Quick, throw your CDs away! There’s a roadblock!

First published on LoyarBurok on 2 November 2010

For the past few months, an email has been circulating alleging that police and the enforcement division of the Domestic Trade and Consumer Affairs Ministry’s (now the Ministry of Domestic Trade, Co-operatives And Consumerism) have started operations to search and fine anyone who keeps pirated discs inside their cars. The email alleges that these operations were carried out through roadblocks at main roads and expressways, and that persons caught in possession of pirated discs were fined RM400 per disc.

In fact, these stories have been circulating for some time now. A report in the Sun newspaper in April 2009 stated that the police set out roadblocks to nab anyone with pirated discs. However, the same report stated that the Ministry denied having such roadblocks being set up.

Whether or not such roadblocks have been set up, it leaves us with the question: Do the police or the Ministry have the power to search our vehicles for pirated discs?

Section 24 of the Police Act 1967 allows any police officer to stop and search without warrant any vehicle which he has reasonable grounds for suspecting is being used in the commission of any offence against any law in force. The Ministry has also authority to enter and search a vehicle without warrant provided that he has reasonable grounds for believing that delay in obtaining a search warrant would lead to the destruction of evidence.

Under section 41 of the Copyright Act 1987, it is an offence to possess, other than for private and domestic use, any infringing goods. Any person who has in his possession, custody or control three or more infringing copies of a work or recording in the same form is presumed to be in possession of such copies otherwise than for private or domestic use. This basically means that possession of a pirated disc for private and domestic use is allowed provided that the pirated disc do not exceed three or more copies of the same form.

The offence would attract a fine not less than RM2,000 and not more than RM20,000 for each infringing copy or imprisonment for a term not exceeding five years or to both.

Can the police or the Ministry stop and search your vehicle?

In short, for now, if the police or Ministry have reasonable grounds to think that you are distributing pirated goods, (e.g. if you’re suspected to be a pirated VCD/DVD seller), they can stop and search your vehicle. Otherwise, they have no authority to stop and search your vehicle for pirated discs.

This situation may soon change.

The Government recently announced plans to amend the Copyright Act 1987 to make it an offence to keep pirated goods, similar to the offence of possessing stolen goods. Although the Government has not announced the details of the amendment, such news is worrying. This basically means that anyone in possession of pirated goods is committing an offence. Hence, any police, with reasonable grounds that there are pirated goods in a vehicle, may stop and search the vehicle.

What if the driver had purchased genuine songs from the internet and had it copied into a CD? The driver would have to prove and explain that he had genuinely purchased the song.

If I had downloaded software, music or movies into my computer from the Internet, does the police or Ministry has the authority to enter my house and search my computer? Based on the proposed amendment, the police or Ministry has the authority to do so.

Guidelines to allow the authorities to stop and search a vehicle for pirated goods should be clearly spelled out and made available to the public. The public should be given the right to use or copy copyrighted materials for their private use. Certain levies or exemptions should be given to the public if they are in possession of pirated goods unintentionally.

An outright ban of unauthorised possession copyrighted materials will create fear and chaos to the country and society.

Stemlife Berhad v Bristol-Myers Squibb (M) Sdn Bhd & Arachnid Sdn Bhd

First published on 10 August 2009

CIVIL SUIT NO S6-23-95-2008 (HC)

Arachnid Sdn Bhd (“Arachnid”) provides web development and related services. In 2003, Bristol-Myers Squibb (M) Sdn Bhd (“Bristol-Myers”) engaged Arachnid to set up a website, www.meadjohnsonasia.com (“the website”). Arachnid thereafter also provided maintenance services for the website.

The website hosts a forum known as the Asian Mom Network (“the forum”), a platform for Asian parents to share tips and views on parenting.

In 2007, Stemlife Berhad (“Stemlife”) brought an action against Arachnid for online defamation, alleging the latter was responsible for certain defamatory statements made by users of the forum.

Arachnid sought to strike out Stemlife’s suit on the basis that it disclosed no reasonable cause of action or was frivolous, vexatious and an abuse of process of the court.

The High Court in Kuala Lumpur struck off the claim by Stemlife. This case highlights the extent of liability for online defamation in Malaysia.

The court held that Stemlife’s suit had no reasonable cause of action on the grounds that:

a) Arachnid’s role was simply to set up and maintain the website for Bristol-Myers. Arachnid is Bristol-Myers’ web agency and the website belongs to Bristol-Myers;

b) Arachnid was not the author and editor of the words complained of. Stemlife had identified the authors as being the forum users, and one of the defamatory statements did not appear on the website but through a hyperlink to another website. Therefore, Arachnid could not be the publisher of the words complained of; and

c) Arachnid, which merely provides the service of setting up and maintaining a website, could not be held responsible as a “publisher” under the law of defamation.

Further, the suit by Stemlife was frivolous, vexatious and an abuse of process of the court in that:

(a) Arachnid was engaged by Bristol-Myers to set up the website;
(b) Arachnid provided maintenance services, including providing updates and upgrades upon the instruction of Bristol-Myers. The court held that it was not sufficient to attach liability on the part of Arachnid;
(c) There was no participation by Arachnid in the promotion of the forum;
(d) The contents of the website would not be within the knowledge of Arachnid, unless informed by Bristol-Myers;
(e) Arachnid did not control content posted on the forum, nor did it moderate or monitor the forum. Any postings on the website would only be removed upon the instruction of Bristol-Myers; and
(f) Stemlife had not shown as to how Arachnid contributed to, or was “knowingly” involved in, the publication of the words complained of.

The court also held that Arachnid had no control over the contents of the website, and had never played an active role in respect of the publication. Neither would Arachnid have knowledge of the contents of the words posted on the website.

Based on the above reasons, the High Court allowed the application by Arachnid to strike out Stemlife’s writ and statement of claim, which it dismissed with costs.

