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[1986] Part 4 Case 1 [SCM]
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www.ipsofactoJ.com/archive/index.htm
[1986] Part 4 Case 1 [SCM]
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SUPREME COURT OF MALAYSIA |
Sanita Manufacturing (M) Sdn Bhd
- vs -
Chanchai
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Coram WAN SULEIMAN SCJ HASHIM YEOP A SANI SCJ SYED AGIL BARAKBAH SCJ |
10 SEPTEMBER 1986 |
Judgment
Hashim Yeop A Sani SCJ
(delivering the Judgment of the Court)
To the uninitiated this case provides an excellent illustration of the intricacies of the business world where rivalry even between business partners is not uncommon. The respondent and the second appellant were partners in business in 1973 but in less than a year thereafter became rivals in the same undertaking.
A brief background note on the case is necessary. On 20 March 1973, a company by the name of Sanita Manufacturing Co Ltd Bangkok ("the Bangkok Co") engaged in the manufacture of sanitary napkins of which the respondent was the managing director entered into an agreement with the second appellant for the sale and distribution of sanitary napkins in Malaysia and Singapore. In the agreement the second appellant was appointed sole agent to distribute the goods in the territories concerned.
There are four important provisions in the 1973 agreement.
The first provision dealt with the conferment on the second appellant of the exclusive rights to purchase for resale of the goods produced by the Bangkok Co in the territories concerned.
The second provision dealt with the covenants by the Bangkok Co and the agent. The covenants included the undertaking not to sell any of the products to any other person within the territories concerned. The covenants also included the undertaking to safeguard the sole and exclusive rights granted to the agent. The covenant by the agent Was expressly to sell the products and to promote the products as much as possible.
The third provision dealt with the authorization by the Bangkok Co to the agent to make application to the Registry of Trade Marks or any other government body for registration of all trade marks, emblems, designs, patterns and all other industrial or commercial monopoly rights within the territories concerned and such applications to be made in the name of the company.
The fourth provision dealt with the operation of the agreement which provided to the effect that after the expiration of ten years from the date of the agreement either party shall have the right to determine the agreement by giving six calendar months’ notice in writing.
Pursuant to the 1973 agreement the second appellant on 28 March 1973, submitted to the Registry of Trade Marks, Kuala Lumpur to have the “Sanita” trade mark registered in the name of the respondent. By virtue of the said registration the respondent became the registered proprietor of the trade mark. However it was alleged by the respondent as plaintiff in the court below that on 28 January 1974 the second appellant without his authority or consent fraudulently submitted Form TM 35 to replace the respondent as the registered proprietor of the trade mark and to insert the name of the first appellant, that is Sanita Manufacturing (Malaysia) Sdn Bhd ("the Malaysian Co"). On 19 September 1983 the first appellant applied for a trade description order under sub-s (1) of s 16 of the Trade Description Act 1972.
On 11 March 1984 the respondent filed a notice of originating motion for an order that the entry in the Registry of Trade Marks on 28 January 1974, pursuant to Form TM 35 submitted by the second appellant be expunged from the said register and the respondent be restored as the registered proprietor of the said trade mark.
In his affidavit in support of the notice of motion the respondent alleged fraud on the part of the second appellant and that the second appellant in submitting Form 35 to effect the alteration was acting outside the purview of his capacity as agent under the 1973 agreement and as a result of the deprivation of his proprietary rights in the trade mark the respondent has suffered losses.
There are many subsidiary issues which need not be resolved presently. For example, what was the effect on the 1973 agreement by the formation of the Malaysian Co which began to manufacture the same products between October 1975 and August 1981 when the factory was destroyed by fire. After the 1981 fire, importation of the products from the Bangkok Co with the “Sanita” trade mark resumed although the labelling particulars did not identify the respondent as the owner of the trade mark.
But the main issue is really quite straightforward. It is the question whether the act of the second appellant on 28 January 1974, was done without knowledge or authority or consent of the respondent and whether it was fraudulently done to deprive the respondent of his rights as the registered proprietor of the said trade mark. The learned judge made the finding in the affirmative.
