Malaysia – Registrar’s Discretion in a Trademark Application: Judicial Principles should Prevail over Arbitrariness

Illinois Tool Works, Inc v Pendaftar Cap Dagangan

The Registrar of Trade Marks has a general discretion to refuse to register a trade mark which satisfied all the positive conditions laid down by the Trade Marks Act. However, that discretion must be exercised judicially on reasonable grounds which are capable of being clearly stated, and unaffected either by caprice or over-caution.

A case in point is Illinois Tool Works, Inc v Pendaftar Cap Dagangan, Malaysia [2009] 1 AMR 665, which involved the application for the registration of a Trade Mark which was filed in 2002, and where the Registrar had formally examined, approved, advertised and gazetted the applicant’s trademark for registration before retracting the acceptance of the application.

It finally ended with a proper guideline being laid down by the court for the Registrar in examining and accepting or objecting in a trademark. The judgment that was handed down by the High Court of Malaya in Kuala Lumpur very recently and the facts of the case are briefly as follows.

Brief Facts

The Appellant in this case is a Fortune 200 company, founded in 1912, with more than 90 years of history and numerous business entities in Malaysia. The Appellant has been using many brands and trademarks in its course of trade, one of which is “HIGH TEMP RED” which is the subject matter of this case. The Appellant sells its products “silicone to be used as a gasket replacement on engine parts and used too replace cork, felt, asbestos and rubber gasket” using the said trademark to its Malaysian distributor, Cathay Motor Sdn Bhd. Cathay Motor would then resell these products to various retailers and customers in Malaysia.

As the Appellant’s subject business was increasing with popular demand and recognition from Malaysian customers and members of the public the Appellant decided to file for registration of it’s trademark “High Temp Red” in respect of its said products. This trade mark was filed on the 21/05/2002 and was given the number 2002-05832.

After taking about 1 ½ years to formally examine the Appellant’s application, the Registrar finally found the Appellant’s trademark to be in compliance with all the requirements of the Trade Mark Act 1976 (“the Act’). Accordingly, on the 10/11/2003, the Registrar issued Form CD29 to officially notify the Appellant that its trade mark had been accepted for registration and will be advertised and gazetted.

Thereafter, the Registrar proceeded to advertise and gazette the Appellant’s trade mark for registration. There was no opposition filed by anyone. No member of the public nor any trader from the relevant trade and industry (silicone industry) had filed any opposition to the registration of the Appellant’s trade mark, during the two months of the opposition period. Subsequently, a certificate of registration was issued. However, the certificate was never delivered nor sent to the Appellant.

Thereafter, in an unusual turn of events, the Registrar issued a letter (Form CD70) dated 30/03/2006 to the Appellant, whereby the Registrar retracted the registration of the Appellant’s trade mark , purportedly in exercise of the Registrar’s discretion pursuant to Section 25(12) of Trade Marks Act 1976, and on the ground that the Registrar had made an “error”. The Registrar then cited new objections under Section 10(1) Trade Marks Act 1976.

The Appellant was not satisfied with the discretion exercised by the Registrar. The Appellant was, therefore, asked to request for a hearing before the Registrar. The hearing was held on 21/11/2007. The Registrar then delivered his decision on 28/07/2008. The Appellant was remains dissatisfied and hence the present appeal.

The relevant sections of the Act read as follows:-

Section 10(1)

In order for a trade mark (other than a certification trade mark) to be registrable , it shall contain or consist of at least one of the following particulars:

(a) the name of an individual, company or firm represented in a special or particular manner;

(b) the signature of the applicant for registration or of some predecessor in his business;

(c) an invented word or words;

(d) a word having no direct reference to the character or quality of the goods or services not being, according to its ordinary meaning, a geographical name or surname; or

(e) any other distinctive mark.

