LAW 587

INTELLECTUAL PROPERTY 2
 The issue is whether Lata Sdn Bhd (Lata) can enforce protection under the common law of
passing off against Syarikat Tirusemua Sdn Bhd (Tirusemua) as Lata has no registration of
trademark.

Passing off is a common law remedy for the purpose of commercialization of product in a
market. It is a form of protection that can be used in a case of an unregistered trademark. According
to the case of Mun Loong Co Sdn Bhd v Chai Tuck Kin 1, passing off prevents a trader from
passing off his goods as if the product has its origin from another trader. The fundamental rule of a
passing off is reflected in Reddaway v Banham2 that nobody has any right to represent his goods
as goods of somebody else. Thus, it prohibits any act of unfair competition as stated in Boh
Plantations Sdn Bhd v Gui Nee Chuan & Ors 3 where not only must trading be honest but must
not even be unintentionally unfair. This is also reflected in Article 10bis of Paris Convention (PC)
which prohibits unfair competition. It has its roots from tort of deceit4and developed into passing
off when there is an emergence of three parties namely deceiver, audience and victim. The
protection afforded by the law of passing off can be seen in the landmark case of AG Spalding &
Bros v AW Gamage Ltd5 where it protects the plaintiff’s business goodwill. The court in Star
Industrial Co Ltd v Yap Kwee Kor 6 further states that doubts of passing off’s protection of its
legal nature is resolved by Lord Parker in Spalding v Gamage where it is remedy for invasion of a
right of a property not in the mark, name or get-up improperly used, instead the goodwill behind it
likely to be injured by misrepresentation. Goodwill is defined in the case of Inland Revenue
Commissioners v Muller & Co’s Margarine Ltd7 as benefit and advantage of good name,
reputation and business connection which distinguish old-established business from a new business.
The court further states that it must emanates from a particular source as it is worth nothing unless it
has power of attraction that is sufficient to bring customers to the source it emanates from. Next,
there are three elements in a passing off action as can be seen in the case of Reckitt & Coleman
Products Ltd v Borden Inc8 where the case has reduced five elements to three namely goodwill,
misrepresentation and damage and has been subsequently followed by Malaysian cases.

To apply, even though Lata is concern about the absence of their trademark registration this
will not hinder them from enforcing their right against Tirusemua as they may invoke passing off as
1
[1982] 1 MLJ 356
2
[1896] AC 199
3
[1975] 2 MLJ 213
4
Southern v How 79 ER 1243
5
(1915) 32 RPC 273
6
[1976] FSR 256
7
[1901] AC 217
8
[1990] RPC 341
1
a remedy to their product’s commercialization from Tirusemua. Thus, applying Mun Loong Co
Sdn Bhd v Chai Tuck Kin 9, passing off may prevent Tirusemua from passing off Lata’s goods as
if their product has its origin from Lata. Thus, by virtue of Reddaway v Banham, Tirusemua has
no right to represent ‘Yam’ as Lata’s goods which is ‘Nyam-Nyam’ thus simultaneously prevents
any unfair competition as stated in Boh Plantations Sdn Bhd v Gui Nee Chuan & Ors and
Article 10bis PC. If Lata is successful in passing off, what will be protected is their business
goodwill as can be seen in the landmark case of AG Spalding & Bros v AW Gamage Ltd and
Star Industrial Co Ltd v Yap Kwee Kor.

For first element of goodwill, it has been defined earlier. Pakai Industries Bhd v Chen
Yew Industries Sdn Bhd10 states that at the time passing off takes place, goodwill must exist. In
Ease E Finance11, geographical spread of use, number of establishments, length of use and
supporting evidence establishes a goodwill in relation to business thus where the facts shows that
several very large Internet cafés had been running for some time in London at the relevant date, it
established goodwill at relevant date in London. Next, goodwill can distinguish a product of a trader
where it may arise in trademark like logo, symbol, word and the like of it or trade name used. Thus,
if a trader uses another trader with similar indicia then it is a misrepresentation which would cause
damage to a goodwill of a trader. Relevant discussion on goodwill in instant are goodwill in relation
to the use of descriptive marks and goodwill in relation to get up. For goodwill in relation to
descriptive marks, a generic or common word is not distinctive unless the word acquired a
secondary meaning. For example, MIFF Sdn Bhd v Kuala Lumpur & Selangor Furniture
Entrepreneur Association & Ors12 provides that common word like ‘furniture’, ‘Malaysia’, and
Malaysia Furniture Fair’ are descriptive thus cannot be monopolized. It is further explained in the
case of Ginvera Marketing Enterprise Sdn Bhd v Tohtonku Sdn Bhd 13 that if a word has a
direct reference character or quality of product, it would be difficult to prove it has lost primary
significance and acquired secondary meaning where it would be associated with the plaintiff by the
public instead of its descriptive meaning. However, even if its primary meaning describes nature of
goods but the descriptive word is able to attain a secondary meaning that would associate it with
mark from a particular trader then can be considered as distinctive. For example, in the case of
Reddaway v Banham14, descriptive words of Camel Hair for belts have attained a secondary
meaning where it refers to belts from plaintiff. Next, Service Master (M) Sdn Bhd v MHL