In his written judgment the learned judge made several vital findings relating to this issue (see supra page 224). A summary of the arguments relied on by the learned judge may be stated as follows:
It is not in dispute that the Malaysian company had agreed to give 25% equity participation to the respondent and this equity participation was made possible by way of a loan of $25,000 each from the second appellant and his two brothers who set up the Malaysian company. The learned judge was of the view that the equity participation had nothing to do with the sale, transfer or assignment of the trade mark. He felt that his view was strengthened by the fact that on 17 March 1976 the Malaysian company paid the respondent $1,000 vide a letter with the heading “Re: Royalties of Sanita Trade Mark” which was acknowledged by the respondent on the following day. The learned judge held that as on 17 March 1976, it was clear that the appellants still regarded the respondent as the proprietor of the said trade mark. He also held that the payment of royalty had the effect of misleading the respondent that he was still the owner and proprietor of the trade mark although his name had been substituted by that of the Malaysian co in 1974.
On the question of fraud the learned judge gave his reason that the original application for registration of the trade mark was submitted on behalf of the respondent by the second appellant who only gave his address as the address for service. It should also become in mind that the respondent in the first instance signed the application himself but not when TM 35 Form was submitted by the second appellant on 28 January 1974. The learned judge asked why was not TM 35 signed by the respondent then as in the first case. The learned judge found that the respondent was not involved in the second application and that he was totally unaware of it.
The learned judge also considered the argument by the appellants that the equity participation was in fact the purchase of the trade mark. He concluded however that there was in, fact no transfer or assignment of the trade mark by virtue of the equity participation.
With respect we agree with these findings of the learned judge which findings were in fact based on the affidavits filed before him.
We might add however that the argument put forward by the second appellant in the court below would seem to have many loose ends. In his affidavit in opposition the second appellant alleged that there was an “oral appointment” by the respondent of one firm, Wah Sang Loong of No 11, Jalan Silang, Kuala Lumpur as the distributor of the sanitary napkins of the Bangkok Co in March 1973. But it was revealed subsequently that that firm belonged to the second appellant and his two brothers.
It was also alleged by the second appellant that the 1973 agreement ceased to operate and was terminated by mutual consent in mid-1975 after the firm, Wah Sang Loong, began to experience difficulties due to high percentage of damage and high import duties of the goods. It was also because of these difficulties which led to the formation of the Malaysian Co to manufacture the same products. But according to cl 10 of the 1973 agreement the agreement was to operate for ten years and only after the expiration of ten years from the date of the agreement will either party have the right to give six calendar months’ notice of termination. We find no evidence that the agreement was terminated orally or otherwise in mid-1975. In fact the only evidence of termination was by the respondent referred to in his affidavit affirmed on 22 October 1984, in that he had sent the notice of termination to the second appellant on 21 February 1984.
The fact that a mark is entered upon the register is prima facie evidence of the validity of the original registration and of the right of the registered proprietor to the exclusive use of the mark. See also GE Trade Mark [1973] RPC 297.
Section 45(1)(a) of the Trade Marks Act 1976 reads:
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The Court may on the application in the prescribed manner of any person aggrieved by the non-insertion in or omission from the Register of any entry or by any entry made in the Register without sufficient cause or by any entry wrongfully remaining in the Register, or by any error or defect in any entry in the Register, make such order for making, expunging or varying such entry as it thinks fit. |
This case can be viewed either as an entry made without sufficient cause or as an entry wrongfully remaining in the register. Since there is evidence on which the learned judge relied (with which we agree) to hold that the second appellant had fraudulently and without the knowledge and consent of the respondent altered the entry on 28 January 1974, the alteration should be expunged from the register.
We accordingly dismiss the appeal with costs and affirm the order of the learned judge.
