Tackling former distributors in Malaysia
The Malaysian High Court upheld on February 8, 2012, a claim for industrial design infringement, trademark infringement, passing off, conspiracy to injure and breach of duty of confidence by former distributors in the case of Visiber Sdn Bhd v Pon 72 Sdn Bhd & 11 Ors.
The plaintiff (‘Visiber’) runs a direct sales, multi-level marketing company and relies mainly on the network marketing of its members for its products. These include pendants, frames and jewellery. Visiber was the registered proprietor of several industrial designs and a trademark. Visiber also claimed to have acquired immense goodwill and reputation in the get-up of the designs and the unique number methodology used on the pendants and frames, warranting an action under passing off.
In response to Visiber’s claim of industrial design infringement, the defendants alleged that Visiber’s industrial design registrations should be invalidated on grounds that they did not satisfy the criteria of novelty by virtue of Visiber’s prior sales (and as a result, disclosure) of the designs to the Malaysian public.
“The court specifically discussed Visiber’s claim of industrial design infringement against the 12th defendant, an advertising agency that was engaged by some of the other defendants to provide mobile roadshow services.”
The defendants tendered Visiber’s accounting and audited reports to demonstrate prior disclosure to the public. The defendants further argued that Visiber did not have exclusive rights over the combination of numbers used on its pendants and frames, which were the subject of the industrial design registrations, as the numerals were subject to a disclaimer.
The defendants claimed that the industrial designs should be considered without taking into account these numerals.
The High Court dismissed the defendants’ counter-claim to invalidate Visiber’s industrial design registrations on grounds that the defendants’ evidence in support of the claim was not cogent enough to prove that the designs were publicly disclosed prior to Visiber’s applications to register them, and that they would not have satisfied the criterion of novelty.
The court also held that the issue of the disclaimed numerals in Visiber’s industrial design registrations was irrelevant in the circumstances, and that such an argument would have been more appropriately raised in relation to trademark infringement. Therefore, Visiber succeeded in its claim of industrial design infringement against the defendants.
The court, however, specifically discussed Visiber’s claim of industrial design infringement against the 12th defendant, an advertising agency that was engaged by some of the other defendants to provide mobile roadshow services. Visiber argued that the 12th defendant had aided and abetted the other defendants in promoting the infringing products.
In this regard, Visiber cited section 33(2) of the Malaysian Industrial Designs Act, which provides that the owner of a registered industrial design shall have the same rights against any person who has performed acts which make it likely that an infringement will occur.
Visiber alleged that use of the 12th defendant’s vehicle as part of the mobile roadshow promoting the first defendant’s infringing products facilitated the infringement of Visiber’s registered industrial designs. However, the court held on the balance of probabilities that the 12th defendant would not have been aware that the first defendant’s products infringed Visiber’s registered rights and that the 12th defendant was therefore not liable under section 33(2).
Visiber was also successful in its trademark infringement and breach of confidence claims, but failed under passing off and conspiracy to injure.
