MALAYSIA: Not using a trademark? You snooze, you lose!
Just registered a trademark? Congratulations!
However, don’t get complacent. The life span of a trademark is not finite, especially if you don’t actively use it. Just remember, an applicant can bring an application under Section 46(1) of the Trademarks Act 2019 (hereinafter referred to as “the Act”) to revoke the registration of a trademark for non-use.
So, what is the non-use of a trademark? This was discussed in the 2022 decision of the High Court in Oatly Ab (hereinafter referred to as “the Plaintiff”) v Pahang Pharmacy Sdn Bhd (hereinafter referred to as “the Defendant”).
The Plaintiff is a manufacturer of oat-based dairy products and substitutes sold under the brand names “OATLY” and “OAT-LY” and was successful in registering four trademarks in Malaysia under Classes 29, 30 and 32.
The Defendant’s three trademarks for “OATLEY” were registered in Classes 5, 16 and 29 (hereinafter referred to as “the Defendant’s Marks”) and issued on 15 July 2013, 18 July 2013 and 18 July 2013, respectively.
Here, the Plaintiff applied for non-use of Defendant’s Marks” under Section 46(1) of the Act. Under this Section, a trademark can be cancelled by the Court if the trademark has not been put to use in good faith in Malaysia and there are no proper reasons for non-use within a period of three years following the date of issuance of the notification of registration or if the use of the goods or services has been suspended for an uninterrupted period of three years, and there are no proper reasons for non-use.
The first ground could not be relied on by the Plaintiff since the Defendant adduced evidence by affidavit of the use of the Defendant’s marks between 2013 and 2016 which was within the three years of the notification of registration. Instead, the Plaintiff relied on the second ground contending that from 27 May 2019 to 27 May 2022, the Defendant’s Marks were not used.
The Defendant contested that the three-year prescribed period under these grounds were the same.
The High Court rejected the Defendant’s interpretation emphasising it was misplaced and inconsistent with the intended meaning of the legislation. The High Court highlighted this provision was not meant to allow a registered proprietor to only use the registered trademark for the first three years after registration and then allow for dis-use for an indefinite period of time without the risk of losing the registration. The Plaintiff could successfully rely on the second ground and the High Court then went on to look at the three-stage inquiry process in Section 46(1) of the Act.
3-stage inquiry process to establish non-use
- First stage: Aggrieved person
The first stage was to inquire and determine whether the applicant is an aggrieved person. The High Court found the Plaintiff successfully showed they were aggrieved by the registrations of the Defendant’s Marks in Classes 5 and 29 only (excluding 16) since the Plaintiff could not register in those classes.
- Second stage: Establishing there was a three-year period of non-use
Navigating through the second stage involved establishing, prima facie, that the use of the goods or services in respect of which the Defendant’s Marks were registered has been suspended for an uninterrupted three-year period. To action this, an investigation report was prepared by an investigator in compliance with the Whitford Guidelines.
The investigator’s final report included evidence from surveys asking shop employees from different retail outlets who have been working there for at least three years, and some have been there for more than 10, whether they had heard or seen the OATLEY brand before. None of them had, except for one who has been a pharmacist for 12 years in Sungai Buloh and knew it was an oat product but did not know the manufacturer. Another survey of 300 stores also found that “OATLEY” products were not on their shelves. These surveys encompassed relevant cross-sections of the trade and public consumers in several high-population cities spanning several states. The Defendant argued that the findings of the report were inconclusive because the findings were not conducted throughout the entire three-year period of the alleged non-use and therefore, could not be used to establish non-use. The High Court found the Defendant’s argument to be illogical and unreasonable to require the Plaintiff to produce a survey conducted over three years.
- Third stage: Defendant’s rebuttal
In the third and final stage, the burden then shifts to the proprietor to either show use during that period of three years or proper reasons for non-use. The Defendant could not establish any abnormal situations, unavoidable regulatory requirements, or obstacles to justify their non-use. Therefore, the High Court found there was prima facie non-use of the Defendant’s Marks under classes 5 and 29.
So remember… if you want to keep your trademark make sure you use it or you might lose it!
