WHAT'S NEW

Dear valued clients and business partners,

We are pleased to highlight the following legal news and updates for July 2019.

Click here to download the PDF version: Legal Alerts July 2019.

---

DISPUTE RESOLUTION

Law of Limitation – An Amendment to the Limitation Act 1953

Pursuant to section 6 of the Limitation Act 1953, an action founded on contract or on tort must be brought within six years from the date on which the cause of action accrues.

In April last year, the Parliament of Malaysia passed a Bill known as the Limitation (Amendment) Act 2018. The Limitation Act 1953 [Act 254], referred to as the principal Act was amended by inserting after section 6, section 6A.

The new section 6A comes into force in September 2019. Section 6A applies to any action for negligence not involving personal injuries. Section 6A brings about the following effect:

1. The six-year limitation period is extended by section 6A. The starting date to calculate the limitation period falls beyond the date of which the cause of action accrued. An action in negligence (not involving personal injuries) to which this section applies shall not be brought after the expiration of three years from the starting date. Starting date has been defined under the Act to mean earliest date on which the plaintiff possessed the requisite knowledge required for bringing an action for damages in respect of the relevant damage and a right to bring such action.
2. This Act only applies if the three-year period expires later than the period of limitation under the Act as prescribed by section 6(1).
3. A further caveat as provided by the Act is that no action shall be brought after the expiration of 15 years from the date in which the cause of action accrued.
4. An example is where in 2004, P entered into a building contract with D, the contractors. P had knowledge of the defect in structure of the swimming pool only in 2010. P has three years from 2010 to bring an action under negligence for such defect. Without the insertion of section 6A, P would have been out of time to bring a civil suit and claim damages.

Knowledge is aptly and appropriately defined in the Act. The plaintiff here may have knowledge of the material facts about the damages sued for or knowledge of other facts relevant to the action. The latter has three components:

1. The damage was attributable in whole or in part to that act/omission which is alleged to constitute negligence.
2. The plaintiff discovered the identity of the defendant and, thirdly, where the act or omission was that of a person other than the defendant, the identity of that person and the additional facts supporting the bringing of an action against the defendant.
3. It also includes the knowledge which the plaintiff might reasonably have been expected to acquire from the facts ascertainable by him or facts ascertainable with the help of expert advice which is reasonable for him to seek.

Further illustrations have been provided under the Act but it is in no way exhaustive of the application of section 6A. Section 6A is a remarkable addition as it safeguards the rights of plaintiff to bring an action under the ambit of negligence.

---

For further information regarding dispute resolution matters, please contact our Dispute Resolution Practice Group.

---

INTELLECTUAL PROPERTY

Does the Trade Marks Registrar have jurisdiction to deal with issues relating to passing-off at the stage of opposition?

The recent High Court case of Hup Seng Perusahaan Makanan (M) Sdn Bhd v Lam Soon Edible Oils Sdn Bhd[efn_note][2019] MLJU 422.[/efn_note] concerns an appeal by the plaintiff against the decision of the Trade Marks Registrar. The plaintiff (“Hup Seng”) is the registered proprietor of the trade mark “NATURELL” in class 30. The first Defendant (“Lam Soon”) is the applicant of the trade mark in class 30 (“Lam Soon’s mark”).

Hup Seng opposed against the registration of Lam Soon’s mark before the Trade Marks Registrar but the Trade Marks Registrar dismissed Hup Seng’s opposition. Dissatisfied with the decision of the Trade Marks Registrar, Hup Seng appealed against the Registrar’s decision to the High Court.

One of the grounds of appeal raised by Hup Seng and discussed by the High Court which is worthwhile to be highlighted is whether the Trade Marks Registrar has jurisdiction to deal with issues relating to passing-off in an opposition proceeding.

The Trade Marks Registrar in its grounds of decision for the opposition proceeding stated that the Registrar has no jurisdiction to deal with issues relating to passing-off as her function is merely to decide on the registration of trade marks.

The Trade Marks Registrar went further and stated that a passing-off action under common law is for the court to decide. Prior to this case, it was held in the High Court case of BRG Brilliant Rubber Goods (M) Sdn Bhd v Santa Barbara Polo & Racquet Club Management Inc (Pendaftar Cap Dagangan Malaysia, Interested Party)[efn_note][2017] 7 MLJ 244.[/efn_note] that whether there is a case for passing-off is for the court to decide and the plaintiff ought to commence an action of passing-off in the High Court.

Such a position has now been clarified in this case. The High Court held that the Trade Marks Registrar has jurisdiction to deal with common law of passing-off in opposition proceedings pursuant to section 14(1)(a) of the Trade Marks Act 1976.

For ease of understanding, section 14(1)(a) of the Trade Marks Act 1976 is one of the possible grounds relied upon by opponents in opposition proceedings to prevent registration of the opposed mark. In particular, the second limb of section 14(1)(a) of the Trade Marks Act 1976 provides that a mark shall not be registered if its use would be contrary to law [Emphasis ours].

While this is not discussed in length in the High Court judgement, the High Court seems to have taken the position that “law” in section 14(1)(a) of the Trade Marks Act 1976 would include the common law of passing-off. As such, the issue of whether the use of the opposed mark by the applicant would constitute passing-off would fall within the ambit of section 14(1)(a) of the Trade Marks Act 1976 and hence would be relevant for the consideration of the Registrar in opposition proceedings.

---

For further information regarding intellectual property matters, please contact our Intellectual Property Practice Group.

---

TAX AND REVENUE