Judgment below
Abdul Malek J
The plaintiff, the managing director of Sanita Manufacturing Co Ltd Bangkok, Thailand (“the Bangkok Co”) had applied by originating motion dated 11 March 1984, for an order that the entry made in the Register of Trade Marks on 28 January 1974, pursuant to Form TM 35 submitted by the second defendant, be expunged from the said Register and that he be restored as the registered proprietor of the said trade marks. At the outset, he had cited the Director of Enforcement, Ministry of Trade and Industry as the third defendant but this was later discontinued when the plaintiff applied for leave to withdraw the originating motion against the third defendant on 26 February 1985, and this was granted by the court on 3 March 1985.
In his affidavits, the plaintiff stated that the Bangkok Co is the registered proprietor of the SANITA trade mark for the manufacture of sanitary napkins in Thailand (exhs CA-1 and CA-2). By an agreement dated 20 March 1973 between the Bangkok Co and the second defendant, the latter was appointed as agent to distribute SANITA sanitary napkins (“the products”) in Malaysia and Singapore (exh CA-3). For that purpose, cl 8 of the agreement stipulated that the second defendant as agent was authorised to apply to the Registry of Trade Marks in the name of the Bangkok Co for registration of the said SANITA trade mark.
On 28 March 1973, the second defendant had the said trade mark registered in two Classes in the plaintiffs name. However, on 28 January 1974, without the knowledge, authority or consent of the plaintiff, the second defendant submitted Form TM 35 substituting for the plaintiff the first defendant as the registered proprietor of the said trade marks. On 19 September 1983 the first defendant applied for a trade description order under sub-s (1) of s 16 of the Trade Description Act 1972 and had it served on the third defendant. In consequence thereof the plaintiff had been deprived of his proprietary rights to the said trade marks and the loss of its exclusive use. As such he was no longer able to market the products.
In passing, it should be stated here that at the same time on 15 March 1984 the plaintiff had applied for an order that the third defendant be restrained from seizing or detaining the products manufactured by the Bangkok Co until the disposal of the originating motion which order was duly granted by the Court on 29 March 1984. However, on 30 May 1984 the third defendant applied for an order that the order made on 29 March 1984 be discharged and the interlocutory injunction dissolved on the ground that the court had no jurisdiction to grant an injunction against an officer of the Government under s 29 of the Government Proceedings Ordinance 1956 and this was granted by the Court on 14 October 1984. Subsequently, as has been stated earlier, on 26 February 1985 the plaintiff applied for leave to withdraw the originating motion against the third defendant.
In the meantime a few other applications had also been made by the parties. On 20 September 1984 the plaintiff had applied for an order that the first defendant be restrained from publishing or permitting or causing to be published or further published the warning notice dated 13 August 1984, which was published in several local dailies until the originating motion was disposed of which order was duly granted on 23 September 1984. Then on 14 October 1984 the first and second defendants applied for an order that the plaintiff do give security for their costs in the sum of $35,000 on the grounds that the plaintiff was ordinarily resident in Thailand and has no bank account or attachable assets in Malaysia. In response, the plaintiff filed on affidavit to show a sum of $60,000 was owing to him. The court granted the application on 24 October 1984, by ordering that a sum of $10,000 be deposited by the plaintiff in the form of bank guarantee.
