Federal Court reserves judgment in important case on foreign marks

The Federal Court has reserved judgment in Meidi-Ya Co Ltd Japan v Meidi (M) Sdn Bhd (Case 02-8-2007 (W), September 11 2008), a case which involves important issues pertaining to the doctrine of first use and ownership of a foreign trademark.
Meidi-Ya Co Ltd Japan, a Japanese corporation, owned the trademark MEIDI-YA for foodstuff in Japan. In 1987 its Malaysian subsidiary filed several applications to register the trademark MEIDI-YA in Roman alphabet and kanji characters in Malaysia.
In 1986 Meidi (M) Sdn Bhd, a Malaysian company, had filed an application to register the trademark MEIDI-YA FRESH BAKERY (and 'stalks of wheat' design).
Faced with two competing applications for the registration of similar trademarks, the registrar of trademarks directed that the case be determined by the High Court. The court allowed the registration of Meidi's mark, but without the component 'Ya'. It also ordered that Meidi-Ya's application proceed to registration, thus allowing the coexistence of the two marks on the market.
Meidi appealed to the Court of Appeal and Meidi-Ya cross-appealed. In October 2007 the Court of Appeal held that since Meidi-Ya had failed to show that it was the first user of the trademark and trade name in Malaysia, it had failed to prove that it owned the trademark MEIDI-YA. Therefore, the Court of Appeal set aside the High Court's order and declared that Meidi was entitled to register the mark MEIDI-YA FRESH BAKERY.
Meidi-Ya obtained leave to refer a number of questions of law to the Federal Court. When the matter came up for hearing before the court on September 9 2008, the parties had agreed to narrow down these questions to the following:    
  • whether Meidi-Ya's de minimis use of its name and trademark in Malaysia implied that Meidi-Ya had sole ownership of the mark in that country; and
  • whether Meidi should be allowed to register the figurative trademark MEIDI-YA FRESH BAKERY in light of:
    • Sections 3, 10 and 14(1)(a) of the Trademarks Act 1976; and 
    • the legislative intent to maintain the purity of the Register of Trademarks
Based on the evidence adduced during trial, the court concluded that Meidi-Ya had used the MEIDI-YA mark extensively in Japan before 1986 (ie, the date of Meidi’s application). However, the court pointed out that the High Court had found no evidence that Meidi was the first to use the MEIDI-YA mark in Malaysia. 
With regard to the first question, Meidi-Ya argued, among other things, that a trademark owner which has used its trademark extensively overseas may prevent a third party from claiming ownership of the mark in Malaysia by demonstrating de minimis use of the mark in that country. Otherwise, any third party would be able to take advantage of the goodwill that the trademark owner has built up in its mark. In short, Meidi-Ya tried to draw the attention of the Federal Court to the problems faced by foreign trademark owners. 
With regard to the second question, Meidi-Ya argued that use by Meidi of a trademark comprising the dominant element 'Meidi-Ya' was likely to cause confusion as to the origin of the goods in violation of Section 14 of the act. According to Meidi-Ya, Meidi’s mark could not function as a badge of origin. Consequently, the registration of the trademark MEIDI-YA FRESH BAKERY by Meidi would contravene Sections 3 and 10 of the act.
Meidi nevertheless seemed to be in a better position, as the Court of Appeal had confirmed on two occasions that a local trader may register a trademark that is used by a third party abroad, as long as the trader can demonstrate prior use in Malaysia.
However, the Federal Court has reserved judgment on the case. Understandably, the trademark community - in particular, foreign trademark owners - is eagerly awaiting the decision of the court. It remains to be seen when the final decision will be issued.
Teo Bong Kwang, Wong Jin Nee & Teo, Kuala Lumpur

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