广州轻工告马来西亚

JE28/2022 08 July 2022
Guangzhou Light Industry & Trade

Group Ltd & Ors v.
[2022] 5 MLRA Lintas Superstore Sdn Bhd 245
GUANGZHOU LIGHT INDUSTRY & TRADE

GROUP LTD & ORS
v.
LINTAS SUPERSTORE SDN BHD
Federal Court, Putrajaya

Abang Iskandar Abang Hashim CJSS, Mohd Zawawi Salleh, Zabariah Mohd
Yusof FCJJ
[Civil Appeal No: 02(f)-62-10-2020(S)]
3 June 2022
Trade Marks: Infringement of — Registered trade mark and passing off — Claim for
damages — Defence of parallel importation — Whether trade mark rights of plaintiffs
had been infringed by defendant — Whether claim for tort of passing off successfully
established
Tort: Passing off — Damages, claim for — Parallel imports — Element of confusion —
Damage to reputation — Whether claim for tort of passing off successfully established
The appellants/plaintiffs appealed against the decision of the Court of Appeal

which allowed the respondent/defendant’s appeal and set aside the High Court
judgment deciding in favour of the plaintiffs. The plaintiffs obtained leave to
appeal on the following seven questions of law: (a) would a brand proprietor/
owner’s trade mark rights be exhausted worldwide even though the goods/
merchandise in relation to which the trade mark was used have been put on
market by the brand proprietor/owner to be sold in a specific country/region/
geographical area only for eg when it was clearly stated the goods/merchandise
were “to be sold in China only”?; (b) whether the sale of parallel imports
in Malaysia could be prohibited if the goods/merchandise purchased and
intended to be resold were materially different from the goods/merchandise
that the trade mark proprietor/owner had authorised to be put on market in
Malaysia?; (c) could the quantity of goods/merchandise purchased be used
to determine if there’s implied consent given by the manufacturer/brand
proprietor/owner to sell the goods/merchandise purchased outside Malaysia
to be resold in Malaysia?; (d) in the event the answer to question (c) above was
“yes”, then could the consent be valid if the goods/merchandise purchased
were put in market by the manufacturer/trade mark proprietor/owner to be
sold only in that specific country from which the goods/merchandise were
purchased from?; (e) whether goods/merchandise when purchased but not
imported and/or did not comply with laws concerning importation amount
to parallel importation?; (f) whether the law in Malaysia allowed for food
products to be sold even though it was not packaged according to the Food
Regulations 1985 (“FRA”) and/or Food Act 1983?; and (g) whether the
Group Ltd & Ors v.
246 Lintas Superstore Sdn Bhd [2022] 5 MLRA
implied consent and/or expressed consent given by the trade mark proprietor/
owner superseded the laws of Malaysia?
The plaintiffs’ claim against the defendant was for loss and damages arising
from an alleged trade mark infringement and passing off of goods. In response,
the defendant denied the claim and filed a counterclaim.
The 1st plaintiff (“P1”) was a leading China-based canned food manufacturing
company and owned the “Eagle Coin” trade mark, which was registered in
China and in Malaysia. The 2nd plaintiff (“P2”), a subsidiary of P1, was
assigned to use the “Eagle Coin” trade mark and sell products bearing the
said trade mark outside China. The 3rd plaintiff (“P3”) was a Malaysian
company based in Sabah that was the registered trade mark user of the
“Eagle Coin” mark in Malaysia. The defendant ran a supermarket business in
Kota Kinabalu, Sabah, and sold sundry goods including food products. The
plaintiffs’ complaint against the defendant was that the defendant used the
“Eagle Coin” trade mark on their canned fried dace products in the course
of their trade in their supermarket in Kota Kinabalu, Sabah and, thus, had
infringed their trade mark. The plaintiffs also pleaded that the defendant had
utilised a mark on its products that was similar to the registered “Eagle Coin”
mark of P3, although the packaging, labels, and net weight of the products
were different (“infringing products”). By utilising the mark the way it did, the
plaintiffs alleged that the defendant undertook an action of passing off. The
defendant’s defence was that it had purchased the infringing products directly
from the retail outlet of P2 in China and shipped the same to its supermarket
in Kota Kinabalu to be sold in Malaysia.
Therefore, it contended that it did not infringe the “Eagle Coin” trade mark
of the plaintiffs and instead raised the defence of parallel importation under
s 40(1)(dd) of the Trade Marks Act 1976 (“TMA”). The High Court Judge
(“Judge”) held that the defence of parallel importation failed, and entered
judgment in favour of the plaintiffs on the claim of infringement of trade mark
and for the tort of passing off; the defendant’s counterclaim was accordingly
dismissed. The High Court judgment was subsequently set aside, resulting in
the present appeal.
Held (allowing the appeal with costs):
(1) As P3 was the registered user under s 48(5) of the TMA, it was entitled to
use the registered trade mark within any prescribed limits of its registration.
Thus, P3 enjoyed the protection afforded by s 35(1) of the TMA. There
was no permission obtained by the defendant from P3 for marketing and
distributing the products in Malaysia. The Judge found that on the packaging
of the infringing goods distributed by P3, it was printed that P3 was the
sole authorised distributor of the product of P1. It was in evidence that the
defendant had previously ordered canned fried dace with the “Eagle Coin”
trade mark from P3 for sale in its supermarket but ceased doing so because
of the high price. Hence, there was knowledge on the part of the defendant
Group Ltd & Ors v.
that P3 was the sole authorised distributor of the product of the “Eagle Coin”
mark. There was no consent, be it express nor implied, by the plaintiffs, to
the resale of the products in Malaysia. There was no affiliation between the
plaintiffs and the defendant to warrant any implied consent, rather it invited
confusion and deception amongst consumers due to the unauthorised sale of
the products. Therefore, there was no exhaustion of their trade mark rights,
be it nationally nor internationally. Hence, the Judge did not err when he held
that the defence of parallel importation failed and that the trade mark rights
of the plaintiffs had been infringed when it imported the products that carried
the trade mark “Eagle Coin” which was restricted for sale in China only. These
products, although not counterfeit, were products of the plaintiffs brought
into Malaysia through unauthorised parallel importation. Question (a) would,
therefore, be answered in the negative. (paras 135-138)
(2) Apart from the expressed territorial restriction of sale on the packaging,
the products offered for sale by the defendant were materially different in
terms of contents, quality and packaging. The infringing products purchased
by the defendant from the retail outlet of P2 in China did not comply with
the labelling requirements under the FRA and halal requirement, unlike the
products authorised to be sold in the Malaysian market which also provided for
the Muslim market. The facts showed the ratio of fish content in the infringing
products bearing the “Eagle Coin” trade mark which were restricted for sale
in China were different from the goods bearing the “Eagle Coin” trade mark
sold in Malaysia. Given the aforesaid, the sale and distribution of parallel
imports of the infringing products, which were materially different from the
goods authorised for sale within Malaysia, would create confusion amongst
the consumers and would constitute trade mark infringement. Therefore, the
sale of parallel imports in Malaysia could be prohibited if the goods intended
to be resold were materially different from the goods that the trade mark owner
had authorised to be put on the market in Malaysia. Hence, Question (b) would
be answered in the affirmative. (paras 144-147)
(3) Bulk purchase of the goods could not be taken as implied consent by
the manufacturer/brand proprietor/owner to sell the goods/merchandise
purchased outside Malaysia to be resold in Malaysia. Consent did not just
extend to the act of reselling but where the products could be resold. There
was also the “territorial restriction” on the packaging of the goods which were
purchased by the defendant from China. Hence, it could not be seen on what
basis could bulk purchase by the defendant outside Malaysia, be used to infer
consent that the goods were to be sold in Malaysia. Due to the clear objection
by virtue of the territorial restriction on the packaging, it would be absurd to
rely on the sheer quantity of the purchase to imply consent to importing the
goods into Malaysia for reselling. For consent to be implied, it must be shown
that there was an unequivocal renunciation of rights by the manufacturer/
brand proprietor/trade mark owner. Thus, the answer to Question (c) was in
the negative. (paras 148-151)
Group Ltd & Ors v.
(4) The facts showed that the goods purchased by the defendant was only
restricted to be sold in China only. There was no consent for the infringing
goods to be sold outside China. As Question (c) was answered in the negative,
and the question posed was no longer relevant as it did not reflect the facts of
the case, this court declined to answer Question (d). This question presupposed
that consent was valid when the facts did not show consent was ever given by
the registered owner or registered user of the trade mark for the goods to be
sold outside the restricted area. (paras 152-153)
(5) Questions (e), (f) and (g) were taken together, as the issues raised in the
three questions were never raised before the Judge. On the legal requirement
that food products for export must be accompanied with a sanitary certificate
issued by the relevant governmental authority, mentioned by the Judge in his
judgment, this was in relation to the factor which he considered to be negating
the element of consent on the part of the plaintiffs. The Judge did not address
anything on the requirements of the compliance of the laws on foodstuff in
relation to parallel imports. Hence, this court declined to answer Questions (e),
(f) and (g). (paras 155-156)
(6) For the foregoing reasons, the Court of Appeal erred in reversing the
decision of the High Court. The Judge was right in allowing the claim by the
plaintiffs, namely that: (i) the defence of parallel importation failed; (ii) the
trade mark rights of the plaintiffs had been infringed by the defendant; and
(iii) the defendant has misled the public into thinking that the fried dace with
the “Eagle Coin” trade mark was the same product marketed by P3. In the
premises, the reputation of P3 would be damaged if Malaysian customers
confused the source of the defendant’s product because of the common
identical trade mark. Hence, the plaintiffs succeeded in establishing their claim
under the tort of passing off. (para 158)
Case(s) referred to:

