This article looks at the recent decision by the Court of Appeal (“COA”) Malaysia in Diesel S.P.A v Bontton Sdn Bhd (Civil Appeal No: W-02-(IPCV)(A)-1594-08/2016).
The Appellant, Diesel S.P.A. is a well-known Italian lifestyle company that has been trading with its name “DIESEL”, a name coined by its founder after being inspired by a global oil crisis at the time of establishment. The mark “DIESEL” has served as the Appellant’s house mark and central theme of its brand since its creation in 1978.
When the Appellant sought to commence sales and distribution of its products using its DIESEL marks in Class 25, the Appellant discovered that the Respondent, Bontton Sdn Bhd, is in the business of retailing and distribution of goods bearing the mark “DIESEL” and owned trade mark registrations for “DIESEL” for similar goods in Class 25. Whilst the Appellant owned DIESEL registrations in Class 25, its Class 25 registrations were composite marks for the text “DIESEL” or marks with fanciful designs, whereas the Respondent’s Class 25 registrations cover the text “DIESEL”. The Respondent had also extensively marketed and promoted its goods bearing the DIESEL trade mark, and claimed to be the common law proprietor of the DIESEL trade mark in Malaysia.
High Court Proceedings
Prior to the proceeding, the Respondent sued the Appellant’s distributor for selling products bearing the Appellant’s DIESEL marks in Class 18, claiming as infringement of the Respondent’s “DIESEL” marks in Class 25, among other grounds. The Respondent successfully obtained an interim injunction in the suit. The Appellant then filed a counterclaim but none of the parties took the proceedings further beyond that.
As a preemptive measure, the Appellant (the Plaintiff in the High Court proceedings) filed an Originating Summons for declaration orders seeking, among others, a declaration that the use in good faith by the Appellant of its DIESEL marks do not infringe the Respondent’s registered DIESEL trade marks as it would be considered as use by the Appellant of its own name and/or its own trade marks.
The Appellant submitted that it is entitled to the declaratory orders because it had adopted the mark “DIESEL” in good faith as it has been trading with its name, and had acquired goodwill over the past 38 over years, and that the use of its DIESEL marks will always be associated with the Appellant. The Appellant further submitted that the own name doctrine is not an act constituting infringement and it is enshrined within section 40(1)(a) of the Trade Marks Act 1976 (“TMA 1976”). As such, the Appellant is entitled to the order even in the absence of a trade mark infringement action.
The High Court disagreed and held that the Appellant could not rely on section 40(1)(a) as it was intended as a statutory defence to a trade mark infringement action and not to confer a right. Dissatisfied with the decision, the Appellant appealed to the COA.
Court of Appeal Proceedings
The COA disagreed with the notion that section 40(1)(a) is only available as a defense to an action for infringement of a trade mark, as the section is expressed in perfectly general terms with an intention to declare for certain acts as not constituting infringement of trade marks. On the Appellant’s right to use its own name, the COA noted that the TMA 1976 implicitly recognises the right of a person/company to use his/its own name, and that such use does not infringe another mark provided that the use is in good faith, even if it results in confusion.
The right to use one’s own name for their goods is a right in law, and the Appellant had raised adequate rights of legal character for the COA to grant the declaratory order sought. The COA found that the Appellant’s intention to use its own mark and name is bona fide (a subjective test) from the documentary evidence of the creation of its name and its DIESEL trade mark, its evolution and numerous efforts in promoting its DIESEL trade mark.
The COA ultimately held that in the interest of justice and fairness the Appellant is entitled to use its own name in its own goods, and granted the Appellant the declaration of non-infringement.
This is a much welcome decision that provides commercial certainty and upholds one’s integrity to use one’s personal name or identity in their course of trade. Honest traders using their own name may conduct their businesses and expand into new markets in Malaysia without fearing the interference of a proprietor of a registered mark that is identical or similar to their trade name.
This article was written by Associate, Lo Zhen Xin, and Principal, Amy Chan.