German company obtains cancellation of trademark registered by local distributor

In Wieland Electric GmbH v Industrial Automation (M) Sdn Bhd (Case No 24IP-14-06/2013), Wieland Electric GmbH has obtained the cancellation of a trademark registered by its former Malaysian distributor.

Wieland, a company incorporated in Germany, manufactures electrical connection technology for automation technology and building installation. It launched a cancellation action against its former distributor alleging that the latter had fraudulently registered its W device mark and WIELAND word mark.

The facts of the case showed that Wieland had duly obtained international trademark registrations for the W device mark and WIELAND word mark under the Madrid System, national trademark registrations in Germany and trademark registrations in many other countries since 1963.

The first defendant, Industrial Automation (M) Sdn Bhd, is a Malaysian company which provides industrial, electrical and electronic products. In 2001 Wieland appointed Industrial Automation as its sales agent for the Wieland products in Malaysia. However, it subsequently discovered that, in 2005, Industrial Automation had surreptitiously applied for a trademark which was identical to Wieland’s W device and WIELAND word mark. The mark was registered in Industrial Automation's name in 2011.

When confronted, Industrial Automation apologised for not discussing the matter with Wieland prior to filing the application, but stated that it wanted to act quickly to protect Wieland's interests. It suggested that the trademark application should be allowed to proceed to registration and that it would take the necessary steps to assign it to Wieland.

Industrial Automation did not honour its words and failed to assign the trademark to Wieland, which filed the present cancellation action. 

In the judgment, the learned judge held that Wieland was the bona fide proprietor of the trademark, as it had adduced sufficient evidence of use prior to Industrial Automation's application (the first sale dated back to 1984). Further, the court accepted evidence adduced by Wieland showing that Industrial Automation had been appointed as Wieland’s agent and distributor in 2001.

The court also found that, in view of the fact Wieland was the rightful proprietor of the trademark, Industrial Automation had in fact committed fraud on the registrar by misrepresenting itself as the rightful proprietor of the WIELAND mark in the statutory declaration accompanying the application. Further, there was bad faith on the part of Industrial Automation because, as demonstrated by its own affidavit in reply, it had clearly admitted that it was merely a "sole distributor" or “sole agent" for the products bearing the mark.

Based on the above considerations, the court ordered that the trademark registration at issue be expunged from the Register of Trademarks.

Teo Bong Kwang and Boo Min Lee, Wong Jin Nee & Teo, Kuala Lumpur