11TH LAW ASIA INTERNATIONAL MOOT COURT,...
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11 TH LAW ASIA INTERNATIONAL MOOT COURT, 2016 KUALA LAMPUR ARBITRATION REGIONAL CENTRE ____________________________________________________________ MEMORANDUM FOR CLAIMANT ON BEHALF OF AGAINST CHELSEA TEA COMPANY ALMOND TEA COMPANY ………CLAIMANT ……RESPONDENT
Transcript of 11TH LAW ASIA INTERNATIONAL MOOT COURT,...
11TH
LAW ASIA INTERNATIONAL MOOT
COURT, 2016
KUALA LAMPUR ARBITRATION REGIONAL CENTRE
____________________________________________________________
MEMORANDUM FOR CLAIMANT
ON BEHALF OF AGAINST
CHELSEA TEA COMPANY ALMOND TEA COMPANY
………CLAIMANT ……RESPONDENT
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CONTENTSLIST OF ABBREVIATIONS.................................................................................................. iii
INDEX OF AUTHORITIES.....................................................................................................iv
STATEMENT OF JURISDICTION.........................................................................................ix
QUESTIONS PRESENTED......................................................................................................x
STATEMENT OF FACTS .......................................................................................................xi
SUMMARY OF PLEADINGS.............................................................................................. xiii
WRITTEN SUBMISSIONS ......................................................................................................1
I. THE ARBITRATION AGREEMENT IS ENFORCEABLE IRRESPECTIVE OF THE TERMINATION OF THE CONTRACT...............................................................................1
A. The Arbitration Agreement survives the termination of the contract in accordance with Article 16 of the UNCITRAL Model Law .................................................................1
B. The Arbitration Agreement survives even after termination of the contract, in accordance with the generally accepted principle of Doctrine of Severability..................................................2
C. The Arbitration Agreement survives the termination of the Agreement between CTC and ATC as per the KLRCA UNCITRAL Rules ...............................................................4
II. THE MALAYSIAN LAW IS THE LAW APPLICABLE LAW TO THE SUBSTANCE OF THIS DISPUTE ...............................................................................................................6
A. The Conflict of Laws rules of Sri Lanka is applicable in the present matter ................6
B. Malaysian law has the closest and most real connection to the law governing the underlying agreement .........................................................................................................7
III. ATC HAS BREACHED THE AGREEMENT BY DISTRIBUTING SAILOR’S CEYLON AFFIXED WITH ATC’S MARK IN MALAYSIA .............................................9
A. The obligations under the agreement were not fulfilled by ATC..................................9
B. CTC has not affirmed the contract...............................................................................11
IV. ATC’S USE OF THE WORD ‘CEYLON’ IN RESPECT OF ITS TEA PRODUCTS IS MISLEADING.....................................................................................................................13
A. ATC’s use of the word ‘CEYLON’ with respect to its tea products violates article 22(2) of the TRIPS Agreement.........................................................................................13
B. ATC’s use of ‘CEYLON’ with respect to their tea products is misleading and creates a situation of unfair advantage as it violates article 10bis of Paris Convention on the Protection of Industrial Property ......................................................................................16
C. ATC’s use of the word ‘CEYLON’ with respect to its tea products is misleading for breach of Section 3 of the Geographical Indications Act, 2000.......................................17
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V. THE DEFENDANT’S USE OF THE ATC’S MARK FOR THE SALE OF SAILOR'S CEYLON AMOUNTS TO INFRINGEMENT AND PASSING OFF................................21
A. The CTC Trademark is protected under section 70(b) of the Trade Marks Act, 197621
B. ATC is liable for infringement under Section 38 of the Trade Marks Act 1976 .........22
C. The defendant’s use of the ATC Logo amounts to passing off ...................................25
PRAYER FOR RELIEF ..........................................................................................................29
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LIST OF ABBREVIATIONS
¶ Paragraph
Arb. Arbitration
Art. Article
ATC Almond Tea Company
Co. Company
CTC Chelsea Tea Company
edn. Edition
i.e. That is
Ibid Ibidem
ICC International Chamber of Commerce
KLRCA Kuala Lumpur Regional Centre for Arbitration
Ltd. Limited
No. Number
pg. Page
Sec. Section
SLTB Sri Lankan Tea Board
TRIPs Agreement on Trade Related Aspects of Intellectual
Property Rights
UNCITRAL United Nations Commission on International Trade Law
v. Versus
iv
INDEX OF AUTHORITIESCASES
1. Administrative and Clerical Officers Association v. The Commonwealth, (1979) 26
ALR 497
2. Arcos Ltd. v. E.A. Ronaasen & Son, (1933) AC 470
3. Australian Woollen Mills Ltd v. F S Walton and Co Ltd., (1937) 58 CLR 641 at 658
4. Boissevain v. Weil, (1959) 1 KB 482
5. Bonython v. Commonwealth of Australia, (1951) AC 201
6. Bowden Brake v. Bowden Wire, (193) 30 R.P.C. 580
7. Britt Allcroft (Thomas) LLC v. Miller, [2000] FCA 699
8. Bulmer v Bollinger, (1978) R.P.C. 79
9. California Fruit Canners Association v. Myer, (1899) 104 Federal Reporter 82
10. Cellular Clothing v. Maxton, (1899) A.C. 326
11. Chelsea Man, (1985) F.S.R. 567
12. Christiansen, (1886) 3 R.P.C. 54
13. Contrast Monkland v. Jack Barclay Ltd., (1951) 2 KB 252
14. Farrow's Trade Mark, (1890) 7 R.P.C. 260
15. GE Trade Mark, (1973) R.P.C. 297
16. Harrods Ltd v. Harrodian School Ltd, (1996) R.P.C 697
17. Harrods v. Harrodian School, (1996) R.P.C. 697
18. Henderson v. Radio Corp, (1969) R.P.C. 218
19. Island Trading v. Anchor Brewing, (1989) R.P.C. 287a
20. John-Pierre Koubi v. OHIM, (2004) E.T.M.R. 61 (CFT)
21. Kammins Ballrooms Co. Ltd. v. Zenith Investments Ltd., (1971) AC 850
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22. Matthews v. Smallwood, (1910) 1 Ch. 777
23. McAndrew v. Bassett, (1864) 4 De. G.J&S. 380
24. Middle East Ltd. v. Arab Republic of Egypt, 22 ILM (1983) 752
25. Mothercare v. Penguin Books, (1988) R.P.C. 113
26. Neutrogena v. Golden, (1996) R.P.C. 473
27. Oertli v. Bowman, (1957) R.P.C. 388
28. Peyman v. Lanjani, (1985) Ch. 457
29. Pochampally Ikat Case
30. Premier Brands v. Typhoon, (2000) E.T.M.R. 1071
31. R. Johnston & Co. v. Orr-Ewing, (1882) L.R. 7 Ap.Cas. 219
32. Reckitt & Coleman Products Ltd v. Borden, (1990) R.P.C 341, House of Lords R.P.C.
351
33. Reddaway v. Bentham, (1892) 2 Q.B.639
34. Reuter v. Mulhens, (1953) 70 R.P.C. 36
35. S.Thorley Q.C. in Pfizer v. Eurofood Link, (2001) F.S.R. 3
36. Sabel v. Puma, (1997) E.C.R I-6191
37. Sandow, (1941) R.P.C.196
38. Sayers v. International Drilling Co. N.V., (1971) 1 WLR 1176
39. Scandeor Development v Scandeor Marketing, (1999) F.S.R. 26, CA
40. Schweppes v. Gibbons, (1905) 22 R.P.C 113, 601
41. Spalding v. Gammage, (1915) 32 R.P.C. 273
42. Stannard v. Reay, (1967) R.P.C. 589
43. Star Indistrial v. Yap Kwee Kor, (1976) F.S.R. 256
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44. Symbion Pharmacy Services Pty. Ltd. v. Idameneo (No. 789) Ltd., (2011) FCA 389
45. United Biscuits v. Asda Stores, (1997) R.P.C. 513
46. Wagamama v. City Centre Restaurants, (1995) F.S.R. 713
47. Y.K. Fung Securities Sdn Bhd v. James Cape (Far East) Ltd., 3 (1997) 2 MLJ 621
AWARDS
1. Arbitration Court of the Chamber of Commerce and Industry of Budapest, Award No.
Vb 1024
2. ICC Court of Arbitration, Case No. 4237 X Y.B. Comm. Arb. 52 (1985)
3. ICC Court of Arbitration, Case No. 5460, XIII Y.B. Comm. Arb. 104 (1988)
4. ICC Court of Arbitration, Case No. 6149, XX Y.B. Comm. Arb. 41 (1995)
5. ICC Court of Arbitration, Case No. 8385 (1995)
6. ICC Court of Arbitration, Case No. CISG/1992/02
7. ICC Court of Arbitration, Case No. XXIX Y.B. Comm. Arb. 46 (2004)
8. ICC Court of Arbitration, Case of 29 December 1998 XXIVa Y.B. Comm. Arb. 13
(1999)
STATUTES
1. Geographical Indications Act, 2000 (Malaysian)
2. The Geographical Indications of Goods (Registration and Protection), 1999 (India)
3. The Malaysian Arbitration Act, 2005
4. The Malaysian Contracts Act, 1950
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CONVENTIONS
1. Lisbon Agreement, 1979
2. The Paris Convention on Protection of Industrial Property, 1883
3. TRIPs Agreement, 1994
BOOKS
1. ALAN REDFERN & MARTIN HUNTER, REDFERN AND HUNTER ON
INTERNATIONAL ARBITRATION (6th edn., Oxford University Press, 2015)
2. GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION, VOLUME
II (2nd edn., Kluwer Law International, 2014)
3. J. BEATSON, A. BURROWS, & J. CARTWRIGHT, ANSON’S LAW OF
CONTRACT, (29th edn., Oxford University Press, 2010)
4. J.W. CARTER, CARTER’S BREACH OF CONTRACT (LexisNexis Butterworths,
2011)
5. DAVID KITCHIN & DAVID LLEWELYN, KERLY’S LAW OF TRADE MARKS
AND TRADE NAMES (14th edn., Sweet and Maxwell, 2005)
ARTICLES
1. A.F.M. Maniruzzaman, Conflict of Laws Issues in International Arbitration: Practice
and Trends, Arbitration International, LCIA 1993
2. Amy P. Cotton, 123 Years at the Negotiating Table and Still No Dessert? The Case in
Support of TRIPS Geographical Indication Protections, 82 CHI.-KENT L. REV.
