1. Trademark infringement and passing off — Assessment of damages following summary judgment regarding the sale of counterfeit medicated oil products. (Para 1 , 3 , 10 , 12 , 13 )
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2026 MarsdenLR 1741
HIGH COURT MALAYA KUALA LUMPUR
EDWIN PARAMJOTHY MICHAEL MUNIANDY, JC
LEUNG KAI FOOK MEDICAL CO PTE LTD & ANOR – Appellant
Versus
TJS WORLDWIDE SDN BHD – Respondent
[Suit No: WA-22IP-71-11/2023]
Important Points
Damages for trademark infringement and passing off are compensatory (restitutio in integrum) and assessed liberally. Loss of business profit requires a causal link to customer diversion, while damage to goodwill is presumed in passing off. Recoverable damages include countermeasure costs and general damages for residual harm.
Subject
Intellectual Property - Trademark Infringement & Passing Off
Act Referred
Rules of Court 2012: O.14
Headnote
(A) Intellectual Property Law - Trademark Infringement and Passing Off - Assessment of Damages - The object of an award of damages is compensatory, aiming for restitutio in integrum to put the injured party in the position they would have been in had the wrong not been committed (Paras 26-27). Damages for infringement of intellectual property rights are to be assessed liberally, especially where loss is not capable of exact mathematical calculation (Paras 29, 33-34).
(B) Loss of Business Profit - The proper inquiry is the loss of business profits caused by the diversion of customers as a result of misrepresentation, rather than a simplistic "loss of sales" or "net profit" approach (Paras 39-40). While assessed liberally, damages must not be speculative or unproven, and a direct causal link between the infringing acts and the loss must be established (Paras 49-51).
(C) Loss of Goodwill and Reputation - In passing off actions, damage to goodwill is presumed once interference with the business is established (Paras 65-66). Goodwill is a commercial asset earned through sustained trading and is tied to the integrity and exclusivity of brand representation (Paras 60, 77).
(D) Countermeasure Costs and General Damages - Costs incurred in detecting and investigating infringement are a natural and direct consequence of the wrongful act and are recoverable (Paras 87-91). General damages may be awarded for residual harm, such as disruption to business operations and erosion of trademark exclusivity, provided there is no double recovery for losses already compensated under other heads (Paras 100-103).
Facts of the case:
A retail business was found in possession of 330 units of counterfeit medicated oil products. Summary judgment was entered against the defendant for trademark infringement and passing off. The court proceeded to assess damages across four heads: loss of business profit, loss of goodwill and reputation, countermeasure costs, and general damages.
Findings of Court:
The court found that while the plaintiffs' claim for loss of business profit was excessive due to lack of a direct causal link between the small quantity of seized goods and the overall revenue decline, some compensation was warranted. Loss of goodwill was presumed given the heritage status of the brand. Countermeasure costs were deemed reasonable and necessary. General damages were awarded for residual harm.
Issues: Whether the claimed loss of business profit was directly caused by the defendant's actions; whether damage to goodwill is presumed in passing off; whether countermeasure costs are recoverable; and whether general damages would result in double recovery.
Ratio Decidendi: Damages in intellectual property cases are compensatory and assessed liberally but must avoid unjust enrichment or speculative awards. Loss of business profit requires a causal link to the diversion of customers. Damage to goodwill is presumed in passing off. Countermeasure costs are recoverable as direct consequences of infringement. General damages are permissible for residual harm not covered by specific pecuniary losses.
Result: Total damages assessed at RM 262,305.00 with 5% interest per annum and costs of RM 10,000.00.
(B) Loss of Business Profit - The proper inquiry is the loss of business profits caused by the diversion of customers as a result of misrepresentation, rather than a simplistic "loss of sales" or "net profit" approach (Paras 39-40). While assessed liberally, damages must not be speculative or unproven, and a direct causal link between the infringing acts and the loss must be established (Paras 49-51).
(C) Loss of Goodwill and Reputation - In passing off actions, damage to goodwill is presumed once interference with the business is established (Paras 65-66). Goodwill is a commercial asset earned through sustained trading and is tied to the integrity and exclusivity of brand representation (Paras 60, 77).
