1 November 2017Jurisdiction reportsKelvin Ganesan

Malaysia jurisdiction report: The tale of the tiger stripes

The Malaysian Youth and Sports Ministry had unveiled a winning design motif on November 14, 2005 consisting of a ‘tiger stripes’ device for Malaysian athletes at sporting events. The ministry, after having chosen the mark, entered into a contract with Mesuma Sports in 2006 to manufacture and produce sports attire for Malaysian athletes bearing the mark. Mesuma was a supplier of sporting apparel, equipment, accessories, and goods.

In 2009, Mesuma applied to register the mark at the Malaysian Intellectual Property Office. The mark was successfully registered and when the ministry tried to register the mark at a later date, the application stalled because of Mesuma’s prior registration.

The ministry filed a suit claiming the following causes of action:

That the ministry was the lawful owner of the mark;

That Mesuma’s registered mark should be expunged from the register; and

That Mesuma was passing off the ministry’s products.

Mesuma countered the ministry’s claims by stating that it was the rightful owner of the mark as it used it first in the market. At the High Court, the matter was decided in favour of the ministry, which was also able to prove its substantial goodwill and reputation in relation to the products bearing the mark. Further, the ministry had successfully shown that it had paid Mesuma to produce the said products. Therefore, the court ordered the cancellation of Mesuma’s registered mark.

Mesuma appealed to the Court of Appeal, but the High Court’s decision was upheld. The Court of Appeal held that not only was the ministry the rightful legal owner of the mark, it was also the first user since 2005. The Court of Appeal further stated that the ministry need not be a ‘commercial entity’ and does not need to manufacture and sell goods bearing the mark to qualify for the requirement of use of the mark in the course of trade. The ministry, in using the mark for the purposes of branding, was deemed to be using it in the course of trade.

Mesuma then filed an appeal to the Federal Court. The main question of law raised was whether a claim for ownership of a trademark depended on who had designed the mark or the first time it was used as a mark in the course of trade. Mesuma contended that a trademark does not belong to the creator but instead to the party that first used it in the market. Its argument was that the ministry was not a profit-making body and not engaged in commercial trade activities and therefore could not use the mark in the course of trade. The ministry countered that it had contracted with Mesuma to supply sports attire bearing the mark and that this act was sufficient to fulfil the requirement of ‘in the course of trade’.

Binding decision

The Federal Court held that having a mark does not automatically qualify as trademark ownership, which requires proof that the mark is being used in the course of trade, reiterating the importance of use of a mark to denote source of origin. Nevertheless the Federal Court held that the ministry was the first user of the mark when it appointed Mesuma as a supplier of sports apparel bearing the mark. The ministry, through its activities to commercialise the design through its contracted suppliers, qualified under the requirement of ‘in the course of trade’.

Although Mesuma was the manufacturer of the goods, this did not equate to its having the proprietary rights. The Federal Court further stated that the ministry did not have to be a trading entity before it could be said that it had used the mark ‘in the course of trade’. Mesuma’s appeal was therefore dismissed.

The Federal Court’s decision is currently the binding decision for the definition of ‘in the course of trade’. As stated in the judgment, there is no need for the party to be a commercial entity to qualify. The decision is good news for many non-profit, non-commercial entities that may wish to register their own marks and protect their IP rights, eg, St John Ambulance and its crest.

Kelvin Ganesan is a trademark attorney at Henry Goh. He can be contacted at: kelvin@henrygoh.com

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