Section 25(12)

Without prejudice to subsection (10) where after the acceptance of an application for registration of a trade mark but before the registration of the trade mark the Registrar is satisfied –

(a) that the application has been accepted in error; or

(b) that in the special circumstances of the case the trade mark shall not be registered or shall be registered subject to additional or different conditions or limitations, the Registrar may withdraw the acceptance and proceed as if the application had not been accepted or, in respect only of a trade mark which shall be registered subject to additional or different conditions or limitations, reissue a new acceptance subject to additional or different conditions or limitations.

Section 30(1)

When an application for registration of a trade mark in of the Register has been accepted and either –

(a) the application has not been opposed and the time for opposition has expired; or

(b) the application has been opposed and the opposition has been decided in favour of the applicant, the Registrar shall, unless the application has been accepted in error, register the trade mark in the Register on payment of the prescribed fees in the name of the proprietor, and the trade mark so registered shall be registered as of the date of application for registration and that date shall be deemed for the purpose of this to be the date of registration

Appellant’s Case

The Appellant argued that the Registrar’s discretion under section 25(12) of the Act could only be exercised at the time “after the acceptance of an application for registration of the trademark but before the registration of the said trademark. It was also pointed out that the Registrar had also failed to clarify what the “error” was all about. It was also noted that except when it is a result of representation made by a third party, the late objection should be communicated in writing to the applicant who will be offered an opportunity to respond in writing and thereafter by way of a hearing. In the present case, there is no evidence of any representation by a third party. Therefore, procedurally, the Registrar ought to have communicated full details of the error to the Appelant.

It was further the Appelant’s case that it’s trade mark, “HIGH TEMP RATE” was registerable under the Act, as the trade mark satisfied paragraphs (c), (d) and/or (e) of Section 10 (1) of the Act.

Respondent’s Case

The Registrar, who was the Respondent explained that he exercised his power under section 25(12) of the Trade Marks Act to retract the registration of the Appellant’s mark. The Registrar had only noticed the error after the registration. Appellant’s acceptance was, therefore, withdrawn because it was given in error when it was being opposed under section 10(1), (c), (d) and (e) of the Trade Mark Act 1976. The Registrar also argued that the Appellant’s trademark “HIGH TEMP RED” is not an invented word. In the Registrar’s view, the Appellant’s trade mark individually and in combination, are common English words and therefore not invented. The Registrar also opined that the Appellant’s trademark was not distinctive because the Registrar had chosen to ascribe a set of meanings to these words based on his own search in the dictionary.

Decision

In arriving at its decision, the High Court noted that the Registrar had taken an over-presumptious and over-cautious approach based on a wrong and narrow proposition of the Appellant’s trade mark.

The Court, disagreed with the Registrar’s decision that the Appellant’s trade mark, “HIGH TEMP RED”, did not fall under any one of the paragraphs (c), (d) or (e) of Section 10(1) of the Act. (It was not in dispute that paragraphs (a) and (b) of Section 10(1) were irrelevant to the Appellant’s application.)

To the contrary, the Court held that the words were, at most, a figurative or fanciful expression which was not objectionable, and which bore no direct reference to the character or quality of the products in question. Further, the Court found the trade mark to be distinctive.

The Court further held that the Registrar’s refusal to register the Appellant’s registration of its trade mark was inconsistent with the fact that there already exists a registration of the same trade mark, in the name of the same Appellant, but in respect of a different Class, namely, Class 1.

Conclusion

1. On the basis of the above, the High Court reiterated the Registrar should maintain consistency and certainty in his decision. Arbitrary decision, over-presumptuous and over-cautious assessment would not enable businessman and members of the public to conduct their business.

2. Inconsistencies with past decisions would set an unhealthy precedent, arbitrariness and create more uncertainties and inconsistencies.

3. It is trite law that a trade mark need only satisfy one of the requirements of Section 10(1) of the Act. The Appellant’s trade mark has satisfied paragraphs (c), (d) and (e) of Section 10(1) of the Act.

4. Accordingly, the Court allowed the Appellant’s appeal, with no order as to costs.

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