1295, 1295 (2007)
3. David J. Branson & Richard E. Wallace Jr., Choosing the Substantive Law to Apply
in International Commercial Arbitration, 27 Va. J. Int’l L. 39 1986-1987
4. Dimitrios Vlachos, How has the concept of characteristic performance influenced the
proper law of the contract doctrine?, Hertfordshire Law Journal 6(1), 42-48
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5. Michelle Agdomar, Removing the Greek from Feta and Adding Korbel to
Champagne: The Paradox of Geographical Indications in International Law, 18
FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 541, 560 (2008)
6. Stacy D. Goldberg, Who Will Raise the White Flag? The Battle between the United
States and the European Union over the Production of Geographical Indications, 22
U. PA. J. INT‟L. ECON. L. 107, 108 (2001)
MISCELLANEOUS
1. Belden Premaraj, Arbitration: The Preferred Alternative, available at
http://www.beldenlex.com/pdf/Arbitration%20-
%20The%20Preferred%20Alternative.pdf
2. Belden Premaraj, The Choices of Law- Better Safe Than Sorry: The Malaysian
Arbitration Perspective, available at
http://www.beldenlex.com/pdf/The%20Choices%20of%20Law%20-
%20Better%20Safe%20Than%20Sorry.pdf
3. D. Rangnekar, The Pros and Cons of Stronger Geographical Indication Protection,
available at
http://www.iprsonline.org/ictsd/docs/RangnekarBridgesYear6N3MarchApril2002.pdf
4. Kirti Bikram, Article on Geographical Indications, available at
http://www.manupatra.co.in/newsline/articles/Upload/42119A6A-EBC6-471C-8E20-
FC10640DEC09.pdf
5. Obaid S. Busit, The Determination of Applicable Law in International Commercial
Arbitration, available at
http://slconf.uaeu.ac.ae/papers/n4e/Dr_%20Obaid%20Busit199-242.pdf
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STATEMENT OF JURISDICTION
The Chelsea Tea Company (The Claimant) and the Almond Tea Company (The Respondent)
have jointly submitted the present dispute to the Kuala Lumpur Regional Centre for
Arbitration (KLRCA), Malaysia, according to the KLRCA i-Arbitration Rules. The validity
and enforceability of the arbitration agreement has not been disputed by the parties.
All the parties shall accept the judgment of the Tribunal as final and binding and execute it in
good faith in its entirety.
x
QUESTIONS PRESENTED
I. WHAT IS THE APPLICABLE LAW THAT SHOULD BE REFERRED TO IN
THIS DISPUTE
II. WHETHER OR NOT ATC HAS BREACHED THE AGREEMENT BY
DISTRIBUTING SAILOR’S CEYLON AFFIXED WITH THE ATC’S MARK
IN MALAYSIA
III. WHETHER OR NOT ATC’S USE OF THE WORD ‘CEYLON’ IN RESPECT
OF ITS TEA PRODUCTS IS MISLEADING
IV. WHETHER OR NOT ATC’S USE OF THE ATC’S MARK AMOUNTS TO
TRADEMARK INFRINGEMENT AND/OR PASSING OFF
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STATEMENT OF FACTS
1. The Sri Lankan Tea Board (SLTB) is a government-owned statutory institution
established in 1976, and is the apex regulatory and administrative body of the Sri
Lankan tea industry.
2. The Chelsea Tea Company (CTC) is a company incorporated in Sri Lanka,
established in 1965. CTC is a manufacturer of Ceylon Tea, under the brand name
‘CTC CEYLON’. The Chairman of the Board of Directors of CTC is Marvan
Ranatunga.
3. CTC CEYLON tea bears the famous heraldic lion insignia, which is affixed onto
labels or packaging of tea grown and manufactured entirely in Sri Lanka by approved
traders who conform to the quality standards set by the SLTB. SLTB has obtained
trademark registrations for the Lion Logo in many jurisdictions worldwide.
4. SLTB is also the proprietor of the Lion Logo in Malaysia. However, as per conditions
imposed by the Intellectual Property Corporation of Malaysia, SLTB has no exclusive
rights over the words ‘CEYLON TEA’ and ‘SYMBOL OF QUALITY’ contained in
their logo.
5. Almond Tea Company (ATC) is a company incorporated in Singapore. The managing
director of ATC is Philip Chan, a former ship captain, who has ventured into the tea
manufacturing and distribution business in Singapore and Malaysia.
6. In 2008, on a visit to Malaysia, Ranatunga met Chan. Ranatunga wanted to appoint
ATC as the exclusive distributor of CTC CEYLON in Malaysia. However, Chan was
not keen to accept this offer, as Ranatunga wanted ATC to cease the sale of all other
tea products in Malaysia.
7. Subsequently, one month later, a fungal disease destroyed the tea plantations of ATC.
Ranatunga took this opportunity to contact Chan again. After negotiations, CTC and
ATC agreed upon a monetary consideration, and entered into a distribution agreement
on 20th October, 2008.
8. CTC CEYLON developed a strong consumer base in Malaysia, and the total profits
from the sale of CTC CEYLON in Malaysia increased from year to year, exceeding
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the targets set by CTC. However, the Agreement was not renewed upon its expiry on
20th October, 2013, as CTC had set up its own Southeast Asian headquarters in Kuala
Lumpur.
9. In March, 2015, it came to CTC’s attention, that ATC had been growing and
manufacturing tea in China, and distributing such tea products under the brand name
‘SAILOR’S CEYLON’ in Malaysia, since November 2012.
10. CTC immediately wrote to ATC, asking for damages for the breach of the Agreement.
CTC also demanded that ATC should stop using the ATC’s Mark on the package of
their tea, and not use the word ‘Ceylon’ to describe their tea.
11. ATC denied any breach of the Agreement, and were of the view that they have the
right to use the word ‘Ceylon’ on their tea products, as well as ATC’s Marks on their
tea packages.
12. As the parties could not come to an agreement, they decided to settle the matter by
arbitration.
13. Further, the parties have agreed that the arbitration will be limited to the following
issues:
(a) What is the law that should be referred to in this dispute;
(b) Whether or not ATC has breached the Agreement by distributing SAILOR’S
CEYLON affixed with the ATC’s Mark in Malaysia;
(c) Whether or not ATC’s use of the word ‘CEYLON’ in respect of its tea products is
misleading; and
(d) Whether or not ATC’s use of the ATC’s Mark amounts to trademark infringement
and/or passing off.
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SUMMARY OF PLEADINGS
I. THE ARBITRATION AGREEMENT IS ENFORCEABLE
IRRESPECTIVE OF THE TERMINATION OF THE CONTRACT
The arbitration agreement between CTC and ATC survives the termination of the
underlying contract in accordance with Article 16(1) of the UNCITRAL Model Law, as
well as Article 23(1) of the KLRCA UNCITRAL Rules. The arbitration agreement
further does not terminate with the termination of the underlying contract, in accordance
with the generally accepted international principle of the Doctrine of Severability.
II. THE MALAYSIAN LAW IS THE LAW APPLICABLE TO THE
SUBSTANCE OF THIS DISPUTE
As per the KLRCA Rules, failure of parties to specify a seat of arbitration determines the
seat of arbitration as Malaysia. According to the Malaysian Arbitration Act, failing any
agreement in international arbitrations, the arbitral tribunal shall apply the conflict of law
rules to the material facts of the dispute to determine the applicable law. In the present
matter, the tribunal should apply conflict of law rules of Malaysia. It is an established
practice in Malaysia that on applying the conflict of laws rules, the applicable law is the
law that has the closest and most real connection to the dispute. In the present dispute,
the Laws of Malaysia bear the closest and most real connection.
III. ATC HAS BREACHED THE AGREEMENT BY DISTRIBUTING
SAILOR’S CEYLON AFFIXED WITH ATC’S MARK IN MALAYSIA
A breach of agreement is the failure to perform contractual obligations. The obligations
are fulfilled only if they meet the requirements mentioned in the agreement. In the present
dispute, ATC has failed to perform three specific obligations under the agreement, by
distributing SAILOR’S CEYLON with ATC’s mark in Malaysia. The requirements of the
provisions given in paragraphs 4.2, 9.3.6, and 9.3.7 of the agreement have been directly
contravened by ATC, thus resulting in breach of the agreement.
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IV. USE OF THE WORD “CEYLON” BY ATC IN RESPECT OF ITS TEA
PRODUCTS IS MISLEADING
ATC’s use of the word “Ceylon” in their trade-name “SAILOR’S CEYLON” has flouted
Art. 22(2) of the TRIPS agreement, which refers to misleading Geographical Indications.
Further, ATC has violated the provisions of Art. 10bis of the Paris Convention on
Protection of Industrial Property, referring to protection of geographical indications and
unfair competition. Finally, ATC’s use of “Ceylon” has also infringed S.3 of the
Geographical Indications Act, 2000. For all such reasons, ATC’s product is liable to
mislead the public and dilute CTC Ceylon’s established goodwill in Malaysia.
V. THE DEFENDANTS ARE LIABLE FOR INFRINGEMENT AND
PASSING OFF FOR THE USE OF ATC’S TRADEMARK.
