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The Eagle Has Landed, into a Dispute

08

JUL

2022

Guangzhou Light Industry & Ors v Lintas Superstore Civil Suit No.: BKI-22NCVC-139/12-2016

Background & Facts

In the Malaysian High Court Case of Guangzhou Light Industry & Ors v Lintas Superstore, the Plaintiffs – Guangzhou Light Industry & Trade Group Ltd (the 1st Plaintiff; a leading China-based canned food manufacturer), Guangzhou Eaglecoin Enterprises Group Corporation (the 2nd Plaintiff; subsidiary company, involved in the manufacturing, importation and exportation of food products), and Kim Guan Hap Kee Sdn Bhd (the 3rd Plaintiff; a Malaysian company involved in the distribution and selling of food products) undertook a joint action against Lintas Superstore Sdn Bhd (Defendant; supermarket business selling sundry goods including food products) on the grounds of trademark infringement and passing off.

The Plaintiff’s case was as follows: The 1st Plaintiff claimed that it owned the trademark “Eagle Coin” which was registered in Malaysia and China. This mark was assigned to the 2nd Plaintiff, for the sale of products outside of China. The 3rd Plaintiff was the sole authorised Malaysian distributor of canned food products that utilised the trademark “Eagle Coin”. It was also the only registered user of the “Eagle Coin” trademark in Malaysia.

The Plaintiffs claimed that the Defendant used the trademark “Eagle Coin” on their canned fried dace products in the course of trade, infringing upon the Plaintiffs’ trademark rights. Besides that, the Plaintiffs alleged that the Defendant utilised a mark similar to the registered “Eagle Coin” mark on its products, and therefore undertook an action of passing off. The Plaintiffs also alleged that the products in question featuring the “Eagle Coin” mark were not meant for distribution in Malaysia, but was obtained by the Defendant through direct importation of the products from China, thus bypassing the 3rd Plaintiff.

The infringing party relied on the defence that the canned fried dace with the Eagle Cointrademark was purchased in China from the 2nd Plaintiff to be sold in Malaysia. As such, they asserted they did not infringe on the Eagle Coin mark and instead it was a case of parallel imports.

Issues

The parties involved were unable to agree on the issues at hand within the trial. As such, based on all submissions made, the Court determined that the main issues involved were:

  1. Whether the “Eagle Coin” trademark was infringed upon;
  2. If the defence of parallel importation had grounds of merit;
  3. Whether passing off had occurred through the sale of the canned fried dace products by the Defendant.

Decision

Rights of Trademark Holder:

During the hearing, the Court found that the Defendant did have knowledge that they were using the 1st Plaintiff’s trademark. This was due to the Defendant had admitted to selling canned fried dace that utilized theEagle Coinmark, which was not sourced from the 3rd Plaintiff, who was the exclusive distributor of the product and sole registered user of the mark within Malaysia. As the registered user in Malaysia, the 3rd Plaintiff was entitled to the rights provided under Section 35(1) of the Trademarks Act 1976 which in respect of any goods or services, provide a person the exclusive right to use the trademark. Therefore, the Defendant had infringed upon this exclusive right to use the mark.

Defence of Parallel Importation:

The Defendant asserted that they did not infringe upon the Plaintiff’s trademark, as they sourced the products from the 2nd Plaintiff in China. The meaning of “parallel importation” was referred to as the importation and sale by third persons, of goods obtained in another country which originate from the original source or manufacturer. According to Section 40 of the Trademarks Act 1976, this defence contained a critical element of requiring either express or implied consent from the owner.

As there was difference between the product meant for the market in China and the product meant for the market in Malaysia, and as the packaging meant for the Malaysian market met all local labelling laws, the Court found that this defence of parallel imports failed. On the facts brought forth, the Defendant had no evidence of obtaining consent from the right holders.

Passing Off:

The claim that the Defendant misled the public into believing the products bearing the “Eagle Coin” mark was the same as those sold by the Plaintiffs, was also upheld by the Court as all three criteria to establish passing off was met.

The Court agreed that the Plaintiff had goodwill attached to the mark used on goods or services. They also determined that the Defendant had misrepresented to the public by using a mark which was likely to confuse or deceive the public that the goods or services are those of the Plaintiff, possibly causing damage to the Plaintiff.

Overall, the Court found that trademark infringement and passing off had occurred. As such, the Defendant was ordered to pay costs of RM30,000.00 to the Plaintiffs.

The case above teaches us that if you are keen on importing and selling goods from overseas in your own country, always make sure you are aware of who owns the trademark rights and whether there are sole distributors already present in your market. Getting proper authorisation from the rightful trademark owners could be the difference between having your business soar or crash due to “ill-eagle” activities. Contact us at kass@kass.asia if you need any advice!

About the Firm

KASS International Sdn. Bhd.
Address Suite 8-13A-2, Menara Mutiara Bangsar, Jalan Liku, Off Jalan Riong, Bangsar, 59100 Kuala Lumpur, Malaysia
Tel 60-3-2284 7872
Fax 60-3-2284 1125
Email hello@kass.asia
Link www.kass.asia

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