August 2016
We are pleased to present to you the inaugural issue of CCLC’s The Legal Link. This is a specially designed, regular e-digest where we present legal articles and updates on the law that we feel will be relevant and of interest to you and to your business.
We believe that you will find great value in the content, but if you would prefer not to receive further issues, please follow the prompts at the bottom of this email. If you have any questions, feedback and comments, please also do not hesitate to contact us.
In this Issue:
1. Setting the Terms: Protecting the Landlord’s Interests in Tenancy Agreements
2. What’s in a Name?: The Importance of Protecting your brand
SETTING THE TERMS
Protecting the Landlord’s interest in Tenancy Agreements
Denise Chong points out the key areas that Landlords should take note and provide for in drafting Tenancy Agreements
Under Malaysian Law, only a tenancy exceeding 3 years may be registered against the title under the National Land Code 1965. So, whilst a Landlord of a registered lease is statutorily protected, a Landlord of a Tenancy (a lease less than 3 years) is not, and his relationship with his tenant is instead governed by a formal contract - a Tenancy Agreement.
Hence, it is especially important for a Landlord to set out terms and conditions in the Tenancy Agreement that will adequately protect his rights in the demised premises and particularly, to secure prompt payment of rentals from the Tenant. Below are a few specific areas that a Landlord should consider specifically providing for, in a Tenancy Agreement.
A. Self-help Remedies
A common and oft-heard problem in Malaysia regarding tenancies is the situation where a Tenant has defaulted or is in breach of the Tenancy Agreement, yet refuses to move out from the demised premises. The question that arises is whether the Landlord can resort to ‘self-help’ - ‘self-help’ here refers to situations where the Landlord himself takes forceful measures to evict the tenant, such as breaking the locks to the demised premises, forcibly moving the Tenant’s possessions out from the property, cutting off water supply etc. Landlords should take note that the remedy of self-help however is not available under Malaysian law. Section 7(2) of the Special Relief Act 1950 (“SRA”) denigrates the remedy for ‘self-help’ by making it compulsory for a Landlord to seek to enforce his right to recover the property by way of a Court action only.
Hence, in order for a Landlord to recover vacant possession, he would have to file a court action for vacant possession. For that, an eviction notice must first be served to the Tenant, giving the Tenant a certain grace period to handover vacant possession and to pay all overdue rental. After the expiry of such grace period, the Landlord must take out a court order for vacant possession. Only then can the Landlord seal the premises with the help of the court bailiff (to prevent access and entry to the delinquent tenant).
This strict position is further emphasized in the case of SME Aerospace Sdn Bhd v Steyr Mannlicher (M) Sdn Bhd [2006] 5 CLJ 121, where the Court held that the use of the word ‘shall’ in sec. 7(2) of the SRA imposed a precondition for a court order before a Landlord can attempt to recover possession.
As for whether a Landlord can resort to disconnecting utilities to the demised premises, there have been cases where this has not been allowed, as shown in the case of Abu Johan Aboo Backer v Ahmad Faizal Mohd Anuar [2013] 1 LNS 898 wherein the judge was of the opinion that the Defendant should be held responsible for being high-handed and had taken the law into his own hands by cutting off the water supply to the Premises, without a Court Order.
Conversely, self-help in the context of a management company and occupier relationship has been allowed in some cases, such as in Premier Model (M) Sdn Bhd v Phileo Promenade Sdn Bhd & Anor where the Court had alluded that where provided for in the agreement, it is well within the rights of the management office to cut off or suspend water supply to the individual units, if the occupier of units fails to pay service charges, and the action of the Plaintiff in cuting off or suspend water supply was not invalid.
Thus, although there is still uncertainty as to whether self-help is allowed and whether a provision allowing a Landlord to disconnect utilities to the demised premises can be enforceable in the case of a delinquent tenant, it is still good practice to insert such provisions as well as provisions expressly allowing for re-entry of the Landlord into the demised premises in the event of breach, in the Tenancy Agreement in case of any changes in law or in the event there are subsequent common law cases that allow for self-help in the Landlord-Tenant context. At the very least, such provisions would act as deterrence to a Tenant.
