Malaysia – Foreign Use Of Trade Mark Rejected

In the case of Elba SpA v Fiamma Sdn Bhd [2008 3 MLJ, Elba, an Italian maker of cooking appliances, filed an originating motion for a declaration that it owned the Elba mark and that Malaysian company Fiamma’s Elba registration in Class 7 and 11, which had been registered for more than seven years, were entries made without sufficient cause and/or were entries wrongfully remaining in the register. Elba also asked for an order to expunge the marks from the register under sections 37 and 45 of the Trade Marks Act 1976.

Section 37 essentially states that in all legal proceedings relating to a registered trade mark, the original registration of the trade mark shall after the expiration of seven years from the date of registration, be taken to be valid in all respects unless it is shown that the original registration was obtained by fraud, the trade mark goes against section 14 of the Act or the trade mark was not distinctive of the goods or services of the registered proprietor when legal proceedings began. Under Section 45 of the Act, the Court may expunge a trade mark registration for being an entry made without sufficient cause or wrongfully remaining in the trade mark register.

The facts of the case are that Fiamma has marketed, sold and promoted a wide range of home appliances with the Elba mark on an extensive basis since 1979. Fiamma had purchased Completely Knocked Down products which were assembled by Fiamma or its independent contract manufacturers and a small amount of Complete Build Up products from the applicant since 1979 to January 2005.

Elba contends that Fiamma was merely a distributor in Malaysia and did not acquire any rights to the Elba trade mark. Fiamma on the other hand contends that Fiamma is the lawful proprietor of the trademark Elba in Malaysia by reason of its purported first and independent use of

the mark as Elba had no presence in Malaysia whatsoever. Elba did not provide any technical assistance, know-how or training to Fiamma in advertising and promotion of the Elba products.

The Court established that the onus to show all the requirements stated in sections 37 and 45 of the Act is borne by Elba and found that Elba failed to show that the Elba mark is not distinctive

of Fiamma’s goods as it should only have regard to the Malaysian market. Elba’s evidence of use in any foreign market was considered irrelevant.

The courts adopted the three step test from the Tiga Gajah case [1997] 4 MLJ 504 to prove fraud beyond reasonable doubt and further stated that Elba’s assertion of ownership of the Elba mark is incompatible  with its decision to abandon registration of the Elba mark in Italy, its country of origin and Malaysia. Further, it had also failed to dispute Fiamma’s claim of proprietorship of the Elba mark in letters dated in 1999 from Fiamma’s counsel to Fiamma.

Besides this, the Court found that as there was no use of the mark by Elba (even through Fiamma), the registered mark was not likely to deceive or cause confusion to the public. Along this same line, the Court also found that Elba had failed to show how it would be an aggrieved party if the trade mark were allowed to remain on the registry. In view of the above, the Court held that Elba had failed to establish the requirements in section 37 and 45 of the Act and dismissed Elba’s motion with costs.

The case goes to show how important it is for foreign trade mark owners to establish use of the mark locally through a registered user or on a contractual basis so as to avoid losing rights over a trade mark to local first users of the mark.