9
[1982] 1 MLJ 356
10
[1991] 2 CLJ 1574
11
Ease E Finance [2003] Lexis Citation 3811
12
[2010] MLJU 1216
13
[2011] 6 CLJ 799
14
[1896] AC 199
2
Servicemaster Sdn Bhd & Anor15, stated that when the words are non-descriptive, there is no need
to show ‘secondary meaning’ for example, fancy words like ‘Vim’ or ‘Fab which does not directly
describe the product need no secondary meaning. Next, is goodwill in relation to get-up where
White Hudson & Co v Asian Organisation Ltd 16 provides that goodwill may be established
where a product through its packaging or appearance has become sufficiently distinctive of trader’s
goods that it has been exclusively associated with the trader’s product. Therefore, the public would
be able to identify the goods by its get-up. In William Edge &Sons Ltd v William Niccolls &
Sons17, where defendant marketed their product in the same form with the plaintiff’s product in blue
but with label of ‘Niccolls’ attached, the Court held that defendant had not sufficiently distinguish
the appearance of its goods from those of plaintiff therefore, it can be associated in the minds of
purchasers with the plaintiffs. Furthermore, there are evidence by the public that goods of plaintiff’s
get-up are used to distinguish it from all others. Similarly, in the case of Danone Biscuits
Manufacturing (M) Sdn Bhd v Hwa Tai Industries Bhd 18 where defendant’s get up of packaging
is confusingly similar to plaintiff’s as the plaintiff’s get up has been associated in the minds of
public with its certain quality, thus the court held that plaintiff has goodwill in it get up in the form
of the product’s packaging. Thus, the defendant had passed off its products as products of plaintiff.

To apply, the first element of passing off which is goodwill by Lata, complied with the case
Pakai Industries Bhd v Chen Yew Industries Sdn Bhd where it must exist when passing off
takes place. The existence will be discussed now. For goodwill in relation to descriptive marks, Lata
marketed and sold digestive biscuits with brand name “Nyam-Nyam’ and the biscuit has several
words on the product namely ‘Sandwich biscuits’, ‘Chocolates’, ‘new’ and ‘200gm’ and
Tirusemua’s product ‘Yam’ also have the words similar to those of Lata. Goodwill of Lata must be
distinctive but some words on the products are descriptive which are ‘Sandwich biscuits’,
‘Chocolates’, ‘new’ and ‘200gm’ which are also used by Tirusemua unless the words acquired
secondary meaning however, these words cannot be considered to have acquired a secondary
meaning as they are common and generic words and thus, cannot be monopolized as stated in
MIFF Sdn Bhd v Kuala Lumpur & Selangor Furniture Entrepreneur Association & Ors. This
is supplemented by the case of Ginvera Marketing Enterprise Sdn Bhd v Tohtonku Sdn Bhd
where the words are descriptive and have direct reference to character of product namely ‘sandwich
biscuits’ refers to food of 2 pieces of biscuit typically crisp, flat, and sweet as a small baked
unleavened cake with filling eaten together, next, ‘chocolates’ refers to foods formed from cacao
seeds, next, ‘new’ as current up to date, and ‘200 gm’ as weight weighing to 200 grams. Thus, the
15
[1998] 5 MLJ 378
16
[1965] 1 MLJ 186
17
[1911] AC 693
18
[2010] AMEJ 0200
3
words are not distinctive and cannot be monopolized as it is descriptive with direct reference to
character of product where no secondary meaning is acquired as it is common generic words.
However, for the word of ‘Nyam-Nyam’ it is distinctive and can be monopolized as the word
cannot be considered as descriptive word as it has no direct reference to character or quality of
product as discussed in the case of Ginvera earlier and, by virtue of Service Master (M) Sdn Bhd
v MHL Servicemaster Sdn Bhd & Anor there is no need to show secondary meaning as it is non
descriptive and just considered as fancy word like Fab or Zim. Therefore, there is goodwill and this
is supplemented by Easy E Finance where the length of use establishes a goodwill, thus the fact
that ‘Nyam-Nyam’, Lata’s product has been manufactured since 1957 shows the length of use as
evidence in establishing goodwill of the digestive biscuit. Next, for goodwill in relation to get-up,
Lata’s digestive biscuit with brand name ‘Nyam-Nyam’ is packaged in aluminium foil packs with
net weight of 200 gm sized 30cm by 5 cm where on the cover of the wrapper, the packet is yellow
coloured and the word ‘Nyam-Nyam’ is printed in white letters upon device of a red castle which
runs horizontal across the packet. Below the trade mark, the word ‘Sandwich biscuits’ and
‘chocolates’ in red block letters appears. On its bottom right, the words ‘new’ and ‘200gm’ appears
and on its back are description of the product in Chinese, Tamil and English languages. All of the
details of the packaging to ‘Nyam-Nyam’ digestive biscuit belonging to Lata has been copied by
Tirusemua with its digestive biscuit but with the brand name ‘Yam’ which has similar get-up, net
weight and also size to ‘Nyam-Nyam’. By virtue of White Hudson & Co v Asian Organisation
Ltd packaging of get-up belonging to ‘Nyam-Nyam’ has sufficiently become distinctive for it to be
exclusively associated with ‘Nyam-Nyam’ itself for its loyal customer to think that any packaging
alike of ‘Nyam-Nyam’ belongs to Lata while in fact it was of ‘Yam’ of Tirusemua with similar get-
up of packaging to Lata’s ‘Nyam-Nyam. Similar in the case of William Edge &Sons Ltd v
William Niccolls & Sons Tirusemua has not sufficiently distinguish its product get-up from Lata as
everything from get-up, net weight and size is similar except the brand name. Thus, by virtue of
Danone Biscuits Manufacturing (M) Sdn Bhd v Hwa Tai Industries Bhd, Tirusemua had passed
off its product as product of Lata since the get up is similar to Lata where the packaging has been
associated with the public with certain quality where Lata’s loyal customer complained of awful
taste and the certain quality is that of its Swiss recipe with good quality chocolate from France with
strict requirements, that is distinguishable from awful taste of ‘Yam’ that merely uses cocoa extracts
and palm oil with the same get-up. Therefore, goodwill is established since ‘Nyam-Nyam’ is not
descriptive and has acquired distinctive get-up in its goodwill.