B. Revision of Rental
Rental is usually negotiated and agreed upon prior to execution of the Tenancy Agreement and forms part of the salient terms and conditions. However, the Landlord can consider a provision to provide for a revision in rental due to specific change of circumstances such as one that affects the costs of maintaining the property. Such circumstances may include excessive hike in assessment levied on the demised premises during the term of the Tenancy Agreement. Having such a provision would allow the Landlord to revisit the terms in the Tenancy Agreement and for the rental to be adjusted accordingly instead of having to wait until the term expires. Take for example the 2014 DBKL revision on assessment - in such a circumstance, if the Tenancy Agreement does not contain an appropriate provision to allow for revision in rental, the Landlord would have to absorb the increase in assessment (which may be substantial in some cases) without being able to pass on the burden to the Tenant through increased rental rates.
C. Sub-Letting of Property-
It is also rather common nowadays for Tenants to subsequently sub-let the demised premises or part of it, to a third party without the Landlord’s consent. This may give rise to a whole host of problems for Landlords such as having no control over the sub-tenants, sub-tenants not knowing of the covenants binding on the main tenant (and/or breaching negative covenants), as well as tenants unjustly sub-renting the property at a higher rental and thus making a profit.
Hence, it is important for Landlords to ensure that there is included in the Tenancy Agreement, a provision that explicitly prevents the Tenant from sub-letting or otherwise parting with the actual or legal possession or granting the use of the property in favour of any other party UNLESS the Landlord’s prior written consent has been obtained.
D. GST
With the coming in force of the Goods and Services Tax Act 2014 (“GST Act”), Landlords should also ensure that it is spelled out clearly in the Tenancy Agreement that the Tenant is the party who shall pay the GST and shall keep the Landlord fully indemnified against any GST chargeable or imposed by the competent authorities. Furthermore, it is advisable that the clause in the Tenancy Agreement also provide that the Landlord shall have the authority to collect any GST payable by the Tenant on behalf of the competent authorities, as the GST Act places the obligation on Landlords to collect and thereafter submit the GST to authorities.
E. Compliance with Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA)
Another law which came into effect not long ago is AMLA which addresses the offence of money laundering, the measures to be taken for the prevention of money laundering and terrorism financing offences. AMLA also provides for the forfeiture of property involved in or derived from inter alia money laundering and terrorism financing offences.
With the government of Malaysia taking such a firm stand on money laundering and related activities, it is important for Landlords to protect themselves from any adverse implication that may arise from the Tenant’s activities in the demised premises or through any payments made to Landlord. Landlords should ensure a provision in the Tenancy Agreement where the Tenant declares that they are aware of AMLA and that all funds used by the Tenant are obtained from legitimate source. Ideally, it should also be drafted such that the Tenant accordingly provides an undertaking to indemnify the Landlord against all claims, costs, damages and expenses which may be brought, suffered or incurred by the Landlord in respect of any contravention of any of the provisions of the AMLA caused by the Tenant.
F. Conclusion
Key areas that Landlords should seek to consider and protect in through their Tenancy Agreements include adjustment and collection of rentals including tax issues, recovery of their premises upon expiry of the tenancy or earlier termination, and indemnities from the Tenant to cover any illegal use or claims by other third parties due to the Tenant’s activities in the property. It is crucial for Landlords to ensure that the terms of their Tenancy Agreement sufficiently protects these and other interests. One way to ensure the strength of your Tenancy Agreement will be to have the right and experienced solicitors assist you in vetting your Tenancy Agreement.
Write Up by - Ms. Denise Chong Pei Yuh (2016)
Contact:
Denise Chong - denise@cclc.com.my
Christina Chia - ccle@cclc.com.my
CCLC’s Conveyancing and Real Estate practice area has vast experience in tenancy matters, having represented numerous landlords and managers of commercial complexes in Malaysia in their tenancy agreements and related dispute resolutions with their tenants. Our team is ready to be of service to you.