Philip Morris Products SA v Ong Kien Hoe & Ors

First published on 22 October 2009

CIVIL SUIT NO S6-23-95-2008 (HC)

Philip Morris Products SA (“Philip Morris”) is a manufacturer and distributor of cigarettes and tobacco products under the trade mark of ‘MARLBORO’ throughout the world and the proprietor of the registered trade mark “MARLBORO” in Malaysia.

On 10 September 2002, the officers of the 3rd Defendant (Director General of the Customs and Excise Department of Malaysia) detained 2 containers containing 1350 unmarked bale boxes containing cigarettes bearing the trade mark of ‘MARLBORO’.

These cigarettes were subsequently found to be counterfeit cigarettes. Philip Morris initiated an action against the 3 defendants but finally went to trial only against one, the 2nd defendant, who is a forwarding agent. Along the way, the claims against the 1st and 3rd defendants were withdrawn.

According to the declaration forms completed by the 2nd defendant and filed with the 3rd defendant, the consignors of the 2 containers were the 1st defendant. The declaration forms, packing and shipping of the goods in the containers were arranged by the 2nd defendant.

Philip Morris claimed against the 2nd defendant for infringement of Philip Morris’s trade and proprietary rights over the registered trade mark of ‘MARLBORO’. The infringement was said to have been committed by the 2nd defendant by passing off or attempting to pass off counterfeit cigarettes

(a) by its action in the transshipment, loading, unloading, reloading, transloading, storing, transitional storing, transiting, transporting, transshipping, transferring and/or dealing in any other manner in the course of trade with the counterfeit cigarettes;

(b) without the consent, authorisation or knowledge of Philip Morris dealt in or with the counterfeit cigarettes and/or counseled, instigated, procured, enabled, directed or assisted in the doing of those same acts.

The 2nd defendant is also alleged to have shown its direct complicity with the counterfeit cigarettes not only with regard to the importation and customs clearance but also in claiming ownership to obtain release and delivery of the counterfeit cigarettes to itself.

The 2nd defendant’s defence was that, among others:

(a) that it was merely carrying out its duties and obligations as a forwarding agent for a named principal;
(b) that it was not responsible or liable for the infringement; and
(c) the counterfeit cigarettes were seized within the free zone which is deemed to be a place outside Malaysia. That being so, not only is there no levy within this zone, the laws in Malaysia including the Trade Marks Act 1976 do not apply. Further, the ‘goods in transit’ are also exempted from seizure.

The High Court allowed Philip Morris’s claim with costs and held the following:

(1) The trade mark on the cigarettes seized from the 2 containers bore a trade mark identical to Philip Morris’s registered trade mark. Since Philip Morris had not authorised or licensed the 2nd defendant to use that registered trade mark there was infringement.

(2) The 2nd defendant was not a mere forwarding agent. On the facts the 2nd defendant did a lot more. In this regard:

(a) Firstly, the whole process from documentation to the handling of the cigarettes or the consignment is part and parcel of the course of the 2nd defendant’s trade or business as a forwarding expert. The 2nd defendant’s use is not as a private consumer. The documentation work related to the clearance of the cigarettes was an integral part of the expertise and trade of the 2nd defendant. It is the 2nd defendant who represented to others including the 3rd defendant that the goods in the 2 containers were cigarettes. Obviously these cigarettes must have a brand or be of a particular make, whatever that may be. The fact that the contents of the 2 containers cleared the Free Zone authorities indicates that these authorities must have believed that the 2nd defendant was authorised or licensed to ‘use’ in the sense of handling the cigarettes and clearing them in the course of its trade as a forwarding agent.

(b) Secondly, the 2nd defendant unstuffed counterfeit cigarettes and later consolidated these cigarettes with the other consignment of counterfeit cigarettes and paper bags. This required the 2nd defendant to open up the containers and deal with their contents. Although there is no need for the 2nd defendant to know for a fact that these cigarettes bore some particular registered trade mark, it is naive to suggest that the 2nd defendant is not aware at that time that it is handling cigarettes bearing the trade mark ‘MARLBORO’. Having being in the forwarding business for almost 15 years it is fair to impute that the 2nd defendant is at least generally aware of trade marks and counterfeiting or infringements of trade marks. Having opened the containers to consolidate their contents the trade mark must have been obviously displayed.

(c) Thirdly, the use of fictitious names and addresses admitted by the 2nd defendant indicates the existence of some element of complicity. Given that s 133(1) of the Customs Act 1967 (Act 235) makes it an offence to, among others, make a declaration which is untrue or incorrect in any particular, The Court held that the 2nd defendant’s argument that they are not obliged to ensure accuracy of the particulars in the documents presented for clearance of the cigarettes is unsustainable both in law and on the facts. On the contrary, ss 80 and 90 mandate the 2nd defendant with certain duties and liabilities for ensuring the completeness and accuracy of the details of the goods declared.

(3) The Free Zone is not free for all area, free of all laws or, that there is lawlessness in this zone. The enforcement agencies continue to hold jurisdiction over and in these Free Zones. In any event the issue of the validity of the seizure was immaterial and irrelevant to the success or otherwise of Philip Morris’s claim. Philip Morris’s rights in the registered trade mark were rights in rem.

Suria KLCC Sdn. Bhd. v Makamewah Sdn. Bhd.

First published on 10 December 2009

CIVIL SUIT NO K22-22 OF 2009-II (HC)

Suria KLCC Sdn. Bhd. (“Suria KLCC”) has been the registered proprietor of the trade marks “Suria KLCC”, “Suria KLCC & Swirl device” and the “Swirl device” in Class 35 and 36 under the Trade Marks Act 1976. Suria KLCC is engaged, among others, in the business of leasing and managing a shopping centre as well as providing business and property management services. When providing those services or in offering those services, it is presented to the public by Suria KLCC using the trade marks “Suria KLCC” and/or “Suria KLCC & Swirl device” and/or the “Swirl device” (‘Suria KLCC’s trade marks’).