Colgate-Palmolive Ltd & Anor v. Markwell Finance Ltd & Anor [1989] RPC 49 (folld)
Federal Hotel Sdn Bhd v. National Union Of Hotel Bar & Restaurant Workers [1982]
1 MLRA 314 (refd)
Lever Brothers Co v. United States of America 981F.2d 1330 (DC Cir 1993) (folld)
PT Garudafood Putra Putri Jaya TBK (Applicant) [2019] MLRHU 141 (refd)
Reckitt & Colman Products Ltd v. Borden Inc & Ors [1990] 1 All ER 873 (refd)
Revlon Inc & Others v. Cripps Lee Ltd [1980] FSR 85 (distd)
Sebago Inc v. GB-Unic SA (Case C-173/98) (refd)
Silhouette International Schmied GmbH & Co KG v. Hartlauer Handelsgesellschaft
mbH (Case C-355/96) (refd)
Sinma Medical Products (M) Sdn Bhd v. Yomeishu Seizo Co Ltd & Ors [2004] 1 MLRA
691 (refd)
Societe Des Proouits Nestle v. Casa Helvetia 982 F.2d 633 (1 Cir 1992) (folld)
Group Ltd & Ors v.
Tien Ying Hong Enterprise Sdn Bhd v. Beenion Sdn Bhd [2009] 4 MLRH 790 (refd)
Winthrop Products Inc & Anor v. Sun Ocean (M) Sdn Bhd & Anor [1988] 3 MLRH
85 (distd)
Zino Davidoff SA v. A & G Imports Ltd [1999] RPC 63 (refd)
Legislation referred to:

Customs Regulations 1977, reg 12(3)
Customs Regulations 2019, reg 23
Trade Marks Act 1976, ss 35(1), 38(1), 40(1)(d), (dd), 48(5)
Trade Marks Act 1938 [UK], s 4(1), 4(3)(a)(i)
Trade Marks Ordinance 1950, s 52(3)(a)
Food Act 1983, ss 29, 30
Other(s) referred to:

Malaysian Halsbury Vol 22, 2007 Reissue (Intellectual Property) para 520.600
Counsel:
For the appellants: Lin Pei San; M/s PS Lin Chambers
For the respondent: Cham Ngit Shin @ Ronny Cham; M/s Ronny Cham & Co
JUDGMENT
Zabariah Mohd Yusof FCJ:
[1] The appellants/plaintiffs appealed against the decision of the Court of

Appeal which allowed the respondent’s/defendant’s appeal with costs of
RM40,000.00 and set aside the High Court judgment which decided in favor
of the appellants/plaintiffs.
[2] The appellants/plaintiffs obtained leave to appeal to this Court on the

following 7 questions of law:
(a) Will a brand proprietor/owner’s trade mark rights be exhausted

worldwide even though the goods/merchandise in relation to
which the trade mark is used have been put on market by the
brand proprietor/owner to be sold in a specific country/region/
geographical area only for eg when it is clearly stated the goods/
merchandise are “to be sold in China only”?
(b) Whether the sale of parallel imports in Malaysia can be prohibited

if the goods/merchandise purchased and intended to be resold are
materially different from the goods/merchandise that the trade
mark proprietor/owner has authorised to be put on market in
Malaysia?
Group Ltd & Ors v.
(c) Can the quantity of goods/merchandise purchased be used to

determine if there’s implied consent given by the manufacturer/
brand proprietor/owner to sell the goods/merchandise purchased
outside Malaysia to be resold in Malaysia?
(d) In the event the answer to question (c) above is “yes”, then can
the consent be valid if the goods/merchandise purchased were
put in market by the manufacturer/trade mark proprietor/owner
to be sold only in that specific country from which the goods/
merchandise were purchased from?
(e) Whether goods/merchandise when purchased but not imported

and/or does not comply with laws concerning importation
amount to parallel importation?
(f) Whether the law in Malaysia allows for food products to be sold
even though it is not packaged according to the Food Regulations
1985 and/or Food Act 1983?
(g) Whether the implied consent and/or express consent given by the
trade mark proprietor/owner supersede the laws of Malaysia?
[3] In this judgment, we will refer to the parties as they were in the High Court.
Brief Facts
[4] The plaintiffs’ claim against the defendant is for loss and damages arising
from an alleged trade mark infringement and passing off of goods. In response,
the defendant denied the claim and filed a counter claim.
[5] The 1st plaintiff (P1) is a leading China-based canned food manufacturing
company. P1 owns the “Eagle Coin” trade mark, which is registered in China
and in Malaysia, which is set out below:
[6] The 2nd plaintiff (P2) is a subsidiary of P1. It is involved in the

manufacturing, importation and exportation of food products including
canned food. P2 was assigned to use the “Eagle Coin” trade mark and sell
products bearing the said trade mark outside China.
[7] The 3rd plaintiff (P3) is a Malaysian company based in Sabah. It is in the
business of distributing and selling food products including canned food. It
Group Ltd & Ors v.
is the sole authorised distributor of canned food products bearing the “Eagle
Coin” trade mark in Malaysia since March 2008. P3 is the registered trade
mark user of the “Eagle Coin” mark in Malaysia. The said registration is
renewable annually.
[8] The defendant runs a supermarket business in Kota Kinabalu, Sabah, and
sells sundry goods including food products.
[9] The plaintiffs’ complaint against the defendant is that the defendant used
the “Eagle Coin” trade mark on their canned fried dace products in the course
of their trade in their super market in Kota Kinabalu, Sabah. By this, it was
alleged that the defendant has infringed their trade mark.
[10] The plaintiffs also pleaded that the defendant had utilised a mark on its
products that is similar to the registered “Eagle Coin” mark of P3 although
the packaging, labels, and net weight of the products are different (herein after
referred to as “the infringing products”). By utilising the mark the way it did,
the plaintiffs alleged that the defendant undertook an action of passing off.
[11] The infringing products with the “Eagle Coin” trade mark sold by the
defendant are produced in China by P1 and P2 but the said products are not
meant for distribution in Malaysia, and only restricted for sale in China. The
defendant is alleged to have imported the infringing products directly from
China and offered them for sale in Malaysia without authorisation from P1 or
P2 and by passing P3, the sole authorised distributor.
[12] The premise of the defence is that, the defendant purchased the infringing
products directly from the retail outlet of P2 in China and shipped the same
to its supermarket in Kota Kinabalu to be sold in Malaysia. Therefore, it
contended that it did not infringe the “Eagle Coin” trade mark of the plaintiffs
and instead raised the defence of parallel importation under s 40(1)(dd) of the
TMA.
[13] The defendant also filed a counter claim. After receiving the plaintiff
solicitors’ notice to “cease and desist”, in order to mitigate loss, the defendant
sold its remaining products with the “Eagle Coin” trade mark at discounted
prices. After being served with the writ of summons, the defendant removed
all the infringing products in question from its shelves. For this, the defendant
sought damages in the sum of RM5,662.88 in its counterclaim against the
plaintiffs.
Proceedings In The High Court
[14] The learned trial Judge allowed the plaintiffs’ claim. At the trial, His
Lordship dealt with the following issues, namely:
(a) Whether the defendant had infringed the “Eagle Coin” trade
mark?;
Group Ltd & Ors v.
(b) Whether there is merit in the defence of parallel importation

raised by the defendant?; and
(c) Whether the defendant passed off the infringing products as the
goods of the 3rd plaintiff ?
Whether The Defendant Had Infringed The “Eagle Coin” Trade Mark?
[15] In determining whether there has been an infringement of trade mark, the
High Court considered the undisputed evidence that P1 as the registered user
of the trade mark had assigned to P3, the sole right to use the “Eagle Coin”
trade mark in Malaysia. P3 tendered evidence that it has been registered as a
“user” under subsection 48(5) of the Trade Marks Act 1976 (TMA). The effect
of being a registered user under subsection 48(5) of the TMA is that, “the use
of that trade mark by the registered user within the limits of his registration
shall be deemed to be used by the registered proprietor of the trade mark to
the same extent as the use of the trade mark by the registered user and shall be
deemed not to be used by any other person”. Pursuant to subsection 35(1) of
the TMA, P3 is entitled to the rights provided under the said section which,
in respect of any goods or services, provides P3 the exclusive right to use the
mark.
[16] The learned High Court Judge made findings that the defendant had
knowledge that it was using P1’s trade mark because of the following evidence:
(i) There was admission by the defendant that in selling the canned
fried dace that used the “Eagle Coin” mark, in Malaysia, it was not
sourced from P3, who is the exclusive distributor of the product
and the sole registered user of the said mark in Malaysia;
(ii) The defendant had previously ordered canned fried dace with the
“Eagle Coin” trade mark from P3 for sale in its supermarket but
ceased doing so because of the high price; and
(iii) It is printed on the packaging of the “Eagle Coin” trade mark
fried dace distributed by P3, that the P3 is the sole authorised
distributor of the product of P1.
Therefore, it is impossible for the defendant to deny knowledge that P3 is the
sole authorised distributor of the products of “Eagle Coin” trade mark. P3
asserted that the defendant is not their authorised distributor in Malaysia.
[17] Given the aforesaid, the learned High Court Judge held that the defendant
had infringed upon the exclusive rights of the plaintiffs to use the mark.
Whether The Defence Of Parallel Importation Has Merit?
[18] The defendant argued that the products did not infringe the trade mark
rights of the plaintiffs because they were sourced from the retail outlet of
P2 in China and therefore fell under the description of “parallel import”.
Group Ltd & Ors v.
The defendant contended that parallel importation of goods is not illegal in

