In the battle at the Court of Appeal between SRAM, LLC (hereinafter referred as “Appellant”) and Huan Schen Sdn Bhd (hereinafter referred as “Respondent”), the Appellant had filed an appeal to rebut the decision of the learned Judicial Commissioner (JC) dated 4 May 2016, to expunge the Appellant’s marks under Registration Numbers: 05016151, 07017014, 09012790 and 09003528 in class 12 from the Register.
Appended below are the findings from the High Court:
- The learned JC found that the Respondent’s failure to oppose the Appellant’s Applications did not stop or bar the Respondent from filing the Originating Summon
- Even if a trader ceases to carry on the business, the goodwill in connection to the business may still be retained and therefore, still be able to enforce the rights in respect of any name attached to that goodwill. In this case, the learned JC found that there was no evidence that the Respondent had abandoned his trade mark, and therefore, his goodwill and reputation were retained.
- The learned JC found that the Respondent was an “aggrieved person” due to the similar goods and class filed by the Respondent and the Appellant and that the presence of the Appellant’s 4 marks had substantially and adversely affected the Respondent.
- The learned JC found that the Respondent was the 1st user of the mark “SRAM” and also the Common Law proprietor of his mark. It was not disputed that the Appellant was the created of the mark “SRAM”, and that the common law ownership to a trade mark requires the claimant to establish its entitlement, not by demonstrating its creator but the use of the mark on the goods in the course of its trade.
- The learned JC also mentioned that the mark in question should use on or in relation to the goods within the Malaysian territory and the learned JC found that the Appellant’s 5 marks had been used extensively outside of Malaysia was irrelevant.
- In view of the above, the learned JC granted the Respondent’s request to expunge 4 of Appellant’s marks from the Register with costs to the Defendant, subject to allocator fees.
Upon careful consideration based on the Appeal records and the extensive oral and written submissions submitted by the learned counsels, the Court of Appeal had granted the appeal based on the following grounds:
- The Respondent had not been able to prove that he is indeed the first user and Common Law proprietor of his marks and the Respondent had not satisfied the requirements of the Trade Mark Act (“TMA” to entitle him to expunge the Appellant’s 4 marks from the Register.
- It was undisputed that the name “SRAM” was coined by the Appellants in 1987 in the US and it was originated from the founders’ name i.e. Scott, Ray and Sam. This was proven by the Appellant in international sports events which were broadcasted worldwide, including Malaysia. Therefore, it was clear that the name “SRAM” was a personalized trade name as opposed to a common generic term and no one could claim to have a proprietary right over. In contrast, the Respondent were unable to provide evidence how he had coined the name “SRAM”. It was then deduced at the Court of Appeal that the Respondent had attempted to obtain the benefit of the Appellant’s worldwide reputation.
- The learned JC at the High Court failed to weigh that reputation or goodwill can also be acquired outside of Malaysia and as the TMA was amended by the addition of Section 14(2) which gave recognition to well-known marks through adoption of Article 6 Bis of the Paris Convention and Article 16 of TRIPS Agreement in which the concept of well-known marks is non-territorial in nature. The said concept is also recognized by the Federal Court in the case of Walton (supra). In view of the well-known mark and the concept of “non-territorial”, the proprietor need not to carry on business or possess any goodwill within the local territory.
In view of the above, the Court of Appeal set aside the decision from the High Court and accept the appeal with costs (subject to allocator fee).