A shopping complex owned and managed by Suria KLCC is strategically situated in the vicinity of the Petronas Twin Towers, a well known landmark of Malaysia. Suria KLCC says its shopping complex bearing its trade marks is one of the premier shopping complexes in Malaysia.

On or around the 7.5.2008, Suria KLCC became aware that Makamewah Sdn. Bhd. (“Makamewah”) had started development and construction of a commercial complex which was being advertised, promoted and operated or managed or leased by Makamewah using the name of “Suria Sabah” and/or “Suria Sabah & Swirl device” and/or a “Swirl device” (‘Makamewah’s said trade marks’).

Suria KLCC asserts that the actions of Makamewah in offering the said sales, lease and services to the public constitutes an infringement of Suria KLCC’s said registered trade marks and an act of passing off of Makamewah’s goods and services as those of Suria KLCC.

On 11.2.2009, Suria KLCC commenced an action against Makamewah and applied for an application for interlocutory injunction to restrain Makamewah from, among others, infringing its trade marks and pass of its trade as the trade of Suria KLCC by using the name “Suria” and/or the “Swirl device” and/or “Suria & Swirl device” or any part or parts thereof or any other business name or style which is identical with or so nearly resembling the same.

Makamewah admits that it has since 22.06.2006 started construction works on a shopping complex in Kota Kinabalu, Sabah which is being advertised, promoted and operated / managed / leased by Makamewah using the name “Suria Sabah” together with the logo of a stylized sun with its eight (8) rays arranged in a swirl which sits above the letter ‘i’ in the word “Suria”. But Makamewah denies that it is in any way infringing Suria KLCC’s trade marks or passing off its goods and services as that of Suria KLCC for the following reasons.

In its arguments, Makamewah claimed, among others, the following:

(1) Suria KLCC has no exclusive use of the letters “KLCC” and also the word “Suria”;
(2) the exclusivity of Suria KLCC’s trade mark “Suria KLCC” is only applicable when those words are used together;
(3) the word “Suria” is not a word invented by either Suria KLCC or Makamewah and that Suria KLCC should not be allowed to claim exclusivity over it as it is a generic and commonly used word derived from the Hindu sun god “Surya”;
(4) Makamewah chose to use the word “Suria” in conjunction with the word “Sabah” for its shopping complex in Kota Kinabalu, Sabah as “Suria” is the Bahasa Malaysia translation for the sun which rises first in Sabah as the eastern-most state of Malaysia; and
(5) Makamewah chose eight (8) rays arranged in a swirl in its stylized logo of the sun as eight (8) is symbolic in the Chinese custom and belief that the number eight (8) symbolizes wealth and prosperity.

The High Court dismissed Suria KLCC’s application for interlocutory injunction with costs and held the following:

(1) There is serious issues to be tried. Suria KLCC has produced sufficient evidence at this stage of the case to show that it has since 1998 actively advertised and promoted its said trade mark and has built up extensive goodwill and reputation in Suria KLCC’s business in respect of its said trade marks such that when used in relation to the provision of leasing and management services of a shopping centre and provision of business and property management services, Suria KLCC can claim that its said trade marks has come to be associated by the public with Suria KLCC and with no other party and that Makamewah by using the word “Suria” and / or the “Swirl device” and / or “Suria and Swirl device” in association with the shopping complex it is building in Kota Kinabalu, Sabah is liable to Suria KLCC for trade mark infringement and passing off. Whether Suria KLCC will succeed in its claim is a matter that must be decided at trial.

(2) Makamewah’s challenge to Suria KLCC’s right to the exclusive use of the mark “Suria” and whether the word “Suria” is a generic and commonly used word which derives from the Hindu sun god “Surya”, are matters which give rise to serious issues of law and fact which need to be investigated at a trial and are not matters which can be resolved at this stage of the case on a mere reading of disputed facts in the affidavits of the parties. Likewise, Makamewah’s contention that its trade mark is not identical to that of Suria KLCC’s trade marks nor do they resemble Suria KLCC’s trade mark so as to deceive or cause confusion in the course of trade, are matters which give rise to factual issues which it is not suitable to decide at this stage of the case on affidavit evidence alone. They should only be decided at the trial.

(3) Makamewah’s contention that no damage has been caused to Suria KLCC’s business and reputation or goodwill as Makamewah’s shopping complex is still under construction and Suria KLCC has failed to produce any evidence of the damage it has allegedly suffered should be decided in trial. At this stage of the case, all Suria KLCC has to show is that there is a likelihood of confusion on the part of the public and that there is a likelihood of damage to Suria KLCC’s business, goodwill and reputation and the Court is satisfied that Suria KLCC has succeeded in showing that there is a likelihood of such confusion and damage.

(4) The Court finds that that damages would not be an adequate remedy to Suria KLCC if it were to eventually succeed in its claim at the trial of this action. The same may be said of Makamewah too. The Court also finds that damages would be an adequate remedy to Makamewah if it were to eventually succeed at the trial.

(5) The balance of justice does not lie in favour of the grant of an injunction in this case. The relief sought by Suria KLCC is equitable in nature and it is well settled law that delay defeats equity.

(6) There has been considerable delay on the part of Suria KLCC in coming to the court for relief. The evidence shows that Suria KLCC became aware of Makamewah’s alleged infringement of its trade marks on or around 7.5.2008 and had written twice to Makamewah since then requesting the latter to cease infringing its trade marks but Makamewah refused to do so. Suria KLCC delayed for some nine (9) months before making this application. Suria KLCC has explained that the delay was caused by it having to seek legal advice from solicitors in Kuala Lumpur and Kota Kinabalu and to co-ordinate instructions between two law firms; that it needed additional time to do proper investigations to compile necessary information and documents; that the affidavits which needed to be filed had to be sent from Kota Kinabalu to Kuala Lumpur and back. The Court finds the explanation for the delay reasonable or acceptable.