The second defendant in reply filed a lengthy affidavit on behalf of both defendants and although before the hearing the plaintiff had given notice to cross examine him, this was later withdrawn at the hearing. In his affidavit, the second defendant admitted having entered into the agreement with the plaintiff but stated that it was never in operation causing it to lapse with the consent and knowledge of the Bangkok Co. He further went on to say that around March 1973 the firm Wah Sang Loong (“WSL”) were orally appointed as the distributors in Malaysia and Singapore of the products for the Bangkok Co. It was terminated in mid-1975. The affidavit also stated that:
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(a) |
between March 1973 to mid-1975 WSL had imported into Malaysia for distribution and sale about 18,500 cartons of the products manufactured by the Bangkok Co which total cash value was around $738,300 and which were sold as products of the Bangkok Co (exh LYF 2); |
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(b) |
the labelling and set-up of the boxes containing the products consisted of the following indicias;
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(c) |
there were no legends to show or identify the plaintiff as the proprietor of the SANITA trade mark in Malaysia or the Bangkok Co as the licensed or permitted user thereof; |
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(d) |
after WSL had been appointed the Malaysian and Singaporean distributors, the plaintiff instructed the second defendant to submit an application for registration of the trade mark SANITA in classes 5 and 16 in Malaysia which the second defendant did on 28 March 1973, in the plaintiff’s name and were given the application numbers M/62085 and M/62086 (it should be pointed out here that in some documents, reference had been made to M/62805 but this is clearly a typographical error); |
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(e) |
after March 1973 WSL (of which the second defendant and his brothers were partners) experienced several difficulties including:
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(f) |
the second defendant then suggested to the plaintiff in October/November 1973 that it would be more practical and profitable to set up a factory in Malaysia to manufacture the products and the plaintiff, who was representing the Bangkok Co, agreed on condition that he be allowed 25% equity participation. In consequence the second defendant further suggested that TM Nos M/62085 and M/62086 be transferred or assigned to the Sanita Manufacturing (Malaysia) Sdn Bhd (hereinafter “the Malaysian Co”) to be set up with an authorised capital of $500,000 and paid up capital of $300,000. The plaintiff agreed provided he did not need to fork out his 25% equity participation. The second defendant felt it was too expensive but the plaintiff felt that that was fair in view of the existing trade and business in Malaysia for the products. The second defendant discussed the matter with his two brothers and they agreed to do so by way of loan to the plaintiff at $25,000 each (exh LYF 4); |
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(g) |
the Malaysian Co was finally incorporated on 15 October 1973, with the plaintiff having 25% equity participation (exhs LYF 7, 8 and LYF 9); |
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(h) |
as a result thereof and with the authority and consent of the plaintiff, the second defendant caused Form TM 35 to be filed on 28 January 1974, against M 62085 and 62086 after getting the advice of the Registrar of Trade Marks and which were duly gazetted (exhs LYF 5 and LYF 6); |
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(i) |
the second defendant was then advised by his counsel that a nominal sum should be paid to the plaintiff for the transfer/assignment of the trade mark and this was effected on 20 March 1976 (exhs LYF 10 and LYF 11); |
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(j) |
the Malaysian Co started to manufacture the products around October 1975 until 31 August 1981, when the factory was destroyed by fire (exh LYF 12). Throughout this period, the second defendant claimed that the plaintiff was fully aware that the Malaysian Co was involved in the manufacture of the products and that the Bangkok Co had ceased to import it into Malaysia. During that period the Malaysian Co sold the quantities of the products and incurred advertising expenses as shown in exh LYF 13 amounting to $1,771,060. Samples of the advertisements are found on exh LYF 14 and the total number of outlets selling the products numbered 8182 (exh LYF 15); |
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(k) |
after the August 1981 fire, the second defendant negotiated with the plaintiff to manufacture the products for and on behalf of the Malaysian Co and the plaintiff was provided with the artwork and transparencies which showed that the products with the SANITA trade mark were imported by the Malaysian Co. The labelling particulars did not identify the plaintiff or the Bangkok Co as the owner of the SANITA trade mark; |
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(l) |
this arrangement continued until January 1982. The sales volume documents (exh LYF 16) and advertisement charges (exh LYF 17) are in the name of Boustead who were the first defendant’s agents and distributors. The import documents are in exh LYF 18; |
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(m) |
around March 1982 the Malaysian Co resumed manufacture of the products up to date (exh LYF 19) and the Bangkok Co ceased to do so since; |
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(n) |
around the middle of 1983, the Bangkok Co began to export into Malaysia the products in an exact trade dress as the products manufactured by the Malaysian Co which has caused the Malaysian Co serious loss and damage. |
In response to this, the plaintiff filed an affidavit in reply stating that he had in fact filed an application to the Registrar of Trade Marks on 28 March 1973, in Forms TM 6 and TM 1 (exhs CA 1 and CA 2) and this was duly gazetted on 13 November 1973 (exh CA 3).
