MALAYSIA: SIKA GROUP TAKES ON NIPPON PAINT
In 2023, a trademark and copyright dispute has ensued between three subsidiaries of the SIKA AG and Nippon Paint (Malaysia) Sdn. Bhd.
In a preliminary issue, the High Court held that only one of the subsidiaries, Sika AG (hereinafter referred to as “the Plaintiff”) had the requisite locus standi as the registered proprietor of the trademark to bring a trademark infringement against Nippon Paint (Malaysia) (hereinafter referred to as “the Defendant”). Together with the trademark infringement action, the Plaintiff also brought an action for passing off, copyright infringement and unlawful interference with trade. An important reminder is not just anyone can bring an action for trademark infringement and it must fall within their rights.
The Defendant’s rebutted the Plaintiff’s allegations counterclaiming to invalidate the Plaintiff’s trademark and a request for damages, as well as leave from the High Court to permit the Plaintiff’s and Defendant’s products to co-exist in the market (hereinafter referred to as “the middle ground”). The issues discussed by the High Court were as follows:
Trademark invalidation
To invalidate the Plaintiff’s trademark, SIKALATEX (hereinafter referred to as “the Plaintiff’s Mark”), the Defendant was required to fulfil the requisite criteria of being an aggrieved party. This was satisfied since there was an alleged trademark infringement by LATEX 118 (hereinafter referred to as “the Defendant’s Mark”) on SIKALATEX, as well as the similarity in trading activities between the Plaintiff’s and the Defendant’s goods. The Defendant contended the Plaintiff’s Mark should be invalidated because it was merely a combination of the Plaintiff’s house mark SIKA with the generic word “latex” making it devoid of any distinctive character. Additionally, the Plaintiff’s Mark consisted exclusively of a sign or indication, used the generic word “latex” and therefore was an erroneous decision on the Trademark Office. The High Court disagreed and found the Plaintiff’s Mark to be distinctive and not descriptive. Hence, the invalidation argument failed.
Trademark infringement
The Plaintiff must prove that they own a valid trademark, the trademark was used in the course of trade without their consent and the unlawful use had caused deception/confusion among the prospective customers to establish trademark infringement. The High Court held that the Plaintiff’s and Defendant’s Mark were neither identical nor similar and the differences between the marks are stark, including the differences in phonetics. The only common denominator was the word LATEX which is a generic word that the Plaintiff cannot have a monopoly over. Moreover, the Plaintiff’s get-up of SIKALATEX was completely different to the Defendant’s get-up of LATEX 118. The 118 was more prominent than the word SIKALATEX whereas on the Defendant’s product LATEX and 118 share equal prominence. The High Court held the Plaintiff and the Defendant were in their own right to develop their own brands, and the public would not be confused. No trademark infringement was established.
Passing off
The Plaintiff claimed the get-up of the yellow-coloured jerry can with a red-coloured cap with SIKALATEX was a part of their goodwill and that the public would be misrepresented by the Defendant’s ‘similar’ get-up. Despite the Plaintiff’s evidence of catalogues and invoice, the High Court held that the assumption that the yellow jerry can and the red caps could not be determined to be a part of the Plaintiff’s goodwill. As not all the Plaintiff’s products were in this specific get-up, no misrepresentation could be made to the public and passing off was not made out.
Copyright infringement
The Plaintiff contended copyright subsisted in their product description “Water resistant polymer bonding agent and mortar-strengthening additive” (hereinafter referred to as “the Plaintiff’s Product Description) and their Product Data Sheet. The High Court held the Plaintiff’s Product Description was not original, eight of the nine words were common and there was insufficient effort, skill and labour expended. However, the High Court did find in favour of the Plaintiff regarding the Product Data Sheet. Side-by-side, the Plaintiff’s Product Data Sheet and the Defendant were almost identical; therefore, copyright infringement was established.
Unlawful interference
Both claims of unlawful interference were dismissed on the basis that the Plaintiff and the Defendant both could not satisfy the criteria that there was unlawful interference in trade.
Middle ground
A suggestion to the High Court by the Defendant was to allow SIKALATEX 118 and LATEX 118 to co-exist, in place of deciding action or any claim in any favour of either the Plaintiff or the Defendant. The High Court rejected this and reminded the Plaintiff and the Defendant the High Court’s role is to adjudicate, deciding disputes and does not play peacekeeper.
Despite the Plaintiff’s success in establishing one of their claims for copyright infringement, the High Court ruled in the Defendant’s favour because they were not successful in all the other claims.
The High Court ordered the Plaintiff to collectively pay to the Defendant costs of RM36,000.00 (approximately USD7500.00) subject to the allocator.