(D) Countermeasure Costs and General Damages - Costs incurred in detecting and investigating infringement are a natural and direct consequence of the wrongful act and are recoverable (Paras 87-91). General damages may be awarded for residual harm, such as disruption to business operations and erosion of trademark exclusivity, provided there is no double recovery for losses already compensated under other heads (Paras 100-103).
Facts of the case:
A retail business was found in possession of 330 units of counterfeit medicated oil products. Summary judgment was entered against the defendant for trademark infringement and passing off. The court proceeded to assess damages across four heads: loss of business profit, loss of goodwill and reputation, countermeasure costs, and general damages.
Findings of Court:
The court found that while the plaintiffs' claim for loss of business profit was excessive due to lack of a direct causal link between the small quantity of seized goods and the overall revenue decline, some compensation was warranted. Loss of goodwill was presumed given the heritage status of the brand. Countermeasure costs were deemed reasonable and necessary. General damages were awarded for residual harm.
Issues: Whether the claimed loss of business profit was directly caused by the defendant's actions; whether damage to goodwill is presumed in passing off; whether countermeasure costs are recoverable; and whether general damages would result in double recovery.
Ratio Decidendi: Damages in intellectual property cases are compensatory and assessed liberally but must avoid unjust enrichment or speculative awards. Loss of business profit requires a causal link to the diversion of customers. Damage to goodwill is presumed in passing off. Countermeasure costs are recoverable as direct consequences of infringement. General damages are permissible for residual harm not covered by specific pecuniary losses.
Result: Total damages assessed at RM 262,305.00 with 5% interest per annum and costs of RM 10,000.00.
Legal Category Hierarchy
-
intellectual property
- trademark law
- tort
- practice and procedure
Petitioner Advocates:Lum Kok Kiong,Chai Zhi Yong ,Respondent Advocate: Mohamed Ibrahim,Nor Aziah
Table of Contents
2. Plaintiffs claim loss of profits, goodwill, and costs — Defendant contends damages should be nominal due to lack of knowledge and limited scale of infringement. (Para 23 , 24 , 45 , 48 , 76 , 86 , 96 )
3. Damages are compensatory based on restitutio in integrum; loss of business profit requires a causal link, while damage to goodwill is presumed in passing off. (Para 26 , 27 , 28 , 29 , 30 , 32 , 33 , 34 , 35 , 51 , 52 , 53 , 55 , 65 , 66 , 67 , 77 , 78 , 79 , 82 , 83 , 84 , 87 , 90 , 91 , 97 , 98 , 100 , 101 , 102 , 103 )
4. Intellectual property damages aim to restore the injured party to their original position, assessed liberally but avoiding speculative claims or unjust enrichment. (Para 26 , 27 , 29 , 33 , 35 )
5. Total damages awarded including loss of profit, loss of goodwill, countermeasure costs, and general damages, with interest and costs. (Para 110 , 111 , 112 )
6. What is the general principle for assessing damages in intellectual property infringement?
The object of an award of damages is compensatory, following the principle of restitutio in integrum, which aims to put the injured party in the same position they would have been in had the wrong not been committed. (Para 26 , 27 , 28 )
7. How is loss of business profit calculated in trademark infringement cases?
It is based on the diversion of customers to the defendant. While applying a profit margin percentage to lost sales is a reasonable method, the plaintiff must prove a direct causal link between the infringement and the specific loss claimed. (Para 38 , 39 , 51 , 53 )
8. Is damage to goodwill required to be proven in passing off actions?
In passing off cases, damage to goodwill is presumed once interference with the business through the passing off of goods is established; the plaintiff is not required to prove actual damage. (Para 65 , 66 , 67 )
9. Are countermeasure costs recoverable as damages in intellectual property cases?
Yes, costs incurred by a trademark proprietor in investigating, detecting, and taking action against infringing activities are recognized as a natural and direct consequence of the infringing acts and are recoverable. (Para 87 , 90 , 91 )
10. How does the court avoid double recovery when awarding general damages alongside specific losses?
General damages are awarded only for residual harm—such as business disruption, erosion of trademark exclusivity, or general inconvenience—that is not already captured by awards for loss of business profit or loss of goodwill. (Para 97 , 101 , 103 )
JUDGMENT
(Assessment Of Damages)
A. Introduction
[1] These are my grounds of judgment in respect of the plaintiffs' assessment of damages, consequent upon the entry of summary judgment against the defenandt on 2 August 2024 ("the Order"). Pursuant to the Order, liability was established in favour of the plaintiffs on their claims for trademark infringement and the tort of passing off, with damages to be assessed.