The second element in a passing off action is there must be a misrepresentation.

Misrepresentation is defined in Syarikat Zamani Haji Tamin Sdn Bhd & Anor v Yong Sze Fun

4
& Anor19 where defendant make a false representation which causes damage to goodwill of
plaintiff’s business through an unlawful association created between defendant and plaintiff. There
are two types of misrepresentation which are direct and indirect but relevant one here is indirect
where the case of Yong Sze Fun v Syarikat Zamani Haji Tamin Sdn Bhd & Anor 20 stated that
indirect misrepresentation is common by adopting a similar trade mark, get-up or other
distinguishing feature which suggests to the public that the product is associated with plaintiff. The
relevant categories of misrepresentation in instance are misrepresentation as to source, quality and
get-up. Misrepresentation as to source occurs where defendant misrepresents that his goods are
from plaintiff and it would confuse the public about the source of defendant’s product. This can be
seen in Microsoft Corporation v Tokyo Micro-Soft (M) Sdn Bhd 21 where plaintiff’s product is
Microsoft and defendant use the word Micro-soft, thus the court held that even though defendant’s
products is differentiated by a hyphen they are still liable for passing off as it is pronounced the
same way with plaintiff’s business name and was conveyed to public as associating with the
plaintiff. Next Harrods Ltd v R. Harrods22 held that defendant’s impudent attempt of using brand
name similar to plaintiff gained them some advantage that it is same source. Next, is for
misrepresentation as to get-up where defendant’s goods are similar in appearance with plaintiff. In
A Clouet & Co Pte Ltd & Anor v Maya Toba Sdn Bhd, plaintiff’s product of canned mackerel is
under trade mark ‘Ayam Brand’ in cans with a combination of red and yellow and defendant’s
product also of canned mackerel under trade mark ‘Botan Brand’ is also under a combination of red
and yellow therefore, the court held that the defendant had misrepresented plaintiff’s product as to
its get-up. In misrepresentation of get-up, nature of consumer’s group is an important consideration
and can be seen in Boh Plantations Sdn Bhd v Gui Nee Chuan 23 where small tea packets are sold
in rural areas, nature that consumer might be illiterate is important as they would depend on the get-
up as identification. Lastly, misrepresentation as to quality. Colgate-Palmolive Ltd & Anor v
Markwell Finance Ltd & Anor24 provides where similar trade mark on two distinct class of
articles is placed, there was no reason not to bring an action of passing off against the trader who
sold goods of inferior class in circumstances which imported a false representation that goods were
of the superior class, thereby causing damage to trader who has goodwill. This can be seen in the
case of York Pacific Holdings Ltd v U-Re Auto Sdn Bhd 25 as defendant ‘s identical, imported
coupler units from China of inferior quality identical to plaintiff’s mark, amounted to act of passing