Just registered a trademark? Congratulations!
However, don’t get complacent. The life span of a trademark is not finite, especially if you don’t actively use it. Just remember, an applicant can bring an application under Section 46(1) of the Trademarks Act 2019 (hereinafter referred to as “the Act”) to revoke the registration of a trademark for non-use.
So, what is the non-use of a trademark? This was discussed in the 2022 decision of the High Court in Oatly Ab (hereinafter referred to as “the Plaintiff”) v Pahang Pharmacy Sdn Bhd (hereinafter referred to as “the Defendant”).
The Plaintiff is a manufacturer of oat-based dairy products and substitutes sold under the brand names “OATLY” and “OAT-LY” and was successful in registering four trademarks in Malaysia under Classes 29, 30 and 32.
The Defendant’s three trademarks for “OATLEY” were registered in Classes 5, 16 and 29 (hereinafter referred to as “the Defendant’s Marks”) and issued on 15 July 2013, 18 July 2013 and 18 July 2013, respectively.
Here, the Plaintiff applied for non-use of Defendant’s Marks” under Section 46(1) of the Act. Under this Section, a trademark can be cancelled by the Court if the trademark has not been put to use in good faith in Malaysia and there are no proper reasons for non-use within a period of three years following the date of issuance of the notification of registration or if the use of the goods or services has been suspended for an uninterrupted period of three years, and there are no proper reasons for non-use.
The first ground could not be relied on by the Plaintiff since the Defendant adduced evidence by affidavit of the use of the Defendant’s marks between 2013 and 2016 which was within the three years of the notification of registration. Instead, the Plaintiff relied on the second ground contending that from 27 May 2019 to 27 May 2022, the Defendant’s Marks were not used.
The Defendant contested that the three-year prescribed period under these grounds were the same.
The High Court rejected the Defendant’s interpretation emphasising it was misplaced and inconsistent with the intended meaning of the legislation. The High Court highlighted this provision was not meant to allow a registered proprietor to only use the registered trademark for the first three years after registration and then allow for dis-use for an indefinite period of time without the risk of losing the registration. The Plaintiff could successfully rely on the second ground and the High Court then went on to look at the three-stage inquiry process in Section 46(1) of the Act.
3-stage inquiry process to establish non-use
- First stage: Aggrieved person
The first stage was to inquire and determine whether the applicant is an aggrieved person. The High Court found the Plaintiff successfully showed they were aggrieved by the registrations of the Defendant’s Marks in Classes 5 and 29 only (excluding 16) since the Plaintiff could not register in those classes.
- Second stage: Establishing there was a three-year period of non-use
Navigating through the second stage involved establishing, prima facie, that the use of the goods or services in respect of which the Defendant’s Marks were registered has been suspended for an uninterrupted three-year period. To action this, an investigation report was prepared by an investigator in compliance with the Whitford Guidelines.
The investigator’s final report included evidence from surveys asking shop employees from different retail outlets who have been working there for at least three years, and some have been there for more than 10, whether they had heard or seen the OATLEY brand before. None of them had, except for one who has been a pharmacist for 12 years in Sungai Buloh and knew it was an oat product but did not know the manufacturer. Another survey of 300 stores also found that “OATLEY” products were not on their shelves. These surveys encompassed relevant cross-sections of the trade and public consumers in several high-population cities spanning several states. The Defendant argued that the findings of the report were inconclusive because the findings were not conducted throughout the entire three-year period of the alleged non-use and therefore, could not be used to establish non-use. The High Court found the Defendant’s argument to be illogical and unreasonable to require the Plaintiff to produce a survey conducted over three years.
- Third stage: Defendant’s rebuttal
In the third and final stage, the burden then shifts to the proprietor to either show use during that period of three years or proper reasons for non-use. The Defendant could not establish any abnormal situations, unavoidable regulatory requirements, or obstacles to justify their non-use. Therefore, the High Court found there was prima facie non-use of the Defendant’s Marks under classes 5 and 29.
So remember… if you want to keep your trademark make sure you use it or you might lose it!