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FAIZA v FAIZ - a rice dispute

Syarikat Faiza Sdn Bhd & Anor v Faiz Rice Sdn Bhd & Anor is a dispute pertaining to the marks and packagings used for distributing rice. There were many issues that were raised for the determination of the trial judge but in essence, the dispute is in relation to claims of trade mark infringement, copyright infringement, passing off and unlawful interference with trade. Background facts The Plaintiffs are in the rice distribution industry and have been trading under the trade name FAIZA for many years. The Defendants recently commenced their trade in the rice distribution industry under the trade name FAIZ. The Defendants also distribute their rice in packagings which the Plaintiffs claim to be substantially similar to the Plaintiffs' rice packagings. The Defendants raised the following arguments among others:

  • The 2nd Defendant was not an employee of the 1st Plaintiff;

  • The 2nd Defendant was the sole creator and author of the marks and packagings and therefore the owner of all marks and copyright used by the 1st Plaintiff;

  • There is an oral agreement between the 2nd Defendant and the 2nd Plaintiff where it was agreed that 2nd Defendant will own the copyright in all the 1st Plaintiff's packaging while the 2nd Plaintiff will own the trade marks.

Decision of the High Court There are various findings made by the High Court in this case. We will highlight the main findings of the High Court. Copyright

  1. The High Court recognised that copyright may subsist in typographical arrangement of published editions pursuant to Section 9 of the Copyright Act 1987.

  2. The High Court recognised that pursuant to Section 26(2)(b) of the Copyright Act 1987, for work authored in the course of the author's employment, copyright shall be deemed to be transferred to the employer in absence to any agreement to the contrary. The agreement to contrary here must be an agreement between the author and the author's employer.

  3. The High Court recognised that Section 36(1) of the Copyright Act 1986 provides for 2 limbs for copyright infringement - the first for doing an act controlled by copyright, the second for causing a person to do an act controlled by copyright.

  4. The High Court held that the test to be adopted for infringement under the first limb is a 3-elements test:

  • The plaintiff must prove sufficient objective similarity between the copyright work and the alleged infringing work;

  • The plaintiff must prove causal connection between the copyright work and the alleged infringing work, namely, that the alleged infringing work was copied from the copyright work. If the first element is proven, there is a rebuttable presumption that the alleged infringing work is as a result of copying. The burden shifts to the defendant to show that the alleged infringing work was not as a result of copying.

  • What was copied by the alleged infringing work must constitute a substantial part of the copyright work.

Trade Mark

  1. The High Court held the Defendants are liable for trade mark infringement pursuant to Section 38(1)(a) of the Trade Marks Act 1976.

  2. The Defendants' defence of estoppel was not accepted by the High Court on the ground that Section 40 of the Trade Marks Act 1976 expressly provides for defences to trade mark infringement. Based on the maxim of construction, expressio unius est exclusio alterius, the equitable estoppel doctrine is excluded as a defence to a trade mark infringement action because such a defence is not expressly provided in s 40(1)(a) to (f) and (2) Trade Marks Act 1976.

  3. The High Court acknowledged that parties are not required to adduce evidence from the consumers and retailers of the goods or service in question to show actual confusion/deception. Nor are parties required to call experts to give their expert views on likelihood of confusion/deception. However, actual confusion or deception may be relevant to the question of loss or damage caused by trade mark infringement and whether the court should award exemplary or aggravated damages.

Passing Off

  1. The High Court recognised and applied the English case of Lever v Goodwin (1887) 4 RPC 492 where it was held that a person can be liable for the tort of passing off even though the person does not sell a product (which is the subject matter of a tort of passing off) if the person provides the means or facilities to enable the commission of the tort of passing off.

  2. As for the elements of passing off, the High Court applied all of the following 3 tests:

  • Lord Diplock's 5-elements test in Erven Warnink v Townend & Sons (Hull) Ltd [1979] AC 731.

  • Lord Fraser's 5-elements test in Erven Warnink v Townend & Sons (Hull) Ltd [1979] AC 731.

  • Lord Oliver's 3-elements test in Reckitt & Colman Products Ltd v Borden Inc & Ors [1990] 1 All ER 873.

Declaration of False Trade Description

  1. The Plaintiffs' prayer with regards to a declaration that certain marks of the Defendants amount to a false trade description under Section 9 of the Trade Descriptions Act 2011 was allowed.

  2. The High Court was of the view that the court was empowered to make such an Order under Section 9 if the following 4 conditions are met:

  • the applicant (X) is the owner of a registered trade mark;

  • X’s rights in respect of the registered trade mark have been infringed in the course of trade by a mark or get-up used by another person (Y);

  • Y’s mark or get-up can pass off as the registered trade mark; and

  • X shall identify specifically Y’s mark or get-up.

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