Damages for trademark infringement must reflect actual losses incurred, with speculative claims being inadmissible; loss of goodwill can be awarded even without evidence of infringing products.

JUDGMENT

Yusrin Faidz Yusoff JC:

Introduction

[1] This judgment concerned the quantum of damages that was awarded to the Plaintiff in a trademark infringement, passing-off, and copyright infringement action that it initiated against the Defendant.

[2] Following an assessment of damages in accordance with a notice issued under O 37 r 1 of the Rules of 2012 ('the Rules'), I granted the total sum of RM50,000.00 along with assessment costs of RM10,000.00, in favor of the Plaintiff. My decision encompasses the following:

a) I hold that the Plaintiff is not entitled to loss of business profit and construction cost; and

b) The sum of RM50,000.00 is awarded as loss of goodwill and reputation.

[3] Further to the above, parties have agreed for me to conduct a simple taxation pertaining to the cost for the full trial in lieu of the filing of a formal bill of costs. Upon hearing submissions of parties on this issue, I awarded the sum of RM50,000.00 as trial costs which is to be paid by the Defendant to the Plaintiff.

[4] Essentially, the Plaintiff is appealing against part of my aforesaid decision, namely the RM50,000.00 awarded for loss of goodwill, as well as against my decision to disallow compensation for their loss of business profit and construction cost. This judgment is prepared for the Plaintiff's appeal based on the following notices of appeal:

a) Plaintiff's Notice of Appeal dated 18 December 2023 which was filed prior to obtaining leave to appeal from the Court of Appeal;

b) Plaintiff's Notice of Appeal dated 27 February 2024 filed upon obtaining leave to appeal from the Court of Appeal (leave obtained on 21 February 2024);

Background Facts

[5] Around 7 February 2018, the Defendant contacted the Plaintiff with the objective of hiring the Plaintiff to design and create a MODULARCRAFT product for the Ministry of Defence, Malaysia (MINDEF). Essentially, the Defendant sought the Plaintiff's support in procuring a tactical expandable cabin (TEC) for military purposes as part of the "PROGRAM PEMBANGUNAN NETWORK CENTRIC OPERATIONS (NCO) ANGKATAN TENTERA MALAYSIA (NO KONTRAK: KP/PERO-5/A/T204/2018/DE)" (hereafter referred to as the "the NCO Tender").

[6] MINDEF organized the NCO Tender to procure a domestically manufactured Tactical Expandable Cabin (TEC), modeled after a sample unit created by the German company Zeppelin. In response to the Defendant's inquiry, the Plaintiff subsequently engineered and produced a product named MODULARCRAFT Mobile System (MMS). Essentially, the responsibilities of each party regarding the construction of the TEC are as follows:

a) The Plaintiff's part: building the structure, including the supply of furniture, air-conditioning system, power generator, power supply, lifting mechanism, mechanical and electricity; and

b) The Defendant's part: completing the structure with ICT support, including radio and integrators, computer system, network system, software, telephone, audio system, wireless access point, WIFI, GPS and laptops.

[7] The Plaintiff alleges that the Defendant has infringed upon and misrepresented the plaintiff's mark, "MODULARCRAFT" (hereinafter referred to as "the plaintiff's mark"). This accusation stems from the Defendant's use in the course of trade of a sign that is nearly identical or closely resembles the Plaintiff's mark. Based on the evidence, it is found that the Defendant had extracted photographs from the Plaintiff's catalogue and reproduced them into a material form in the Defendant's website. This occurred despite the Defendant impliedly sidelining the Plaintiff from the tender exercise upon Plaintiff's failure to meet the requirement set out by MINDEF.

[8] The Defendant subsequently won the NCO tender without the Plaintiff's involvement. Dissatisfied with being ousted from the NCO tender exercise, the Plaintiff directed their attention to the Defendant's continuous usage of their MODULARCRAFT mark and filed this suit for trademark infringement and passing off on 28 April 2021. Later, on 21 J