In the recent Court of Appeal decision of SV Beverages Holdings Sdn Bhd & Ors v Kickapoo (M) Sdn Bhd, justices Gopal Sri Ram, Heliliah and Ahmad Maarop reviewed a High Court decision allowing an interlocutory injunction.
Kickapoo, the respondent in this case, obtained an interlocutory injunction at the High Court restraining the appellants from inter alia using the brand name Kickapoo and Kickapoo Joy Juice and from dealing with any rights as exclusive franchise for that drink in Malaysia and Singapore or from making, manufacturing, selling or marketing that drink in Malaysia and Singapore. Kickapoo alleged that the proprietor of the trade mark, The Monarch Beverage Company Enterprise (a successor in title to The Monarch Company Inc), has licensed the trade marks to Kickapoo and that the licensing agreement between Kickapoo and the proprietor of the trade marks is still valid and subsisting and has not been terminated.
Therefore, Kickapoo contends that SV Beverages were wrong in licensing the use of the trade marks to SV Beverages Holdings and alleged breach of contract against the appellants. Kickapoo argues that a purported notice of termination of the licensing contract between Kickapoo and the appellants was in bad faith, bad in law and hence had no legal effect. Kickapoo further alleged malicious falsehood, trade libel and passing off by the appellants in applying for the injunction.
The court of first instance allowed Kickapoo's application for an interlocutory injunction and SV Beverages appealed against the decision to the Malaysian Court of Appeal.
The issue of interest in this case is that the first appellant was in fact not the first proprietor of the trade marks. SV Beverages was a successor in title to the first proprietor (The Monarch Company Inc) of the trade marks. Hence, the licence agreement entered into between Kickapoo and the first proprietor was valid and therefore binding on SV Beverages.
Kickapoo further alleged that since the appellants had not taken any action preventing Kickapoo from using the trade marks prior to this, they were estopped from doing so now.
The Appellate Court deliberated and considered many issues before arriving at its decision in allowing SV Beverages's appeal, which effectively sets aside the interlocutory injunction. Among the issues considered by the Court of Appeal were:
- whether the termination of the licensing contract by the first appellant was valid and binding;
- whether the torts alleged by Kickapoo had in fact been established;
- the law and principles applicable with regards to the granting of interlocutory injunctions including damages and the issue of public interest; and
- the rights of the trade mark proprietor.
The appellants' success in its appeal was primarily on the basis that the termination of the licensing contract by the first appellant was lawful and binding. Hence, the SV Beverages, as the proprietor of the trade marks was not estopped from licensing the use of the trade marks to a third party, in this case the second appellant. The Court of Appeal also held that the trade marks rightfully being passed to the first appellant as successor in title and recognized the first appellant as having the right to grant exclusive rights to the use of the trade marks.
This can be seen as a positive step taken by the Malaysian Courts in recognising the interest and rights of a licence in Malaysia and this further paves the way to a greater protection of intellectual property in this country.
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