Brothers in arms: use of the family mark
On February 17, 2012, the Malaysian High Court held in favour of the plaintiffs in Burukan Bin Mohamed & Two Ors v Sirajudin Bin Y Mohamed Mydin & Three Ors concerning the use of a mark in a family restaurant business and the parties’ agreement after parting ways.
The first plaintiff (BBM) and the first defendant (SBMM) are brothers who wished to continue separately to run an Indian restaurant business inherited from their father, popularly known as Kayu Nasi Kandar, in Malaysia.
To this end, the brothers entered into an agreement under which BBM retained control of two outlets and SBMM retained control of the remaining 10 outlets. The parties also agreed that they would be allowed to continue using the trade name ‘Restoran Kayu Nasi Kandar’ for their “continuing business”.
The dispute commenced when the plaintiffs claimed passing off against the second defendant, who had used a sign that was confusingly similar to the plaintiffs’. Although both parties were by virtue of the agreement permitted to use the same trade name, the colours, font and figurative elements comprising the second defendant’s sign closely resembled the plaintiffs’ sign, and evidence of public confusion was presented.
The defendants, however, counterclaimed for trademark infringement relying on their trademark registration for the figurative element of the sign contended by the plaintiffs as giving rise to passing off.
"THE COURT UPHELD THE PLAINTIFFS’ CLAIM OF PASSING OFF ON GROUNDS THAT THE OVERALL LOOK AND FEEL OF THE SECOND DEFENDANT’S SIGN TOO CLOSELY RESEMBLED THE PLAINTIFFS."
Before deciding on the parties’ respective claims, the court on its own motion determined two questions, namely (i) whether the term “continuing business” in the agreement meant that use of the trade name ‘Restoran Kayu Nasi Kandar’ by BBM was confined to the two outlets existing at the time of execution of the agreement or extended to future outlets he operated; and (ii) whether the second plaintiff—the business owned by BBM and his wife which was not party to the agreement—prevented the second plaintiff from using the trade name.
The court answered the first question in the negative and held that the parties would have intended that each of them be allowed to use the trade name not only for their outlets existing at the time the agreement was executed, but also for future outlets.
The second question was also answered in the negative, although this appears to be a drafting error, as the court based its finding on the fact that BBM retained control over the operation of the second plaintiff ’s outlets, suggesting that the court agreed that the second plaintiff comes within BBM’s “continuing business” and should therefore be allowed to use the trade name.
The court upheld the plaintiffs’ claim of passing off on grounds that the overall look and feel of the second defendant’s sign too closely resembled the plaintiffs’, but dismissed the defendant’s counterclaim of infringement on grounds that the plaintiffs’ sign was visually and phonetically distinguishable from the defendants’ trademark registration, which demonstrates the stricter test applied in cases of infringement as opposed to passing off.
