Defendant wrote to the Plaintiff for the first time by a letter dated 9.2.1989 with the letterhead of Nina Durani Textile requesting the Plaintiff for a distributorship. There was also another company which wrote to the Plaintiff by letter dated 25.7.1992 which requested to be authorized as the Plaintiff’s sole franchisee in Malaysia. All the above shows the unsolicited request from potential distributors for the goods

 

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of the Plaintiff. The figure of sales of the Plaintiff’s toothpaste marketed under the marks PROMISE and MISWAK had been set out in evidence during the trial. The proof of the Plaintiff’s participation in a trade fair as early as 1988 had been proven and verified by the Defendants. Evidence have been adduced which shows the Plaintiff’s registrations and applications for the Plaintiff’s mark PROMISE and MISWAK in numerous countries which reflect the use or recognition of the said marks. The Plaintiff’s trade marks PROMISE and MISWAK have been registered in the Plaintiff’s name in numerous countries such as China, United Kingdom, and the Russian Federation. The Plaintiff had enforced its intellectual property rights against infringers in countries of India, Ukraine, Russia, United Kingdom, Morocco and China. The commercial value of the Plaintiff’s trade marks has been firmly established.

 

In my judgment, by reason of the extensive goodwill and reputation attained by both the trade marks PROMISE and MISWAK, the Plaintiff has acquired exclusive rights to the use of the said trade marks in Malaysia and the world to the exclusion of all other parties and the Plaintiff can claim to the trade marks “PROMISE” and “MISWAK” being well-known trade marks. Given this, it is my

 

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findings the Defendants’ use of the trade marks INTAN PROMISE and MISZWAK in Malaysia in the course of trade without the Plaintiff’s consent as the proprietor of PROMISE and MISWAK are likely to deceive or cause confusion to the public. In this context, the Defendants are not entitled to rely on the Section 70B (2) of the Act because there is no bona fide use of the trade marks in dispute by the Defendants.

 

In my judgment, the Defendants have infringed the Plaintiff’s

 

right to its well-known trade marks of PROMISE and MISWAK as

 

provided for under Section 70B of the Act. As a proprietor of the well-

 

known trade marks which is entitled to protection under the Paris

 

Convention or the TRIPS Agreement, the Plaintiff can restrain any

 

unauthorized use of a trade mark which, or the essential part of which

 

is identical or confusingly similar to the well-known trade mark.

 

4. Ownership of the trade marks and the issue of contract manufacturer

 

It is the contention of the Defendants that the Plaintiff was the Defendants’ contract manufacturer. According to the Defendants, they are the party who hired the Plaintiff to manufacture the toothpaste. In this, they are saying that they are the owner of the trade marks PROMISE and MISWAK.

 

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In the case of Hai-O Enterprise v Nguang Chan @ Nguang Chan Liquor Trade (a firm, intervening) [1992] 4 CLJ 1985, the

 

court held that:

 

(1) A foreign manufacturer who places his trade mark upon his product which he intends to export for sale into Malaysia is the proprietor of the mark;

 

(2) An importer of such goods, notwithstanding the acquisition of a commercial reputation therefore, does not acquire any proprietary rights over a manufacturer’s mark merely by being a conduit from manufacturer to ultimate consumer;

 

(3) Such an importer who registers himself as the proprietor of the manufacturer’s mark, even where he does so with the knowledge of the manufacturer, must be treated as having been wrongly registered;

 

(4) To become a proprietor of a trade mark, so as to be regarded as a true importer’s mark, the importer must activate a qualitative change in the mark so as to dissociate any connotation that mark may have with the manufacturer, so that in the minds of the Malaysian public it is associated exclusively with the importer alone;

 

(5) The registration, even if with the consent or knowledge of the foreign manufacturer, by a local importer of himself as proprietor of

 

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the foreign manufacturer’s mark where his role is that of an importer simpliciter, will be regarded as having been obtained by fraud on the Registrar and the Malaysian public.

 

As stated earlier, the Plaintiff has won international recognition and accolades for their toothpaste marketed under the trade mark PROMISE. These included, among other things, the Certificates/Letters of Recommendation given by an Institute based in Paris, France known as La Monde Selection in the years 1981 and 1982 and accreditation from British Dental Health Foundation on 25.9.1994. On the other hand, the 1st Defendant was only incorporated in Malaysia on 18.5.1990. The Plaintiff’s toothpaste bearing the trademark PROMISE was first distributed by one Mr. Devicharan sometime between 1988 and 1989 for a consideration of USD 1,800.00 paid to the Plaintiff. All these show that the Plaintiff is the original proprietor for the trade mark PROMISE.

 

In my judgment, the Plaintiff was not a contract manufacturer that was employed to manufacture. Their relationship was purely on seller-distributor basis.

 

5. The acquiescence defence.

 

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The Defendants contend that because of the delay in commencing this present suit, the Plaintiff has acquiesced to the Defendants’ unlawful acts resulting in the Defendants continuing to expend money in respect of their unlawful acts.

 

Now, upon the discovery of the Defendants offending toothpaste products bearing the marks of INTAN PROMISE and MISZWAK, the Plaintiff had taken steps to protect its trademark. The Plaintiff commenced legal proceedings against the Defendants in India and on 14.10.2005, and the Plaintiff obtained an ad interim injunction against the manufacturer, Personna Cosmetics, of the toothpaste bearing the Defendants’ trademarks INTAN PROMISE and MISZWAK. In addition, the Plaintiff instructed their solicitor to cause to issue the notice to cease and desist to the Defendants on 20.1.2006. Subsequently, the Plaintiff instructed their trade mark agent, Messrs Suren & Ragu to commence Opposition Proceedings against the 1st Defendant’s trade mark application for the mark INTAN PROMISE at IPCM on 18.3.2006; and finally the plaintiff commenced the present suit against the Defendants on 17.7.2006. In my view, there is no unreasonable or inexcusable delay in commencing the present suit.

 

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Conclusion

 

For all these reasons, I allow the Plaintiff’s claim against the Defendants. I grant an order in terms of enclosure 1 (the Plaintiff’s Statement of Claim) prayers (i) (a) (b) (c), (ii), (iii), (iv), (v), (vi), (vii) and (viii). The Defendants’ counterclaim is dismissed with costs.

 

(DATO’ AZAHAR BIN MOHAMED)

 

Judge of High Court Kuala Lumpur.

 

8 June 2010

 

Counsel for the Plaintiff: Mr. Surendran Subramaniam (Mr. C.

 

Soosay Nathan with him)

 

Solicitor for the Plaintiff: Messrs.Christie Soosay Nathan &

 

Associates

 

Counsel for the Defendants: Mr. Ng Kim Poh (Mr Ee Chai Hak and

 

Ms Ee Tin Gin with him)

 

Solicitor for the Defendant: Messrs. EE & Associates.

 

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