The plaintiff further maintained that the said agreement was signed by the second defendant on behalf of WSL and this was later transferred to the first defendant. The setting up of the Malaysian factory was solely for the purpose of maximising profits. He also stated that the second defendant’s application in Form TM 35 was fraudulent and without his consent and knowledge.
The plaintiff also stated that he resumed exporting the products in mid-1983 only after the expiry of the ten-year period stated in the agreement and became aware of the fraudulent act of the second defendant only when the third defendant threatened to seize his products.
It is now necessary to review the following matters raised by counsel on both sides.
As regards locus standi, I found no merit in the submission of learned defence counsel that the plaintiff had none. It is true the original agreement was made between the Bangkok Co and the second defendant but it is not disputed that the plaintiff was the managing director of the Bangkok Co and was the person with and to whom all the dealings and correspondence were done and channeled. This is evidenced by an the affidavits and annexures pertaining thereto. The plaintiff was also the person registered as the proprietor of the trade mark on 28 March 1973, which was gazetted in PU(B) 482 the same year. I therefore held that in the circumstances the plaintiff had the locus standi to bring this originating motion as an aggrieved person.
As regards the relevant law, the Trade Marks Act 1976 (“the Act”) came into force on 1 September 1983, and this originating motion was filed on 11 March 1984. The offending change of name for which this rectification is sought was made on 28 January 1974, and I was of the view that the relevant law that governs it at the time the originating motion was filed was the Act and not the Trade Marks Ordinance 1950 (“the Ordinance”). No doubt prior to 1 September 1983, it was the Ordinance that governed the registration of this particular trade mark but on the passing of the Act and with the provisions contained in s 2 thereof, all the registrations under the repealed ordinance came under the purview of the Act. Therefore the Act is the governing law at the time the originating motion was filed. In any case s 45 of the Act is actually the same as s 46 of the repealed ordinance and the new law only had the effect of maintaining this provision.
It is not in dispute that the original application for registration of the trade mark was made on 28 March 1973, in the name of the plaintiff about a week after the agreement between, the plaintiff and the second defendant. It is not disputed that the products of the plaintiff were in fact sent into Malaysia by the second defendant for the period from the date of the agreement to October 1975. The second defendant contended in his affidavit at para 3(b) that the agreement was never in operation because it was not him but WSL which had imported the products. I fail to understand the logic of this argument as WSL in fact a company belonging to the second defendant and his two brothers which was incorporated on 15 October 1973. The second defendant stated in his affidavit at para 3(c) that WSL was orally appointed in March 1973 to distribute the products. This was averred with the intention of showing that the agreement was never in operation but I was of the opinion that the taking over of the distributorship by WSL partly owned by the second defendant had the effect of showing that it was in line with the concept of “permitted assigns” stated in the agreement between the second defendant and the Bangkok Co. The agreement therefore to my mind had in fact been in operation since its commencement. However, it ceased to operate in October 1975 for reasons which I shall state later.