(7) Given the fact that Suria KLCC was already aware of Makamewah’s alleged infringement of its trade marks in May 2008, the Court did not accept Suria KLCC’s explanation that it takes nine (9) months to obtain legal advice and to send documents between Kuala Lumpur and Kota Kinabalu. With regard to the alleged investigations which Suria KLCC needed nine (9) months to undertake, Suria KLCC has not attempted to assist the court by saying what it was that needed investigating or the nature of such investigations and why it took nine (9) months to do so.

(8) In the circumstances, it would be inequitable for Suria KLCC to expect the court to preserve the status quo ante by the grant of an injunction when Suria KLCC itself did not act with promptitude and in good time to preserve that status quo which it wants the court to preserve.

Income Tax (Deduction for Expenditure on Registration of Patent and Trade Mark) Rules 2009 [P.U. (A) 418/2009]

First published on 18 January 2010

From the year of assessment of 2010 until the year of assessment of 2014, certain companies and enterprises are able to claim tax deduction for fees or payments made to register patents and/or to register trade marks under the Malaysian Patents Act 1983 and Malaysian Trade Marks Act 1976 respectively.

The companies and enterprises that are eligible for such deduction are as follows:

(a) A company which has a paid-up capital in respect of ordinary share of RM2.5 million and less at the beginning of the basic period for a year of assessment but shall not include:

(i) A company where 50% of its paid up capital in respect of ordinary share of the company is directly or indirectly owned by a related company;

(ii) A company where 50% of the paid-up capital in respect of ordinary shares of a related company is directly or indirectly owned by the first mentioned company; and

(iii) A company where 50% of the paid-up capital in respect of ordinary shares of a company and a related company is directly or indirectly owned by another company.

(b) An enterprise in the manufacturing industry, manufacturing related services industry and agro-based industry, resident in Malaysia, which at the end of the basis period for a year of assessment-

(i) has not more than 150 full-time employees; or
(ii) has achieved annual sales of not more than RM25 million ringgit.

(c) An enterprise in the services industries, primary agriculture, information and communications technology industry, resident in Malaysia, which at the end of the basis period for a year of assessment:

(i) has not more than 50 full-time employees; or
(ii) has achieved annual sales of not more than RM5 million.

Download: [ Income Tax (Deduction for Expenditure on Registration of Patent and Trade Mark) Rules 2009]

Lew Cher Phow @ Lew Cha Paw & Ors v Pua Yong Yong & Anor

First published on 10 March 2010

(Johor Bahru High Court Suit No. MT4-22-510-2007)

In this case, the Plaintiffs and the Defendants were neighbours. The High Court had dismissed an application by the Plaintiffs who applied for an order for interlocutory injunction to restrain the Defendants from installing any CCTV cameras at the Defendants’ house which faced the Plaintiffs’ house as well as also for an order to compel the Defendants to remove their CCTV cameras that were installed facing the Plaintiffs’ house.

The Plaintiffs alleged that the act of the Defendants installing the CCTV cameras had intruded their livelihood and daily activities. The Defendants on the other hand alleged that the CCTV cameras were for security reasons as their house had been intruded before and also that the CCTV cameras only showed the Plaintiffs’ house as background.

The grounds given by the High Court in dismissing the Plaintiffs’ application are, among others, as follows:

(a) there is no evidence to show that the CCTV cameras intruded the livelihood and daily activities of the Plaintiffs. Further, there is no evidence in the Plaintiffs’ affidavit to show that the CCTV cameras recorded the Plaintiffs’ activities.

(b) the Defendants are entitled to install CCTV cameras for security and safety purposes.

(c) if the interlocutory injunction is granted this will bring a legal implication to the general public especially when CCTV cameras are installed at residential and commercial premises to protect the safety of the general public.

(d) there is no right of privacy in Malaysia thus the Plaintiffs do not have the right to institute an action against invasion of privacy rights.

Giordano defeats Giordano

Published on 14 September 2010

Walton International Limited v Yong Teng Hing B/S Hong Kong Trading Co & Anor (Civil Appeal No: W-02-685-2008)

The appellant is the registered proprietor of “GIORDANO” trade mark and other related trade marks in Class 25 (for garments and wearing apparels; jeans, T-shirts, pouch, accessories, trousers, clothing, footwear and headgear and articles of clothing), Class 18 (for leather and imitations of leather, and goods made of these materials and not included in other classes, animal skins, hides, trunks and traveling bags, umbrellas, parasols and walking sticks, whips, harness and saddlery); and Class 13 (for GIORDANO ladies).

The appellant’s predecessor in title, Giordano Limited has sold and exported substantial quantities of goods bearing “GIORDANO” trade mark, such as articles of clothing, watches with leather straps, leather belts, eyewear including sunglasses, bags, wallets umbrellas and fashions accessories, to many countries including Malaysia. All the “GIORDANO” trade mark and other related trade marks worldwide together with the goodwill and reputation in connection with the trade marks were assigned to the appellant in 1991.

The respondent on the other hand, is the sole proprietor of Hong Kong Trading Co. He ventured into businesses of selling watches with leather and imitation leather straps in 1986, and selling optical and sun glasses, and cases made of leather or imitation leather in 1992, in Malaysia. All the goods sold and dealt with by the respondent used the “GIORDANO” trade mark. He had in fact applied to register the “GIORDANO” trade mark for goods in Classes 9, 14 and 18 and had obtained registration of “GIORDANO” trade mark in Class 14.

The respondent filed an application for registration of the trade mark “GIORDANO” at the Registry of Trade Marks, Malaysia in 1992 for optical and sun glasses in Class 9. The appellant filed an opposition against the respondent’s application on the grounds, inter alia, that the “GIORDANO” trade mark applied for by the respondent is identical or similar to the appellant’s “GIORDANO” trade mark.

