Upon obtaining the trade mark registration certificate, does the registrant own the registration forever, provided it is renewed every 10 years?
Unfortunately, the answer is: Not necessarily. The success in obtaining the trade mark registration certificate neither includes a guarantee of perpetual ownership nor indefeasibility of title. The validity of the registration is but a rebuttable presumption and even a properly registered trade mark can be removed by a third party.1
There are several ways a trade mark registration may be challenged and removed from the Register of Trade Marks.
Registration without sufficient cause or wrongfully remaining in the Register
On an application by a “person aggrieved”, the court may remove or vary any trade mark registration on the grounds that the registration is without sufficient cause or wrongful, erroneous or defective.2
Ponni rice is specially processed rice proven to have a low glycaemic index (good for the management and control of diabetes and blood cholesterol). The rice is named after and in tribute to the Kaveri Delta region in India where it is grown.
In Malaysia, several entities were licensed as distributors of imported Ponni rice since the 1990s. Syarikat Faiza Sdn Bhd (“Faiza”) proceeded to obtain trade mark registration of the word PONNI in 2000. As Faiza’s registration of PONNI would block the use of the name and mark PONNI by others who have trading interests in the Ponni rice, those wishing to use the term Ponni were and could further be negatively affected by Faiza’s exclusive claim to the mark. Upon an application to the court, Faiza’s registration of PONNI as a trade mark was removed.
In 2001, Industrial Automation (M) Sdn Bhd (“Industrial Automation”) was appointed the local sales agent for German company, Wieland Electric GmbH (“Wieland Electric”) in Malaysia. In 2005, Industrial Automation filed for registration of the trade mark WIELAND in its own name.
Wieland Electric demanded that Industrial Automation stop the registration which was filed without its authorisation. Industrial Automation admitted to filing the registration but promised to assign the registration of WIELAND to Wieland Electric if the registration was allowed to proceed to completion. However, upon a grant of registration, Industrial Automation refused to assign the trade mark to Wieland Electric, prompting Wieland Electric to terminate the business relationship and file an application to remove the registration. The court allowed the application and held, among other things, that Industrial Automation, being merely a local distributor appointed by Wieland Electric, had obtained the registration of the WIELAND trade mark by fraud and without authority of Wieland Electric, who was the rightful proprietor of the mark. Registration by the distributor would cause deception and confusion to the public.
Zhan Qiao Pai5
In 1976, Hai-O Sdn Bhd (“Hai-O”) was the sole importer of a medicated wine called “Zhan Qiao Pai” in Malaysia. The Chinese manufacturer was the proprietor of the trade mark. Hai-O sold this product in Malaysia till 1981, after which they registered themselves in Malaysia as the proprietors of the same trade mark.
In 1990, another importer, Nguang Chan commenced selling the same product from the Chinese manufacturer in Malaysia. Hai-O initiated action against Nguang Chan, whereupon Nguang Chan and the Chinese manufacturer responded with an application to remove Hai-O’s registered mark. The court ordered the removal of Hai- O’s registered mark, on the grounds, among others, that:
- Hai-O does not acquire any proprietary rights over the Chinese manufacturer’s mark merely by being a conduit from manufacturer to ultimate consumer;
- Even if the Chinese manufacturer had knowledge of Hai-O’s registration, the trade mark must be treated as having been wrongly registered and obtained by fraud on the Registrar and the Malaysian public;
- the Chinese manufacturer who places his trade mark upon his product which he intends to export for sale into Malaysia is the proprietor of that mark; and
- The public should not be left in doubt as to whether two products carrying the same mark come from the same source.
Who can apply for removal?
Only a “person aggrieved” by the registration has the right to apply to court for this relief. He cannot be a mere busybody.6
Whether a party is a “person aggrieved” would depend on the facts and circumstances of each case.7 The term may be construed widely to include someone with simply a bona fide or genuine intention to use a trade mark,8 whose interests will be damaged or injured if a registration were allowed to remain on the Register,9 or whose trading interest is blocked by the registration of a mark.10
Discretion of the court
While the legislation provides that a court “may order the removal of a registered trade mark”,11 the Federal Court has held that once the grounds for removal of a registration have been made out, neither the court nor the Registrar has a real discretion to allow the registration to remain on the Register.12
After 7 years
A trade mark registration is deemed “conclusive” seven years from the date of registration and “shall be taken to be valid in all respects”,13 unless it is shown that the original registration was obtained by fraud, or that the registered trade mark offends against s 14 of the Trade Marks Act 1976,14 or if the registered trade mark has become generic or no longer distinctive. Some registered trade marks that have lost their legal status and become generic names for, or synonymous with, a general class of products include ASPIRIN, DRY ICE, ESCALATOR, KEROSENE, TRAMPOLINE and SELLOTAPE.
Use it or lose it
Fundamentally, the purpose of registration is in order to claim exclusive use of a trade mark. Non-use of a registered trade mark may expose the registration to removal15 in two situations — namely, where the registration was obtained without any intention in good faith to be used and in fact having not been used in good faith, and where the registered trade mark has not been used in good faith for a continuous period of three years.16
In an application for removal for non-use, any use by the registrant17 within one month before the filing of the application will be disregarded. In this way, any attempted last minute use of the registered mark in the hope of defeating the application will not suffice.
Protecting a registered mark
Continuous use and commercial exploitation of the registered trade mark is essential in reducing the risk of losing it through non-use. Genuine use is a qualitative and not a quantitative criterion. In considering whether there is “genuine use”, several factors are relevant.18
The registrant himself19 must use the registered mark on the market or in the course of trade. Therefore, any use of the registered mark internally only or by a party unrelated to the registrant will not suffice as “use”. There must be use of the mark on or in relation to goods or services, which include affixing the mark to the goods or in an advertisement, circular or a catalogue20 and the taking of steps necessary for the production of goods as well as their actual placing on the market.21
The use must also be consistent with the essential function of the trade mark; which is to guarantee to the consumer the identity and source of the goods or services. In other words, the use of the mark must be to such a degree and in a manner that enables the consumers to identify the registrant as the source of the goods and services.
The use must not be trivial and has to be to maintain or create a share in the market. For example, offering to sell goods bearing the registered mark but on a very small scale and in a very remote location may not be sufficient to constitute “use” of the registered mark.
Merely obtaining registration of the trade mark does not fulfil the requirement of “actual use” of the mark “in the course of trade”.22
Protection of a brand does not end at registration. Successful registration is but the first of many steps that a registrant will need to undertake to preserve ownership.
Each step in trade mark portfolio management from brand creation to commercial exploitation and any subsequent “face-lift” undertaken must be handled with care. Serious consequences can result from a lack of vigilance ranging from losing a registered trade mark to being liable for trade mark infringement.
Even a threat of loss of ownership of a trade mark can have serious repercussions on a brand. LH-AG