Between October 1975 and August 1981 the Malaysian Co manufactured the products because, as the second defendant had stated in his affidavit, WSL had experienced the following difficulties:
a high percentage of damage to the imported SANITA sanitary napkin;
high import duties at the rate of one sen per piece or $4.80 per carton;
high freight charges because of the bulky nature of the sanitary napkins; and
inconvenience of having individual boxes of the sanitary napkins replaced from Bangkok when damaged,
and the plaintiff had stated in his affidavit that it was for the purpose of maximising profits. The second defendant in any case had stated in his affidavit at para 8(g) that this arrangement was adopted because it was “more practicable and profitable”. It follows therefore the joint contention was that the agreement between the Bangkok Co and the second defendant purportedly still subsisted at that stage except that there was a variation as regards the country of manufacture. However, I was of the view that the agreement could not very well continue in its original form 99 the products had to be purchased for resale from the Bangkok Co and not the Malaysian Co. Nevertheless this, to my mind, did not affect the plaintiff’s application as we are not concerned as to whether the original agreement was still in existence but whether the plaintiff was aware of the submission of TM 35 by the second defendant after the new arrangement. Be that as it may, this arrangement was terminated by a fire in the Malaysian Co factory at the end of August 1981 following which the Malaysian Co told the Bangkok Co to manufacture the products once more thus reverting to the 1973 — 1975 procedure till January 1982 at which time the Malaysian Co manufactured the products again. Thereupon the plaintiff started to export the products again to Malaysia after the expiry of the agreement at which time he was threatened with seizure of the products by the Ministry of Trade and Industry which resulted in this present originating motion. It is pertinent to note here that the conduct of the plaintiff in this respect also apply demonstrated that he was of the impression that there was nothing amiss as regards the original agreement and the subsequent variation and that he was quite unaware of the second defendant’s action on 28 January 1974.
At the time of the change of name on 28 January 1974, I had earlier held that the Ordinance was the relevant law. Let us now consider whether TM 35 was the proper form then. The change of name was purportedly made under s 44 of the Ordinance read with r 80 of the Trade Marks Rules 1951. Section 44 states that the application must be made by the registered proprietor but r 80 goes on to say that it may be made by such person as may satisfy the Registrar that he is entitled to act in the name of the registered proprietor. On the question of whether TM 35 is the proper form, I would find on these provisions that it was, since apart from the fact that it was the form prescribed by the Rules for this sort of application, the Registrar must have acted on the notion that since it was the second defendant who had filed the application for registration for the plaintiff in the first instance on 28 March 1973, he was “entitled to act in the name of the registered proprietor”. I do not agree with counsel for the plaintiff that TM 35 is not the proper form to displace a registered proprietor as para (b) of sub-s (1) of s 44 of the Ordinance covers a change of name, address or description of the person who is registered as proprietor of a trade mark. However, I held that it was an error on the part of the Registrar to consider the second defendant as a person “entitled to act in the name of the registered proprietor”. At the least, I was of the view that the second defend should have registered himself as agent first before the Registrar could treat him as someone who was entitled to act for the plaintiff in such an application. This is because in the original application the second defendant had given his address only as an address of service.
The next question to decide is whether the Bangkok Co had abandoned or assigned the trade mark to the Malaysian Co by the 25% equity participation. The second defendant had stated that in view of certain import and distribution difficulties, he had in October/November 1973 suggested to the plaintiff to allow the Malaysian Co to manufacture the products in Malaysia whereupon the plaintiff agreed provided he was given 25% equity participation. The sum of $75,000 was then agreed to be paid to the plaintiff by way of loan of $25,000 each from the second defendant and his two brothers who later set up the Malaysian Co. The plaintiff says this was purely for maximising profits in view of the difficulties faced by WSL but the second defendant avers that this was an assignment of the trade mark. Now, if this was an assignment, surely the plaintiff and the second defendant would have submitted the proper forms to the Registrar of Trade Marks to effect the same. The fact that they did not and the fact that WSL continued to import the products for another two years after that from the Bangkok Co showed that this was not so. The $75,000 to my mind was not for the sale, transfer or assignment of the trade mark but for the purchase of shares, in view of the 25% equity participation, by the plaintiff in the Malaysian Co and this was merely a variation as regards the country of manufacture as far as the plaintiff was concerned. This view is strengthened by the fact that on 17 March 1976, the Malaysian Co paid the plaintiff $1,000 vide a letter with the heading “Re: Royalties of Sanita Trade Mark” which was acknowledged by the plaintiff the following day. This to the court had the effect of misleading the plaintiff that he was still the owner of the trade mark as late as March 1976.
