JUDGMENT

Zulkefli Ahmad Makinudin J:

[1] This is the plaintiffs' claim against the defendant for acts of trade mark infringement and/or passing off the defendant's offending watches as and for the watches of the plaintiffs.

[2] The defendant has filed a counter claim averring that the plaintiff's Five Star Device (watches) mark has been entered with the Trade Mark Register without sufficient cause and/or is wrongfully remaining in the Register. The defendant counter claims that the plaintiffs trade mark under Registration No 91/02436 for the Five Star Device be rectified and/or expunged from the record of the Register of Trade Marks.

[3] The relevant facts as agreed by both the parties are as the following:

(1) The plaintiffs are the registered proprietors of the Trade Mark Registration of the "Blansacar with Five Stars Device" trade mark ("the plaintiffs' Registered Trade Mark") by way of the Trade Mark Registration No 91/02436 in respect of watches in Class 14 as from 21 May 1991 in Malaysia.

(2) The first plaintiff has also applied to register the Chinese characters "WU XING SHANG JIANG", the translation of which is "Five Stars General", in respect of watches in Class 14 vide Application No 97/02902 on 7 March 1997 in Malaysia.

(3) The first plaintiff is also the registered proprietor of numerous Trade Mark Registrations of the trade marks either "Blansacar with Five Stars Device" and/or the "Five Stars Device" and/or "WU XING SHANG JIANG" and/or "Blansacar with Five Stars Device with WU XING SHANG JIANG" in various countries, namely France, China, Germany, Switzerland, Hong Kong, Laos, Spain, Chile, South Korea, the United Kingdom, Taiwan, Cambodia, Indonesia, Argentina, Thailand, Japan and Vietnam since May 1997.

(4) The first plaintiff has also applied to register the above trade marks or combinations of them in various other countries such as Brazil, Brunei, Egypt, India, Italy, Kuwait, Mexico, Myanmar, Pakistan, Panama, the Philippines, Russia, Saudi Arabia, Singapore, South Africa, Turkey, the USA, and the United Arab Emirates since March 1997.

(5) The plaintiffs have been selling watches bearing the plaintiffs' Registered Trade Mark which includes the "Five Stars Device" in Malaysia since 1994, and has exported and sold watches to China, Hong Kong and Singapore since 1999.

(6) The plaintiffs have expended a substantial amount of money in advertising and promoting the plaintiffs' Registered Trade Mark in relation to their watches in Malaysia since 1994 as well as in China, Hong Kong and Singapore.

(7) The defendant has been distributing, selling and promoting watches bearing the "Commander with Five Stars Device" trade mark since 1996.

[4] The following are summary of the issues to be tried:

(1) Whether the defendant has infringed the plaintiffs' Registered Trade Mark.

(2) Whether the defendant has committed a passing-off of the plaintiffs' Registered Trade Mark, and the plaintiffs' other trade marks, namely, the "Five Stars Device" and/or "WU XING SHANG JIANG" and/or "Blansacar with Five Stars Device with WU XING SHANG JIANG" or a combination of them.

(3) Whether the plaintiffs' Registered Trade Mark should be rectified or expunged from the Register of Trade Marks as claimed by the defendant in the counter claim against the plaintiffs.

Infringement Of Trade Mark

[5] Section 38 of the Trade Marks Act, 1976 ["The Act"] states as follows:

"38. Infringement of trade mark

(1) A registered trade mark is infringed by a person who, not being the registered proprietor of the trade mark or registered user of the trade mark using by way of permitted use, uses a mark which is identical with it or so nearly resembling it as it likely to deceive or cause confusion in the course of trade in relation to goods or services in respect of which the trade mark is registered in such a manner as to render the use of the mark likely to be taken either:—

(a) as being use as trade mark;

(b) ..."

[6] The elements required for