Former distributor has no joy in KICKAPOO infringement claim

The Malaysian Court of Appeal has discharged an injunction granted to Kickapoo (Malaysia) Sdn Bhd (Kickapoo), a manufacturer and distributor of carbonated drinks sold under the trademark KICKAPOO in Malaysia (Civil Appeal W-02-94-2007, August 21 2007).

The KICKAPOO and KICKAPOO JOY JUICE trademarks were originally registered in Malaysia in the name of The Monarch Company Inc (Monarch). In the mid 1990s Monarch granted an exclusive licence to Kickapoo to manufacture and distribute carbonated drinks bearing the mark KICKAPOO JOY JUICE. Sometime in 1999 Monarch assigned the said marks to its affiliated company, The Monarch Beverage (Europe) Limited (Monarch Europe). The licence agreement between Kickapoo and Monarch was purportedly terminated in 2002. In 2005 Monarch Europe appointed SV Beverages Holdings Sdn Bhd to be its new exclusive licensee to manufacture and distribute carbonated drinks under its trademark KICKAPOO.

In early 2006 Kickapoo applied to the High Court for an injunction to restrain SV Beverages and its contract manufacturers from manufacturing and distributing the carbonated drinks under the said marks. After some delay, in January 2007 the High Court granted Kickapoo the injunction. SV Beverages appealed.

The Malaysian Court of Appeal held that although there were serious issues to be tried, the balance of convenience tilted in favour of SV Beverages. The court took the view that the damages suffered by Kickapoo could be quantifiable through the sales and profits generated by SV Beverages. The court reasoned that as Kickapoo is not the trademark owner, it does not have a proprietary interest in the mark and its remedies lies in contract rather than trademark law.

Meanwhile, Monarch Europe has applied to the High Court to intervene in the proceedings.

Teo Bong Kwang and Alan Ng, Wong Jin Nee & Teo, Kuala Lumpur