The last question to be decided now is whether there was fraud on the part of the second defendant. It has to be noted that the original application for registration of the trade mark was submitted on behalf of the plaintiff by the second defendant who only gave his address as the address for service. It should be kept in mind too that the plaintiff signed the application himself and there was no submission of Form TM 2 as required by the 1951— Rules for the agent. When the TM 35 form was submitted by the second defendant on 28 January 1974, he signed the application himself. If as the second defendant had affirmed in his affidavit that he had done so because of the new arrangement, why did he not tell the plaintiff so and why was not the subsequent application on TM 35 signed by the plaintiffs He said he acted on the advice of the Registrar of Trade Marks but surely this was based on the facts given by him to the Registrar. The fact that there is nothing to show that the plaintiff was involved in this application merely shows that he was totally unaware of it.
Despite the submission of this TM 35 the arrangement under the agreement continued for almost another two years. The Court had held that the 25% equity participation by the plaintiff in the Malaysian Co was by way of loan to the plaintiff by the second defendant and his two brothers for the allotment of shares. Nothing was stated that this was in exchange for the plaintiffs trade mark. There was no written agreement to this effect and no valid assignment on record. Two elegant factors should be noted here. If as the second defendant had stated that this was for taking over the plaintiff’s trade mark, he should have registered the change of name only when the local production of the products commenced in October 1975. However, we know that this offending act had been done as early as January 1974. secondly, if the $75,000 was for the purchase of the trade marks, why did the Malaysian Co give to the plaintiff another $1,000 purportedly for the “transfer” as stated in their letter dated 19 March 1976? There was a lapse of well over two years. Why is there a need to purchase two years later anyway if the change made on 20 January 1974, was valid? To my mind, this only illustrated that there was in fact no such transfer or assignment of the trade marks. At this juncture I would also like to mention that learned defence counsel had raised the issue that there is no evidence that the plaintiff was the proprietor or user. I held that there was no substance in this submission as the definition of “trade mark” in, and the other relevant provisions of, the Ordinance are quite implicit on the question of user and also, because the plaintiff had in fact been entered as the proprietor of the trade marks on 2 March 1973, and this fact had been duly advertised. Later we are told the Malaysian Co factory was gutted by fire at the end of August 1981. The second defendant instead of making arrangements locally for the manufacture of the products, if as he said the agreement was never in operation and that the trade marks had been transferred, got the plaintiff to agree to the Bangkok Co doing so in line with the original agreement. This went on till early 1982.
To my mind, it did not matter whether or not the original agreement was still subsisting. What was important was that the plaintiff was totally unaware of the TM 35 being submitted by the second defendant about ten months after the original application as he did not sign it and did not authorise the second defendant to make the application for change. The plaintiff’s involvement in the Malaysian Co to manufacture the products so as to eliminate the difficulties faced by the second defendant and to maximise profits for both parties was, as the Court had found, by way of equity participation which he had paid for by way of purchase of shares from a loan given by the second defendant and his two brothers at $25,000 each. It is also clear that the $1,000/given to him in March 1976 was by a letter with the heading on royalties. In August 1981 when the Malaysian Co factory was destroyed by fire and put out of operation, the plaintiff had agreed to continue on the original agreement when requested by the second defendant. When the ten year period expired, the plaintiff continued exporting the products into Malaysia again. To the Court, these factors and series of events could only have one effect on the plaintiff’s mind and that was he was still the registered proprietor of the trade marks all along.
Having made all the preceding considerations, I therefore found that there was indeed mala fide on the part of the second defendant in registering TM 35 on 28 January 1974. In the result, I held that the plaintiff’s application should be granted and in line with s 69 of the Act accordingly now order that the entry made in the Register of Trade Marks on 28 January 1974, pursuant to Form TM 35 submitted by the second defendant be expunged from the said Register and that the plaintiff be restored as the registered proprietor of the said trade marks. The plaintiff is also granted costs of this application.
Cases
GE Trade Mark [1973] RPC 297
Legislations
Trade Descriptions Act 1972: s. 16(1)
Trade Marks Act 1976: s. 45(1)(a)
Representation
SF Wong for the appellants.
HS Lim for the respondents.
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