Under Malaysian law, the claimant’s trademark is a well-known mark protected under
Section 70(b) of the Trade Marks Act 1976. The defendant is liable for infringement
under Section 38 of the Trade Marks Act 1976 for the use of an imitation of the
claimant’s mark that shares deceptive resemblance with the claimant’s registered
trademark. The use of the ATC Logo amounts to passing off under common law as the
claimant’s trademark had acquired a distinctive reputation in the Malaysian market and
the use of ATC’s logo by the defendant amounts to misrepresentation. The defendant’s
use of the disputed mark resulted in direct loss of sales of CTC Ceylon Tea.
1
WRITTEN SUBMISSIONS
I. THE ARBITRATION AGREEMENT IS ENFORCEABLE IRRESPECTIVE OF THE TERMINATION OF THE CONTRACT
1. It is humbly submitted that the arbitration agreement is valid notwithstanding the termination of the contract, in accordance with [A] Article 16(1) of the UNCITRAL Model Law, [B] The generally accepted International principle of Doctrine of Severability, and [C] Article 23(1) of the KLRCA UNCITRAL Rules
A. The Arbitration Agreement survives the termination of the contract in accordance with Article 16 of the UNCITRAL Model Law
2. Article 16 of the UNCITRAL Model law describing the competence of the arbitral tribunal states that: (1) The arbitral tribunal may rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause which forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.
3. The arbitration agreement in the current dispute is provided in Clause 22 of the agreement. It is submitted, that according to Article 16(1) of the UNCITRAL Model Law, it is independent of the other terms of the contract that defines the distributor-supplier relationship between the parties to the dispute. The term of the agreement has been defined under Section 1.1.4 as “period of 5 years commencing on the date of this agreement unless terminated earlier in accordance with the terms of this agreement”, the commencement date being 20th October, 2008. The parties submitted the dispute to arbitration proceedings under the arbitration clause in the contract after the expiry of the ‘term’. In the light of these facts and the law stated above, although the contract is inoperative at the time of bringing an action for arbitrational proceedings for breach of contract, the arbitration agreement survives and the Arbitral Tribunal derives its jurisdiction from such.
4. Further, the arbitral tribunal’s jurisdiction will only be affected where the defect causing the invalidity of the main contract necessarily extends, by its very nature, to the arbitration clause.1
1 A/CN.9/264, Analytical commentary on draft text of a model law on international commercial arbitration, under article 16, para. 2, available on the UNCITRAL website at http://www.uncitral.org/uncitral/en/commission/sessions/18th.html.
2
5. A series of decisions stands for the proposition that the termination of the contract will not necessarily affect the validity of the arbitration clause contained therein.2 The severability principle was also held to be applicable in cases where it was argued that the main contract was void on grounds of repudiation, fundamental breach or frustration.3
6. In Mulheim Pipecoatings GmbH. v. Welspun Fintrade Limited & Anr.,4 an Indian Court enforced the doctrine of severability. “Modeled on the UNCITRAL Model Law, the Act of 1996 incorporates the doctrine of the severability of an arbitration agreement from the underlying contract of which the agreement is a part into the statute. Section 16 of the Act of 1996 empowers the arbitral tribunal to rule on its own jurisdiction, including on any objection with respect to the existence or validity of the arbitration agreement. For that purpose: (a) An arbitration clause which forms part of a contract is to be treated as an agreement independent of the other terms of the contract; and (b) A decision by the arbitral tribunal that the contract is null and void shall not entail ipso jure the invalidity of the arbitration clause.”
7. For all the foregoing reasons, it is submitted that the arbitration agreement survives the termination or expiry of the Agreement between CTC and ATC, and the tribunal derives its jurisdiction from such Agreement.
B. The Arbitration Agreement survives even after termination of the contract, in accordance with the generally accepted principle of Doctrine of Severability
8. It is humbly submitted that although an arbitration agreement is part of the main contract, the law regards it as a collateral and independent part of the contract, and for valid reason, quite apart from the need to preserve the business efficacy of commercial dealings. The main contract defines substantive obligations and corresponding rights. An arbitration agreement is an agreement on dispute resolution which is independently capable of specific enforcement. Hence, an arbitration agreement can and does survive a termination, repudiation or frustration of the contract. The law has evolved the doctrine of severability as the basis for enabling parties to arbitrate, independent of the status of their contract.
2 Cecrop Co. v. Kinetic Sciences Inc., Supreme Court of British Columbia, Canada, 9 April 2001, [2001] BCSC 532 (CanLII); Net Sys Technology Group AB v. Open Text Corp., Ontario Superior Court of Justice, Canada, 29 July 1999, [1999] CanLII 14937 (ON SC); CLOUT case No. 178 [Siderurgica Mendes Junior S.A. v. “Icepearl” (The), Supreme Court of British Columbia, Canada, 31 January 1996], [1996] CanLII 2746 (BC SC); CLOUT case No. 349 [Harper v. Kvaerner Fjellstrand Shipping A.S., Supreme Court of British Columbia, Canada, 13 September 1991]3 CLOUT case No. 20 [Fung Sang Trading Limited v. Kai Sun Sea Products and Food Company Limited, High Court—Court of First Instance, Hong Kong, 29 October 1991], [1991] HKCFI 190; CLOUT case No. 368 [Campbell et al. v. Murphy, Ontario Court of Justice—General Division, Canada, 9 August 1993], [1993] CanLII 5460 (ON SC); CLOUT case No. 32 [Mind Star Toys Inc. v. Samsung Co. Ltd., Ontario Court of Justice—General Division, Ontario, Canada, 30 April 1992]4 Appeal (L) No. 206 of 2013 in Arbitration Petition No. 1070 of 2011 in Suit No. 2287 of 2011
3
9. The principles of law which were formulated in the judgment Justice Subba Rao,5
speaking for the majority in the Supreme Court are as follows, “[There are] many categories of disputes in connection with a contract, such as the question of repudiation, frustration, breach, etc. In those cases it is the performance of the contract that has come to an end, but the contract is still in existence for certain purposes in respect of disputes arising under it or in connection with it. As the contract subsists for certain purposes, the arbitration clause operates in respect of these purposes."
10. Further, in Mitsui Osk Lines Ltd. v. Orient Ship Agency Pvt. Ltd.6 even where the matrix contract is held to be void, the arbitration agreement may still be upheld as a valid and independent agreement so that any dispute must be referred to arbitration.
11. Additionally, in a foreign arbitral award7 given by Foreign Trade Court of Arbitration attached to Serbian Chamber of Commerce, it was stated that “Although the underlying contract has expired, in its own terms, on 31st December 2007, the arbitration clause contained in the contract was clearly not time-barred in the same manner and its operation could have been invoked (and was indeed invoked) at a later point in time. The arbitration clause itself provides that it 'shall survive termination or expiration of (the Contract)'. Therefore, the fact that the arbitration clause wasinvoked after the expiration of the contract does not affect jurisdiction of this arbitration. Even if the clause itself were silent on this, the outcome would be the same. Every dispute resolution clause is clearly meant to survive the expiration or termination (avoidance) of the underlying contract, at least to resolve disputes arising out of the expired contract. Otherwise, effectiveness of dispute resolution clauses would be severely limited.”
12. It is further submitted that Clause 17 of the Agreement between CTC and ATC states that, “Delay by the Supplier in exercising any rights arising from any of the Distributor’s defaults or omission to exercise them shall not affect or impair the Supplier’s rights in respect of those defaults or any default of any kind.”
5 Supra note 46 Mitsui Osk Lines Ltd. v. Orient Ship Agency Pvt. Ltd., in the High Court of Bombay, Chamber Summons no. 1304 of 2010 in arbitration petition no. 156 of 2002, at ¶297 In re. Medicaments Case, Proceedings No. T-8/08 (28 January 2009)
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13. Moreover, it was held in Heyman v. Darwine Ltd.8 that, “If, however, the parties are at one in asserting that they entered into a binding contract, but a difference has arisen between them as to whether there has been a breach by one side or the other, or as to whether circumstances have arisen which have discharged one or both parties from further performance, such differences should be regarded as differences which have arisen "in respect of", or "with regard to", or "under" the contract, and an arbitration clause which uses these, or similar, expressions, should be construed accordingly. By the law of England, such an arbitration clause would also confer authority to assess damages for breach even though it does not confer upon the arbitral body express power to do so.”
14. It is therefore humbly submitted, that the validity of the arbitration agreement is independent of the validity of the contract, and the tribunal derives its jurisdiction by such agreement.
C. The Arbitration Agreement survives the termination of the Agreement between CTC and ATC as per the KLRCA UNCITRAL Rules
15. Article 23(1) of the KLRCA UNCITRAL rules providing for the pleas as to jurisdiction states: “The arbitral tribunal shall have the power to rule on its own jurisdiction, including any objections with respect to the existence or validity of the arbitration agreement. For that purpose, an arbitration clause that forms part of a contract shall be treated as an agreement independent of the other terms of the contract. A decision by the arbitral tribunal that the contract is null shall not entail automatically the invalidity of the arbitration clause.
16. According to Lord Macmillan: "I am accordingly of opinion that what is commonly called repudiation or total breach of a contract, whether acquiesced in by the other party or not, does not abrogate a contract, though it may relieve the injured party of the duty of further fulfilling the obligations which he has by a contract undertaken to the repudiating party. The contract is not put out of existence, though all further performance of the obligations undertaken by each party in favour of the other may cease. It survives for the purpose of measuring the claims arising out of the breach, and the arbitration clause survives for determining the mode of their settlement. The purposes of the contract have failed, but the arbitration clause is not one of the purposes of the contract."9
17. In the event that a contract expires as a result of novation, settlement, rescission or avoidance, the arbitration agreement survives.10
8 Heyman v. Darwine Ltd., (1942) 1 All E.R. 3379 [1942] 1 All ER 337 (HL)10 See Cosiac v. Consorts Luchetti, CA Paris, 4th March, 1986 and commentary by C. Jarrosson
5
18. In Riley Manufacturing Co. v. Anchor Glass Container Corp.11 it was held that "Under the federal common law of arbitrability, an arbitration provision in a contract is presumed to survive the expiration of that contract unless there is some express or implied evidence that the parties intend to override this presumption... Thus, when a dispute arises under an expired contract that contained a broad arbitration provision, courts must presume that the parties intended to arbitrate their dispute. This is so even if the facts of the dispute occurred after the contract expired."
