In the case of Skyworld Holdings Sdn Bhd & Ors v Skyworld Development Sdn Bhd & Anor, the Federal Court (hereinafter referred to as “the FC”) revisited the decision of the Court of Appeal (hereinafter referred to as “the COA”) and clarified on the elements which need to be established in a case of trademark infringement.
Skyworld Holdings Sdn Bhd & Ors are affiliated companies involved in property development and are the registered owners of the mark “SkyWorld” in Class 37. They instituted an action for trademark infringement and passing off against Skyworld Development Sdn. Bhd. & Anor who are primarily involved in the tourism industry, purporting that Skyworld Development Sdn. Bhd. & Anor’s use of the word “Skyworld” in their corporate names and domain names which is allegedly resembled Skyworld Holdings Sdn Bhd & Ors’ registered trademarks and hence an infringement of the Skyworld Holdings Sdn Bhd & Ors’ trademark.
The High Court (hereinafter referred to as “the HC”) dismissed the application at first instance. Skyworld Holdings Sdn Bhd & Ors subsequently appealed to the COA which reversed the decision of the HC. Skyworld Development Sdn. Bhd. & Anor appealed to the FC, which unanimously allowed the appeal, in favour of Skyworld Development Sdn. Bhd. & Anor.
The primary issue considered by the FC was whether a party’s use of words which form part of another party’s registered trademark (but not registered as a word mark or disclaimed) in its’ corporate name and/or domain name amounts to a trademark infringement?
The FC, in coming to its decision, held that in Malaysia, trademark infringement is governed by Section 38 of the Trade Marks Act 1976 (hereinafter referred to as the “TMA 1976”), that determines what amounts to infringement. The FC, referring to prior decided cases, held that to establish an action for trademark infringement in accordance with Section 38 of the TMA 1976, one needs to establish the following elements:
- there has been use of a mark identical with or nearly resembling the registered trademark, that is likely to deceive or cause confusion;
- the user of the mark is not authorized or licensed to use the registered trademark;
- the user of the mark is using the offending mark in the course of trade;
- the user of the mark is using the offending mark in relation to goods in respect of which the trademark is registered; and
- the user of the mark has used the mark in such a manner as to render the use of the mark likely to be taken as being used as a trademark or as importing a reference to the registered proprietor/user or to their goods or services.
The FC further held while the law of trademarks in Malaysia is governed by TMA 1976, the law on passing off is based on common law.
The FC held that to prove passing off, a party must establish that:
- there is goodwill or reputation attached to its goods or services;
- a misrepresentation was done by another party; and
- the party has suffered damages because of another party’s misrepresentation.
Having visited the elements which need to be established for trademark infringement and passing off, the FC held that the law of trademarks is quite settled and there was no dispute on the elements that need to be proven to establish infringement or passing off a trademark.
The issue at hand was if Skyworld Development Sdn. Bhd. & Anor’s use of the word “Skyworld” as their corporate names and domain names is infringing as the word resembles Skyworld Holdings Sdn Bhd & Ors’ registered trademark.
The FC held that to amount to infringement, it had to first be determined whether Skyworld Development Sdn. Bhd. & Anor’s corporate names and domain names were identical or similar to Skyworld Holdings Sdn Bhd & Ors’ registered trademarks such that is likely to deceive or cause confusion.
The FC, in agreeing with the HC, referred to the case of Tohtonku Sdn Bhd v Superace (M) Sdn Bhd [1992] 2 MLJ 63, which adopted the following test laid down by Parker J in Re Pianotist Co’s Application (1906) 23 RPC 774, to determine if there was similarity between contending marks:
“You must take the two words. You must judge them, both by their look and their sound. You must consider the goods to which they are to be applied. You must consider the nature and kind of customer who would be likely to buy those goods.
In fact, you must consider all the surrounding circumstances; and you must further consider what is likely to happen if each of those marks are used in a normal way as a trademark of the goods of the respective owners of the marks.”
