Transshipment of goods infringing trademarks constitutes both trademark infringement and passing off under relevant law, emphasizing confusion likelihood.

Table of Content
1. the transshipment involved a trademark with a potential for confusion. (Para 1 , 2 , 3)
2. the court defined the issues concerning trademark infringement and passing off. (Para 4)
3. the court noted the plaintiff's established trademark rights and witness credibility. (Para 5 , 6 , 8)

[1] This case concerns a transshipment of goods owned by the first defendant (1st Defendant),a business entity in Egypt. The goods were to be shipped in 12 containers from Vietnam to Egypt with transshipment in Malaysia (first at Penang Port and then at Klang Port before onward delivery to Egypt).

[2] When the 12 containers of goods belonging to 1st Defendant were at Klang Port (to be transshipped to Egypt), the Royal Malaysian Customs Department (RMCD) seized 10 out of the 12 containers (10 Containers). This seizure was made because it was declared in the Customs Declaration Form that all the 12 containers contained "Omani Marble" (False Customs Declaration). The 10 Containers did not contain Omani Marble but "MALIMBO" brand of cigarettes (MALIMBO Cigarettes). A representation of MALIMBO brand is annexed to this judgment as Annexure A.

[3] The plaintiff company (Plaintiff) owns 28 MARLBORO trade marks registered in the Malaysian Register of Trade Marks (MARLBORO Trade Marks) for goods in Class 34 (which includes, among others, cigarettes) (MARLBORO Cigarettes).

B. Issues

[4] The following questions arise in this case:-

(1) whether 1st Defendant's transshipment of MALIMBO Cigarettes:-

(a) infringed MARLBORO Trade Marks under s 38(1 )(a) of the Trade Marks Act 1976 ( TMA ); and/or

(b) constituted a tort of passing off MALIMBO Cigarettes as MARLBORO Cigarettes when the MALIMBO Cigarettes in the 10 Containers -

(i) were not sold or offered to be sold in Malaysia;

(ii) were not taken out of the 10 Containers. In fact, the 10 Containers did not leave the "free zone" [defined in s 2(1) of the Free Zones Act 1990 (FZA)] in Klang Port; and

(iii) no tax or customs duty was imposed by Malaysian authorities on the MALIMBO Cigarettes;

(2) whether 1st Defendant could counterclaim against Plaintiff based on:-

(a) the allegation that this suit is frivolous, vexatious and/or an abuse of court process; and

(b) Plaintiff's undertaking to pay damages when Plaintiff obtained an ex parte interlocutory injunction (Ex Parte Interlocutory Injunction) and subsequently an inter partes interlocutory injunction (Inter Partes Interlocutory Injunction), to restrain the 1st Defendant from, among others, taking possession of the contents of the 10 Containers until the disposal of this suit

(Counterclaim);

(3) should compensatory, exemplary and aggravated damages be awarded against 1st Defendant?; and

(4) whether the court can order RMCD to destroy MALIMBO Cigarettes in the 10 Containers at the 1st Defendant's expense.

C. This Suit

[5] The Plaintiff filed this action against 5 defendants based on infringement of MARLBORO Trade Marks and tort of passing off in respect of MARLBORO Cigarettes.

[6] The 1st Defendant had counterclaimed for, among others, a declaration that the 1st Defendant had not infringed MARLBORO Trade Marks

[7] The Plaintiff had discontinued this suit against the fourth defendant company. A consent judgment had been entered between the Plaintiff and the second, third and fifth defendant companies (2nd, 3rd and 5th Defendants) wherein a perpetual injunction had been granted to restrain the 2nd, 3rd and 5th Defendants from dealing with the contents of the 10 Containers.

D. Plaintiff's Case

[8] The Plaintiff called the following 2 witnesses to support this suit:

(1) Mr Nicholas Foot (Mr Foot); and

(2) Ms Virawaty.

[9] Mr Foot testified as follows, among others:-

(1) Mr Foot is the "Senior Counsel, Trademarks" of Philip Morris Asia Ltd and has been authorized by the Plaintiff to give evidence on behalf of the Plaintiff in this case;

(2) the Plaintiff is an affiliate company of Philip Morris International Inc (Philip Morris), a company listed on the New York Stock Exchange. P

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