Malaysia: Munchy Food Industries Sdn Bhd v Huasin Food Industries Sdn Bhd
Malaysia: Munchy Food Industries Sdn Bhd v Huasin Food Industries Sdn Bhd
Both Munchy Food Industries Sdn. Bhd. (“Munchy Food”) and Huasin Food Industries Sdn Bhd (“Huasin Food”) are manufacturers and sellers of biscuits and confectionary. Munchy Food has registered a variety of trademarks with one of it being the mark “LEXUS” since 1998. On the other hand, Huasin Food had only now attempted to apply to the Registrar of Trade Marks to register their “LEX” mark after a consumer had mistook the “LEX” mark being associated with Munchy Food.
Subsequently, Munchy Food had filed an opposition to Huasin Food’s trade mark application, and brough a legal action against Huasin Food for trade mark infringement and passing-off.
Huasin Food’s Defence
Huasin Food argued that the public identifies the word “LEXUS” with Toyota’s LEXUS cars and that it is uncertain whether the word “LEXUS” means Munchy Food’s “LEXUS” mark and/or biscuits. However, the High Court (“HC”) found that the vast difference in price will certainly negate any likelihood of deception or confusion between Munchy Food’s “LEXUS” mark and Toyota’s “LEXUS” mark, and the “LEXUS” mark is capable of distinguishing Munchy Food’s biscuits from other brands of cream sandwich biscuits. As such, the HC decided that Munchy has exclusivity over the registered trademark “LEXUS” and Huasin Food is unable to apply to remove the “LEXUS” mark from the register as Munchy Food is the first use of the said mark.
Court of Appeal’s Decision
On Huasin Food’s appeal, the Court of Appeal (“COA”) has set aside the High Court’s decision in that the trade mark law, pertinently the Trade Marks Act 1976, was in no way meant to give any form of monopoly to traders at the expense of the public. The COA emphasized that the parties should have sought for ways to co-exist which could also avoid confusion and generate healthy competition for the benefit of the public.
Federal Court’s Final Ruling
Nonetheless, the Federal Court (“FC”) subsequently set aside the COA’s decision whereby, Justice Datuk Seri Hasnah Hasnah Mohammed Hashim has stated:
‘I am satisfied that the plaintiff (Munchy Food) has exclusivity over the registered trademark and (that the trademark) will not create a monopoly by the company (Munchy Food) of the biscuits.’
The FC found that there was no evidence to show that the trademark was used in good faith and that the Huasin Food had no knowledge of Munchy Food’s existing “LEXUS” trade mark, which are essential ingredients to establish an honest concurrent right defence.
Why Did the High Court Rule in Favour of Munchy Food?
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The High Court found that the vast difference in price between Munchy Food’s biscuits and Toyota’s LEXUS cars would negate any likelihood of deception or confusion. The court held that the “LEXUS” mark was capable of distinguishing Munchy Food’s biscuits from other brands, and since Munchy Food was the first to use and register the mark (since 1998), they had exclusivity over it.
Why Did the Court of Appeal Overturn the High Court’s Decision?
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The Court of Appeal held that the Trade Marks Act 1976 was not meant to give any form of monopoly to traders at the expense of the public. The COA emphasized that both parties should have sought ways to co-exist to avoid confusion while generating healthy competition for the benefit of consumers.
What Is the “Honest Concurrent Right Defence”?
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The honest concurrent right defence allows a party to use a similar mark if they can prove: (1) the mark was used in good faith, and (2) they had no knowledge of the existing registered trademark. The Federal Court found that Huasin Food failed to establish both essential ingredients — there was no evidence of good faith use or lack of knowledge of Munchy Food’s existing “LEXUS” mark.
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