19. Thus, it is reiterated to submit that the Arbitration agreement stands valid on expiry or termination of the contract, by virtue of Article 23(1) of the KLRCA UNCITRALRules.
11 1998 WL 601098, 10th Cir
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II. THE MALAYSIAN LAW IS THE LAW APPLICABLE LAW TO THE SUBSTANCE OF THIS DISPUTE
20. It is humbly submitted that the Malaysian Law is the applicable law to the substance
of this dispute because [A] the tribunal should apply conflict of law rules of Sri
Lanka, and [B] Malaysian Law has the closest and most real connection to this
dispute.
A. The Conflict of Laws rules of Sri Lanka is applicable in the present matter21. As per the Laws of Sri Lanka, failing any agreement in international arbitrations, the
arbitral tribunal shall apply the conflict of law rules to the material facts of the dispute
to determine the applicable law.12
22. Further, by selecting the KLRCA Rules, the parties have agreed that in absence of an
agreement determining the choice of law, the Tribunal should determine the
appropriate law applicable to the substance of the dispute by way of conflict of law
rules.13
23. The historic view in many civil and common law states was that international arbitral
tribunals were mandatorily required to apply the arbitral seat’s choice of law rules.14
Consistent with this view, a number of arbitral awards have held that the local conflict
of laws rules of the arbitral seat are applicable and, in some cases, mandatorily
applicable.15
24. In the words of one award, “on any question of choice of law [the arbitrator] must
therefore apply the relevant rules of private international law of [the seat of
arbitration].”16 A variation of this rule adopted in some arbitral awards was that,
although not mandatorily applicable, the conflict of laws rules of the arbitral seat
nonetheless should be applied, either because they were impliedly chosen by the
parties17 or because they were otherwise appropriate.18
25. It is humbly submitted that the conflict rules of the seat is certain and efficacious, and
it will avoid the complexity and ambiguity for arbitrators deciding between various
existing conflicts rules. Therefore the conflict of law rules of Sri Lanka is applicable
12 The Sri Lankan Arbitration Act, 1995, Sec. 24(2)13 KLRCA UNCITRAL Rules, Art. 3514 GARY B. BORN, INTERNATIONAL COMMERCIAL ARBITRATION, VOLUME II (2nd edn., Kluwer Law International, 2014), pg. 263715 Award in ICC Case No. 8385, in J.J. Arnaldez, Y. Derains & D. Hascher, Collection of ICC Arbitral Awards 1996-2000 474 (2003); Interim Award in ICC Case No. 6149, XX Y.B. Comm. Arb. 41 (1995); Final Award in Hamburg Friendly Arbitration Case of 29 December 1998 XXIVa Y.B. Comm. Arb. 13 (1999)16 Final Award in ICC Case No. 5460, XIII Y.B. Comm. Arb. 104, 106 (1988)17 Final Award in ICC Case No. 9771, XXIX Y.B. Comm. Arb. 46, ¶18 (2004)18 Award in ICC Case No. 4237, X Y.B. Comm. Arb. 52, 54 (1985)
7
to determine the applicable law governing the substance of this dispute.
B. Malaysian law has the closest and most real connection to the law governing the underlying agreement
25. It is an established practice that on applying the conflict of law rules, the applicable
law is that law which has the closest and most real connection to the dispute.19
Further, the determination of the law with the closest and most real connection
involves consideration of several connecting factors.20
26. It is humbly submitted that where there is no explicit expression of the governing law
or proper law in a contract, the proper law of the contract shall be that with which the
transaction has its closest and most real connection. It has been held by Denning LJ
that the proper law of the contract depends not so much on the place where it is made,
not even on the intention of the parties or on the place where it is to be performed, but
on the place with which it has the most substantial connection.21 The proper law of the
contract has been defined as the system of law by reference to which the contract was
made, or that with which the transaction has its closest and most real connection.22 In
the absence of an express choice, an arbitrator may resort to a variety of connecting
factors: the place of execution of the contract,23 the place of performance,24 etc.
27. In an award,25 it was observed that the contract was concluded in Pakistan. The place
of performance was also Pakistan. Further, payment of the purchase price was also
effected in Pakistan. In consequence, the connecting principles generally recognised
in private international law, such as lex loci contractus, lex loci executionis, and lex
loci solutionis, pointed unanimously to the fact that Pakistani law should be applied to
the contract. As, a result, it was held that the dispute should be decided according to
the substantive law valid in Pakistan.
28. One of the most significant factors in determining the closest connection to a
particular legal system is the place of performance of the contract. Where the contract
is to be performed is indicative of the law that ought to govern it. Lord Simonds
19 Bonython v. Commonwealth of Australia, (1951) AC 201, 219 (Privy Council on appeal from Australia); Y.K. Fung Securities Sdn Bhd v. James Cape (Far East) Ltd., 3 (1997) 2 MLJ 62120 Ibid21 Boissevain v. Weil, (1959) 1 KB pg. 482 at ¶49022 Bonython v. Commonwealth of Australia, (1951) AC 20123 Middle East Ltd. v. Arab Republic of Egypt, 22 ILM (1983), pg. 752 at pg. 769 ¶4924 Ibid25 Award 1961 No. Vb 1024, cited by Mora in Questions of International Law (Hungarian Branch of the International Law Association) 1964, 141.
8
referred to it as being sometimes a decisive factor.26
29. Lord Denning indicated a series of factors that point towards one law as the proper
law of the contract; namely, inter alia, the place of making it, the currency agreed
upon, the place of administration, and the language used.27
30. It is humbly submitted that in the present dispute, the legal system that has the closest
and most real connection to the dispute, is Malaysian law. The factors discussed in
various cases, that determine closest connection, all unanimously point to the fact that
Malaysian Law should be applied, and be the governing law of the contract.
31. It has been held that several connecting factors are involved, in determining the
closest connection.28 It is pertinent to mention that the Distribution Agreement29
between CTC and ATC was signed in Malaysia. Further, the Agreement was for the
distribution of tea in Malaysia, and the contract was performed in Malaysia.
Therefore, the principles generally recognised in private international law, such as lex
loci contractus, lex loci solutionis, and lex loci executionis, point to the fact that
Malaysian Law has the closest connection with the present dispute. Moreover, as per
the Agreement, the currency agreed upon for payment is Ringgit Malaysia.
32. It is humbly submitted that the aforementioned factors together make it clear that the
test for closest connection is satisfied, and it is Malaysian Law that has the closest and
most real connection to the present dispute. Therefore, the proper law or the law
governing the contract, i.e. the law applicable to the substance of the dispute is
Malaysian Law.
26 Bonython v. Commonwealth of Australia, (1951) AC 201, at pg. 219.27 Sayers v. International Drilling Co. N.V., (1971) 1 WLR 117628 Supra note 1229 Appendix A of the compromis
9
III. ATC HAS BREACHED THE AGREEMENT BY DISTRIBUTING SAILOR’S CEYLON AFFIXED WITH ATC’S MARK IN MALAYSIA
33. As per the laws of Malaysia, “When a contract has been broken, the party who suffers
by the breach is entitled to receive, from the party who has broken the contract,
compensation for any loss or damage caused to him thereby, which naturally arose in
the usual course of things from the breach, or which the parties knew, when they
made the contract, to be likely to result from the breach of it.”30
34. It is humbly submitted that there is a breach in contract, and CTC is entitled to
appropriate remedies because [A] the obligations under the agreement were not
fulfilled by ATC, and [B] CTC has not affirmed the contract.
A. The obligations under the agreement were not fulfilled by ATC35. A breach of contract occurs if there is a failure to perform a contractual obligation.
Furthermore, a party’s obligation to perform is only discharged if the performance
rendered matched the requirements of the contract. If such requirements are not
fulfilled, there is a failure to perform. The breach may consist in the non-performance
of the relevant obligation, or its performance in a manner or at a time which fails to
comply with the requirements of the contract.31
36. In the case of Symbion Pharmacy Services Pty. Ltd. v. Idameneo (No. 789) Ltd.,32 the
distribution of the goods of the plaintiff company was given to a third party. This
agreement contained a term that prohibited the third party from using any mark
similar to or capable of being confused with the plaintiff’s mark. However, the third
party began using such a mark, and the plaintiff brought an action for breach of the
agreement. It was held that the use of a similar mark amounted to breach of the
agreement, and the third party was restrained from using the mark.
37. In the Veneer Import Case,33 a Malaysian seller entered into a contract with a Chinese
buyer, for the sale and purchase of Malaysian veneer. Subsequently, the seller was
unable to deliver the goods, and remitted only 60 percent of the sum, and withheld the
rest. The tribunal ordered the seller to return the remainder of the price, and
compensate the buyer for lost profits as a consequence of the seller’s breach of
contract.
30 The Malaysian Contracts Act, 1950, Sec. 74(1)31 J. BEATSON, A. BURROWS, & J. CARTWRIGHT, ANSON’S LAW OF CONTRACT, (29th edn., Oxford University Press, 2010), pg. 50632 Symbion Pharmacy Services Pty. Ltd. v. Idameneo (No. 789) Ltd., (2011) FCA 38933 Award in Case No. CISG/1992/02
10
38. In another case,34 where the contract specified that the goods, i.e. timber staves were
to be half an inch in thickness, and only about five percent of the goods matched such
requirement, the House of Lords held that the sellers were in breach of the contract.