The Registrar dismissed the said opposition and the appellant filed an appeal to the High Court against the Registrar’s decision in dismissing the said opposition. The learned High Court judge dismissed the appeal and decided in favour of the respondent i.e. rejecting the appellant’s opposition and accepting the respondent’s application for registration of “GIORDANO” trade mark for Class 9. The appellant then appealed against the High Court decision to the Court of Appeal.

Allowing the appeal, the Court of Appeal held the following:

1. In the present case, the appellant had adduced unchallenged documentary evidence that the appellant and/or its licencees have been using the “GIORDANO” trade mark extensively in Hong Kong and in other countries around the world, in respect of goods such as articles of clothing, watches with leather straps, leathers belts, eyewear including sunglasses, bags and wallets. The appellant and/or its licencees first used the said trade mark in Malaysia in relation to goods such as articles of clothings, leather belts, bags, wallets, umbrellas and other fashion accessories sometime in 1990, before the respondent’s alleged date of first use of the trade mark in Malaysia in 1992.

2. The appellant had acquired substantial goodwill and reputation in the “GIORDANO” trade mark in Malaysia and in other countries in respect of those goods. The High Court should have taken into account the appellant’s significant use and registration of the said trade mark, particularly in relation to Class 25 goods in considering whether confusion or deception would arise.

3. Under section 14(1)(a) of the Malaysian Trade Marks Act 1976 (“Act”), registration of a trade mark should be refused if there is likelihood of confusion or deception to the public or customers. It is for the person applying for registration (the applicant) to establish that there is no likelihood of such confusion or deception; or that the result of the use of the mark will not cause a number of persons to wonder whether the products of the respondent and of the appellant came from the same source.

4. It is not enough for the applicant to negate the likelihood of confusion in relation to the actual trade carried on by the opponent at the time of the registration and to the manner in which the latter then uses his work. The applicant must also take into account all legitimate use of which the opponent may reasonably make of his mark within the ambit of his registration.

5. It may be important to see whether the registered mark is of a general or special character and to ascertain the extent of its reputation. Again, it may be important to determine whether the goods in respect of which it is registered constitute a narrow class or wide variety of goods as also will be the question of whether the goods of both the applicant and the opponent will be likely to find market substantially in common areas and among the same classes of people.

6. In the present case, both the appellant’s and respondent’s goods are fashion apparels which are targeted at the same class of customers and market areas. It is highly likely that members of the public will wonder if the appellant’s and respondent’s goods, both bearing the “GIORDANO” trade mark, might originate from the same source. There is sufficient evidence to show that the appellant is the originator or bona fide proprietor of the “GIORDANO” trade mark, particularly when the appellant has commenced use of the said trade mark in Malaysia prior to the date of the respondent’s application.

7. The evidence indicates that the respondent did not independently devise the mark himself. The respondent in truth is not the true proprietor of the “GIORDANO” trade mark. The respondent is trying to obtain the benefit of the worldwide reputation of the appellant. The respondent has failed to proffer any plausible explanation on his choice of mark which is identical to the appellant’s mark.

8. If at the date of application for registration of the trade mark by the respondent, the trade mark, although it has not been used in Malaysia, has become associated in the mind of the public with the appellant’s goods, then the respondent cannot claim or appropriate proprietorship of the said trade mark. There are no artificial limits on geographical areas to which reputation or goodwill can or cannot extend. Thus, the appellant’s reputation or goodwill in the “GIORDANO” trade mark outside Malaysia prior to the respondent’s use of the said mark in 1992 reinforces and supplements the reputation and goodwill of the appellant’s “GIORDANO” mark in Malaysia.

9. Modern technology and communications have improved to such an extent that the public in Malaysia would be aware of foreign marks even though such marks had not been previously used in Malaysia. Confusion and deception have no boarders in these days of information technology age. A small amount of use of the “GIORDANO” trade mark by the appellant is sufficient to prevent the respondent or any other party from claiming proprietorship in the said mark if its use by the respondent is likely to cause confusion to the public. The appellant in the present case has through its licencees used the “GIORDANO” trade mark in Malaysia prior to the filing date of the respondent’s application for registration.

10. In the present case, the learned Registrar, should refuse registration of the application by the respondent as there is a real risk of confusion or deception in that members of the public, as opposed to persons in the trade alone, might erroneously suppose that the respondent’s goods or products originated from or in are some way connected with the appellant.

11. The respondent as an applicant for registration of the “GIORDANO” trade mark bears the onus of proof to satisfy that the said trade mark is registrable and should be registered under the Act.

12. In law it is not a pre-requisite under section 14(1)(a) of the Act that the appellant must have acquired goodwill or reputation in the mark in Malaysia prior to the application for registration. It is sufficient so long as the mark has been in use in Malaysia by the appellant prior to the respondent’s application for registration. Going by the words of section 14 (1)(a) of the Act, the court has to determine whether the use of the “GIORDANO” trade mark by the respondent is likely to deceive or cause confusion to the public. If there are people who are likely to be deceived or confused by the use of the trade mark by the respondent, then it can safely be concluded that such use is likely to deceive or cause confusion to the public. Thus it is not necessary to find whether the appellant had acquired a reputation or goodwill in respect of its use of the trade mark on its products in order to get protection under section 14(1)(a) of the Act.

13. The issue of ‘first user’ of the said trade mark was raised before this court. The learned High Court judge concluded that the respondent was the first person who used the “GIORDANO” mark in Class 9 in Malaysia, hence the appellant has no reputation or goodwill in the “GIORDANO” mark in connection with goods in Class 9. However, the Court was of the view that the learned judge’s finding on this ‘first user’ issue is not supported by sufficient evidence adduced by the parties.

14. The Court is satisfied that there is no evidence to support the respondent’s allegation that he has been selling sunglasses, eye wear or fashion accessories bearing the “GIORDANO” trade mark in or before 1992. As such, based on the available evidence, the court is convinced that the appellant (not the respondent) is the first user and therefore the bona fide proprietor of the “GIORDANO” trade mark.

