Disclaimers in Malaysia’s Trademark Law


Introduction


In this current era of modernisation where there is a dramatic surge in reliance on intellectual property rights, business owners are encouraged to be well equipped in understanding and knowing their rights in intellectual property, in particular, with regards to trademark matters such as trademark infringement.


In the past, when faced with a trademark infringement action, some trademark infringers had succeeded in avoiding liability by relying on the fact that the trademark registered was subjected to a disclaimer thereafter making the trademark holder to not possess the exclusive rights to the disclaimed parts of the mark.


However, the recent landmark case of Ortus Expert White Sdn Bhd v Nor Yanni bt Adom & Anor [2021] MLJU 2747 had caused serious repercussions where the Federal Court had redefined the scope and impact of a disclaimer in Trademark Infringement.


This Article will thus look into the decision of the Federal Court as well as an analysis into the decision delivered.


Brief facts of Ortus Expert White Sdn Bhd v Nor Yanni bt Adom & Anor [2021] MLJU 2747


Ortus Expert White (“OEW”) is the registered owner of the trademark distinguished as “Royal Expert White”


whereby OEW sells skin and beauty products under the trademark “Royal Expert White”. OEW had subsequently entered into a dealership agreement with Rafica Resources, i.e. the first Defendant whereby OEW had appointed Rafica Resources to distribute the products sold by OEW. However, OEW had then discovered that Rafica Resources had been selling a product labelled as “Real Expert White”, which is extremely similar to the trademark that OEW had been trading under where both of the marks are produced herewith as follows:-


OEW had then commenced an action against the Defendants for trademark infringement, passing off and a breach of dealership agreement.


High Court Decision


It is interesting to note that before the Federal Court had went into the merits of the case, the Federal Court had first taken the initiative of analysing the decisions of the predecessor courts, starting from the High Court.


The High Court of Kuala Lumpur had initially held that there was a clear cut trademark infringement action, passing off and breach of dealership agreement committed by the Defendants as the Defendants had clearly used their infringed mark in the course of trade as well as the fact that both parties are trading in the same industry, i.e. the cosmetics beauty products industry.


Dissatisfied with the decision, the Defendants had then appealed to the Court of Appeal.


Court of Appeal


The Court of Appeal had unanimously reversed the decision of the High Court as they had explicitly held that given that the Plaintiff’s mark, “Royal Expert White” has the words “Royal” and “Expert White” thereafter the Plaintiff, OEW has no exclusive rights to the registered mark at all.


Dissatisfied with the decision of the Court of Appeal, the Plaintiff had then appealed to the Federal Court where leave was subsequently granted to the Plaintiff to the Federal Court.


Federal Court


Upon this case reaching the Federal Court, the Federal Court had to consider the following question namely:


i) Whether in a trade mark infringement action, the court ought to consider the disclaimed words in juxtaposition or in combination with the essential features in the registered trade mark for the purpose of deciding whether there is a likelihood of confusion and/or deception?


Ultimately, the Federal Court had unanimously decided this question in favour of the Plaintiff where the Federal Court had held that even though the disclaimed parts of the mark cannot amount to being an essential feature of the mark, this does not mean that the disclaimed parts of the mark will be excluded when considering the likelihood of confusion.


In essence, the Federal Court had held that given that in this case, the mark registered by the Plaintiff is a combined mark, i.e. where the word, picture or logo are combined together to make up the registered mark, the mark as a whole has to be considered and this includes the disclaimed parts of the mark.


Based on the above, the Federal Court had held that the Defendants did indeed infringed the trademark of the Plaintiffs and they had then reversed the decision of the Court of Appeal.


Aftermath


It is clear from the outset that the case of Ortus Expert White Sdn Bhd v Nor Yanni bt Adom & Anor [2021] MLJU 2747 is a landmark decision that shakes the very core of Intellectual Property Law as now disclaimers are now a factor to be considered when considering the test of a likelihood of confusion as the mark as a whole has to be looked at.


This was previously not the case where upon there being a disclaimer in the trademark, courts will subsequently immediately neglect and omit the disclaimed parts of the trademark when considering the likelihood of confusion.


The Federal Court’s decision is indeed a much needed change in Malaysia’s Intellectual Property law as it is now in line with what the general consumers perceive in the market, which is viewing the mark as a whole without knowing which parts of the mark is subjected to a disclaimer.


Conclusion


The Federal Court decision on the case of Ortus Expert White Sdn Bhd v Nor Yanni bt Adom & Anor [2021] MLJU 2747 has brought about a much needed and necessary change in Intellectual Property Law as it has been firmly decided by the Federal Court that the mark as a whole including disclaimed parts of the mark has to be looked at when considering a likelihood of confusion.


This decision could potentially result in many registered trademark holders being able to commence an action against the trademark infringer for infringing their trademark where previously the trademark holder could not do so due to the fact that their trademark has a disclaimer. However, it is pertinent to note that the disclaimed part of the mark cannot amount to being an essential feature of the mark therefore trademark holders should still take extra caution before initiating a suit for trademark infringement.

 

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