Further, where a promise to deliver goods on a particular day was made, and the
goods were not delivered, there was a failure to perform.35
39. A promise may be positive or negative in character.36 Where it is necessary to do so,
whether a promise is positive or negative is determined as a matter of substance rather
than form.37 No matter what the form of the promise, if inaction on the part of the
promisor would constitute a failure to perform, the obligation will generally be
positive in character.38
40. It is most humbly submitted that in the present dispute, the distribution of SAILOR’S
CEYLON affixed with ATC’s mark in Malaysia, is a breach of three specific
provisions of the Distribution Agreement, on part of ATC.
i. Breach of Clause 4.2 of the Agreement
41. Clause 4.2 of the Agreement states that, “During the Term and for a period of 12
months after it the Distributor must not be concerned or interested, either directly or
indirectly, in the manufacture or distribution in the Territory of any goods that
compete with the Products, affixed with the Trade Marks or any other arguably
similar mark in the Territory.”
42. The Agreement was entered into on 20th October, 2008,39 and the same expired on
20th October, 2013, and was not renewed.40 ATC had been distributing tea products
under the brand name SAILOR’S CEYLON in Malaysia since November, 2012.41
ATC’s mark is arguably and deceptively similar to CTC’s Trade Mark. Further, under
ATC’s mark, ATC was distributing tea products in Malaysia.
43. This is thus a breach of the Agreement, as the act of distributing tea products under an
arguably similar mark during the Term of the Agreement is specifically prohibited by
Clause 4.2 of the Agreement.
34 Arcos Ltd. v. E.A. Ronaasen & Son, (1933) AC 47035 Contrast Monkland v. Jack Barclay Ltd., (1951) 2 KB 25236 J.W. CARTER, CARTER’S BREACH OF CONTRACT (LexisNexis Butterworths, 2011), pg. 3237 Ibid38 Administrative and Clerical Officers Association v. The Commonwealth, (1979) 26 ALR 497 at 50139 ¶11 of the compromis40 ¶13 of the compromis41 ¶14 of the compromis
11
ii. Breach of Clause 9.3.6 of the Agreement
44. Clause 9.3.6 of the Agreement states that the Distributor must not “use in relation to
the Products any trade marks other than the Trade Marks without obtaining the prior
written consent of the Supplier”.
45. In the present dispute, ATC started distributing SAILOR’S CEYLON tea products
under ATC’s mark, in November 2012. ATC had not obtained any such prior written
consent of the Supplier before doing so. It is pertinent to mention here, that it was
only in 2015, that it came to the Supplier’s attention, that ATC had been distributing
SAILOR’S CEYLON tea products under ATC’s mark.42 The use of ATC’s mark is in
contravention to the provision laid down in Clause 9.3.6 of the Agreement, and
therefore a breach of the Agreement.
iii. Breach of Clause 9.3.7 of the Agreement
46. Clause 9.3.7 of the Agreement states that the Distributor must not “use in the
Territory any trade marks or trade names so resembling the Trade Marks, any trade
marks or trade names of the Supplier as to be likely to cause confusion or deception.”
47. In the current dispute, ATC distributed SAILOR’S CEYLON under ATC’s mark, in
Malaysia. ATC’s mark is deceptively similar to CTC’s mark, and can cause confusion
to the consumers of the tea products. Further, this mark was used in the Territory of
Malaysia.
48. Therefore, this act of ATC is in contravention to the provision laid down in Clause
9.3.7 of the Agreement, and thus a breach of the same.
B. CTC has not affirmed the contract49. Affirmation is a voluntary act, and requires knowledge.43 The traditional position was
that a party need only have knowledge of the facts which give rise to the right to
affirm or terminate.44 Further, recent cases suggest that a party cannot be called upon
to make an election or be held to have made an election, unless, in addition to the
knowledge of the relevant facts, that party has knowledge of the right to elect.45
42 ¶14 of the compromis43 J. BEATSON, A. BURROWS, & J. CARTWRIGHT, ANSON’S LAW OF CONTRACT, (29th edn., Oxford University Press, 2010), pg. 51044 Matthews v. Smallwood, (1910) 1 Ch. 777, Kammins Ballrooms Co. Ltd. v. Zenith Investments Ltd., (1971) AC 85045 Peyman v. Lanjani, (1985) Ch. 457
12
50. It is submitted that in the present dispute, the fact that ATC had been using the brand
name ‘SAILOR’S CEYLON’ in Malaysia since November, 2012, came to the
knowledge of CTC only in March, 2015.46 Thus, CTC had no knowledge of the fact
of breach of the Agreement during the Term of the Agreement.
51. It is humbly submitted that in view of the fact that CTC had no knowledge of the
breach during the Term of the Agreement, it cannot be said that CTC had affirmed the
contract even after such breach. Thus, there has been no affirmation of the contract by
CTC, after breach of the same.
46 ¶14 of the compromis
13
IV. ATC’S USE OF THE WORD ‘CEYLON’ IN RESPECT OF ITS TEA PRODUCTS IS MISLEADING
52. It is humbly submitted that ATC’s use of the word ‘CEYLON’ in respect of its tea
products is misleading because [A] ATC’s use of the word ‘CEYLON’ with respect to
its tea products violates article 22(2) of the trips agreement, [B] ATC’s use of
‘CEYLON’ with respect to their tea products is misleading and creates a situation of
unfair advantage as it violates article 10bis of the Paris Convention on the protection
of industrial property, and [C] ATC’s use of the word ‘CEYLON’ with respect to its
tea products is misleading for breach of sec. 3 of the geographical indications act,
2000.
A. ATC’s use of the word ‘CEYLON’ with respect to its tea products violates article 22(2) of the TRIPS Agreement
53. Article 22(1) of TRIPS defines Geographical indication as “Geographical indications
are, for the purposes of this Agreement, indications which identify a good as
originating in the territory of a Member, or a region or locality in that territory, where
a given quality, reputation or other characteristic of the good is essentially attributable
to its geographical origin.”47
54. Further, Art 22(2) of TRIPS agreement states that in respect of geographical
indications, Members shall provide the legal means for interested parties to prevent:
(a) the use of any means in the designation or presentation of a good that indicates or
suggests that the good in question originates in a geographical area other than the true
place of origin in a manner which misleads the public as to the geographical origin of
the good;
(b) any use which constitutes an act of unfair competition within the meaning of
Article 10bis of the Paris Convention (1967).
55. It is submitted that the word “Ceylon” has acquired the status of a geographical
indication for tea grown and manufactured in Sri Lanka. Further, “Ceylon” being Sri
Lanka’s previously known colonial name, also indicates the origin of the good. In
such a circumstance, CTC Ceylon was the registered users of the Lion Logo, which
when affixed with a tea product indicated pure Ceylon Tea grown and manufactured
in Sri Lanka. Although “CTC Ceylon” was not a registered trademark in Malaysia, it
indicated the origin or quality or characteristic of the good attributed to Sri Lanka.
Further, the Lion Logo, which consists of the brand name “Ceylon Tea”, is a
47 Art.22(1) of Trade Related Intellectual Property Rights Agreement
14
recognized brand in various jurisdictions around the world. ATC’s “SAILOR’S
CEYLON”, an unregistered mark in Malaysia, clearly intends to mislead the public as
to the origin of the tea, which in reality is grown and manufactured in China.
56. It further intends to dilute the goodwill established by CTC Ceylon in Malaysian
Market. Evidence of misleading can also be established by the effect ATC’s
SAILOR’S CEYLON on the sales of CTC Ceylon.
“CTC continued to make some profits although its sales fell by 30% in 2013. The
sales suffered a further 15% drop in 2014. The 2015 figures, however, reported a
slight increase of 8% from the previous year.48” ATC initiated sale of SAILOR’S
CEYLON in November, 201249 and this reasonably manifests the inverse relationship
between CTC Ceylon’s sales and the entry of ATC’s competing product as
SAILOR’S CEYLON in the Malaysian market.
57. A protected appellation of origin is “the geographical name of a country, region, or
locality, which serves to designate a product originating therein, the quality and
characteristics of which are due exclusively or essentially to the geographical
environment, including natural and human factors.”50 Moreover, designations that are
not “direct geographical names”, but are instead traditional names also exist.51 For
example, “Basmati” is taken to be an indication for rice coming from the Indian sub-
continent,52 and “Feta” for cheese from Greece, although these names are
designations of a particular place.
58. Ceylon Tea, grown and manufactured in Sri Lanka and approved by traders to
conform to the quality standards set by the SLTB, owes its quality and world-wide
reputation that is registered in various jurisdictions worldwide53 to its geographical
origin. The proclaimed quality is represented by the Lion Logo, the registered
proprietor being SLTB.54 However, ATC’s tea product under the brand name Sailor’s
Ceylon grows and manufactures its tea products in China.55 This creates confusion in
48 Clarifications to the compromis49 ¶14 of the compromis50 Lisbon Agreement for the Protection of Origin and their International Registration, Oct. 31, 1958, [hereinafter Lisbon Agreement] at http://www.wipo.int/lisbon/en/legal_texts/lisbon_agreement.html.51 See, e.g., The Geographical Indications of Goods (Registration and Protection) Act, No. 48, § 2 (1999) (India) [hereinafter India Act], available at http://www.wipo.int/clea/docs_new/pdf/en/in/in010en.pdf.52 Ibid53 ¶4 of the compromis54 Appendix A55 Clarifications to compromis
15
the minds of consumers, and misleads the public as to its true origins.
59. However, Article 24(9) of the TRIPS agreement states “There shall be no obligation
under this Agreement to protect geographical indications which are not or cease to be
protected in their country of origin, or which have fallen into disuse in that country.”