15. The Court was of the view that even if the respondent’s goods are not exactly the same with the appellant’s goods, nevertheless all their goods are in the same description. Therefore the prohibition under section 19(1)(a) of the Act is applicable and the respondent’s trade mark should not have been registered. The Registrar is duty bound to enforce the prohibition under section 19(1)(a) of the Act strictly, even without any opposition to the registration by the proprietor of the trade mark.

16. In the present case, the Court was of the view that “optical and sunglasses” (in Class 9) and “garment and wearing apparels” (in Class 25) are goods of the same nature in that both can be commercially described as “personal wear” or articles meant to be worn on the body. From a practical and commercial point of view, both categories of goods are considered to be fashion wear.

17. Both categories of goods have common practical purpose of acting as articles of adornment for personal wear. From a commercial stand point both categories of goods are used and sold as articles which portray one’s sense of fashion and preference. Sunglasses (Class 9) can be used as a form of fashion statement. One may choose square or oval-shape sunglasses purely based on preference and taste. Similarly, one may choose to buy clothes or pants (Class 25) of a particular design or colour based on one’s preference and taste.

18. In today’s business environment and practice, both categories of goods are more often than not manufactured, distributed and sold through the same sources or channels. For instance, many famous brands such as Giorgio Armani, Dunhill, Cartier, Nike, Calvin Klien, Dolce and Gabbano, Channel, Christian Dior, Hugo Boss, Versace, Gucci, Coach, Guess, manufacture and distribute both categories of goods. Further, a visit at any shopping complexes would show that such goods are commonly sold at the same places next to each other in departmental stores, fashion boutiques and retail stores.

19. The goods covered by the respondent’s application, i.e. optical and sunglasses, and the appellant’s goods, i.e. articles of clothing, watches with leather straps, leather belts, eyewear including sunglasses, bags, wallets, umbrellas and fashion accessories, are closely related as these are goods commonly sold together or next to each other in departmental stores or fashion boutiques. Further, those goods are likely to be manufactured, distributed and sold through the same sources or channels. It is also likely that the respondent and the appellant share the same market.

Personal data and the law

Published in The Star Newspaper on 5 August 2010

As the Personal Data Protection Act 2010 will be in force any time soon, data users are advised to be familiar with, and to start adhering to, its principles.

THE Personal Data Protection Act 2010 that is set to be enforced regulates the collection of personal data by parties for commercial transactions and will change the way we do business.

In brief, personal data is defined as any information that relates directly or indirectly to a data subject, who is identified or identifiable from that information or from that and other information in the possession of a data user.

A data user is basically the party using the personal data of an individual, which is referred to as data subject in the Act.

Personal data may take various forms and may be a name combined with other information, passport/identity card number, telephone number, photograph, fingerprint, or DNA.

A name itself cannot be personal data as there may be many individuals with the same name. However, where the information is combined with other information such as an address, this may be sufficient to identify an individual.

Unfortunately, the Act is only limited to personal data in respect of commercial transactions. Social media networking websites such as Facebook and Twitter, and foreign website owners are not subject to the Act.

This limits the type of personal data that are protected, for example, intimate photographs of individuals. As such data is normally not collected through commercial transactions, their distribution may not contravene the Act.

In Hong Kong, such data is covered. In an incident relating to the online circulation of nude photos of certain celebrities, the Privacy Commissioner for Personal Data decreed that such photographs are caught under the Hong Kong Personal Data (Privacy) Ordinance.

The Act sets out seven principles which a data user must adhere to when dealing with personal data. They are General, Notice and Choice, Disclosure, Security, Retention, Data Integrity and Access.

Failure to comply with any of the seven principles amounts to an offence punishable with a fine not exceeding RM300,000 or imprisonment not exceeding two years or both.

Under these principles, the collection and use of personal data must be consented to by the data subject, and steps must be taken to ensure that they are updated, correct and stored securely.

Further, adequate notice must be given to data subjects that their personal data will be used, and the purpose of the same. Data subjects should also be given the choice to opt out from giving certain personal data. Personal data no longer in use has to be destroyed.

Consent is not defined in the Act but a positive consent — written, oral or electronic — would be sufficient. However, positive consent would not apply in a scenario where a data user sends a form requesting consent and the form states that consent is assumed if no response is given. Failure to respond may not be considered as consent under the Act.

As the Act only applies to personal data in respect of commercial transactions, whether blogs would fall under its purview would depend on the circumstance of the case. If a blog is established purely for a recreational purpose, the Act may not apply due to the limitation of the definition of personal data.

A website generally collects personal data in two situations: when a user visits the website, and when a user provides information to the website operator, e.g. through an online form.

Information collected from a visitor to the website would include the IP address of the visitor and also cookies. Cookies are files used by websites to collect information about a user’s online activity. It can recognise a computer when a user logs on and can allow a website to store and remember usernames and passwords. Such information must be properly kept and not revealed to third parties.

As for the latter situation, website operators should inform the visitor that his or her information will be kept and used by them and their related parties. If website operators wish to use the information for other purposes, such as for marketing, they should obtain consent from the data subject.

Also, if personal data will be transferred outside Malaysia, consent should be obtained, otherwise any reference to the owner should be removed as it is an offence under the Act for a data user to transfer personal data outside Malaysia.

Companies need to be careful when sending out marketing materials. Under the Act, data users may be liable to a fine not exceeding RM200,000 or imprisonment not exceeding two years or both if they refuse to cease sending unsolicited marketing materials.

Following the security principle, personal data collected by website operators must be kept properly to ensure that they are not leaked. Proper security measures such as encryption must be in place.

If personal data is meant to be revealed to the public, notice should be given ahead and consent obtained. For example, a web forum should indicate to its users that information will be revealed to the public if requested. However, if the personal data is requested by a competent authority, consent may not be required.

In addition, website operators should also consider inserting a privacy policy statement on their websites in a specific page accessible by a visitor.