WHAT’S IN A NAME?
The importance of protecting your brand
Joshinae Wong explains the benefits of taking the all-important step to register your brand as a trade mark
Imagine that you have started a business selling water filters and have chosen to use the name “McQueen” to market your product. You print your marketing materials, you launch your website, you affix the “McQueen” name to your physical products – you invest substantial amount of money and time, and you start selling the products. Business is starting to take off, when all of a sudden you realise that a new competitor has entered the market – their product is almost identical to yours and is sold under the brand “MCQEEN”. What can you do? Well, if you have not registered “McQueen” as a trade mark, you may find yourself in a bit of a spot but if you have, you can be rest assured that there are legal avenues available to you.
Centuries ago, Shakespeare wrote, “What’s in a name? That which we call a rose, by any other name would smell as sweet.” Well, Shakespeare obviously had little inkling on the power of business brands. According to Forbes’ latest list, the world’s most valuable brand, Apple, has a value of USD154 billion. To put things into perspective, this figure is more than the Gross Domestic Product (GDP) of more than half the countries in the world. In today’s competitive world, there is no doubt that a strong brand and the goodwill residing in it, may be the key to your business success and thus, protecting it is of the utmost importance.
A. Registering your brand as a trade mark – what are the benefits?
The first step to developing, building and protecting your brand is to register your brand or trade name as a trade mark. If your brand or trade name is sufficiently distinctive and able to distinguish your products and services, it may be accepted for registration as a trade mark by the Malaysian Intellectual Property Office (MYIPO). A descriptive or generic mark however will not be registrable - you cannot register the mark “PHONE” to sell your brand of mobile phones, and you likely cannot register, say, “SPICY” for your brand of curry powder (descriptive).
Logos, names, symbols, images, tag lines or combinations of those are registrable. There have also been much interesting discussion as to the registration of non-conventional trade marks such as sound, color or smell or a combination of those, but that perhaps can be left for the subject of a later article.).
A trade mark may further not be accepted for registration if it is identical or so similar to a registered trade mark or an earlier application, such that it would be likely to deceive or cause confusion to the public. Registrations are made by the type or class of goods or services for which the mark is used or intended to be used. Thus, if you are using your trade mark in relation to goods and services in different classes (according to the NICE International Classification system), you may need to consider multiple registrations to enjoy full protection.
Now, what does it mean for you to have your trade mark registered? Quite simply, registration gives you the exclusive right to use the registered mark in relation to the goods and services specified. If another company uses an identical mark or one that resembles your registered mark in a manner that is likely to deceive or cause confusion, then they may then be liable for trade mark infringement under the Trade Marks Act 1976 (“TMA”). Hence, in the example above, you may be able to bring an action against your “MCQEEN” competitors for trade mark infringement, and to stop their use of that mark
B. Enforcing your registered rights
But protecting your brand does not stop at merely registering it. If your rights are threatened, taking prompt action against infringers or potential infringers is also a key component of a successful brand strategy. Be sure to keep an eye out for identical or similar names to your registered mark in your industry, and to act upon it (some businesses have a strategy that involves regular monitoring). Inaction or delay may be costly to your business in terms of lost sales, customer diversion and loss of brand value or strength. Your available actions may vary and range from taking opposition proceedings against a potentially conflicting application to initiating court action for infringement, and to claim damages or an injunction.
C. Some practical considerations
Now that you have an idea of how you may protect your brand, we would leave you with a few practical considerations.
1. Perform a trade mark search and consult your advisers, before settling on, and developing your brand name
As mentioned above, if an application is found to be identical or similar to an earlier application or registration, your application may be rejected or opposed to at a later stage. Not only would you have wasted costs and time, but if you use the mark in relation to goods or services specified for the earlier registration, you may be liable for trade mark infringement. So, taking again our “McQueen” and “MCQEEN” scenario, imagine now that you find out that your competitor’s “MCQEEN” mark is in fact a registered trade mark. Had you performed a trade mark search beforehand when deciding on your “McQueen” brand name, you would likely have come across this registration. However, because you had overlooked this, you find yourself now in the position where you are open to an infringement action by your competitor, and you would have to stop using your “McQueen” brand after having spent all that money and time on building up the brand.
