MALAYSIA: Facemask Brands, Facing Off!
When news about COVID-19 hit, we all rushed to the shelves to buy rapid antigen tests and facemasks. A company that established itself in the facemask business was Maystar Beauty Sdn. Bhd. (hereinafter referred to as “the Plaintiff”) has registered its trademark NEUTROVIS in Classes 3, 5 and 10 (hereinafter referred as “the Plaintiff’s Mark”).
In 2023, the Plaintiff came to know that a company by the name of Midda Marketing Sdn Bhd and an individual by the name of Lee Senf Kiat (hereinafter referred to as “the Defendants”) which also sold facemasks using (hereinafter referred to as “the Defendants’ Mark”) under the trademark neumask (hereinafter referred to as “the Defendants’ Mark”). The Plaintiff alleged that the Defendants were copying the get-up of the Plaintiff’s Mark and packaging.
Consequently, the Plaintiff filed a legal action in High Court and has requested the Court to issue numerous reliefs and declarations against the Defendants including:
- the Plaintiff is the registered owner of the trademark “NEUTROVIS”;
- the Plaintiff is the owner of the copyright of the NEUTROVIS logo and the NEUTROVIS Facemask and the packaging;
- the Defendants infringed, committed the tort of passing off and unlawfully interfered with the Plaintiff’s trade;
- the Defendants supplied goods with false trade descriptions reproducing the Plaintiff’s mark; and
- the Defendants infringed the Plaintiff’s copyright.
In addition to this, the Plaintiff also sought:
- a permanent injunction restraining the Defendants and any associated parties from passing off and unlawfully appropriating the Plaintiff’s goodwill,
- an order that the Defendants procure all relevant documents to the Plaintiff and the destruction of all the offending goods,
- damages for loss of reputation, an account of the Defendants’ profits in respect of their passing off, interest, costs and further or other relief as the Court may deem fit and reasonable.
Pending the trial of the action, the Plaintiff also applied for an interim injunction to restrain the Defendants from passing off or using the mark and/or a mandatory injunction to compel the Defendants to disclose to the Plaintiff any third parties that were involved in the procurement of the facemasks.
There were four issues considered by the High Court. They were
- whether there are bona fide serious issues to be tried;
- whether the balance of convenience lies in favour of granting or refusing the interim injunction;
- whether damages is an adequate remedy; and
- whether a case has been made out for the issuance of a mandatory injunction.
For the first issue, the High Court found that there was a serious issue to be tried since the Plaintiff alleged trademark infringement, passing-off and unlawful interference, all of which the Defendants had rejected. Therefore, the conflicting position between the Plaintiff and the Defendants indicated there were serious issues to be adjudicated.
For the second issue, the High Court found that the balance of convenience was not in favour of granting the interim injunction. This was decided on the basis that the issue of the likelihood of confusion was not obvious and had not yet been resolved at trial. Notably, the Plaintiff’ Mark and the Defendants’ Mark were not identical and at first glance, they do not look similar. Additionally, during registration of the Defendants’ Mark, the objection raised by the Registrar was not on the account of the Plaintiff’s Mark. This is amplified by the fact the packaging, colour combination, and print font of the box exhibit some differences.
The High Court also found the word “neu” to be a descriptive word and it remains unresolved the effect this alleged common use has on the Plaintiff, and whether the Plaintiff can establish the three ingredients of passing-off. The Defendants rebutted that it has taken steps to differentiate the get-up of its packaging from the Plaintiff’s and the injunction will prevent it from disposing of its remaining stock and cripple its business. This is in contrast with the Plaintiff’s thriving business despite the reduction in the use of face masks. These factors were not in favour of granting the interim injunction.
For the third issue, the High Court found that where damages are an appropriate remedy, no interim injunction should be issued. The High Court held the Plaintiff’s general damages to include the loss of reputation and an account of the Defendants’ profit in respect to the Defendants’ passing off to be an appropriate remedy.
For the fourth issue, the High Court found that mandatory injunctions should only be granted as an interim relief in unusually strong and clear cases which was not met in the Plaintiff’s case since infringement was not obvious.
To conclude the High Court failed to see why the Defendants should divulge information even before their liability to the Plaintiff for the Plaintiff’s claim had even been decided. No interim or mandatory injunction was issued at the interim stage, and the Plaintiff’s Application was dismissed.