The privacy policy should state:

> WHAT will be done with the personal data;

> WHO is collecting the personal data;

> WHAT personal data is being collected;

> whether the personal data will be transferred out of Malaysia: AND

> whether the personal data will be disclosed to third parties.

As the Act will be in force any time soon, data users are advised to start adhering to its principles. Notice and consent of data subjects are the keys to allow a data user to use personal data. As such, data users should revise their data collecting system to be in line with the seven principles.

Unfortunately, at this stage, the extent and applicability of the Act is unknown and it seems to be wide and far reaching and, to a certain extent, excessive. In this regard, a Personal Data Protection Commissioner should be appointed soon to address these uncertainties.

In many jurisdictions with data protection legislation, the respective Commissioners play a vital role in determining the scope and applicability of the Act and will from time to time issue good practice notes or clarifications to the public.

Tweet at your own risk

Published in The Star Newspaper on 21 January 2010

The explosion in Internet-based social networking – fuelled by ease of DIY publishing – is throwing up new challenges, business and legal, to the online community.

THE year 2009 marked an important year for social media networking. It brought change to politics, society and business.

Many politicians set up their own Twitter accounts to connect with the masses.

Many companies – from multinational companies to our local restaurants – set up accounts on social media networking websites to publicise their business, and even to manage consumer complaints.

Malaysian company MOL Global Pte Ltd entered into an agreement with Friendster, Inc to acquire 100% of Friendster.

Also launched was Project Alpha, Malaysia its first online TV show about Malaysian bloggers.

Social media, designed to be disseminated through social interaction, is created using highly accessible and scalable publishing techniques, Internet-based applications that build on the ideological and technological foundations of Web 2.0 and allow the creation and exchange of user-generated content.

Social media can take many different forms, including Internet forums, weblogs, social blogs, wikis, podcasts, pictures, videos, ratings and bookmarking (Source: Wikipedia). Examples of social media networking websites or tools are Facebook, Twitter, LinkedIn and Friendster.

With social media websites rising in popularity, there are now more content generators on the Malaysian online community. Publishing content, once a technical and time consuming task, has been simplified; users merely need to enter text and click a button to publish.

Is Malaysian law able to cope with such changes?

The law governing online activities remains the same. Content generated through social media websites are still governed by laws on defamation, trade mark, copyright, and as well as the Computer Crimes Act 1997, Communi­cations and Multimedia Act 1998, and so on.

Internet users should be vigilant when posting updates, blog entries, tweets, comments and emails.

Even a 140-character limit tweet may get you into trouble. For example, Courtney Love, the widow of Kurt Cobain, was sued by her former clothes designer for defamation, invasion of privacy and inflicting of emotional distress for “an extensive rant” on Twitter about how she was billed for custom clothing.

Social media websites or tools have also been used to attack others. Some users think they can hide incognito behind the screen. However, some were unmasked and had to endure severe punishment.

In 2008, in the case of Applause Store Productions Limited & Anor v Grant Raphael [2008] EWHC 1781 (QB), the claimants were awarded £22,000 in damages against Raphael, an old school friend, who had created a false personal profile of the claimants on Facebook.

Back home, in July 2009, a former bank employee was charged with posting vile and indecent material in a blog with intent to annoy another colleague. He was fined RM8,000, in default two months’ jail.

Making a complaint against malicious users is now fairly easy and can even be done online – at http://aduan.skmm.gov.my, the website of the Malaysian Communications and Multimedia Commission’s (MCMC) complaints bureau.

In the face of severe punishments, malicious users will take all sorts of steps to keep their identity secret. They may use fake names and emails, proxy servers, and also install devices to ensure that their identity cannot be traced. However, they are not safe from the long arm of the law.

In the case of The Author of a Blog v Times Newspaper Limited [2009] EWHC 1358 (QB), a blogger sought an interim injunction in the English court to restrain Times Newspapers Ltd from publishing any information that would or might lead to his identification as the person responsible for a blog.

The blogger argued that his anonymity protected him against any action being brought against him. His application failed. The judge commented that blogging is a public activity and any right of privacy would likely be outweighed by public interest in revealing his activities.

Anything posted on the Internet will stay on the Internet. It will travel and be read by other people. Nothing is ever private on the Internet.

A clear example is the case where a former high school teacher in the US was forced to resign over photos and expletives on her Facebook page. The page had photos of her holding wine and beer and an expletive.

Although one may argue that it is one’s right of privacy to have one’s personal activities protected, the law does not prevent others from doing so.

Trade marks and trade names have also been highly abused in social media websites. Many users register their username using trade marks or trade names of other companies or individuals.

Companies have had to seek legal advice on the available courses of action in restraining such action or in obtaining such names back. This resulted in hefty legal fees and also time.

In combating such problems, Facebook gave trade mark owners the opportunity to register their rights to the username before the launch of personalised username and URLs. In doing so, Facebook had taken steps to avoid any lawsuits over trade mark.

Twitter on the other hand was not so lucky. A well-known US sports figure, St. Louis Cardinals manager Tony La Russa sued Twitter over an account created in his name.

The false account posted updates that gave the false impression that the comments came from La Russa. The suit said the comments were “derogatory and demeaning” and damaged La Russa’s trade mark rights. The case was eventually settled.

The year 2010 will be another interesting year. Internet-enabled phones and data plans are offered at an affordable rate. Users can now access the Internet through their mobile devices whenever and wherever they are.

It will be interesting to see what are the new tools for online social networking, and the new legal challenges for the online community.

> The writer is a young lawyer. Putik Lada, or pepper buds in Malay, captures the spirit and intention of this column – a platform for young lawyers to articulate their views and aspirations about the law, justice and a civil society. For more information about the young lawyers, please visit www.malaysianbar.org.my/nylc.

Tweet below the law

Featured in The Star Newspaper on 8 August 2010

Sunday August 8, 2010
Tweet below the law

By JOSEPH LOH
sunday@thestar.com.my

Social networking sites such as Facebook and Twitter have allowed people to easily let others know what is on their minds. But users should be careful with what they post because the laws of the land apply to cyberspace as well.

