Different Rights, Different Causes of Action

06 January 2016

Different Rights, Different Causes of Action

Malaysia’s Federal Court recently, in the case between the National Sports Council (NSC) and Mesuma Sports Sdn Bhd (Mesuma), clarified the position as regards the requisites needed in determining the common law ownership rights in source identifiers. The confusion arose when the courts below appeared to have attached significance to the authorship of the source identifier in deciding who the common law owner of the source identifier was. [See paragraph [35] of the grounds of decision, Civil Appeal No. 02(f)-56-06/2014(W)]

 

The subject source identifier in question was the tiger stripes design that can be found on the sports attires of the athletes.

 

NSC is a statutory body created under the National Sports Council of Malaysia Act 1971. Its statutory duty is to promote sports locally and internationally as well as to participate in the development of sports in Malaysia. When NSC’s attempts at registering the tiger stripes design were blocked by Mesuma’s prior trademark registrations, also for the tiger stripes design, it commenced a passing-off action (a common law tort that can be used to enforce unregistered trademark rights) against Mesuma as well as trademark rectification action against Mesuma’s prior trademark registrations. Its action was on the basis of it having commissioned the design of a new motif (tiger stripes design) of which the NSC claimed to be the assignee of such proprietary rights in it, including copyright.

 

Mesuma claimed it was the owner of the said motif, being the first in time to have used the motif as a trademark in the course of trade. Therefore, ownership of the motif as a trademark had to be determined under common law.

 

The Federal Court held that the fact that the claimant is the designer of the motif or is the assignee of the proprietary rights to it does not, under common law, automatically entitle it to claim common law trademark ownership rights. Common law trademark ownership can only be claimed if there is use of the motif as a trademark in the course of trade. On the factual matrix however, the Federal Court found that it was NSC who also first used the motif in a manner distinctive of itself in the course of trade under its contractual sponsorship arrangement with Mesuma. It thus had the necessary goodwill and is therefore the common law owner of the motif trademark.

 

In reaching this decision, the Federal Court evidently had applied an expansive meaning to the requisite “use in a trademark sense in the course of trade” whereby it held that one does not need to be a “trading entity” before it could be said to have used a trademark in the course of trade. Taking the definition from the ninth edition of the Concise Oxford Dictionary, the learned Judges unanimously agreed that trade is defined not just by business conducted for profit, but business of a specified nature, or even a transaction with a person for a thing. The learned Judges accepted that, while the NSC was not a trader as a manufacturer and seller of the sports attire of the motif, its statutory functions and duties are sufficient to meet the criterion “business of a specified nature or a transaction with a person for a thing.”

 

Whilst not adopted in the grounds of judgment, the decision by the Federal Court would appear to also affirm the position that, claimants wishing to enforce their legal rights would need to be absolutely aware of the type and kind of legal rights that they possess. The differing conditions, circumstances and requirements that gave rise to such right must first be examined. Rights borne out of one set of law (such as copyright) do not automatically conferanother protection (such as trade mark) for the same nature of rights under another set of laws

 

 

Shearn Delamore & Co

7/F., Wisma Hamzah-Kwong Hing

No 1 Leboh Ampang

50100 Kuala Lumpur, Malaysia

T: +60 3 2027 2727

F: +60 3 2078 5625

E: info@shearndelamore.com


About the author

 Michelle Loi

Michelle Loi

Michelle Loi is a partner at Sheran Delamore & Co, where she focuses on IP litiation, including work on patent, trademark, copyright and design infringements. She also handles passing-off cases; geographical indication-related cases; breach of confidential information cases; licensing and technology transfer agreements; computer and software agreements; domainname disputes; frachising, gaming and food regulatino matters; Perosnal Data Protection Act matters; and trademark prosecution work, including opposition procedures. 

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