Malaysia and reliance was placed on the case of Winthrop Products Inc & Anor v.
Sun Ocean (M) Sdn Bhd & Anor [1988] 3 MLRH 85 (Winthrop).
[19] As the defendant had raised the defence of parallel importation under
subsection 40(1)(dd) of the TMA, the learned High Court Judge considered
the law in relation to the said section and ruled that in raising the defence of
“parallel import” by the defendant, it is incumbent on the defendant to prove
the critical element of an express/implied consent from the owner of the trade
mark as required under the same.
[20] On the facts of the instant case, His Lordship held that there is no evidence
(be it direct or circumstantial), of the presence of the element of consent that
is essential to sustain the defence of parallel importation.
[21] Apart from the absence of consent, the infringing products which were
imported by the defendant to be sold in Malaysia were not meant to be sold
in Malaysia as its sale was restricted to the China market only. The facts also
show that the labelling of the infringing products, which were imported by
the defendant, failed to comply with the requirements under Malaysian laws.
These facts present a sharp contrast to the facts in Winthrop where there is
no territorial restriction on the packaging of Panadol bought in the UK.
Significantly, the plaintiffs in Winthrop were found to have impliedly consented
to the use of the trade mark by the manufacturers of the Panadol in the UK
which had found its way into the Malaysian market. They all belong to the
same corporate group.
[22] Hence, the learned High Court Judge held that the defence of parallel
importation fails. Therefore, the trade mark rights of the plaintiffs had been
infringed by the defendant.
Whether The Defendant Passed Off The Fried Dace That It Sold As The
Goods Of the 3rd Plaintiff ?
[23] Concerning the claim by the plaintiff on passing off, P3’s case is that the
defendant misled the public into thinking that the fried dace with the “Eagle
Coin” trade mark put up for sale by the defendant, was the same product
marketed by P3.
[24] The witness for P3 testified that the fried dace sold by his company
complied with Malaysian law including the “halal” requirement where as the
infringing products sold by the defendant did not. However, as both bore the
same distinctive “Eagle Coin” trade mark on the packaging, the public had
been misled into assuming that it is the same product that is marketed by P3 as
the sole authorised distributor in Malaysia. It was established at trial that the
infringing products sold by the defendant, despite the common origin, is not
the same as the product that is being sold by the plaintiffs as the defendant’s
infringing product does not comply with the requirements of Malaysian law.
Group Ltd & Ors v.
[25] The learned High Court Judge found the essential elements as propounded
in the case of Reckitt & Colman Products Ltd v. Borden Inc & Ors [1990] 1 All ER
873, where Lord Oliver in the House of Lords laid down the following three
essential elements of the tort of passing off (followed in the Court of Appeal
case of Sinma Medical Products (M) Sdn Bhd v. Yomeishu Seizo Co Ltd & Ors [2004]
1 MLRA 691) had been proved by the plaintiffs:
(i) That the plaintiffs have good will attached to the business
regarding the mark used by the plaintiffs in respect of the
plaintiffs' goods or services;
(ii) That the defendant has misrepresented to the public by using a
mark which is likely to confuse or deceive the public to believe
that the defendant’s goods or services are that of the plaintiffs; and
(iii) That there is a likelihood of damage to the plaintiffs due to the
defendant’s misrepresentation.
[26] In the premises, the reputation of P3 would be damaged if Malaysian
customers confused the source of the defendant’s product because of the
common identical trade mark. Therefore, the plaintiffs have also succeeded in
establishing the claim under the tort of passing off.
[27] Hence, judgment was entered in favour of the plaintiffs on the claim of
infringement of trade mark and for the tort of passing off. The counterclaim by
the defendant was accordingly dismissed.
Proceedings In The Court Of Appeal
[28] As we have alluded to earlier, the Court of Appeal allowed the appeal
by the defendant and set aside the judgment of the High Court with costs of
RM40,000.00. The Court of Appeal however, did not make any order on the
Counterclaim of the defendant. Neither were there any Grounds of Judgment
from the Court of Appeal.
[29] In any event, the grounds of appeal by the defendant at the Court of
Appeal were premised on the following:
(i) That when the defendant through their agent went to the retail
store in China to purchase the infringed products, there is implied
consent given by P2 through the retail stores that they can re-sell
the infringed products purchased in Malaysia; and
(ii) With the existence of implied consent given by the P2, it falls under
the meaning and principles of the law on parallel importation as
stated in the case of Winthrop.
[30] Although there are no reasons proferred by the Court of Appeal as to

why the appeal was allowed, the plaintiff in their written submissions (encl
28), at para 4.2 submitted that the Court of Appeal via their brief oral grounds
Group Ltd & Ors v.
mentioned that they have considered the quantity of the Infringing Products
(which consisted of 720 cans of fried dace without salted bean and 1200 cans
of fried dace with salted bean) purchased by the defendant, and the panel of
the Court of Appeal were satisfied that there was implied consent given by the
plaintiffs to the defendant for reselling purposes. In other words, this was the
sole basis of the Court of Appeal in accepting that the defendant had proved
its defence of parallel importing.
Proceedings In The Federal Court
Submission By The Plaintiffs
[31] In addressing Question 1, the plaintiffs submitted that, on the facts, the
infringing products purchased by the defendant from China are different in
quality and packaging from the plaintiffs’ goods in the Malaysian market
and there was no exhaustion of the plaintiffs’ trade mark rights, nor had the
plaintiffs consented (expressly or impliedly) to the resale of the infringing
products in Malaysia.
[32] The plaintiffs asserted that most jurisdictions allow parallel imports
following the principle of exhaustion of intellectual property rights upon
the sale of the goods bearing the trade mark in question. However, there is a
distinction between national and international exhaustion of the Intellectual
Property rights. The former allows national resale of the goods while the latter
allows resale in countries other than the country of origin.
[33] Currently, there is no international treaty in the field of trade marks

compelling any form of standard of national or international exhaustion.
Neither has it been addressed by the Paris Convention.
[34] Subsection 40(1)(d) of the TMA, provides for instances where parallel
importation does not constitute trade mark infringement. Specific to subsection
40(1)(dd) TMA, for the defence of parallel importation to succeed, there must
be consent (be it express or implied) from the registered owner of the trade
mark.
[35] The case of Winthrop, relied heavily by the defendant can be distinguished
from its facts with our present appeal, where in Winthrop, there was no territorial
restriction on the sale of the goods. In the present appeal there was restriction
for the goods to be sold outside China so there cannot be implied consent from
the trade mark proprietor or trade mark user.
[36] Another distinguishing factor is that in Winthrop, one of the defendants

was an existing customer of the plaintiffs who knew that the defendant was
an exporter of the goods so the court could infer there was implied consent to
reselling, whereas here the defendant was neither an existing customer of P2
nor a known exporter/distributor of “Eagle Coin” products for consent to be
implied or deemed.
Group Ltd & Ors v.
[37] Winthrop followed the ratio in the case of Revlon Inc & Others v. Cripps Lee
Ltd [1980] FSR 85 (Revlon) on the issue of consent where the facts bear some
similarities to the facts in Winthrop.
[38] The plaintiffs referred to the English case of Colgate-Palmolive Ltd & Anor v.
Markwell Finance Ltd & Anor [1989] RPC 49 (Colgate-Palmolive), where the Court
found there was an absence of express consent and refused to infer any implied
consent as there were attempts to prevent the import of the Brazilian goods to
the UK. This was especially so, when the goods produced in Brazil were of lower
quality compared to the goods made in the UK due to the significant difference
in the formulation of the toothpaste, and this would create a misrepresentation
to consumers as to the quality of the goods marketed by the plaintiff.
[39] These principles are similar to the position adopted by the European
Court of Justice (ECJ) in dealing with exhaustion of rights within the member
states. Cases from the ECJ show that trade mark rights cannot be exhausted
worldwide and would only be exhausted nationally if the imported goods were
also placed on the national market by the registered proprietor/owner of the
mark with their consent (see the cases of Silhouette International Schmied GmbH
& Co KG v. Hartlauer Handelsgesellschaft mbH (Case C-355/96); Sebago Inc v. GB-
Unic SA (Case C-173/98)).
[40] Consent can only be implied if it can be shown from the facts and
circumstances of the case at the time the goods were placed in the market
elsewhere that the trade mark proprietor has unequivocally renounced their
right to oppose the placing of the goods on the market within the jurisdiction
where the goods are imported to (see Zino Davidoff SA v. A & G Imports Ltd
[1999] RPC 63).
[41] In summary, the ECJ cases demonstrate that a trade mark proprietor’s
rights cannot be exhausted worldwide. It cannot even be exhausted nationally,
unless the goods imported from the outside jurisdiction were also placed
nationally by the trade mark proprietor or owner or with their consent.
[42] This is also in line with the position taken by the International Trade
Mark Association, which advocates worldwide exhaustion should not apply
to parallel import in the absence of clear proof that the trade mark owner
consented to such imports.
[43] In our present case, with the existence of the expressed restrictions on
the packaging of the infringing goods bearing the registered trade mark of
the proprietor that restricts sale outside China, there cannot be worldwide
exhaustion of the plaintiffs’ trade mark rights. In addition, the infringing
products are not the same as the products sold by the plaintiffs in Malaysia in
terms of quality and packaging. The infringing products also do not comply
with the standard, technical rules, and labelling regulations under the Food
Act 1983 which imposes compulsory labelling and shelf life on the packaging.
Group Ltd & Ors v.
[44] The plaintiffs submitted that Question (a) ought to be answered in the
negative and the appeal should be allowed.
[45] In answering Question (b), the plaintiffs submitted that it is not unusual
for a company to produce different goods for different markets under the same
trade mark.
[46] The International Trade Mark Association recommends some jurisdictions