THE Internet is increasingly becoming a virtual soapbox for people to vent their thoughts – and sometimes frustrations and dissatisfaction. The proliferation of blogs, discussion groups, and more recently, social networking, have emboldened many – with the assumption that making comments from behind a screen shields them from any legal repercussion.

However, the long arm of the law extends beyond solid ground, and reaches into the virtual realm as well.

According to H.R. Dipendra, from the Malaysian Bar Council’s human rights committee, there is no distinction between comments posted on the Internet and traditional print media.

“Internet posts are subject to similar laws as that of print media, aside from the Communications and Multimedia Act 1998 (MCMC Act) and Printing Presses and Publications Act 1984.


False sense of security: People on social networking sites and blogs tend to say more than they do in real life, thinking they can do it anonymously.

“You have to be careful what you write, and not just post what comes off the top of your head. If you know it to be inflammatory, then you should be careful,” he says.

Eddie Law, blogger and founder of elawyer.com.my and laweddie.com.my says that the www header is not an acronym for the wild wild west.

“Some think they can post or write anything, but that is not true,” he says.

Examples of legislation (see chart) include the Sedition Act, Internal Security Act, as well as civil and criminal defamation laws – all of which have previously been invoked to bring an individual to court, most famously in the cases involving blogger Raja Petra Kamarudin.


Dipendra

More recently, DAP member Teng Chang Khim was summoned to appear before the party disciplinary committee for a Twitter message that read “OMG! Real culprit freed.”

Dipendra says what has happened to Teng is fascinating, but does not believe anything will come out of it.

“His statement is not defamatory as it does not specifically refer to any particular person. It is a general opinion on a general matter,” he says.

Posting news content on Internet blogs, for example, is in some way similar to what mainstream news journalists do, but Law feels that bloggers are at a distinct disadvantage.

“They do not have proper media training or resources to help them determine what they are doing is legal.”

He opines that as social networking and blogging activity is still relatively new, there is little legal precedent to follow and there are many issues yet to be tested in court.

“The wording of the MCMC Act (Section 233 and 211) is very broad, and there is a lot of uncertainty. Because it is not yet tested, you can be snagged if its wording can be defined to suit your case,” he says.

Dipendra shares a similar opinion, and believes that when the law was drafted, it was intentionally broadly-worded.


Law

“It can be of any mode, medium or application – SMS, iPad or Twitter – so long as you type out a comment and post it, you will fall within the ambit of the two sections.

“The law is broad enough to include everyone, even an innocent disseminator,” he says.

However, he does not think it is a bad law.

“It may be uncertain and ambiguous, but not bad law. It gives enforcement agencies a lot of leeway so they would have the unfettered discretion for its use. The only question is if this discretion is used fairly,” says Dipendra.

Anonymity not guaranteed

Foong Cheng Leong, from Lee Hishammuddin Allen & Gledhill’s intellectual property department, says that people tend to say more than they do in real life, thinking they can do it anonymously.

“They think they can get away with it, but they may still get caught,” he cautions.

He gives the example of the Stemlife Bhd v Bristol-Myers Squibb (M) Sdn Bhd case. The co-defendant, Arachnid Sdn Bhd, who provided website maintenance services, was ordered to reveal the names of the persons who posted disparaging remarks against the plaintiff.

However, in a separate defamation suit involving the same parties, the judge struck out the suit against Arachnid, as it had never played an active role in respect of the content of the comments posted on the website.

There was another case where the defamatory contents of a website were deleted, but the lawyers were able to find the offending page using archived pages on waybackmachine.com.

“Simply deleting the page is not a defence, as the damage may have already been done. In a way, it is like destroying the evidence,” says Foong.

However, Law says web service providers need immunity from content posted on their website, something that United States law provides for in Section 230 of its Communi­cations Decency Act.

Foong informs that a similar “safe harbour” provision is being drawn up in Malaysia, and the same kind of immunity may later be found here.

Dipendra also says that what is posted on cyberspace stays there forever.

“Something that you said 10 years ago on a website may resurface, and you may have no recollection of even writing it.”

While existing Malaysian law appears to cover cases of wayward online behaviour at the moment, there are some who feel that there is a need for the law to be reformed.

Sonya Liew of the Bar Council explains that the world is currently undergoing both a revolution and evolution at the moment.

“Just like how there was the industrial revolution before, now we are having an information revolution,” she says.

She explains that during the agrarian age, laws were formed to protect the land, and during the industrial age, to protect intellectual property with laws regarding copyright and trademarks, for example.

“Laws regarding sedition and secrets were passed many years ago, before the information revolution. But now, society has evolved beyond this,” she says, adding that the people’s expectations regarding the right to information have evolved – together with technological advances.

“The whole world now has information at its fingertips, and if you withhold information, people start to question the lack of access to it.

“People expect information, and the question is if existing laws are sufficient to provide for the needs of a modern society,” says Liew.

She notes that signs of this can be seen in the increasing call for freedom of expression and the right to information.

“Later, we will hear of even more rights that we have not even heard of before, and it may even eat into the right to privacy,” she says, explaining that this may arise as people may want to know more about government officers’ or politicians’ lifestyle – in order to reduce graft.

“Laws exist to serve society, and society does not serve the law. We have this need now, and the question is if the Government is doing enough to provide for this need,” says Liew.

Any significant legal reform on the use of the Internet is not yet on the horizon, and until then, social networkers and bloggers should be vigilant on their online behaviour.

“People should behave the same way online as they would in real life. If they do not shout and curse in public, then their behaviour should remain the same online. They should not wear a different hat in cyberspace,” says Law.

Foong succinctly describes the appropriate online behaviour with a biblical quotation – which is still as relevant today as it was 2,000 years after it was uttered.

“Do unto others as you would have them do unto you,” quotes Foong.

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