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2022 MarsdenLR 1216
FEDERAL COURT PUTRAJAYA
GUANGZHOU LIGHT INDUSTRY & TRADE GROUP LTD & ORS – Appellant
Versus
LINTAS SUPERSTORE SDN BHD – Respondent
[Civil Appeal No: 02(f)-62-10-2020(S)]
Trade mark rights are not universally exhausted post-sale; express/implied consent is mandatory for parallel imports, which if lacking, constitute infringement.
Headnote:(A) Trade Marks Act 1976 – Sections 35(1), 38(1), 40(1)(dd), and 48(5) – Parallel imports – Infringement of trade mark rights upheld as no evidence of express/implied consent for resale in Malaysia; preliminary sale restrictions existed for goods intended solely for China – Prior case Winthrop distinguished due to marked differences in goods and absence of mutual trading relationships – Court emphasized the requirement of substantial compliance with local law and standards. (Paras 28, 42, 132, 162)
(B) Passing Off – Elements established: goodwill, misrepresentation, and likelihood of damage upheld due to confusion among consumers regarding the source of goods sold by the defendant. (Paras 25, 26, 158)
(C) Defences – Parallel importation defence dismissed as material differences existed between goods sold by plaintiffs and infringed goods. Consent was requisite and not implied in instances of unauthorized trade. (Paras 20, 21, 138)
Facts of the case: Plaintiffs claimed damages for trade mark infringement and passing off against the defendant, who sold goods bearing the 'Eagle Coin' trade mark, sourced from China without authorization, thus bypassing the exclusive distributor in Malaysia. (Para 4-12)
Findings of Court: Trade mark rights were infringed, and the defendant misled customers leading to potential harm to the plaintiffs' goodwill and business reputation. (Paras 158)
Issues: The case addressed whether trade mark rights extend globally after partial sale and if parallel imports could be authorized without consent when goods differed materially. (Para 2)
Ratio Decidendi: Court affirmed that national trade mark rights cannot be considered universal; express/implied consent is crucial for parallel imports which were absent, thus breach was clear; the defined limitations for trade dictated valid concerns regarding passing off. (Paras 115-136)
Result: Appeal allowed; reinstatement of the High Court's decision that ruled for the plaintiffs. (Paras 158)
JUDGMENT
[1] The appellants/plaintiffs appealed against the decision of the Court of Appeal which allowed the respondent's/defendant's appeal with costs of RM40,000.00 and set aside the High Court judgment which decided in favor of the appellants/plaintiffs.
[2] The appellants/plaintiffs obtained leave to appeal to this Court on the following 7 questions of law:
(a) Will a brand proprietor/owner's trade mark rights be exhausted worldwide even though the goods/merchandise in relation to which the trade mark is used have been put on market by the brand proprietor/owner to be sold in a specific country/region/ geographical area only for eg when it is clearly stated the goods/ merchandise are "to be sold in China only"?
(b) Whether the sale of parallel imports in Malaysia can be prohibited if the goods/merchandise purchased and intended to be resold are materially different from the goods/merchandise that the trade mark proprietor/owner has authorised to be put on market in Malaysia?
(c) Can the quantity of goods/merchandise purchased be used to determine if there's implied consent given by the manufacturer/ brand proprietor/owner to sell the goods/merchandise purchased outside Malaysia to be resold in Malaysia?
(d) In the event the answer to question (c) above is "yes", then can the consent be valid if the goods/merchandise purchased were put in market by the manufacturer/trade mark proprietor/owner to be sold only in that specific country from which the goods/ merchandise were purchased from?
(e) Whether goods/merchandise when purchased but not imported and/or does not comply with laws concerning importation amount to parallel importation?
(f) Whether the law in Malaysia allows for food products to be sold even though it is not packaged according to the Food Regulations 1985 and/or Food Act 1983 ?
(g) Whether the implied consent and/or express consent given by the trade mark proprietor/owner supersede the laws of Malaysia?
[3] In this judgment, we will refer to the parties as they were in the High Court.
Brief Facts
[4] The plaintiffs' claim against the defendant is for loss and damages arising from an alleged trade mark infringement and passing off of goods. In response, the defendant denied the claim and filed a counter claim.
[5] The 1st plaintiff (P1) is a leading China-based canned food manufacturing company. P1 owns the "Eagle Coin" trade mark, which is registered in China and in Malaysia, which is set out below:
[6] The 2nd plaintiff (P2) is a subsidiary of P1. It is involved in the manufacturing, importation and exportation of food products including canned food. P2 was assigned to use the "Eagle Coin" trade mark and sell products bearing the said trade mark outside China.
[7] The 3rd plaintiff (P3) is a Malaysian company based in Sabah. It is in the business of distributing and selling food products including canned food. It is the sole authorised distributor of canned food products bearing the "Eagle Coin" trade mark in Malaysia since March 2008. P3 is the registered trade mark user of the "Eagle Coin" mark in Malaysia. The said registration is renewable annually.
[8] The defendant runs a supermarket business in Kota Kinabalu, Sabah, and sells sundry goods including food products.
[9] The plaintiffs' complaint against the defendant is that the defendant used the "Eagle Coin" trade mark on their canned fried dace products in the course of their trade in their super market in Kota Kinabalu, Sabah. By this, it was alleged that the defendant has infringed their trade mark.
[10] The plaintiffs also pleaded that the defendant had utilised a mark on its products that is similar to the registered "Eagle Coin" mark of P3 although the packaging, labels, and net weight of the products are different (herein after referred to as "the infringing products"). By utilising the mark the way it did, the plaintiffs alleged that the defendant undertook an action of passing off.
[11] The infringing products with the "Eagle Coin" trade