adopt a “material differences” standard to exclude parallel imports that are
materially different from those products authorised for sale by the trade mark
proprietor/owner in the domestic market. This is the approach that appears to
have been adopted by the High Court in PT Garudafood Putra Putri Jaya TBK
(Applicant) [2019] MLRHU 141.
[47] The position in the US is such that parallel imports are not unlawful
perse. Once a trade mark owner releases its products into the market, it cannot
prevent the subsequent resale of those products by others. However, the sale
and distribution of parallel imports that are “materially different” from goods
authorised for sale in the US constitutes trade mark infringement. In support
of this proposition, the plaintiff referred to the case of Societe Des Proouits
Nestle v. Casa Helvetia, 982 F.2d 633 (1 Cir 1992) where the US Federal Court
of Appeals held that the registered proprietor of the trade mark ought to be
protected against the importation of the gray goods, namely, trade marked
goods manufactured abroad under a valid license but brought into this country
in derogation of arrangements lawfully made by the trade mark holder to
ensure territorial exclusivity. It was held that even a single material difference
creates a presumption that the gray goods have a potential to mislead or confuse
consumers about the nature or quality of the product.
[48] The case of Lever Brothers Co v. United States of America, 981F.2d 1330
(D.C. Cir 1993) is instructive where the US Court of Appeals for the District
of Columbia prohibited the importation of physically different foreign goods
bearing a trade mark which was identical to a valid US trade mark, regardless of
the trade mark’s genuine character abroad or affiliation between the producing
firms The Court went on to hold that the affiliation between the producers in no
way reduces the probability of substantial consumer confusion and deception
in the US about the nature and origin of the goods.
[49] In the Colgate-Palmolive’s case, the Court held that the ‘goodwill’ of
“Colgate” had been damaged by the importation of inferior "Colgate" products.
In the US which applies the “first-sale doctrine” (where the trade mark owner
cannot prevent the subsequent re-sale of its goods by others), the sale and
distribution of parallel imports that are materially different from the goods
authorised for sale within the US, would cause confusion and would constitute
trade mark infringement. The plaintiffs submitted that this should be adopted
in cases of parallel imports in Malaysia, as the fact that both goods come from
the same manufacturer is irrelevant as the probability of confusion exists.
Group Ltd & Ors v.
[50] In our present case, it was agreed, apart from the expressed territorial
restriction of sale on the packaging, the products offered for sale by the
defendant are materially different in terms of contents, quality and packaging.
In addition, it failed to comply with the legislation pertaining to food for sale
in Malaysia.
[51] Therefore, for Question (b) it is submitted that this Court ought to answer
it in the affirmative.
[52] For Question (c), the plaintiff submitted that, implying consent from the
brand proprietor/trade mark owner through bulk quantity purchased by the
defendant is a false premise because consent does not just extend to the act of
reselling but where the products can be resold.
[53] Due to the territorial restriction on the packaging, the bulk purchase by the
defendant can only be used to infer that the purchase was to be resold in other
areas within China so the consent of the appellants, if any, must be restricted
to reselling in China only.
[54] The territorial restriction on the packaging meant that there was objection
for the goods to be sold outside China, therefore, it would be absurd to rely on
the sheer quantity of the purchase to imply consent to importing the goods into
Malaysia for reselling. For consent to be implied, it must be shown that there
was a clear renunciation of rights by the manufacturer/brand proprietor/trade
mark owner.
[55] Hence, Question (c) ought to be answered in the negative.
[56] For Question (d) it ought to be answered in the negative. Consent cannot
extend to reselling outside of China for the reasons above under Question (c).
[57] For Question (e) it ought to be answered in the negative. What technically
amounts to parallel importation may not be authorised when it does not
comply with the laws of the country where the goods were imported into. The
following legislations were not complied with, in this case:
i. Regulation 12(3) of the Customs Regulations 1977 (now embodied

in reg 23 of the Customs Regulation 2019) requires an importer
to be able to produce on demand by the customs officer all
documents in his possession relating to the origin and destination
of his goods;
ii. Section 30 of the Food Act 1983 provides that no manufacturer/

distributor/dealer in food products shall sell food unless it gives
a written warranty/statement that the food complies with the
provision of the Act or any regulations made the re under;
iii. Section 29 of the Food Act 1983 prohibits the importation of any
goods that do not comply with the requirements under the Act
Group Ltd & Ors v.
or any regulations thereunder. This includes specific requirements

in relation to standards, packaging and labelling under the Food
Regulation 1985; and
iv. The food products exported out of China for resale overseas must
be accompanied by a sanitary certificate issued by the Entry-Exit
Inspection and Quarantine of the People’s Republic of China in
compliance with the exporting laws of China;
[58] In this case, even if the goods are genuine products, the defence of parallel
importation cannot be relied upon in a trade mark infringement action where
the importation of the goods do not comply with the laws on importation.
[59] For Question (f) it ought to be answered in the negative.
[60] In Malaysia, compliance with the Food Act 1983 and its subsidiary
legislation ie the Food Regulations 1985 is mandatory unless it relates to food
meant to be exported. Therefore, the respondent cannot resell the infringing
products in Malaysia as the same does not meet the requirements under
Malaysian laws and Malaysian standards, thus to resell the same would put
the appellants’ reputation and good will at stake. Question (g) ought to be
answered in the negative.
[61] Consent of the trade mark proprietor/owner cannot be used to circumvent

compliance of any mandatory statutory requirement in the absence of any
statutory provisions which allow this (see Federal Hotel Sdn Bhd v. National
Union Of Hotel Bar & Restaurant Workers [1982] 1 MLRA 314).
[62] Even if there was consent, the laws of Malaysia cannot be superseded as
this would amount to importation and selling of illegal goods.
[63] Hence, the plaintiffs submitted that the High Court did not errand the
Court of Appeal had erroneously interfered with the findings of the learned
High Court Judge without any justification. The appeal should be allowed, the
HC decision reinstated with costs here and below to the appellants.
Submissions By The Defendants
[64] Question (a) relates to goods/merchandise bearing the same trade mark
were sold in the market. It is submitted that parallel importation relates to
goods bearing the same trade mark and not where such goods were sold. The
goods bought by the defendant in China and the goods sold by the defendant’s
retail shop in Malaysia bears the same trade mark owned by P1. There is no
question of infringement of the trade mark, it is a question of P3 (who is the
exclusive distributor), the registered user being infringed by P1 and P2. P3
cannot complain of any infringement or passing off when P3 knew that it was
P1 authorising P2 to sell the trade marked goods to the defendant without
regards to his exclusive rights of use of the trade mark in Malaysia.
Group Ltd & Ors v.
[65] The learned trial Judge had misdirected himself in law and in fact when
he failed to take into consideration or otherwise give due appreciation to the
pleaded facts and evidence that the infringing products bearing the “Eagle
Coin” trade mark were sold to the defendant by “Eagle Coin” trade mark
holder in China and in Malaysia, namely P1 through P2 who was assigned by
P1 to use “Eagle Coin” trade mark to sell the infringing goods outside China,
irrespective of whether the infringing products bearing the “Eagle Coin” trade
mark was for sale in China or in Malaysia.
[66] On Question (b), the defendant took the position that the “parallel
imported” goods/merchandise must bear the same trade mark and this is not
in dispute.
[67] On Question (c), the quantity of the goods does not matter. The defence
of parallel importation is invoked when goods purchased outside Malaysia are
sold in Malaysia with the implied consent of the brand owner. In this case the
defendant took the position that there was implied consent when P2 sent the
goods to the defendant in Malaysia to be sold in the Malaysian market.
[68] On Question (d), it is submitted that it does not matter whether the goods/
merchandise were meant for sale in China only, since parallel importation
relates to the use of trade marks.
[69] On Questions (e), (f) & (g) it is submitted that these were not issues before
the Court of Appeal and these questions attempt to re-write the law on parallel
importation.
[70] In summary, the defendant submitted that, in the Court of Appeal, the
defendant was able to persuade the Court that the element of consent could
be clearly seen from the unchallenged contemporaneous documents adduced
at trial, ie P2’s invoicing, packaging, labelling and sending of the goods to the
defendant in Sabah, Malaysia between September 2016 and November 2016.
Consent, express or implied is therefore proved.
[71] Since there are no grounds, it is inferred that the Court of Appeal agreed
with the defendant and allowed its appeal on the basis that there was evidence
of the presence of consent, an essential element for the defendant to mount the
defence of parallel importation.
[72] The defendant submitted that the Court of Appeal exercised its appellate
jurisdiction appropriately. The Court of Appeal was perfectly entitled to find
that there were facts and evidence of consent, either express or implied. The
Court of Appeal did not err when it decided on the question of law that
subsection 40(1)(dd) of the TMA, which does not differentiate between goods
bearing the same trade mark when the goods are manufactured for sale in
one place and parallel imported for sale in another place as long as there was
consent, express or implied, from the trade mark owners.
Group Ltd & Ors v.
[73] The Court of Appeal rightly held that the High Court erroneously read
into subsection 40(1)(dd) TMA the requirement of “restriction” and had
wrongly distinguished the facts of this case from that of Winthrop. Since the
Court of Appeal accepted the defendant’s argument, the Court of Appeal must
have rejected the plaintiffs’ submissions and the plaintiffs would find it hard to
adopt similar submissions here before this Court. All authorities concerning
infringement of trade marks are irrelevant here. Once the defence of parallel
importation has been proven, all the authorities on passing off would also be
irrelevant.
[74] Based on the aforesaid, the defendant summed up that the 7 questions of
the plaintiffs posed before this Court are irrelevant to the actual issues decided
by the Court of Appeal.
Our Findings
The Law On The Use Of A Registered Trade Mark
[75] Subsection 35(1) of the TMA 1976 provides that the registered proprietor
of a trade mark has the exclusive right to use “the trade mark, and also the right
to prevent other persons (not being registered users) from using the trade mark
or any mark similar to it.
[76] Section 38(1) of the TMA 1976 provides that:

“(1) A registered trade mark is infringed by a person who, not being the
registered proprietor of the trade mark or registered user of the trade mark
using by way of permitted use, uses a mark which is identical with it or so
nearly resembling it as likely to deceive or cause confusion in the course of
trade in relation to goods or services in respect of which the trade mark is
registered in such a manner as to render the use of the mark likely to be taken
either—”
[77] Essentially, it means that no one else can use a mark which is identical
with it or so nearly resembling it as is likely to deceive or cause confusion in
the course of trade in relation to goods or services in respect of which the trade
mark is registered.
[78] Subsection 48(5) of the TMA provides protection for registered user of the
said trade mark, which reads:
“(5) Where a person has been registered as a registered user of a trade mark,
the use of that trade mark by the registered user within the limits of his
registration shall be deemed to be used by the registered proprietor of the
trade mark to the same extent as the use of the trade mark by the registered
user and shall be deemed not to be used by any other person.”
Registered user therefore has the same rights to the trade mark within the limits
of registration.
[79] In our case, it is undisputed that:

Group Ltd & Ors v.
(i) P1 is the registered owner/proprietor of the “Eagle Coin” trade

mark registered in China and Malaysia;
(ii) P2, which is the subsidiary of P1, was assigned to use the “Eagle
Coin” trade mark and sell the products bearing the said trade
mark outside China;
(iii) P3, a company based in Sabah, is the sole authorised distributor of

food products bearing the “Eagle Coin” trade mark since March
2008; and
(iv) P3 is also the registered user of the said trade mark in Malaysia.
[80] In our view, it is clear that the defendant does not fall under any of the
above categories.
The Law On “Parallel Import”
[81] The defence of the defendant is that there is no infringement of trade mark
but it is a case of “parallel import” and that it has implied consent from the
plaintiffs under subsection 40(1)(dd) of the TMA.
[82] In the Malaysian Halsbury Vol 22, 2007 Reissue (Intellectual Property) para
520.600, “parallel import” is legally described as:
“... strictly the importation and sale by others of goods originating from the
owner of industrial rights in parallel with his own importation of such goods,
whether carried out by himself or through authorised agents, but is used more
generally to describe the importation and sale by third [persons or goods
obtained in another country which originate from an internationally known
company or group.”
[83] In simple terms, parallel imports are goods that are imported into and sold
in a particular country, territory or market without the express permission of
the brand owners in that country. Parallel imports are not counterfeit products
as they originated from the same brand owner or its group of companies.
Parallel imports which are often referred to as “gray products” are, more often
than not, implicated in issues of international trade, and intellectual property.
The High Court in Tien Ying Hong Enterprise Sdn Bhd v. Beenion Sdn Bhd
[2009] 4 MLRH 790 held that parallel imports are goods which are lawfully
manufactured overseas but imported and distributed in Malaysia by a person
other than the registered proprietor of the trade mark.
[84] In dealing with parallel imports, subsection 35(1) TMA plays a significant
role. In the case of parallel importer, he may import and sell the products
bearing the trade mark, although he is not the registered proprietor of the trade
mark. Given the provision of subsection 35(1) of the TMA, can it be said that
there is an infringement of trade mark by the parallel importer?
[85] Although subsection 35(1) TMA confers on the registered proprietor, the
Group Ltd & Ors v.
exclusive right to the use of the trade mark in relation to the goods applied for,
it is to be read subject to the provisions of the TMA. In this respect, subsection
40(1) of the TMA is relevant where it provides for the defences to a claim of
trade mark infringement, which reads:
“40. Acts not constituting infringement
(1) Notwithstanding anything contained in this Act, the following acts do

not constitute an infringement of a trade mark:
(a) ...
(b) ...
(c) ...
(d) in relation to goods connected in the course of trade with the registered
proprietor or a registered user of the trade mark if, as to those goods or a
bulk of which they form part, the registered proprietor or the registered user
in conforming to the permitted use has applied the trade mark and has not
subsequently removed or obliterated it;
(dd) the use by a person of a trade mark in relation to goods or services to

which the registered proprietor or registered user has at any time expressly or
impliedly consented to;
(e) ...
(f) ..."
[Emphasis Added]
[86] Subsection 40(1)(dd) of the TMA was inserted vide Amendment Act A881
in 1994, ie after the decision in Winthrop which allowed parallel importing
even without express consent of the registered proprietor, save and except in
situations where there are contractual restrictions.
[87] The defendant in our present appeal, relied on the defence under
subsection 40(1)(dd) of the TMA. Subsection 40(1)(dd) of the TMA provides
that once the registered proprietor or registered user has expressly or impliedly
consented to another, to use the trade mark in relation to certain goods, and the
goods are then placed on the market, the registered proprietor cannot control
further dealings with the goods.
[88] The defendant also placed heavy reliance on the ratio in Winthrop to
support its defence of parallel import, where it was argued that its conduct
and the mode of importing and distributing the goods as transacted by the
defendant falls within the defence of “parallel imports” and that there was
implied consent by P2. Therefore, it is crucial to understand the reasoning
behind the decision of Winthrop. We need to assert at the outset, that Winthrop
Group Ltd & Ors v.
does not concern subsection 40(1)(dd) of the TMA but rather subsection 52(3)
(a) of the Trade Marks Ordinance 1950, which is in pari materia to s 4(3)(a)(i)
of the English Trade Marks Act 1938. For clarity we reproduced the said s 4(3)
(a) of the UK Trade Marks Act 1938 which provides:
“...
The right to the use of a trade mark given by registration as aforesaid shall
not be deemed to be infringed by the use of any such mark as aforesaid by
any person:
(a) in relation to goods connected in the course of trade with the proprietor
of a registered user of the trade mark if, as to those goods or a bulk of which
they form a part, the proprietor or the registered user had applied the trade
mark and has not subsequently removed or obliterated it, or has at any time
expressly or impliedly consented to the use of the trade mark.”
[89] Winthrop involved the trade mark “Panadol” for which a well known
analgesic is sold. The owner of the trade mark:
(i) in the United States of America (USA) is Sterling Drug Inc;
(ii) in the United Kingdom (UK), is Sterling Winthrop Group Ltd;

and
(iii) in Malaysia is Winthrop Products Inc, a company incorporated

under the laws of State of Delaware, USA. Winthrop Products
Inc has registered rights of the mark in the UK.
[90] The 2nd plaintiff is registered in Malaysia as the sole registered user of
the mark. All the aforesaid corporations are related companies. Lifting the
corporate veil revealed that these corporations are all members of a group of
companies that function on a worldwide basis. The parent company is Sterling
Drug Inc of the USA. The worldwide activities of the group are carried out
by sub-groups, each functioning in different geographical areas. The various
corporations in the group, namely that of the Malaysian, British and the
American companies referred to herein, can be traced to Sterling Drug Inc.
[91] It was in evidence that the 1st plaintiff, Winthrop Products Inc and the
British company Sterling Winthrop Group Ltd are both wholly owned by
Sterling Drug Inc. It is an undisputed fact that the 2nd plaintiff, Sterling Drug
(M) Sdn Bhd’s ownership can be traced back to Sterling Drug Inc.
[92] The analgesic blue pack Panadol had been imported into Malaysia by the
2nd defendant, Maltown Ltd and was being sold in Malaysia through the 1st
defendant, Sun Ocean (M) Sdn Bhd.
[93] The 1st and the 2nd plaintiffs took an action against the defendants
for trade mark infringement. Both the plaintiffs were owned by the parent
company, Sterling Drug Inc. The evidence disclosed during trial was that the
Group Ltd & Ors v.
defendants had obtained the goods directly from Sterling Winthrop Group
Ltd (another UK subsidiary of the ultimate holding company, Sterling Drug
Inc) and occasionally from a British wholesaler, Chemi save to which Sterling
Winthrop Group Ltd supplies to.
[94] The plaintiffs’ complaint against the defendants was that the 2nd
defendant’s importation and sale into Malaysia of the blue pack Panadol which
they obtained from the British domestic market through the 1st defendant,
infringes the 1st plaintiff ’s proprietorship and the 2nd plaintiff ’s user rights in
the Panadol trade mark. It was also contended that the defendants, by putting
the blue pack Panadol into the Malaysian market had practiced deception on
the Malaysian public that amounts to passing off the blue pack Panadol as
being that of the plaintiffs.
[95] VC George J (as he then was) held, inter alia, that where a parent
company (or a group of companies) chooses to manufacture and sell through a
subsidiary or related companies in different parts of the world products which
bear the same trade mark, the registered owner in Malaysia could not object
to the importation and distribution of such imported goods in Malaysia. His
Lordship held that the “registered owner and registered user in Malaysia can
be said to have impliedly consented to the said acts, so that the holder of the
goods acquires the absolute ownership of the goods including the right to sell
the goods in any part of the world in the same condition in which they were
disposed of.”
[96] In contrast, the case of Tien Ying Hong held that parallel importation of
goods without the consent of the registered proprietor amounted to trade mark
infringement. The plaintiff in Tien Ying Hong is the registered proprietor of
the trade mark of “SEIZAIKEN” under the TMA, who is in the business of
distributing and selling batteries for watches and clocks as well as watches and
clock parts.
[97] The defendant imported its batteries marked with “SEIZAIKEN” from
Star (Far East) Ltd, a company based in Hong Kong, which obtained the
batteries from Seiko Instrument Inc in Japan, which is the lawful manufacturer
and owner.
[98] The plaintiff instituted an action against the defendant which had
been importing and selling watch batteries in Malaysia under the name of
“SEIZAIKEN”. The defendant relied on subsection 40(1)(d) of the TMA to
assert that parallel imports are not prohibited under the TMA. Reference was
also made to Winthrop.
[99] The facts show that the plaintiff had never appointed the defendant to be
a distributor of the plaintiff ’s batteries bearing the trade mark “SEIZAIKEN”.
Seiko Instrument Inc, the owner of the trade mark SEIZAIKEN in Japan,
however, has no economic or legal relationship with the plaintiff. The
defendant denied infringement and argued that as the batteries it imported
Group Ltd & Ors v.
and sold in Malaysia were manufactured by Seiko Instrument Inc, the lawful
owner of the SEIZAIKEN mark in Japan, the goods were genuine and not
imitation nor were they pirated products and the mode of importing and
distributing the SEIZAIKEN batteries as transacted by the defendant falls into
the legal description of “parallel import”. As the purchaser from the lawful
manufacturer of the SEIZAIKEN batteries in Japan, the defendant was legally
entitled to parallel import them into Malaysia, and therefore its act should not
result in infringement of the plaintiff ’s trade mark. It was held that the plaintiff
was unrelated to Star (Far East) Ltd and to Seiko Instruments Inc of Japan,
and the ratio of Winthrop did not apply to the facts of Tien Ying Hong.
[100] In Winthrop, the plaintiff and the defendant were subsidiaries of the
same corporate group and, as such, although there was no express consent,
the plaintiff was deemed to have impliedly consented to the importation of
the products in question. In Tien Ying Hong, the plaintiff has no connection or
association with Seiko Instrument Inc or even the supplier from Hong Kong.
[101] It was held in Winthrop that there was nothing to stop the plaintiffs from
exporting their products out of UK, or any traders for that matter, once the
products were put on sale other than any contracting restrictions that there
may be imposed, though on the facts, there were none. The Court went on
to hold that where a member of an international group applied a trade mark
to goods, a purchaser of the trade marked goods was entitled to presume that
he would not be sued by any other member of the group simply on the basis
of the place of manufacture of the product. By putting the product into the
market in the UK elsewhere by related companies, the plaintiffs had impliedly
consented so that the holder of the goods acquires absolute ownership of the
goods including the right to sell the goods in any part of the world in the same
condition in which they were disposed of.
[102] A significant factor present in Winthrop is that, there was norestriction

