Forwarding agent found liable for trademark infringement and passing off

Malaysia
In Philip Morris Products SA v Ong Kien Hoe ([2010] 2 CLJ 106, May 22 2009, only recently published), the High Court has found in favour of Philip Morris Products SA in relation to its claim for trademark infringement and passing off.
  
The second defendant was a forwarding agent which handled counterfeit Marlboro cigarettes while the goods were in transit (the claims against the first and third defendants were withdrawn). Philip Morris claimed that the second defendant had infringed the registered trademark MARLBORO and had passed off (or attempted to pass off) counterfeit cigarettes as genuine Marlboro cigarettes, through:

  • "... the loading, unloading, reloading, transloading, storing, transitional storing, transiting, transporting, transshipping, transferring and/or dealing in any other manner with counterfeit cigarettes"; and
  • dealing in counterfeit cigarettes or instigating, procuring, enabling, directing or assisting others in doing the same.
The second defendant claimed that it had no knowledge that the goods were counterfeit, and that it was merely carrying out its duties as a forwarding agent for a named principal. The second defendant also claimed that it had not used the MARLBORO mark in the course of trade within the meaning of Section 38 of the Trademarks Act 1976. Its trade was only that of a forwarding agent.

The High Court found that the second defendant was not a mere forwarding agent and that the evidence showed active participation of the second defendant. The High Court relied on the following evidence, among other things:
  • The whole process, from obtaining the documentation to the handling of the cigarettes, was part and parcel of the second defendant’s trade or business as a forwarding agent. Therefore, the second defendant’s use of the mark was not use as a private consumer.
  • The second defendant’s role included unpacking the counterfeit cigarettes and later adding these cigarettes to other consignments of counterfeit cigarettes. This would require the second defendant to open the containers. Therefore, the second defendant would be aware that the cigarettes bore the MARLBORO mark. As the second defendant had been in the forwarding business for almost 15 years, it was fair to assume that it would be at least generally aware of trademarks or trademark infringement.
  • The second defendant admitted that it used fictitious names and addresses on the declarations and documents presented for customs clearance.
The court further held that it was immaterial whether the second defendant intended to infringe the mark or had knowledge of the infringement. The court concluded that:
 
"the importation of the spurious articles would amount to an infringement and the defendant remains liable regardless of its intention towards the spurious articles. Innocence is therefore not a defence to the infringement of a registered trademark."
 
It is unclear whether the finding of liability would have been affected if the second defendant had been a mere agent. However, the judgment appears to suggest that even agents who unknowingly deal in counterfeit goods are unlikely to escape liability by raising such a defence.
 
Joshinae Wong, Skrine, Kuala Lumpur

Unlock unlimited access to all WTR content