Trade marks may also not be registrable due to other reasons such as it being generic, descriptive, laudatory or otherwise not distinctive. Therefore, it is important that you not skip the step of having a search of the existing register performed, and also of discussing registrability of your intended mark with your advisers.
2. Register… and use
Although an intention to use the trade mark is sufficient to apply for registration of a trade mark, non-use of a registered trade mark can be a ground for expungement i.e your registration can be cancelled for non-use. Note that use in this context, means use in the trade mark sense. Ideally as well, the mark used should not differ or vary too much from what is registered, as use of a substantially different variation may not be considered use of the actual registered mark.
3. Protect your rights in each jurisdiction where you conduct business
Trade marks rights are territorial in nature. A registration in Malaysia gives you the rights to exclusive use within the country only. If someone starts selling “McQueen” filters in Singapore, you would not be able to take action against them based on your Malaysian registration. Heed well the notorious story of Pinterest, who lost its right to use the trade mark in Europe as it had delayed in making the necessary applications, thus allowing another UK firm to file its application in the meantime for an identical mark. Thus, consider obtaining advice and registering your mark in all countries in which you are doing business. Expand your IP protection along with your business’s reach.
D. Conclusion
Adequately protecting your brand and enforcing your rights will ensure that your business has a reliable, valuable asset that can help keep you ahead of your competitors.
Write Up by - Ms. Denise Chong Pei Yuh (2016)
Contact:
Joshinae Wong - jwong@cclc.com.my
Christina Chia - ccle@cclc.com.my
CCLC advises and represents clients in various aspects of intellectual property (IP) rights protection including trade marks, copyright, industrial design and patent matters. Amongst other things, we handle the filing and prosecution of trade mark applications, advice clients on licensing and franchising transactions, and represent them in IP infringement/ enforcement proceedings. Our team is ready to be of service to you.
We are pleased to present to you the inaugural issue of CCLC’s The Legal Link. This is a specially designed, regular e-digest where we present legal articles and updates on the law that we feel will be relevant and of interest to you and to your business.
We believe that you will find great value in the content, but if you would prefer not to receive further issues, please follow the prompts at the bottom of this email. If you have any questions, feedback and comments, please also do not hesitate to contact us.
1. Setting the Terms: Protecting the Landlord’s Interests in Tenancy Agreements
2. What’s in a Name?: The Importance of Protecting your brand
SETTING THE TERMS
Protecting the Landlord’s interest in Tenancy Agreements
Denise Chong points out the key areas that Landlords should take note and provide for in drafting Tenancy Agreements
Under Malaysian Law, only a tenancy exceeding 3 years may be registered against the title under the National Land Code 1965. So, whilst a Landlord of a registered lease is statutorily protected, a Landlord of a Tenancy (a lease less than 3 years) is not, and his relationship with his tenant is instead governed by a formal contract - a Tenancy Agreement.
Hence, it is especially important for a Landlord to set out terms and conditions in the Tenancy Agreement that will adequately protect his rights in the demised premises and particularly, to secure prompt payment of rentals from the Tenant. Below are a few specific areas that a Landlord should consider specifically providing for, in a Tenancy Agreement.
A. Self-help Remedies
A common and oft-heard problem in Malaysia regarding tenancies is the situation where a Tenant has defaulted or is in breach of the Tenancy Agreement, yet refuses to move out from the demised premises. The question that arises is whether the Landlord can resort to ‘self-help’ - ‘self-help’ here refers to situations where the Landlord himself takes forceful measures to evict the tenant, such as breaking the locks to the demised premises, forcibly moving the Tenant’s possessions out from the property, cutting off water supply etc. Landlords should take note that the remedy of self-help however is not available under Malaysian law. Section 7(2) of the Special Relief Act 1950 (“SRA”) denigrates the remedy for ‘self-help’ by making it compulsory for a Landlord to seek to enforce his right to recover the property by way of a Court action only.