in the agreement entered between the plaintiff and the manufacturer limiting
the sale of Panadol to domestic use in UK only. The Court decided that
the exhaustion defence applied when the goods parallelly imported by an
independent third party were manufactured and put on the market in a foreign
country by an associated or related company ofthe plaintiff trade mark owner,
even if the importation of the goods were carried out without the consent of
the registered trade mark owner. It was in that context that the consent was
held to be implied.
[103] The Court in Tien Ying Hong had distinguished the facts with Winthrop.
In Tien Ying Hong, there is no nexus between Seiko Instrument Inc or, even
the supplier from Hong Kong. The Court in Tien Ying Hong, emphasized the
significance of s 35 of the TMA which confers on the registered proprietor of
“SEIZAIKEN” trade mark, the sole and exclusive right to sell and distribute
the goods bearing that trade mark in Malaysia and pursuant to s 38 of the
same, no one else had the right to import, sell or advertise for sale such
Group Ltd & Ors v.
batteries in Malaysia without the prior permission of the plaintiff. It was held
that parallel imports are permitted only if the registered proprietor of the
trade mark consented to the importation, distribution and sale in Malaysia.
Neither can the consent be implied as the Japanese manufacturer and supplier
of the imported batteries were not related or associated with the plaintiff
company. It was held that the issue of implied consent to use the trade mark
does not arise.
[104] However, it is interesting to note that, the defendant in Tien Ying Hong
relied on subsection 40(1)(d) in its defence, not subsection 40(1)(dd) of the
TMA. Tien Ying Hong was decided in 2010, after the amendment to subsection
40(1) was made in 1994 when subsection 40(1)(dd) was inserted.
[105] Subsection 40(1)(d) is premised on a situation when “the registered

proprietor or the registered user in confirming to the permitted use has
applied the trade mark” to the goods which were the subject matter of the
litigation. In Tien Ying Hong there was never any allegation that the goods were
manufactured, and the SEIZAKEN trade mark applied by the plaintiff or the
registered proprietor. It was Seiko Instrument Inc, the owner of SEIZAIKEN
trade mark in Japan, who applied the trade mark in question. It appears that ss
40(1)(d) as relied upon by the defendant in Tien Ying Hong, has no relevance.
The defendant there in could have mounted its defence based on ss 40(1)(dd)
as the defendant’s stand then was where “the registered proprietor or registered
user has at any time expressly or impliedly consented” to the use of the mark
by a third party, even though they had not applied the trade mark themselves.
Such defence would be applicable if the defendant could prove that the plaintiff
and Seiko Instrument Inc, the entity which applied the mark, had economic or
legal relationship for the court to infer some kind of consent to the use of the
trade mark. However, as the facts showed, Seiko Inc, the entity which applied
the mark, had no economic or legal relationship with the plaintiff, hence, there
cannot be any implied consent to the use of the mark coming from the plaintiff,
if Winthrop is to be relied upon. Therefore, even if the defence of exhaustion
under ss 40(1)(dd) TMA was invoked, it would also fail premised on the facts
of the case.
[106] VC George J in Winthrop relied on Revlon which dealt with the ambit of
s 4(3)(a) of the UK Trade Marks Act 1938 (which is in pari materia to subsection
52(3)(a) of the Trade Ordinance 1950 and substantially similar to our present
ss 40(1)(d) and (dd) TMA).
[107] Revlon is the leading case regarding the principle that if the mark has
been applied overseas by a company which is part of the same corporate group
as the local trade mark owner, then it is no infringement of the local trade
mark for a third party to import goods bearing the mark. Here, Revlon Inc was
the parent company of the Revlon Group of international companies which
manufactured and marketed cosmetics and toiletries in the United States.
Revlon Suisse SA (a subsidiary of the parent company) was the registered
Group Ltd & Ors v.
proprietor of the United Kingdom trade mark in question. There was a

subsidiary incorporated in Venezuela which manufactured the goods for the
British market. Another subsidiary, incorporated in New York marketed the
goods in the United Kingdom. Both the subsidiaries enjoyed registered user
agreements in respect of the trade mark. The parallel importer had sourced
cheap stocks from a line marketed which has been discontinued by Revlon
Inc. in the United States. Revlon Group alleged that the parallel importer had
infringed their registered trade mark. It was argued by the Revlon Group that
it was entitled to control the use of its trade mark in the United Kingdom,
meaning that it was entitled to make a profit from selling the goods in the
United States without any restriction as to their export but they are entitled
to obtain an injunction against the innocent third party which had purchased
them so as to export them into the United Kingdom. There was nothing to
indicate on the packaging of Revlon Flex products that the defendants had
obtained from the US that the products were not to be exported out of US or
that otherwise there were restrictions imposed in respect of the sale of these
products.
[108] The Court of Appeal was unanimous in finding that the Revlon products
were able to be imported to the United Kingdom market without infringing s
4(1) because of the provisions of s 4(3)(a) of the Trade Marks Act 1938 (UK).
[109] Buckley LJ held that it could not be said that the registered proprietor
had applied the trade mark to the goods, because the actions of the principal
(Revlon Inc) could not be said to be those of the registered proprietor of the
trade mark, its subsidiary (Revlon Suisse SA). He therefore, held that the first
portion of the paragraph in s 4(3)(a) which reads “... the proprietor ... had
applied the trade mark and has not subsequently removed or obliterated it” is
not applicable. However, he was satisfied that the subsidiary must be taken to
have consented to the principal’s use of the trade mark because of the nexus
between them and that the second portion of s 4(3)(a) which reads “has at any
time expressly or impliedly consented to the use of the trade mark” Bridge LJ
concurred with Buckley LJ.
[110] Templeman LJ, however regarded the registered proprietor of the trade
mark (Revlon Suisse SA) as having applied the mark to the goods within the
meaning of s 4(3)(a) simply because of its relationship with its parent. This
proposition appears to have disregarded the distinct legal entity between
the principal and its subsidiaries and a willingness to lift the multi-national
corporate veil. He regarded the Revlon Group of companies as one collective
corporate entity regardless of technical legal distinction between them.
[111] The apparent result of the Revlon is that the courts would not permit the
use of UK registered trade mark to prevent the importation of goods bearing a
particular trade mark where these goods were originally marketed by a branch
or subsidiary of which the UK registered proprietor or registered user was part
of. This was not achieved by finding the use of the imported goods as being
Group Ltd & Ors v.
used by the proprietor or registered user, but rather, by finding the use as having
been connected to, by the registered proprietor.
[112] It therefore, follows that, in the absence of consent by the proprietor or

registered user and the trade mark had been applied by an independent licensee,
a parallel importer could be restrained. The important factor in Revlon regarding
consent was the lack of any express agreement prohibiting the export of their
product. Although it may be difficult to see how the overseas manufacture by
the parent company could be treated as manufacture by a local subsidiary, as
the latter enjoy a separate legal entity under the principle of corporate law, one
should approach it from the implied consent line of reasoning rather than the
power of corporate control of parent over subsidiary.
[113] Still on the issue of consent, Revlon was distinguished by Colgate-