60. In reference to the above, it is submitted that Ceylon Tea as a geographical indication
is protected in the country of origin and has not ceased to be protected by virtue of
Section 191 of the Intellectual Property Act, no. 36 of 2003 pertaining to Sri Lankan
Intellectual Property legislations. It states as such;
Any person who (a) Makes a false declaration to the Director-General ; (b) Makes a
false declaration in respect of geographical indication inclusive of Ceylon Tea and
Ceylon Cinnamon, shall be guilty of an offence and shall be liable on conviction by a
Magistrate to a fine not exceeding five hundred thousand rupees.56
61. In Australian Woolen Mills Ltd v. F S Walton and Co. Ltd. 57 the test to be applied in
considering whether a registered trade mark has been infringed was expressed by
Dixon and McTiernan JJ in the following terms: “If a mark is in fact or from its
nature likely to be the source of some name or verbal description by which buyers
will express their desire to have the goods, then similarities both of sound and of
meaning may play an important part. The usual manner in which ordinary people
behave must be the test of what confusion or deception may be expected. Potential
buyers of goods are not to be credited with any high perception or habitual
caution. On the other hand, exceptional carelessness or stupidity may be
disregarded. The course of business and the way in which the particular class of
goods are sold gives, it may be said, the setting, and the habits and observation of men
considered in the mass affords the standard. Evidence of actual cases of deception, if
forthcoming, is of great weight.”
62. In California Fruit Canners Association v. Myer,58 The court recognized the right to
sue the name “California” as a trade designation in respect of fruit. Accordingly, the
defendants were restrained from using the deceptive labels as it had acquired a special
trade significance of value with regard to article of food and particularly with regard
to fruits the place where they were grown which creates often an essential distinction
as to quality and flavor; and this distinction, when it has become known in trade by
56 Section 191 of the Intellectual Property Act, no.36 of 200357 Australian Woollen Mills Ltd v. F S Walton and Co Ltd., (1937) 58 CLR 641 at 65858 California Fruit Canners Association v. Myer, (1899) 104 Federal Reporter 82.
16
the geographical name of the place where grown, the growers of the fruit are entitled
to the benefit of and the consumers should not be deceived.
63. Thus it is submitted that the use of the word “Ceylon” by ATC is misleading and in
violation of Art. 22(2) of the TRIPS agreement.
B. ATC’s use of ‘CEYLON’ with respect to their tea products is misleading and creates a situation of unfair advantage as it violates article 10bis of Paris Convention on the Protection of Industrial Property
64. It is humbly submitted that ATC’s use of the word ‘CEYLON’ in respect to their tea
products is an act of unfair competition, which is directed at misleading the public as
to the quality or origin of the good and diluting their goodwill established in
Malaysia. Malaysia, being a signatory to the Paris Convention of Protection of
Industrial Property59 is bound by the provisions stated as such;
65. Article 10bis of Paris Convention on the Protection of Industrial Property provides for
such;
(1) The countries of the Union are bound to assure to nationals of such countries
effective protection against unfair competition.
(2) Any act of competition contrary to honest practices in industrial or commercial
matters constitutes an act of unfair competition.
(3) The following in particular shall be prohibited:
(iii) indications or allegations the use of which in the course of trade is liable to
mislead the public as to the nature, the manufacturing process, the characteristics, the
suitability for their purpose, or the quantity, of the goods.
Article 10ter enlists further the following provision;
(1) The countries of the Union undertake to assure to nationals of the other countries
of the Union appropriate legal remedies effectively to repress all the acts referred to in
Articles 9, 10, and 10bis.
66. It is further submitted that ATC’s SAILOR’S CEYLON in its course of trade is liable
to mislead and deceive the public as to the characteristics attributed to Ceylon Tea
globally. The consumers’ mental association between the indication, the place, the
goods, the qualities or characteristics of the goods, and the producers elevates a
geographic sign to the level of a distinctive source identifier such that it functions to
distinguish one producing source from another producing source when used on
59 Www.wipo.int. WIPO, n.d. Web. 30 Mar. 2016
17
particular goods.60 Thus, as pointed out by WIPO, false use of geographical
indications by unauthorized parties is detrimental to consumers and legitimate
producers.61
67. Furthermore, The WIPO Standing Committee while dealing with the conflict between
trademark and geographical indications observed: “A geographical indication is best
protected under trademark and unfair competition law. Trademarks having acquired in
good faith had to be protected against conflicting geographical indications.”62
68. Additionally, in Pochampally Ikat case,63 a suit for permanent injunction restraining
infringement of GI, passing off, unfair competition, delivery up, etc was filed by the
Plaintiffs against the Defendants. The Defendants are manufacturing and selling their
product with label HYCO Pochampally, which is visually and phonetically similar to
the Plaintiffs GI and product Pochampally IKAT. The adoption by Defendants of
word Pochampally in HYCO Pochampally in respect of identical goods would lead to
confusions and deceptions in the minds of the consumers leading to the passing off
the Defendant’s goods as those of the Plaintiffs and unfair competition. The use of
“pochampally” in HYCO Pochampally is of nature off since the products is not made
using the traditional methods significant to the GI, but instead is a product made on
power looms. Thus, the adoption of the mark HYCO Pochampally by the Defendants
is a blatantly dishonest and mala fide attempt to derive unfair advantage by creating
the impression that the Defendant’s products have some connection, nexus,
association, affiliation with or endorsement by Plaintiffs.
69. Thus, it is submitted that the use of the word “Ceylon” by ATC creates a situation of
unfair competition and violates Art. 10bis of the Paris Convention on Protection of
Industrial Property.
C. ATC’s use of the word ‘CEYLON’ with respect to its tea products is misleading for breach of Section 3 of the Geographical Indications Act, 2000
70. Section 3 of the Geographical Indications Act, 2000 states that, Protection under this
Act shall be given to a geographical indication-
(a) regardless whether or not the geographical indication is registered under this Act;
and
60 Amy P. Cotton, 123 Years at the Negotiating Table and Still No Dessert? The Case in Support of TRIPS Geographical Indication Protections, 82 CHI.-KENT L. REV. 1295, 1295 (2007).61 Supra note 562 Draft Report of the International Bureau of WIPO, Geneva, 13-17 July 1998 at p263Kirti Bikram, Article on Geographical Indications, available at http://www.manupatra.co.in/newsline/articles/Upload/42119A6A-EBC6-471C-8E20-FC10640DEC09.pdf
18
(b) as against another geographical indication which, although literally true as to the
country, territory, region or locality in which the goods originate, falsely represents to
the public that the goods originate in another country, territory, region or locality.
71. Geographical Indications serve as a tool for securing consumers’ loyalty by
establishing the link between products attributes and the geographical origin. In
economic terms, a geographical indication essentially permits producers to increase
rents based on product differentiation, that is, a form of monopolistic competition
prevalent in the modern economy where there are elements of both monopoly and
perfect competition.64
72. A prime example in this context would be the case of the Basmati Rice indigenous to
the Indian sub-continent. American manufacturers were attempting to free ride on the
extensive goodwill and customer recognition of basmati.65 While the consumers are
induced with the belief that they are buying goods of a particular attribute, they are in
effect duped with an imitation. This harms the business and reputation of the
manufacturers. The uniqueness vests in that the producer or manufacturer of the
product is a collective, a group that has some unifying inherent characteristic, trait or
quality that it is trying to protect.66 Likewise, protection of geographical indications
considers the traditions and number of generations associated with production of the
food or beverage.67
73. Protecting a geographical indication (GI) enables those who have the right to use the
indication to take measures against others who use it without permission and benefit
from its reputation also known as “free-riders”. A geographical indication’s reputation
is a valuable, collective, and intangible asset. If not protected, it could be used without
restriction and its value diminished and eventually lost. E.g. ‘Darjeeling’ (India) for
tea68; ‘Stilton’ (Great Britain) for cheese69; ‘Swiss’ (Switzerland) for chocolate; and
‘Roquefort’ (France) for cheese – have been protected by the United States as
64 Paris Convention for the Protection of Industrial Property, art. 1(2), Mar. 20, 1883, 21 U.S.T. 1583, 828 U.N.T.S. 305 [hereinafter Paris Convention]; Lisbon Agreement for the Protection of Appellations of Origin and their International Registration, art. 2, Oct. 31, 1958, 923 U.N.T.S. 205 [hereinafter Lisbon Agreement]65 D. Rangnekar, The Pros and Cons of Stronger Geographical Indication Protection, at http://www.iprsonline.org/ictsd/docs/RangnekarBridgesYear6N3MarchApril2002.pdf.66 Michelle Agdomar, Removing the Greek from Feta and Adding Korbel to Champagne: The Paradox of Geographical Indications in International Law, 18 FORDHAM INTELL. PROP. MEDIA & ENT. L.J. 541, 560 (2008).67 Stacy D. Goldberg, Who Will Raise the White Flag? The Battle between the United States and the European Union over the Production of Geographical Indications, 22 U. PA. J. INT‟L. ECON. L. 107, 108 (2001).68 US Registration No. 1,632,72669 US Registration No. 1,959,589
19
registered certification marks.
74. Additionally, referring to protection of Geographical Indications in a similar dispute,
the Malaysian High Court in Chocosuisse Union des fabricants Suisses de Chocolat
& Ors v Maestro Swiss Chocolate Sdn Bhd & Ors70 gave relevant decisions. The
respondents had used the words 'Maestro SWISS' in relation to chocolates and
chocolate related products with the brand name 'Vochelle'. The appellants contended
that given the reputation and goodwill for fine quality chocolates made in and
exported from Switzerland, the use of the words 'Maestro SWISS' would lead a
significant number of the Malaysian public to believe that the products were
manufactured in Switzerland or by a Swiss manufacturer.