Hence, in order for a Landlord to recover vacant possession, he would have to file a court action for vacant possession. For that, an eviction notice must first be served to the Tenant, giving the Tenant a certain grace period to handover vacant possession and to pay all overdue rental. After the expiry of such grace period, the Landlord must take out a court order for vacant possession. Only then can the Landlord seal the premises with the help of the court bailiff (to prevent access and entry to the delinquent tenant).
This strict position is further emphasized in the case of SME Aerospace Sdn Bhd v Steyr Mannlicher (M) Sdn Bhd [2006] 5 CLJ 121, where the Court held that the use of the word ‘shall’ in sec. 7(2) of the SRA imposed a precondition for a court order before a Landlord can attempt to recover possession.
As for whether a Landlord can resort to disconnecting utilities to the demised premises, there have been cases where this has not been allowed, as shown in the case of Abu Johan Aboo Backer v Ahmad Faizal Mohd Anuar [2013] 1 LNS 898 wherein the judge was of the opinion that the Defendant should be held responsible for being high-handed and had taken the law into his own hands by cutting off the water supply to the Premises, without a Court Order.
Conversely, self-help in the context of a management company and occupier relationship has been allowed in some cases, such as in Premier Model (M) Sdn Bhd v Phileo Promenade Sdn Bhd & Anor where the Court had alluded that where provided for in the agreement, it is well within the rights of the management office to cut off or suspend water supply to the individual units, if the occupier of units fails to pay service charges, and the action of the Plaintiff in cuting off or suspend water supply was not invalid.
Thus, although there is still uncertainty as to whether self-help is allowed and whether a provision allowing a Landlord to disconnect utilities to the demised premises can be enforceable in the case of a delinquent tenant, it is still good practice to insert such provisions as well as provisions expressly allowing for re-entry of the Landlord into the demised premises in the event of breach, in the Tenancy Agreement in case of any changes in law or in the event there are subsequent common law cases that allow for self-help in the Landlord-Tenant context. At the very least, such provisions would act as deterrence to a Tenant.
B. Revision of Rental
Rental is usually negotiated and agreed upon prior to execution of the Tenancy Agreement and forms part of the salient terms and conditions. However, the Landlord can consider a provision to provide for a revision in rental due to specific change of circumstances such as one that affects the costs of maintaining the property. Such circumstances may include excessive hike in assessment levied on the demised premises during the term of the Tenancy Agreement. Having such a provision would allow the Landlord to revisit the terms in the Tenancy Agreement and for the rental to be adjusted accordingly instead of having to wait until the term expires. Take for example the 2014 DBKL revision on assessment - in such a circumstance, if the Tenancy Agreement does not contain an appropriate provision to allow for revision in rental, the Landlord would have to absorb the increase in assessment (which may be substantial in some cases) without being able to pass on the burden to the Tenant through increased rental rates.
C. Sub-Letting of Property-
It is also rather common nowadays for Tenants to subsequently sub-let the demised premises or part of it, to a third party without the Landlord’s consent. This may give rise to a whole host of problems for Landlords such as having no control over the sub-tenants, sub-tenants not knowing of the covenants binding on the main tenant (and/or breaching negative covenants), as well as tenants unjustly sub-renting the property at a higher rental and thus making a profit.
Hence, it is important for Landlords to ensure that there is included in the Tenancy Agreement, a provision that explicitly prevents the Tenant from sub-letting or otherwise parting with the actual or legal possession or granting the use of the property in favour of any other party UNLESS the Landlord’s prior written consent has been obtained.
D. GST
With the coming in force of the Goods and Services Tax Act 2014 (“GST Act”), Landlords should also ensure that it is spelled out clearly in the Tenancy Agreement that the Tenant is the party who shall pay the GST and shall keep the Landlord fully indemnified against any GST chargeable or imposed by the competent authorities. Furthermore, it is advisable that the clause in the Tenancy Agreement also provide that the Landlord shall have the authority to collect any GST payable by the Tenant on behalf of the competent authorities, as the GST Act places the obligation on Landlords to collect and thereafter submit the GST to authorities.