Palmolive, where the plaintiff therein is the US parent of an international group
of companies which manufactured “Colgate” toothpaste. Colgate US was the
registered proprietor of the trade mark and Colgate UK was the registered user.
Under licence agreement with Colgate US, a Brazilian subsidiary, Limitada
was permitted to use the trade mark in Brazil. This agreement allowed Limitada
to export to specified countries in South America and Africa. The defendants
procured supplies of the Brazilian toothpaste for importation and sale in the
English market, by representing that the goods were intended for export to one
of the approved countries, namely Nigeria.
[114] The Court of Appeal held in favour of the plaintiff, finding on the facts
that there had never been an application of the relevant UK Trade Mark to
the Brazilian goods since the Colgate mark applied to the goods in Brazil was
neither used nor contemplated to be used in the UK. The only application
made was that of the Brazilian trade mark, even though this was the same as
the UK. Lloyd LJ stated “the present reality is that each country grants trade
mark protection within its own territorial limit”. This decision lends support to
the decision by Azahar Mohamed J (as he then was) in Tien Ying Hong when
His Lordship stated that on principle and on authority that our trade mark law
is territorial in nature.
[115] With that established legal position of the law on the issues that would
be relevant in the determination of the present appeal, at the fore front of our
minds, we now proceed to answer the questions posed by the plaintiffs.
Question (a)
Will A Brand Proprietor/Owner’s Trade Mark Rights Be Exhausted

Worldwide Even Though The Goods/Merchandise In Relation To Which
The Trade Mark Is Used Have Been Put On Market By The Brand
Proprietor/Owner To Be Sold In A Specific Country/Region/Geographical
Area Only For Example When It Is Clearly Stated The Goods/Merchandise
Are “To Be Sold In China Only”?
Group Ltd & Ors v.
[116] Question (a) posed by the plaintiffs focus on the extent in which a trade
mark owner should be allowed to maintain control over its trade mark by using
its exclusive trade mark rights in Malaysia to restrict the importation of goods
into Malaysia after the goods have been restricted in its sale somewhere else
in a specific country or region. In this case, the sale of the goods in question
was restricted only to China. Hence, the issue in Question (a) is: would the
proprietor’s rights be exhausted worldwide even if the sale is restricted only to
a specific territory?
[117] The defendant interpreted subsection 40(1)(d) to mean that since P2 is

the registered proprietor of the trade mark and P3 as registered user had placed
the trade mark on the goods which are marketed from China throughout the
world for sale, P2 and P3 shall immediately cease to have rights to control
subsequent dealings with goods bearing the “Eagle Coin” trade mark. The
defendant took the interpretation of subsection 40(1)(d) TMA to mean that the
registered proprietor’s rights in the goods are exhausted once the goods are sold
by him or his authorised distributor with his consent anywhere in the world,
as in this case. Much reliance was placed by the defendant on Winthrop which
made reference to Revlon which highlighted on parallel importation and held
that when a member of an international group applied a trade mark to goods,
a purchaser of the goods was entitled to assume that he would not be sued by
any other member of the group simply on the basis of the place of manufacture
of the products and therefore, since both the plaintiff and the defendant were
authorised dealer appointed by the registered proprietor, the plaintiff in the two
cases shall have no right to sue the others.
[118] The principle in both cases of Winthrop and Tien Ying Hong is that, if
the mark has been applied overseas by a company which is part of the same
corporate group as the local trade mark owner, it is not infringement of the
local trade mark for a third party to import goods bearing the mark. Both the
plaintiffs in Winthrop were regarded to have impliedly consented to the use of
the trade mark by the manufacturers of the blue pack Panadol in the UK. The
defendants acquired absolute ownership of the goods including the right to sell
the goods in any part of the world in the same condition in which they were
disposed of. The Court also found that there was no territorial restriction on the
exportation of the product and neither was there evidence of any conditional
sale of the product.
[119] Winthrop is the first case in Malaysia that dealt expressly with parallel
importation of trade mark goods under the Trade Mark Ordinance 1950 which
was later repealed and replaced by the TMA.
[120] Subsequently Tien Ying Hong dealt with the application of the trade
mark exhaustion defence, which involved the application of ss 35(1)and s 38
relation to parallel imported goods. The Court held that in the context of the
case, “parallel import of the batteries bearing “SEIZAIKEN” trade mark are
permitted under the TMA, if and only if the plaintiff must be taken to have
Group Ltd & Ors v.
consented to their importation, distribution and sale in Malaysia” (para 19 of

Tien Ying Hong).
[121] In Tien Ying Hong, the goods imported and sold in Malaysia were not
goods manufactured by the plaintiff or its related companies overseas, but by
a third party that was not connected to the plaintiff, yet owned the trade mark
rights in the foreign company. The issue was whether in such situation could the
goods manufactured by a foreign trade mark owner be legitimately imported
and distributed in Malaysia without infringing the Malaysian registered trade
mark owner’s rights? In other words, whether the exhaustion defence applies
to a parallel importation of this nature? The Court ruled that importation and
sale of such goods would infringe the Malaysian registered trade mark owner’s
rights. The learned Judge in Tien Ying Hong held that it made no difference
whether the batteries were imported, distributed and sold domestically by
the defendant were genuine products by Seiko Instruments Inc Japan, Seiko
Instrument Inc. itself did not have the right to sell batteries under the trade
mark SEIZAIKEN in Malaysia because the plaintiff is the registered owner
of the trade mark SEIZAIKEN. Only the plaintiff has the right to import,
distribute and sell in Malaysia batteries bearing the trade mark SEIZAIKEN.
His Lordship held that no one has the right to import or sell the batteries
bearing the trade mark SEIZAIKEN without the consent of the plaintiff.
[122] From the analysis of the facts in Winthrop, the reliance by the defendant
on Winthrop which referred to the case of Revlon and the reliance on Tien Ying
Hong is misconceived, as the facts between Winthrop and our present appeal are
poles apart.
[123] In Winthrop referred to by the defendant, it was between two appointed

distributors (plaintiff and defendant) of the registered owners of the trade mark
from different countries who imported their goods to other countries. There
the registered proprietor of the trade mark was not involved in the Suits. It
is a situation where the plaintiff (company A) and defendant (company B)
were both appointed distributors and manufacturers of products belonging to
the registered proprietor. Instead of selling Company’s A products in Country
A, the defendant (company B) was selling the products manufactured by
Company B in the geographical area belonging to Company A. The issue that
was raised by the parties in those cases was between the plaintiff (Company A)
and the defendant(Company B). In situation like this, the registered proprietor
should not have the right to step in because authorisation and consent has been
given to both the plaintiff (Company A) and the defendant (Company B) in
selling and manufacturing the products bearing the same trade mark belonging
to the registered proprietor. This is a situation where the rights and consent has
been given to both the plaintiff (Company A) and the defendant (Company B)
by the registered proprietor.
[124] In Revlon, the Revlon group of companies was one collective corporate
entity, regardless of the technical distinctions. Although the parent company,
Group Ltd & Ors v.
Revlon Inc. did own the Revlon Flex marks in the UK, they were held by
Revlon Suisse (the proprietor of the UK marks) for the benefit of Revlon Inc.
Templeman LJ opined that in a group such as Revlon, the legal ownership
of trade marks were mere instruments. In fact, Revlon Inc orchestrated the
business of the group through subsidiaries for the benefit itself. He further
held that Revlon Suisse was a subsidiary which could not object to the parent
company, Revlon Inc, putting the trade mark and disposing the goods in the US
or anywhere in the world. Thus, Revlon Suisse was taken as having impliedly
consented to the use of the trade mark in connection with the goods which
emanated from the parent company, and which had found their way into the
ownership of the defendants.
[125] However, that is not the situation in our present case. P2 in our case is
not the registered proprietor of products bearing the “Eagle Coin” trade mark.
P2 was assigned to use the “Eagle Coin” trade mark and sell the products
bearing the said trade mark outside China. The defendant is not the authorised
distributor of the products bearing “Eagle Coin” trade mark. This fact is
admitted by the defendant. Through the testimonies of P1, P2 and P3, there was
no authority, consent (express or implied) given by the registered proprietor/
owner (P1) of the “Eagle Coin” trade mark or the authorised distributor (P3)
in Malaysia, to the defendant, to sell the products bearing the same trade mark.
[126] Further distinction in the facts in Winthrop is that, the goods were the
same for both domestic and export market. There was no issue of passing off
or misrepresentation. There was no territorial restriction on the goods in the
agreement between the manufacturer and the registered owner/user of the
trade mark in Malaysia or on the packaging, that the registered owner/user
had no right to restrict the defendants from selling the goods imported from
the British domestic market in Malaysia. There is also no agreement for the
goods to be sold outside China so there cannot be implied consent for this to
be done. As imprinted on the packaging of the goods which were purchased
by the defendant from retail outlet of P2 in China, there is restriction that the
goods are meant for the China market only.
[127] Another distinguishing factor in Winthrop is that there was knowledge on