75. In allowing the appellants “action for passing-off the Court of Appeal held, inter alia,
that :- (a) in an action for extended passing off, such as the present case, the test is not
whether the use by the alleged infringer of the impugned mark, name, description or
other indication on his goods may induce members of the buying public to believe
that the goods are manufactured by the complainant, but whether such use has the
likelihood of inducing the relevant members of the buying public to believe that the
goods bearing the impugned mark, name, description or other indication belong to a
distinctive group of goods with recognisable and distinctive qualities that has acquired
a certain goodwill and reputation; and (b) there was a likelihood of confusion in the
minds of some members of the public that the chocolate products manufactured and
marketed by the respondents came from the distinctive group of Swiss chocolates. On
the issue of contravention of the Act, the Court held that :- (a) the words “Maestro
SWISS” is a geographical indication within the definition in Section 2 of the Act; and
(b) the appellants‟ claim under the Act could not be sustained in view of Section
27(2) of the Act since the respondents had started using the words 'Maestro SWISS'
before the commencement of the Act.
76. Further, in Britt Allcroft (Thomas) LLC v Miller71 it was in question whether
respondent’s use of shop name ‘The Thomas Shop’ connotes an association with
applicants when respondent sells exclusively products licensed by applicants to be
manufactured and whether it constitutes misleading and deceptive conduct. It was
held to be misleading as it was substantially identical with the applicant’s products
and moreover, the relationship of licensor and licensee between the applicant and
70 [2013] 6 CLJ 5371 Britt Allcroft (Thomas) LLC v. Miller, [2000] FCA 699
20
respondent was significant to arrive at such a decision.
77. Thus, it is submitted that the use of the word “Ceylon” by ATC as a trade name is in
violation of S. 3 of the Geographical Indications Act, 2000.
21
V. THE DEFENDANT’S USE OF THE ATC’S MARK FOR THE SALE OF SAILOR'S CEYLON AMOUNTS TO INFRINGEMENT AND PASSING OFF
A. The CTC Trademark is protected under section 70(b) of the Trade Marks Act, 197678. Under section 70B(1) of the Trade Marks Act 1976, a proprietor of a trade mark that
is entitled to protection under Article 6bis of the Paris Convention72 as a well-known
mark, is entitled to restrain the use of the marks used in the course of trade in
Malaysia:-
i) without the proprietor's consent
ii) if it resembles essential parts or is identical to the proprietor's mark, in respect of
the same goods and services, where the use is likely to deceive and cause confusion.
79. The Trade Marks Regulations 1997 provides the following criteria to determine
whether a mark is well known:73
(a) the degree of knowledge or recognition of the mark in the relevant sector of
the public;
(b) the duration, extent and geographical area of any use of the mark;
(c) the duration, extent and geographical area of any promotion of the mark,
including advertising or publicity and the presentation, at fairs or exhibitions, of
the goods or services to which the mark applies;
(d) the duration and geographical area of any registrations, or any applications for
registration, of the mark to the extent that they reflect use or recognition of the
mark;
(e) the record of successful enforcement of rights in the mark, in particular, the
extent to which the mark was recognized as well-known by competent
authorities;
(f) the value associated with the mark.
80. It is humbly submitted that SLTB was established in 1976 and is the registered
proprietor of the Lion Logo in Malaysia and CTC is the registered user of the Logo. It
is further submitted that SLTB has successfully acquired trademark registrations for
72 Malaysia became party to the Convention on January 1, 1989 and acceded to it on June 24, 198873 Regulation 13B, Trade Marks Regulations 1997
22
the logo in many jurisdictions worldwide. CTC has been using the Lion Logo in
Malaysia since 2008 in respect of the product, CTC Ceylon Tea and has since
acquired a strong consumer base in Malaysia that accounts for 35% of the global nett
revenue of the company. CTC is also a successful company in Europe, where CTC
Ceylon is marketed.74 Thus, the Lion Logo of which CTC is a registered user in
Malaysia, is a well-known mark that is entitled to protection under 70B(1) of the
Trade Marks Act, 1976 as per the provisions listed in Regulation 13B of the Trade
Mark Regulations, 1997.
B. ATC is liable for infringement under Section 38 of the Trade Marks Act 1976i. The defendant’s use of the ATC Logo amounts to infringement under
Section 38 of the Trade Marks Act 1976
81. Under Section 38 of the Trade Marks Act, 1976 a registered trademark is infringed by
a person who uses a mark identical or so nearly resembling it as is likely to cause
confusion in the course of trade in respect of which the trademark has been registered,
as to render the use of the mark as importing a reference to a person having the right
either as a registered proprietor/user to use the trade mark in respect of goods with
which the person is connected in the course of trade.75
82. In WB Fresh Coconut Supplier Sdn Bhd v. Gan Boon Wah & Anr.76, the plaintiff was
one of the leading suppliers and distributors of fresh Thai coconut beverages in
Malaysia. The plaintiff's Thai coconut beverages were sold under the "WB Fresh
Coconut Thailand" brand and the term "WB" formed part of the plaintiff's Company
name. The plaintiff was the registered proprietor of the mark which was also
registered in Singapore. The plaintiff claimed that the marks used by the defendants
on their products were identical and resembled the registered Trade Mark of the
plaintiff and therefore would likely to deceive or cause confusion. The defendants
contended that the plaintiff could not complain about the defendants‟ name "BW Thai
Coconut Enterprise" as the words did not belong exclusively to the plaintiff. The High
Court applied the imperfect recollection test and held that when the two Trade Marks
were compared carefully - the similar shape of the two Trade Marks with the pictorial
74 Clarification 9
75 Trade Marks Act, 1976, Section 38(2)76 [2013] 6 CLJ 659
23
device of coconut and the letters "BW" or "WB" in red at the centre with the same
yellow backdrop and the upwardly curved blue coloured text which was "BW Thai
Coconut" and "Fresh Coconut Thailand" at the top of the label would probably
confuse a consumer in general. Hence, the Court granted an interlocutory injunction
against the defendants premised on trade mark infringement and passing-off.
83. As noted in Sabel v Puma77, on the issue of deceptive resemblance and the likelihood
of confusion, account is to be taken of the visual, aural and conceptual similarity of
the marks in question, including the overall impression given by the marks and
bearing in mind their respective distinctive and dominant components.78 If the marks
are similar in respects which are distinctive and origin specific then this will increase
the likelihood of confusion.79 The risk that the public might believe that the goods in
question come from the same undertaking or business constitutes a likelihood of
confusion. This includes cases where the public wrongly believe that the goods have
their origin in the same enterprise or otherwise make a connection between the two,
for example, that the later mark is a sub-brand.80
The goods or services the subject of the registered mark and those the subject of the
alleged infringing mark must be the same or similar.81
84. It has long been established that evidence of the likelihood of confusion or deception
is not necessary, the judge is not confined to such evidence and, in the absence of
evidence is entitled to form his own view and the assistance it gives to the court is
limited in nature.82 The question of whether two marks are deceptively similar or
confusingly similar is one for the tribunal to decide and not the witness.83 The
claimant must establish whether a substantial or large number of public have been
misled or are likely to be misled. It is not necessary to be able to extrapolate from
evidence so as to arrive at a quantitative or qualitative measure of the deception
77 Sabel v. Puma, (1997) E.C.R I-6191.
78 Premier Brands v. Typhoon, (2000) E.T.M.R. 1071;
79 Wagamama v. City Centre Restaurants, (1995) F.S.R. 713.
80 John-Pierre Koubi v. OHIM, (2004) E.T.M.R. 61 (CFT)81 S.Thorley Q.C. in Pfizer v. Eurofood Link, (2001) F.S.R. 3 “Viagra” case82 GE Trade Mark (1973) R.P.C. 297; Spalding v. Gammage, (1915) 32 R.P.C. 273; Neutrogena v Golden
(1996) R.P.C. 47383 Dillon L.J. in Mothercare v Penguin Books (1988) R.P.C. 113; Knox J. in Island Trading v Anchor Brewing
(1989) R.P.C. 287a.
24
caused by the defendant.84 The court must also consider the fact that “people are
confused even when products and names are well-differentiated, mistakes do occur.”85
85. Stirling J. notes in Farrow's Trade mark case86, Trademarks have to be considered as a
whole, where common parts are included in the marks to be compared.87 Marks are
remembered rather by general impressions or by some significant detail than by any
photographic recollection of the whole.88
86. It is submitted that at the outset, the goods associated with both the marks are
identical, namely, Tea. Further, it is submitted that at first glance, the two logos share
two common elements, namely, a rampant lion and the use of the words “Symbol of
Quality”.
87. It is humbly submitted that Lions have been in constant use is the art of heraldry since
as early as 1151, and the progession of time has resulted in countless designs with
lions in different “attitudes”, in essence, postures.89 Some common attitudes include
the passant lion in the instant case, rampant, salient, sejant, couchant etc. It is humbly
submitted that the passant attitude is a common element in both the marks and this is
a calculated decision by ATC to ensure a deceptive resemblance to CTC's Lion Logo.
Further, it is humbly submitted that CTC's logo is indicative of the specific origin of
the tea from Sri Lanka and the use of the Lion logo has a specific conceptual idea, that
the tea originates from Sri Lanka and also meets quality standards set by a statutory
body. The visual and conceptual similarity of both the marks is almost identical.
Although “Symbol of Quality” is not part of the registered mark, its use by the ATC is
calculated to lend visual resemblance to the CTC Logo.
88. It is humbly submitted as per the Imperfect Recollection theory90, the posture of the
lion and the mention of Symbol of Quality is a significant detail linked to
remembering the Logo. Thus, there is a real likelihood of confusion due to the use of
the deceptively similar Logo by ATC.