E. Compliance with Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (AMLA)
Another law which came into effect not long ago is AMLA which addresses the offence of money laundering, the measures to be taken for the prevention of money laundering and terrorism financing offences. AMLA also provides for the forfeiture of property involved in or derived from inter alia money laundering and terrorism financing offences.
With the government of Malaysia taking such a firm stand on money laundering and related activities, it is important for Landlords to protect themselves from any adverse implication that may arise from the Tenant’s activities in the demised premises or through any payments made to Landlord. Landlords should ensure a provision in the Tenancy Agreement where the Tenant declares that they are aware of AMLA and that all funds used by the Tenant are obtained from legitimate source. Ideally, it should also be drafted such that the Tenant accordingly provides an undertaking to indemnify the Landlord against all claims, costs, damages and expenses which may be brought, suffered or incurred by the Landlord in respect of any contravention of any of the provisions of the AMLA caused by the Tenant.
F. Conclusion
Key areas that Landlords should seek to consider and protect in through their Tenancy Agreements include adjustment and collection of rentals including tax issues, recovery of their premises upon expiry of the tenancy or earlier termination, and indemnities from the Tenant to cover any illegal use or claims by other third parties due to the Tenant’s activities in the property. It is crucial for Landlords to ensure that the terms of their Tenancy Agreement sufficiently protects these and other interests. One way to ensure the strength of your Tenancy Agreement will be to have the right and experienced solicitors assist you in vetting your Tenancy Agreement.
Write Up by - Ms. Denise Chong Pei Yuh (2016)
Contact:
Denise Chong - denise@cclc.com.my
Christina Chia - ccle@cclc.com.my
CCLC’s Conveyancing and Real Estate practice area has vast experience in tenancy matters, having represented numerous landlords and managers of commercial complexes in Malaysia in their tenancy agreements and related dispute resolutions with their tenants. Our team is ready to be of service to you.
WHAT’S IN A NAME?
The importance of protecting your brand
Joshinae Wong explains the benefits of taking the all-important step to register your brand as a trade mark
Imagine that you have started a business selling water filters and have chosen to use the name “McQueen” to market your product. You print your marketing materials, you launch your website, you affix the “McQueen” name to your physical products – you invest substantial amount of money and time, and you start selling the products. Business is starting to take off, when all of a sudden you realise that a new competitor has entered the market – their product is almost identical to yours and is sold under the brand “MCQEEN”. What can you do? Well, if you have not registered “McQueen” as a trade mark, you may find yourself in a bit of a spot but if you have, you can be rest assured that there are legal avenues available to you.
Centuries ago, Shakespeare wrote, “What’s in a name? That which we call a rose, by any other name would smell as sweet.” Well, Shakespeare obviously had little inkling on the power of business brands. According to Forbes’ latest list, the world’s most valuable brand, Apple, has a value of USD154 billion. To put things into perspective, this figure is more than the Gross Domestic Product (GDP) of more than half the countries in the world. In today’s competitive world, there is no doubt that a strong brand and the goodwill residing in it, may be the key to your business success and thus, protecting it is of the utmost importance.
A. Registering your brand as a trade mark – what are the benefits?
The first step to developing, building and protecting your brand is to register your brand or trade name as a trade mark. If your brand or trade name is sufficiently distinctive and able to distinguish your products and services, it may be accepted for registration as a trade mark by the Malaysian Intellectual Property Office (MYIPO). A descriptive or generic mark however will not be registrable - you cannot register the mark “PHONE” to sell your brand of mobile phones, and you likely cannot register, say, “SPICY” for your brand of curry powder (descriptive).
Logos, names, symbols, images, tag lines or combinations of those are registrable. There have also been much interesting discussion as to the registration of non-conventional trade marks such as sound, color or smell or a combination of those, but that perhaps can be left for the subject of a later article.).
