Federal Court on procedure for applying a Trade Description Order in Malaysia
Updated: Jan 7, 2019
The Federal Court in the case of Tan Kim Hock Product Centre Sdn Bhd & Anor v Tan Kim Hock Tong Seng Food Industry Sdn Bhd recently decided on an appeal in relation to the scope and application of Section 9 of the Trade Descriptions Act 2011.
The Respondent is the registered proprietor of the following Trade Mark registered under Class 30 for "dodol being a sweet confection made of glutinous rice, kaya, coconut biscuits, coconut candy".
The First Appellant was selling and marketing dodol products manufactured by the Respondent. Sometime in 2013, the Respondent stopped supplying its dodol products to the First Appellant. However, it was found that the First Appellant continued to sell and market dodol products, not dodol products manufactured by the Respondent, under the Respondent's trade mark. As a result, the Respondent applied for a Trade Description Order pursuant to Section 9(1) and 9(2) of the Trade Descriptions Act 2011 and the First Appellant company was raided by the enforcement officers.
The Appellants subsequently applied to set aside the Trade Description Order. The Appellants' application was dismissed by the High Court and the High Court's decision was reaffirmed by the Court of Appeal. The Appellants were granted leave to appeal to the Federal Court. Out of the 7 questions of law originally posed, the Appellants narrowed it down to the following 4 questions for the determination of the Federal Court:
1. Whether a Trade Description Order could be applied for on an ex-parte basis under Section 9 Trade Descriptions Act 2011 given the criminal consequences imposed by the Trade Description Order?
2. Whether Section 9 Trade Descriptions Act 2011 empowers the High Court to determine and declare goods as imitation goods whether on an ex-parte basis or at all?
3. Whether Section 9 Trade Descriptions Act 2011 applies to enforce a registered trade mark that had admittedly not been in use for a long period or abandoned in its use?
4. Whether Section 9 Trade Descriptions Act 2011 would be invoked when the unregistered trade marks are common law marks and subject to concurrent use by both parties?
Decision of the Federal Court
In answering question 1, the Federal Court held that the current procedure for applying a Trade Description Order by way of an ex-parte application under Section 9 Trade Descriptions Act 2011 is permissible and in accord with the legislative purpose for which it was enacted. In support, the Federal Court reasoned that for a meaningful and effective use of Trade Description Order, obtaining it swiftly and characterised with some elements of surprise is an essential ingredient. As such, an ex-parte application would be the most suitable and appropriate. The Federal Court further stated that unless a Trade Description Order is obtained swiftly through the mechanics of an ex-parte application, any effort to curtail the problem of imitation goods flooding the market would be seriously hampered. Therefore, supplementing the word "ex-parte" into the provision would certainly achieve the very purpose for the enactment of the provision and satisfy the mischief which the provision seeks to overcome.
In answering question 2, the Federal Court was of the view that when a court declares that a particular infringing mark is a false trade description, it must have reference to particular goods bearing or using the infringing mark and therefore when the court pronounces that there is infringement, that is in effect to declare that the goods are imitation goods.
The Federal Court refrained from answering question 3 as any answers given will have no impact on the position of the parties. Furthermore, both the High Court and the Court of Appeal found that there was no abandonment or non-use of the trade mark by the Respondent. The Federal Court also declined to answer question 4 as the ownership of the mark is the subject matter of another dispute between the parties which is still pending.