84 Morritt L.J. in Neutrogena v. Golden, (1996) R.P.C. 473 at 505.85 Jacob L.J. in Neutrogena v. Golden, (1996) R.P.C. 473 at 482.86 Farrow's Trade mark, (1890) 7 R.P.C. 260.87 Christiansen, (1886) 3 R.P.C. 54 at 61.88 R.Johnston & Co. v Orr-Ewing (1882) L.R. 7 Ap..Cas. 219.89 FOX-DAVIES, A COMPLETE GUIDE TO HERALDRY, p. 62.90 Sandow (1941) R.P.C.196 at 205, per Sargant J.
25
C. The defendant’s use of the ATC Logo amounts to passing off89. In Reckitt & Coleman Products Ltd v. Borden or the “Jif Lemon” case,91the House of
Lords confirmed that each passing off case depended on its own facts. The Jif case,
which established the so-called classical trinity for the elements of the cause of action
in passing off, is given most importance in the present position.92 Lord Jauncey stated
in the judgement “It is a pre-requisite of any successful passing off action that the
plaintiff's goods have acquired a reputation in the market and are known by some
distinguishing feature. It is also a prerequisite that the misrepresentation has deceived
or is likely to deceive and that the plaintiff is likely to stuffer damage by such
deception. Mere confusion which does not lead to a sale is not sufficient.”
i. CTC's registered trademark has acquired a reputation distinctive of CTC
Ceylon Tea in Malaysia
90. It is essential to show that the disputed mark has become, by local use, distinctive of
the plaintiff's goods, so that the use in relation to any goods of the kind in the country
will be understood by the trade and the public in the country as meaning that the
goods are the plaintiff's goods.93
91. In judging the extent of reputation, overriding consideration is given to whether the
claimant has built up goodwill to the point where substantial damage will be caused to
it by the acts he complains of.94
92. Further, it is easier to establish a reputation where a mark has been used for a
substantial period of time, but no length of time during which the claimant or his
predecessors must have used the marks in question has been laid down.95
93. Both reputation and goodwill exist in a country where goods associated with the
relevant indicia are in or about to be in circulation. Goodwill is the value of the
attraction to customers which the name, indicia and reputation possesses.96 The
question of who owns the goodwill is not always easy, but can be decided by the
answer to the question: of whom is the indicia(whether it be a name, mark, or get-up)
91 Reckitt & Coleman Products Ltd v. Borden, (1990) R.P.C 341, HL92 See Nourse L.J. in Parma Ham (1991) R.P.C. 351 at 369
See also Millet L.J. in Harrods Ltd v. Harrodian School Ltd., (1996) R.P.C 697 at 711.93 Per Jenkins L.J, Oertli v. Bowman, (1957) R.P.C. 388 at 397 cf.94 Chelsea Man (1985) F.S.R. 567 at 574, upheld on Appeal (1987) R.P.C. 18995 Stannard v. Reay, (1967) R.P.C. 589 (three weeks sufficient for “Mr.Chippy”); McAndrew v Bassett (1864)
4 De. G.J&S. 380 (one and a half-months sufficient)96 Reuter v. Mulhens, (1953) 70 R.P.C. 36
26
distinctive of?97
94. It is humbly submitted that the Sri Lankan Tea Board (SLTB), a government-owned
statutory institution is the registered proprietor of the Lion Logo in Malaysia.98 SLTB
has also obtained trade mark registrations for the Lion Logo in many jurisdictions.
CTC Ceylon is a registered user of the Lion Logo in Malaysia.99
95. Further, it is submitted that CTC Ceylon was established in 1965 and conforms to
quality standards set by the SLTB,100 ensuring that only quality products reach the
market. Also, it can be observed that after entering into the Distribution Agreement
with Phillip Chan in 2008, CTC Ceylon developed a strong customer base in Malaysia
and in 2012 sales in Malaysia alone constituted 35% of the global nett revenue of
CTC.101
96. It is humbly submitted that CTC is the owner of the goodwill associated with the Lion
Logo in Malaysia102, as CTC Ceylon Tea is in circulation in the Malaysian market
after 2008 and the indicia is associated with CTC only.
ii. ATC's use of the Logo amounts to misrepresentation in respect of passing off
97. Fraudulent intention is not a necessary element of the right of action in passing off.103
Per Goff L.J. “It is sufficient if what is done represents the defendant's goods to be
connected with the plaintiff's goods in such a way as would lead people to accept
them on the faith of the plaintiff's reputation.”104
98. In Harrods v Harrodian School105, Millet L.J observed that it is sufficient to
demonstrate a connection of some kind between the plaintiff and the defendant,
provided the connection would lead the public to suppose that the plaintiff has made
himself responsible for the quality of the defendant's goods or services.”
99. Further in Spalding v Gamage106, asper Lord Parker, “The basis of a passing-off
action being a false representation by the defendant, it must be proved in each case as
a fact that the false representation was made. It may, of course, have been made in
express words, but cases of express misrepresentation of this sort are rare. The more
97 Scandeor Development v. Scandeor Marketing, (1999) F.S.R. 26, CA98 ¶ 5 of the compromis99 ¶ 6 of the compromis100 ¶ 4 of the compromis101 ¶ 13 of the compromis102 Goodwill is local in nature. See Star Indistrial v Yap Kwee Kor (1976) F.S.R. 256103 Reddaway v. Bentham, (1892) 2 Q.B.639; Cellular Clothing v Maxton (1899) A.C. 326 at 334104 Bulmer v. Bollinger, (1978) R.P.C. 79 at 117105 Harrods v. Harrodian School, (1996) R.P.C. 697 at 713106 Spalding v. Gamage, (1915) 32 R.P.C. 273 at 284.
27
common case is where the representation is implied in the use or imitation of a mark,
trade name or get-up with which the goods of another are associated in the minds of
the public, or of a particular class of the public. In such cases the point to be decided
is whether, having regard to all circumstances of the case, the use by the defendant in
connection with the goods of a mark, name or get-up in question impliedly represents
such goods to be the goods of the plaintiff, or the goods of the plaintiff of a particular
class or quality, or, as it is sometimes put, is calculated to deceive. It would, however,
be impossible to enumerate or classify all the ways in which a man may make the
false representation relied on.”
100. Goff L.J. oobserved in Bulmer v Bollinger:107 “It is sufficient in my view if
what is done represents the defendant's goods to be connected with the plaintiff's in
such a way as would lead people to accept the, on the faith of the plaintiff's
reputation. Thus for example it would be sufficient if they were taken to be made
under license which would give the plaintiff control over the defendant's goods.”
101. Further, it is also well established that the court is not concerned with the truth
or falsity of statements in the defendant's advertisements except so far as they tend to
induce the belief that the defendant's goods or business are the claimant's.108
102. It is humbly submitted that the use of the ATC logo is a case where
misrepresentation is implied in the imitation of the mark with which CTC Ceylon was
associated. Further, it is humbly submitted that the intention was only to imitate the
mark, as ATC stopped distributing Sailor's Ceylon upon the expiry of the Distribution
agreement. It is humbly submitted that ATC stopped distributing Sailor's Ceylon due
to the lack of an individual reputation and business goodwill of ATC in Malaysia, and
sales of Sailor's Ceylon were only due to the confusion caused by the use of the
disputed mark.
iii. ATC's use of the ATC Logo has resulted in a direct loss of sales of the
claimant’s CTC Ceylon Tea
103. Proof of damage is not essential to enable the claimant to maintain his
action,109 it is essential to show that the defendant's conduct is calculated to pass off
other goods as those of the claimant, or at least, to produce such confusion in the
107 Bulmer v. Bollinger, (1978) R.P.C. 79 at 117.108 Bowden Brake v. Bowden Wire, (193) 30 R.P.C. 580 at 618.109 United Biscuits v. Asda Stores, (1997) R.P.C. 513 at 531.
28
minds of probably customers or other persons as would be likely to lead to the other
goods being bought and sold for the claimant's.110 Further, there is no fixed threshold
for how many people must likely be deceived, only more than de minimis.111
104. Further, if proof or likelihood of damage is established, it is a general
presumption that the plaintiff is prevented from selling as many of the goods as he
otherwise would, due to the defendant's unauthorized appropriation or profit from the
plaintiff's business goodwill or professional reputation.112
105. It is humbly submitted that ATC started distributing Sailor's Ceylon in
November 2012. CTC recorded a 30% drop in sales in 2013, the sales suffered a
further drop in 2014, and there was only a slight recovery of 8% from the previous
year. It is humbly submitted that upon entering the Agreement in 2008, profits from
the sale of Ceylon Tea in Malaysia saw constant increase from year to year, exceeding
initial expectations and building a strong customer base in the country. It is humbly
submitted that the healthy position of the company was altered directly as a result of
ATC's sale of Sailor's Ceylon through the use of a deceptively similar trade mark.
110 Schweppes v. Gibbons, (1905) 22 R.P.C 113, 601 (HL).111 Per Jacob L.J in Neutrogena v Golden (1996) R.P.C. 473 at 482112 Henderson v. Radio Corp., (1969) R.P.C. 218 (High Ct. Aust.)
29
PRAYER FOR RELIEF
The Chelsea Tea Company, the Claimant, respectfully requests this Tribunal to adjudge and
declare as follows:
(a) That CTC is entitled to receive damages to be determined by the profits of ATC by
the sail of SAILOR’S CEYLON in Malaysia, for the breach of the agreement by
ATC.
(b) That the parties can only refer to tea grown and manufactured entirely in Sri Lanka as
‘Ceylon Tea’.
(c) That ATC stop using the name ‘SAILOR’S CEYLON’, the ATC’s Logo, or any other
name or mark containing the word ‘CEYLON’ or a lion device, if its tea does not
originate from Sri Lanka.
(d) That ATC discontinue the sale of its products described as ‘Ceylon Tea’ and to recall
all such products from the market.
Date: sd/-
Place: Kuala Lumpur Claimant
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