Malaysia – Raytheon Wins Battle Of The Bombs

The battle between Lockheed Martin and Raytheon, the two of the largest companies in the global defence industry, reached a new level at the High Court in Malaysia last year. The argument was over the registration and use of the trade mark Paveway, a type of laser-guided bomb made by Raytheon in Malaysia.

Both companies compete in the international market for laser-guided bombs. The bomb in question, Paveway, comprises a computer controlled unit and an airfoil unit, which provide guidance and flight control to an otherwise unguided bomb. Raytheon claims exclusive right to use Paveway as a trade mark for its variant, having already registered the name under Class 13 in Malaysia. Countering this claim, Lockheed contended that Paveway is a generic term used in military lingo around the world and not distinctive of the goods in question. Since it has a direct reference to the character of the goods and is descriptive in nature there cannot be any monopoly on its use by Raytheon. Alleging contravention of Malaysian Trade Mark Laws in this regard, Lockheed initiated cancellation action against the registration of Paveway in favour of Raytheon in Malaysia.

In its defence, Raytheon argued that it was the first and sole user of the Paveway trade mark, internationally since 1970 and in Malaysia since 1983. It further claimed that Paveway as a trade mark was never a generic term in Malaysia both at the point of registration and at the time of proceedings and was, hence, distinctive. Since Trade Mark law is territorial in nature, only use of the Paveway trade mark in Malaysia is relevant for the purpose of expungement. If there has not been any use of the mark in Malaysia by any other player, it is not possible for it to become generic or lose distinctiveness. The argument of the mark becoming generic can only hold if blameworthy conduct by Raytheon can be shown to establish its role in making the mark generic.

In deciding the matter, the Malaysian Court focussed on two key issues – whether the territorial nature of Trade Mark Law remains valid even when a mark becomes generic outside Malaysia and whether the fact that a registrant (in this case Raytheon) is the only maker of the goods in question in Malaysia has a bearing on the registration, notwithstanding the generic nature of goods outside Malaysia.

Evaluating the facts of the case, especially in light of judgments on the same issue, the Court eventually upheld the territorial nature of Trade Mark Law and ruled in favour of Raytheon. It observed that a registrant’s rights over a mark remains valid until it becomes generic and that the ownership or non-distinctiveness of the mark outside Malaysia has no relevance for its protection within. The only pre-condition is that the mark should be distinctive at the time of its registration.

Lockheed hasn’t appealed against the Court’s decision, at least, not yet.

Raytheon may have won this round of battle, but one needs to wait and see who wins the final war.