Intelcard ordered to change its name

In Intel Corporation v Intelcard Systems Sdn Bhd (D8-22-1381-2002), the High Court of Malaya has granted the plaintiff's motion for an interlocutory injunction to restrain Intelcard Systems from further using 'Intel' in its name.

Intelcard Systems was registered with the Malaysian Registry of Companies in 1997. Its main business is the supply of smart cards, magnetic access cards, security banking cards and credit cards. It also provides services in relation to programming and customization of smart and magnetic access cards. Upon discovering the existence of Intelcard Systems in November 2001, Intel first sent a cease and desist letter, and later agreed to waive all claims for damages and costs if Intelcard Systems agreed not to use 'Intel' in its name. Intelcard Systems agreed on condition that Intel make a payment of $350,000. Intel refused and filed a suit in the High Court of Malaya in September 2002 for passing off and conspiracy to injure against Intelcard Systems and two of its directors. Pending the full trial, Intel moved for an interlocutory injunction to restrain the defendants from using 'Intel' in their company name.

The court granted Intel's motion for interlocutory injunction. It found that as Intel had cited extensive evidence showing its substantial presence and reputation in Malaysia, it had established a serious question to be tried in respect of passing off. The court rejected the defendants' contention that (i) 'Intelcard' means intelligent card and that there would be no likelihood of confusion between Intelcard and Intel, and (ii) Intel was adopted by many other companies as part of their trading names both in Malaysia and other parts of the world. The court held that the name Intel is distinctive and "it is inconceivable that anyone, even more so a company [...] [involved in the] manufacture of smart cards can overlook this fact".

On the issue of confusion, the court held that the defendants are engaged in a line of business that is closely related to Intel's business. Even though Intel does not deal directly in smart cards, the evidence showed that Intel's microprocessors and architecture were used to power such smart cards. The court therefore held that by using 'Intel' as a prefix to their company name, the defendants created a misrepresentation that gave rise to confusion.

Accordingly, the court granted the injunction and ordered the defendants to delete 'Intel' from their company name within 30 days.

The defendants have appealed.

Teo Bong Kwang, Raja, Darryl & Loh, Kuala Lumpur