A trade mark may further not be accepted for registration if it is identical or so similar to a registered trade mark or an earlier application, such that it would be likely to deceive or cause confusion to the public. Registrations are made by the type or class of goods or services for which the mark is used or intended to be used. Thus, if you are using your trade mark in relation to goods and services in different classes (according to the NICE International Classification system), you may need to consider multiple registrations to enjoy full protection.
Now, what does it mean for you to have your trade mark registered? Quite simply, registration gives you the exclusive right to use the registered mark in relation to the goods and services specified. If another company uses an identical mark or one that resembles your registered mark in a manner that is likely to deceive or cause confusion, then they may then be liable for trade mark infringement under the Trade Marks Act 1976 (“TMA”). Hence, in the example above, you may be able to bring an action against your “MCQEEN” competitors for trade mark infringement, and to stop their use of that mark
B. Enforcing your registered rights
But protecting your brand does not stop at merely registering it. If your rights are threatened, taking prompt action against infringers or potential infringers is also a key component of a successful brand strategy. Be sure to keep an eye out for identical or similar names to your registered mark in your industry, and to act upon it (some businesses have a strategy that involves regular monitoring). Inaction or delay may be costly to your business in terms of lost sales, customer diversion and loss of brand value or strength. Your available actions may vary and range from taking opposition proceedings against a potentially conflicting application to initiating court action for infringement, and to claim damages or an injunction.
C. Some practical considerations
Now that you have an idea of how you may protect your brand, we would leave you with a few practical considerations.
1. Perform a trade mark search and consult your advisers, before settling on, and developing your brand name
As mentioned above, if an application is found to be identical or similar to an earlier application or registration, your application may be rejected or opposed to at a later stage. Not only would you have wasted costs and time, but if you use the mark in relation to goods or services specified for the earlier registration, you may be liable for trade mark infringement. So, taking again our “McQueen” and “MCQEEN” scenario, imagine now that you find out that your competitor’s “MCQEEN” mark is in fact a registered trade mark. Had you performed a trade mark search beforehand when deciding on your “McQueen” brand name, you would likely have come across this registration. However, because you had overlooked this, you find yourself now in the position where you are open to an infringement action by your competitor, and you would have to stop using your “McQueen” brand after having spent all that money and time on building up the brand.
Trade marks may also not be registrable due to other reasons such as it being generic, descriptive, laudatory or otherwise not distinctive. Therefore, it is important that you not skip the step of having a search of the existing register performed, and also of discussing registrability of your intended mark with your advisers.
2. Register… and use
Although an intention to use the trade mark is sufficient to apply for registration of a trade mark, non-use of a registered trade mark can be a ground for expungement i.e your registration can be cancelled for non-use. Note that use in this context, means use in the trade mark sense. Ideally as well, the mark used should not differ or vary too much from what is registered, as use of a substantially different variation may not be considered use of the actual registered mark.
3. Protect your rights in each jurisdiction where you conduct business
Trade marks rights are territorial in nature. A registration in Malaysia gives you the rights to exclusive use within the country only. If someone starts selling “McQueen” filters in Singapore, you would not be able to take action against them based on your Malaysian registration. Heed well the notorious story of Pinterest, who lost its right to use the trade mark in Europe as it had delayed in making the necessary applications, thus allowing another UK firm to file its application in the meantime for an identical mark. Thus, consider obtaining advice and registering your mark in all countries in which you are doing business. Expand your IP protection along with your business’s reach.
D. Conclusion
Adequately protecting your brand and enforcing your rights will ensure that your business has a reliable, valuable asset that can help keep you ahead of your competitors.
Write Up by - Ms. Denise Chong Pei Yuh (2016)
Contact:
Joshinae Wong - jwong@cclc.com.my
Christina Chia - ccle@cclc.com.my
CCLC advises and represents clients in various aspects of intellectual property (IP) rights protection including trade marks, copyright, industrial design and patent matters. Amongst other things, we handle the filing and prosecution of trade mark applications, advice clients on licensing and franchising transactions, and represent them in IP infringement/ enforcement proceedings. Our team is ready to be of service to you.
CCLC © 2016