The Fight Over a Famous Dodol Mark: The Federal Court Rules that a TDO may Declare Goods as Imitation Goods
By Teo Bong Kwang
The Federal Court of Malaysia has in November 2017 explained the meaning and significance of section 9 of the Trade Descriptions Act, 2011 (“TDA 2011”). In the case of Tan Kim Hock Product Centre Sdn Bhd & Anor v. Tan Kimhock Tong Seng Food Industry Sdn Bhd (Federal Court Civil Appeal No. 02-6-02/2016(W) ([2017 1 LNS 1748, unreported), questions of law relating to the scope and application of section 9 of the TDA 2011 were examined.
Section 9 of the TDA 2011 empowers the High Court to declare an infringing trade mark as a “false trade description”. The order issued by the High Court under section 9 is called a “Trade Descriptions Order” or in short, a “TDO”. The principal issue before the Federal Court was whether a TDO could be applied for on an ex parte basis, i.e. by one side without informing the parties to be affected by it. The second issue is whether section 9 empowers the High Court to determine and declare goods covered by the TDO as imitation goods.
The facts of the case are fairly simple. The Respondent, Tan Kimhock Tong Seng Food Industry Sdn Bhd, obtained a TDO declaring certain coconut flavoured confectionary (namely dodol and biscuits) bearing the following trade mark belonging to the Respondent to be “imitation goods”:
The TDO was obtained on an ex parte basis.
In the appeal, lawyer for the Appellant argued that section 9 imposes criminal liability and a TDO has the effect of creating an offence. As such, it is against all norms of criminal justice for an ex parte TDO to be allowed. In reply, the Respondent argued that the principal objective of a TDO is to combat counterfeit activities and that there is nothing unjust about such an order being granted on an ex parte basis.
After hearing arguments from both sides, the Federal Court ruled that it is permissible for a TDO to be obtained on an ex parte basis. The apex court took into account the avowed objective of the TDA 2011 and its predecessor legislation, which is to combat the problems and menace of counterfeit goods. As such, for a meaningful and effective use of the TDO, the ability to obtain it swiftly and the element of surprise are essential ingredients. Hence, an ex parte application would be the most appropriate remedy. The apex court added that the obtaining of a TDO is not the end of the matter as the owner of a TDO still needs to “move the machinery of the criminal law” under the other provisions of the TDA 2011. Besides that, the court observed that an ex parte order can always be set aside.
On the second issue of whether the TDO could declare certain goods as “imitation goods”, the Court’s reasoning is that section 9(1) is to be read together with section 8 of the TDA 2011. The Court explained that section 9 should not be read in a vacuum but must instead be linked to the stated purpose of section 8. Essentially, section 8 provides that any person who applies, offers to supply or exposes for supply, or has in his possession, custody or control for supply any goods to which a false trade description is applied shall commit an offence. The Federal Court thus ruled that when the High Court declares a particular infringing mark to be a false trade description, it must have reference to some particular goods that bears or uses that infringing mark. In effect, the High Court is declaring the goods bearing or using such false trade description to be imitation goods. It is thus permissible to declare the relevant goods covered by the TDO to be imitation or counterfeit goods.