Star Trolls: Attack Of The Clones

Grace Teoh discusses the groundless threats provisions in the Trademarks Bill 2019.

Back in 2014, Legal Insights examined the issue of patent trolls and the laws available to address such issues in Star Trolls: The Patent Menace. In December 2016, the Malaysian High Court held in Diesel SpA v Bontton Sdn Bhd [2016] MLJU 1350 that the Malaysian courts only had grounds to grant negative declarations, e.g. that the plaintiff's bona fide use of the plaintiff's own name does not infringe the defendant's registered trademark, if Parliament amended the Trade Marks Act 1976 to provide a remedy for groundless threats of infringement.

Parliament must have found the issue sufficiently threatening in Malaysia and has taken steps to provide a solution, starting with the Trademarks Bill 2019. Section 61 of the Trademarks Bill 2019 will provide the remedies for groundless threats of infringement proceedings when the Bill comes into operation.

THE BEST DEFENCE IS A GOOD OFFENSE

Sections 61(1) and 61(2) provide that where an aggrieved person is threatened with infringement proceedings, that person may initiate proceedings for a declaration that the threats are unjustifiable. He may also seek an injunction to restrain the continuance of the threats, or damages in respect of any loss he has sustained by the threats. Section 61(4) further provides that even if the trademark proprietor proves infringement, the aggrieved person is still entitled to relief if it is proven that the registration of the trademark should be revoked or is invalid.

These provisions are in pari materia with section 35 of the Singapore Trade Marks Act (Cap. 332), section 21 of the UK Trade Marks Act 1994 (which has now been amended by the UK Intellectual Property (Unjustified Threats) Act 2017), and sections 129 and 130A of the Australia Trade Marks Act 1995.

HOLD YOUR HORSES

This does not mean that any and all aggrieved persons may initiate proceedings the moment they receive cease and desist letters.

Section 61(1) of the Trademarks Bill 2019 is only triggered where the threat is for grounds other than: (a) the application of the trademark to labels, packaging, or goods; (b) the importation of goods bearing the trademark; or (c) the supply of services under the trademark. Further, section 61(1) specifically refers to threats of infringement of registered trademarks, appearing to ignore threats of action for the tort of passing off.

In Han's (F & B) Pte Ltd v Gusttimo World Pte Ltd [2015] 2 SLR 825...