The FC opined that the HC applied the test laid down in Re Pianotist Co’s aptly, by viewing the marks as a whole both aurally and visually. The FC agreed with the HC’s findings that although Skyworld Development Sdn. Bhd. & Anor’s corporate names and domain names were aurally similar to Skyworld Holdings Sdn Bhd & Ors’ registered trademarks, they were both visually different as Skyworld Development Sdn. Bhd. & Anor used the word “Skyworld” either wholly in uppercase or lowercase and not in mixed uppercase and lower case or stylized form as in the case of Skyworld Holdings Sdn Bhd & Ors’ registered trademarks.
To amount to infringement under Section 38(1) of the TMA 1976, the infringing mark must be identical with or so nearly resemble the registered mark, and in the instant case, apart from the oral resemblance between Skyworld Holdings Sdn Bhd & Ors’ registered mark and Skyworld Development Sdn. Bhd. & Anor’s corporate names and domain names, there was no other resemblance. Accordingly, the FC held that the necessary elements for infringement was not established.
The FC also emphasized that the question of similarity between marks is a finding of fact, and the appellate courts will not intervene with the finding of facts by the lower courts unless it can be shown that the lower courts were plainly wrong, or there was serious procedural or other irregularity in the proceedings in the lower court, which renders the finding of the fact unjust.
The FC further held that the burden of proof was on Skyworld Holdings Sdn Bhd & Ors to show that the contending marks were similar, and on the facts of the case, Skyworld Holdings Sdn Bhd & Ors did not discharge this burden. Accordingly, the COA erred when it concluded that the contending marks were aurally and visually similar, substituting the finding of the HC with its own finding of fact, without any adequate reason.
In regard to the element of confusion or deception, the COA held that that the HC did not consider two e-mails which were received by Skyworld Holdings Sdn Bhd & Ors, purported to be sent by the general public, that would have shown that there was an element of confusion or deception present in the current case. The FC disagreeing with the COA, held that it is evident from the judgment of the HC that the two e-mails were disregarded because its respective authors were not called as witness, and, in accordance with Section 90B of the Evidence Act 1950, the Court was empowered to draw reasonable inference relating to the document including the manner and purpose of its creation and its accuracy.
The FC went on to state that assuming the two e-mails were admitted as evidence, it would still be insufficient to establish confusion or deception as the e-mails were mere enquiries by unidentified persons. The FC emphasized that the test requires average intelligent consumer – not “moron in a hurry” – to be confused. This is more so where the subject matter concerned is relating to the purchase of land as in the current case, which cannot be equated to purchasing common items such as groceries. The FC accordingly held that in the present case, the element of confusion cannot be easily established, and it is not present.
The FC further held that the existence of confusion or deception is a finding of fact to be decided by the Court upon considering all evidence and surrounding circumstances, and not to be decided by the witnesses.
Accordingly, the FC opined there was no infringement in the current case.
The FC further held that one of the essential elements needed to be established in a cause of action of passing off is misrepresentation and harm to Skyworld Holdings Sdn Bhd & Ors’ goods. The FC held that misrepresentation will surely create confusion or deception. As neither deception nor confusion were established in the instant case, the FC held that the tort of passing off was also not established.
The decision of the FC in the instant case clearly shows that in a trademark infringement case, the contending marks should be looked at together with the surrounding circumstances, to determine if the marks are similar or confusingly similar. The case also seems to suggest that a company, domain or business name which is similar to a registered trademark could amount to infringement. The question of whether there is similarity between contending marks, however, is a question of fact which is to be determined by the trial Court and the appellate Court will not interfere with the finding of fact unless it can be shown that there was serious procedural or blatant mistake at the trial Court. The decision of the FC seems to reemphasize the established principle of conducting a wholesome comparison of mark in trademark infringement case, to determine the similarity between the contending marks