19
[2006] AMEJ 0031
20
[2012] 1 AMR 389
21
[2008] 8 MLJ 510
22
(1924) 41 RPC 74
23
[1975] 2 MLJ 213
24
[1988] RPC 283
25
[1998] 5 MLJ 84
5
off. Once misrepresentation is established, it must be shown to cause confusion or deception. In
26
Perusahaan Otomobil Nasional Bhd v Bidara it is sufficient where there is likelihood of
deception or confusion. In instance, there is likelihood of confusion. Lim Yew Sing v Hummel
International Sports & Leisure27 states that confusion comes in when two different goods
belonging to two different proprietors are competing in same market. This can be seen in Seet
Chuan Seng & Anor v Tee Yih Jia Foods Manufacturing Pte Ltd 28 where plaintiff and
defendant are in same business of spring roll skin, it is a direct competition. Amongst guidelines
can be seen in McCurry Restaurant (KL) Sdn Bhd v McDonalds Corporation where it must be
looked as a whole where each of marks must be looked at as whole thus, court found plaintiff’s get-
up to defendant as distinctively different. Next, is the test in Chocosuisse Union v Maestro Swiss
of public’s perception who are taken to be of ordinary person with ordinary caution and memory.

To apply, there is misrepresentation as Tirusemua had make false representation of its

product and caused damage to Lata and proven where Lata’s loyal customer has been likely
confused by it. This is an indirect misrepresentation as in Yong Sze Fun & Anor v Syarikat
Zamani Haji Tamin Sdn Bhd & Anor since Tirusemua has adopted similar trade mark and get up
of Lata that causes the public to associate it with Lata and proven with Lata’ loyal customer’s
purchase. Tirusemua misrepresented as to source that its product is from Lata by using ‘Yam’ as its
brand name which is identical to ‘Nyam-Nyam’ where by virtue of Microsoft Corporation v
Tokyo Micro-Soft (M) Sdn Bhd Tirusemua shall be liable for passing off as it is pronounced with
the same vowel identical with Lata’s business name with same sound ‘Nyam-Nyam’ and ‘Yam’ and
was conveyed to public as associating with Lata. Furthermore, by virtue of Harrods Ltd v R
Harrod, it can be seen that ‘Yam’ is chosen since it is similar to ‘Nyam-Nyam’ with same sound so
Tirusemua can gain advantage from misrepresentation of source. This is supplemented with the fact
that Tirusemua had also misrepresent as to get-up since Tirusemua’s product appearance of
packaging is similar to Lata. Similar with A Clouet & Co Pte Ltd & Anor v Maya Toba Sdn
Bhd, only the brand name differs but with same packaging of get-up thus, Tirusemua had
misrepresented Lata’s product as to its get-up. Plus, in misrepresentation of get-up, customer’s legal
nature is important as some class would depend on get-up to distinguish by virtue of Boh
Plantations Sdn Bhd v Gui Nee Chuan as some who are illiterate might depends on get-up to
distinguish product and proven where Lata’s loyal customer who was misrepresented might also
merely depend on the get-up with whatever nature she has as customer where she might be illiterate
or busy, for her to depends on the get-up. Lastly, there is also misrepresentation as to quality.