[2] The Plaintiffs in this suit are Leung Kai Fook Medical Co Pte Ltd ("the 1st Plaintiff"), a company incorporated in Singapore, and Leung Kai Fook Medical Sdn Bhd ("the 2nd Plaintiff"), a company incorporated in Malaysia (collectively, "the Plaintiffs"). The defenandt is TJS Worldwide Sdn Bhd, a company incorporated in Malaysia which operates a small retail business at the 3rd Floor, Plaza GM, No 12, Lorong Haji Taib 5, Off Jalan Raja Laut, 50350 Kuala Lumpur.
[3] The Plaintiffs commenced this action by way of Writ of Summons and Statement of Claim dated 27 November 2023, premised upon the Defenandt's alleged infringement of the Plaintiffs' registered trademarks and the tort of passing off in relation to counterfeit Axe Brand Medicated Oil products found at the Defenandt's business premises.
[4] The Defenandt filed a Defence and Counterclaim dated 10 January 2024, to which the plaintiffs replied on 24 January 2024. On 25 March 2024, the Plaintiffs filed a summary judgment Application (Encl 12) pursuant to O 14 of the Rules of Court 2012 (ROC 2012), together with an application to strike out the defenandt's Counterclaim (Encl 15).
[5] It is significant to note that the defenandt failed, refused and/or neglected to file any affidavit in opposition to the summary judgment Application. On 2 August 2024, this Court, having considered the merits of the application, allowed the summary judgment Application and entered judgment in favour of the plaintiffs. The defenandt's Counterclaim was also struck out. No appeal was filed by the defenandt against the Order, nor was any stay of execution sought.
[6] Accordingly, by the operation of the Order dated 2 August 2024, the defenandt's liability predicated on trademark infringement and the tort of passing off is final and conclusive. The only remaining matter for this Court's determination is the quantum of damages to be awarded to the Plaintiffs pursuant to paras (6)–(10) of the Order.
[7] The Plaintiffs thereafter filed a Notice for Directions dated 30 August 2024 (Encl 38) seeking the assessment of damages. A Notice of Appointment of Assessment of Damages was issued on 7 February 2025 (Encl 44). The Plaintiffs filed their affidavit in support for the assessment of damages affirmed by Wong Kean Ewe on 7 February 2025 ("PAIS"). The Defenandt filed its Affidavit in Reply affirmed by Intan Nurain binti Ruzainor on 5 March 2025 ("DAIR"). The Plaintiffs thereafter filed an Affidavit in Reply affirmed by Wong Kean Ewe on 14 March 2025.
B. Background Facts
[8] The Plaintiffs are the common law and registered proprietors of the following trademarks in Malaysia, which are and have at all material times been valid and subsisting:
(Collectively referred to as "the Arm & Axe Marks")
[9] The Axe Brand Medicated Oil is one of the leading brands of medicated oil in Malaysia and globally. The Plaintiffs have a longstanding history of more than 90 years of heritage in Malaysia and worldwide. The brand is well-known and the Plaintiffs have expended substantial sums over the years in advertising and promotional expenses to build and maintain the goodwill and reputation associated with the Arm & Axe Marks.
[10] At all material times up to the filing of the Writ, the defenandt had been importing, supplying, distributing, selling and/or offering for sale goods bearing the Arm & Axe Marks which were not produced or authorized by the Plaintiffs ("the Counterfeit Goods"), without the licence and/or authority of the Plaintiffs ("the Offending Acts").
[11] On 13 March 2023, the Plai
