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Caught with Their Pants Down: Mohammad Hafiz bin Hamidun v Kamdar Sdn. Bhd.

08

OCT

2019

What grounds, if any, do famous personalities have to prevent their name from being used by others under the guise of false endorsements or association? Here’s the story of what singer and song composer, “Hafiz Hamidun” (the Plaintiff), did.

Apart from his musical pursuits, the Plaintiff had also incorporated a company selling clothes including Baju Melayu (a traditional Malay outfit for men) and fabrics (hereafter referred to as “the Plaintiff’s goods”) in boutiques and online.

In February 2017, the Plaintiff was made aware by his fans via social media that the Defendant, Kamdar Sdn. Bhd., was selling fabrics and advertising their products on signboards using the Plaintiff’s name. The Plaintiff’s fans sent the Plaintiff screenshots of the Defendant’s products, some querying whether the products were the Plaintiff’s products, and some who had purchased the products on the assumption that they originated from the Plaintiff. The Plaintiff also went on to purchase three of the Defendant’s fabrics which contained the name “Hafiz Hamidun” on them.

Soon thereafter, the Plaintiff’s solicitors issued the Defendant a demand on the basis that the Defendant had committed the tort of passing off in regard to the Plaintiff’s name. The Defendant did not reply to the Plaintiff, but the Plaintiff then found out that the Defendant continued to sell the particular goods but had changed the name to “Afiz Amidun” instead. Consequently, the Plaintiff filed a suit against the Defendant for commission of the tort of passing off.

The Defendant countered that it was a well-established business in Malaysia in the textile industry, selling fabric under its own brand “KAMDAR” as well as other brands. The Defendant also stated that they used an internal classification system based on random meaningless combinations of words and numbers to differentiate their products, and this classification was printed on the edge of their fabrics before the fabrics were rolled up and displayed at their stores. The classification was therefore not visible, and once the fabric was sold and made into clothes, the classification was not retained in the finished clothes.

The Defendant alleged that they had a policy not to use celebrities’ names and the Plaintiff’s name had been inadvertently used as part of their classification system, and they were unaware of the Plaintiff’s name being used until they received the Plaintiff’s letter of demand. The Defendant claimed that the Plaintiff had demanded an unreasonable compensation sum of RM 5 million, and to comply with the demand, the Defendant began using the name “Afiz Amidun” instead, which they also stopped using when this suit was filed.

The Defendant also argued that the Plaintiff had no monopoly over the name “Hafiz Hamidun” as the Plaintiff did not have his name registered as trademark for clothing and textiles, and that the Plaintiff did not have any goodwill in the Plaintiff’s name; as such, there is no reason for the Plaintiff to be given monopoly over his name.

The Court made a distinction between trademark infringement and the tort of passing off, and stated that whilst trademark infringement is a statutory cause of action, the tort of passing off is based on case law, and protects the overall goodwill of a person’s business, such as the trademark, name, get up or indicium of the business (hereafter referred to as “Business Indicium”). As such, there is no requirement for a trademark to be registered in order to bring an action for the tort of passing off. In ascertaining whether a party could file an action for the tort of passing off based on his or her Business Indicium (which could consist of his or her actual name, stage name, moniker or picture) as there is currently no Malaysian precedent on this matter, the Court considered different judicial approaches in New South Wales (Australia), Ontario (Canada) and the UK to address this issue. The Court found the New South Wales and the UK’s precedents to be applicable in Malaysia, and decided that a person (Malaysian or otherwise) who has goodwill in their Business Indicium should be allowed to claim for the tort of passing off against another party who has used the Business Indicium without consent.

The Court considered the following tests to ascertain whether the Defendant had committed the tort of passing off in this case:

Firstly, the Court looked into whether the Plaintiff has acquired goodwill in his name, and was satisfied based on evidence that the Plaintiff was a famous Nasyid singer who had promoted and sold his products based on his name. The Court found that as a result of the promotion and sale of the Plaintiff’s goods under his name, the Plaintiff’s name had become synonymous with the Plaintiff’s products, and the Plaintiff therefore had acquired substantial goodwill in the business when the Plaintiff’s name was used in connection with the goods the Plaintiff sold.

Secondly, whether the Defendant had misrepresented the Defendant’s goods to the public through usage of Plaintiff’s name. The Court rejected the Defendant’s arguments in regard to their internal classification system and found that the Defendant’s use of the Plaintiff’s name on the fabrics and signboard was with the intention to misappropriate the Plaintiff’s goodwill. Further, the fact that the Plaintiff’s fans had raised queries on the Defendant’s goods showed that there was a clear likelihood of confusion between the Plaintiff’s goods and the Defendant’s goods. The Court also found the Defendant’s act of replacing the Defendant’s name with “Afiz Amidun” showed an intention to continue with their act of misrepresentation as the pronunciation was still similar to the Plaintiff’s name.

Lastly, on the question of whether there is a likelihood of damage caused by the Defendant’s misrepresentation, the Court established that there was indeed a likelihood of damage caused to the Plaintiff, by virtue of (amongst others) the likelihood that sales of the Plaintiff’s goods would be adversely affected, the loss of the Plaintiff’s right to use his name exclusively for his goods, and a likelihood of the Plaintiff’s goodwill being damaged through dilution of the Plaintiff’s name.

Applying the above, the Court found in favour of the Plaintiff and allowed the action. The Court in this case also explicitly stated that if a celebrity has goodwill in his or her Business Indicium, it is important for any person to obtain written consent before using any part of the celebrity’s Business Indicium for the latter’s products or services. Failure to do so may render the person liable under the tort of passing off.

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