26
 [2012] 5 CLJ 428
27
[1997] 1 AMR 48
28
[1994] 2 MLJ 770
6
‘Nyam-Nyam’ and ‘Yam’ has similar trademark in its get-up thus by virtue of Colgate-Palmolive
Ltd & Anor v Markwell Finance Ltd & Anor, Lata can bring an action of passing off against
Tirusemua for misrepresenting its quality as Tirusemua are selling goods of inferior quality that
was made from cocoa extracts and palm oil with cheaper price of RM 1.90 compared to Lata who
imported chocolate from France with strict requirements with price of RM 20 therefore causing
damage on Lata’s goodwill similarly like in York Pacific Holdings Ltd v U-Re Auto Sdn Bhd ,
thus Tirusemua’s act reflected to misrepresentation of the poor quality of products of Lata which is
superior proven with different ingredients and complaint by Lata’s loyal customer. As
misrepresentation has been established, it can be shown now that there is confusion as in
Perusahaan Otomobil Nasional Bhd v Bidara likelihood of deception or confusion is sufficient
and in instance, it is likelihood of confusion. The fact that ‘Nyam-Nyam’ and ‘Yam’ belongs to
different proprietor and is in common field of activity shows that there will likely be confusion as in
Lim Yew Sing v Hummel International Sports and by virtue of Seet Chuan Seng & Anor v Tee
Yih Jia Foods Manufacturing Pte Ltd it is direct competition of digestive biscuits. The test in
Chocosuisse Union v Maestro Swiss can be used where Lata’s loyal customer can be considered
as ordinary person with ordinary caution as a loyal customer not an ordinary customer who always
bought from them can also be confused into buying ‘Yam’ instead of ‘Nyam-Nyam’. Furthermore,
if the biscuit is looked as a whole like test in McCurry Restaurant (KL) Sdn Bhd v McDonalds
Corporation, it can still cause confusion as everything is similar except to its brand name, thus
there is confusion that led to misrepresentation. Therefore, the second element of misrepresentation
is established as there is misrepresentation with likelihood of confusion in relation to source, get up
and quality.

The last element is damage which would be suffered by plaintiff as a result of defendant’s
misrepresentation. The case of Pakai Industries Bhd v Chen Yew Industries 29 stated that
likelihood of damage is sufficient thus actual damage need not be proved. There are several head of
damages for example loss of sales and devaluation of plaintiff’s reputation 30 but most common is
loss of sales where sales have been misdirected from plaintiff to defendant as a result of the
misrepresentation. Particularly when it relates to source that misled the public to be confused or
deceived into believing that defendant’s product is of plaintiffs. Moreover, loss of sales occurred
when it is a direct competition as illustrated in Dabur India Ltd v Nagasegi Sdn Bhd & Ors 31
where both defendant and plaintiff are dealing with toothpaste. Therefore, the court held that there
was a likelihood of damage to plaintiff’s goodwill through loss of sales as the products bears similar

29
Ibid 9
30
York Pacific Holdings Ltd v U-Re Auto Sdn Bhd (1998) 5 MLJ 84
31
[2011] 7 MLJ 522
7
trade mark, get-up, and packaging. Furthermore, in Syarikat Wing Heong Meat Product Sdn Bhd
v Wing Heong Food Industries Sdn Bhd & Ors 32 plaintiff’s goodwill would be damage if
defendant’s product has an inferior quality which does not meet the standards associated with
plaintiff’s product as it would be attributed to the plaintiff. This case further states that loss of
exclusivity over one’s trade mark was head of damage under law of passing off.

To apply, Lata has suffered damage as a result from Tirusemua’s misrepresentation. Lata
has suffered loss of sales in its damage as both Lata and Tirusemua are dealing with digestive
biscuits which is in a direct competition thus, similarly in Dabur India Ltd v Nagasegi Sdn Bhd
& Ors the fact that both of the products ‘Nyam-Nyam’ and ‘Yam’ has similar get-up in its
packaging, net weight and size proves the likelihood of damage suffered by Lata by loss of sales.
This is supplemented with the case of Syarikat Wing Heong Meat Product Sdn Bhd v Wing
Heong Food Industries Sdn Bhd & Ors the fact that ‘Yam’ has inferior quality compared to
‘Nyam-Nyam’ as ‘Yam’ which is a product of Tirusemua was merely made with cocoa extract and
palm oil and reflected with cheap price of RM 1.90 whereas ‘Nyam-Nyam’ with chocolate from
France with strict requirement with price RM 20 would also damage Lata’s goodwill as ‘Yam’ has
been associated with Lata’s product of ‘Nyam-Nyam’ that it is inferior. Additionally, the fact that
‘Yam’ is cheaper would contribute to Lata’s loss of sales in damage as public would be misdirected
into buying Tirusemua’s cheaper misrepresentation of Lata and upon tasting awful taste which they
associated with Lata, while in fact belong to Tirusemua, Lata would also suffer loss of sales where
public would stop buying their product. Therefore, by virtue of the same case, Lata also loss its
exclusivity in its damage. Therefore, this will also damage Lata in devaluating their reputation.
Thus, third element of damage is established.

To conclude, even though Lata Sdn Bhd has no registration of trade mark, it can enforce
protection under the common law of passing off against Syarikat Tirusemua Sdn Bhd as it has
established all elements in a passing off action namely goodwill, misrepresentation and damage.

Since Lata is also worried for their non-registration of trademark, it is also advisable for
them to register for trademark so they can be protected with a more extensive protection under
Trademark Act 2019.

32
[2010] 7 MLJ 504
8