the part of the plaintiffs that the defendant is an existing customer of theirs and
that the plaintiffs also knew that the defendant was an exporter of the goods,
so the court could infer there was implied consent to reselling, whereas in our
case, the defendant was neither an existing customer of the P2 nor a known
exporter/distributor of “Eagle Coin” products for consent to be implied or
deemed.
[128] In Winthrop and Revlon, the registered proprietor of the trade mark in
question was never involved in the Suit. Unlike our present case, P1 and P2 are
parties to the Suit and it was in evidence that there was never any consent nor
authorisation given to the defendant to purchase the goods from China and
export it to Kota Kinabalu, Malaysia to be resold to the public.
Group Ltd & Ors v.
[129] The aforesaid principles are similar to the position adopted by the
European Court of Justice (ECJ) in dealing with exhaustion of rights within
the member states. Cases from the ECJ show that trade mark rights cannot be
exhausted worldwide and would only be exhausted nationally if the imported
goods were also placed on the national market by the registered proprietor/
owner, with their consent.
[130] Further, implied consent can only be inferred when the facts and the
circumstances unequivocally show that the proprietor has renounced his right
to oppose placing of the goods on the market in the jurisdiction the goods were
imported (see Zino Davidoff SA).
[131] With regard to consent, it is clear from the decision in the case of Colgate-
Palmolive Ltd & Anor v. Markwell Finance Ltd & Anor [1989] RPC 49, that firstly,
the consent must be by the registered proprietor or user. Secondly, it must
be shown that the consent relates to the use of the marks whose rights were
secured by registration. In the Colgate-Palmolive case, the court held there was
no implied nor express consent and there were attempts to prevent the import
of the Brazilian goods to the UK, as there was significant difference in the
formulation of the goods. The facts disclosed that the goods produced in Brazil
were of lower quality compared to the goods made in the UK, which would
create a misrepresentation to consumers as to the quality of the goods. The
Brazilian licensee was strictly limited to the use of the trade mark in Brazil
and a few other territories which did not include the United Kingdom. Given
the qualitative differences in the products, one can understand the commercial
reasons for wanting to keep the markets separate.
[132] In the grounds of appeal filed by the defendant at the Court of Appeal, the
defendant stated that when the defendant, through their agent went to the retail
store in China to purchase the infringing products, there is implied consent
given by P2 through the retail stores that they can resell the infringed products
purchased in Malaysia; and that with the existence of the implied consent
given by P2, it falls under the meaning and understanding of the law on parallel
importation as stated in the case of Winthrop. The defendant contended that
this can be seen in P2’s invoicing, packaging, labelling and sending the goods
to the defendant in Sabah between September 2016 to November 2016 after the
defendant or DW1 had purchased the goods from P2 in China on 28 August
2016.
[133] However, the learned High Court Judge had evaluated this aspect of
the evidence which suggests otherwise. It was the findings of the learned
High Court Judge that there is no evidence that P2 had shipped the canned
fried dace purchased by the defendant at its outlet in China in Malaysia. The
learned High Court Judge found on the evidence that 720 cans of the products
were shipped by Guangzhou Hefu International/Hefu International Logistic
Company Limited, which is the transporter of the defendant. It was also the
findings of His Lordship that the defendant had admitted selling a product
Group Ltd & Ors v.
with a trade mark of which, itis neither the registered owner nor the registered
user. The retail store in China sold the infringing goods to the agent of the
defendant, a Chinese citizen. Although the infringing goods were bought in
bulk, that cannot be inferred that the plaintiffs knew that the infringing goods
were purchased for purposes of re-selling, marketing and distributing in
Malaysia. The infringing goods were arranged for transportation and shipment
to Malaysia by the defendant through its agents in China, not through the
plaintiffs or the plaintiffs’ agents. The transporter and the forwarding company
that was responsible for the shipment of the goods to Malaysia have nothing to
do with P1 or P2. The representative of the defendant, DW1 had gone to the
retail outlet of P2 in China to purchase the goods, could read Mandarin and it
was the finding of the learned High Court Judge that DW1 would have known
that the labelling on the products indicated that the goods were not meant to be
sold outside the China market. We have no reason to disturb such findings by
the learned High Court Judge.
[134] These findings of facts by the learned High Court Judge were never
impugned nor assailed by the Court of Appeal. Due to the unavailability of
the grounds of judgment by the Court of Appeal, this Court is in no position
to hazard a guess as to the reasons why the Court of reversed the decision
of the learned High Court Judge. It was never explained in what way the
learned HighCourt Judge was plainly wrong in making such findings of facts
on the evidence which were before him, which to our mind, have no reason to
interfere.
[135] As P3 is the registered user under subsection 48(5) of the TMA, it is
entitled to use the registered trade mark within any prescribed limits of its
registration. Thus, P3 enjoyed the protection afforded by subsection 35(1) of
the same. There was no permission obtained by the defendant from P3 for
marketing and distributing the products in Malaysia. The learned High Court
Judge found that on the packaging of the infringing goods distributed by P3, is
printed that P3 is the sole authorised distributor of the product of P1. It was in
evidence that the defendant had previously ordered canned fried dace with the
“Eagle Coin” trade mark from P3 for sale in its supermarket but ceased doing
so because of the high price. Hence, there was knowledge on the part of the
defendant that P3 is the sole authorised distributor of the product of the “Eagle
Coin” mark.
[136] There was no consent, be it express or implied, by the plaintiffs, to the
resale of the products in Malaysia. There is no affiliation between the plaintiffs
and the defendant to warrant any implied consent, rather it invites confusion
and deception amongst consumers due to the unauthorised sale of the products.
Therefore, there is no exhaustion of their trade mark rights, be it nationally or
internationally.
[137] Hence, the learned High Court Judge did not err when His Lordship
held that the defence of parallel importation fails and that the trade mark rights
of the plaintiffs had been infringed when it imported the products that carry
Group Ltd & Ors v.
the trade mark “Eagle Coin” which was restricted for sale in China only. These
products though not counterfeit but products of the plaintiffs brought into
Malaysia through unauthorised parallel importation.
[138] We therefore answer question (a) in the negative.
Question (b)
Whether The Sale Of Parallel Imports In Malaysia Can Be Prohibited If The
Goods/Merchandise Purchased And Intended To Be Re-Sold Are Materially
Different From The Goods/Merchandise That The Trade Mark Proprietor/
Owner Has Authorised To Be Put On Market In Malaysia?
[139] Admittedly, there are occasions/situations where a company chose
to produce different goods for different markets under the same trade mark,
due to different requirements in terms of culture, standards and availability
of resources relevant in different regions/countries. Such situation is well
illustrated by the Colgate Palmolive case and PT Garudafood Putra Putri Jaya
TBK (Applicant) [2019] MLRHU 141, where “the applicants’ products meant
for export and sale in the Malaysian market which used and incorporated the
“Gery” mark are different from the applicants’ products that also used and
incorporated the “Gery” mark meant for the Indonesian market”.
[140] The International Trade Mark Association recommends some
jurisdictions adopt a material differences standard to exclude parallel imports
that are materially different from those products authorised for sale by the
trade mark proprietor/owner in the domestic market. This is the approach that
appears to have been adopted by the High Court in PT Garudafood Putra Putri
Jaya TBK (Applicant).
[141] In the Colgate-Palmolive case above, the court held that the goodwill' of
Colgate had been damaged by the importation of inferior Colgate products
into the US. In the US which applies the “first-sale doctrine” (where the trade
mark owner cannot prevent the subsequent resale of its goods by others), the
sale and distribution of parallel imports that are materially different from the
goods authorised for sale within the US, would cause confusion and would
constitute trade mark infringement. Case laws from the US demonstrate that
the fact that both goods come from the same manufacturer is irrelevant as the
probability of confusion exists. The cases from US are instructive, in that even
a single material difference creates a presumption that the gray goods have a
potential to mislead or confuse consumers about the nature or quality of the
product.
[142] We are persuaded by the submission by the plaintiff that Malaysia
should adopt an approach like the US that the sale and distribution of parallel
imports that are “materially different” from goods authorised for sale within
the country constitutes trade mark infringement. This proposition is illustrated
by the following cases from the US:
Group Ltd & Ors v.
- In Societe Des Proouits Nestle v. Casa Helvetia, 982 F.2d 633 (1st Cir
1992) where the Federal Court of Appeals adopted the protective
approach on registered proprietors of the trade mark against the
importation of the gray goods, and went on to hold that even
a single material difference creates a presumption that the gray
goods have a potential to mislead or confuse consumers about the
nature or quality of the product;
- In Lever Brothers Co v. United States of America, 981 F.2d 1330

(DC Cir 1993) where the US Court of Appeals for the District
of Columbia prohibited the importation of physically different
foreign goods bearing a trade mark which was identical to a valid
US trade mark, regardless of the trade mark’s genuine character
abroad or affiliation between the producing firms. Such affiliation
between the producers in no way reduces the probability of
substantial consumer confusion and deception in the US about
the nature and origin of the goods; and
- In the Colgate-Palmolive’s case, the court held that the sale and
distribution of parallel imports that are materially different
from the goods authorised for sale within the US, would cause
confusion and would constitute trade mark infringement. It went
on to hold that the ‘goodwill’ of “Colgate” had been damaged by
the importation of inferior “Colgate” products.
[143] We agree with the submission by the plaintiffs that the aforesaid approach
should be adopted in cases of parallel imports that are materially different from
goods authorised for sale in Malaysia. The fact that the goods originate from
the same manufacturer is irrelevant as the probability of confusion exists.
[144] In our present appeal, apart from the expressed territorial restriction
of sale on the packaging, the products offered for sale by the defendant are
materially different in terms of contents, quality and packaging.
[145] The infringing products purchased by the defendant from the retail outlet
of P2 in China do not comply with the labelling requirements under the Food
Regulations 1985 and halal requirements unlike the products authorised to
be sold in the Malaysian market which also provides for the Muslim market.
The facts show the ratio of fish content in the infringing products bearing the
“Eagle Coin” trade mark which was restricted for sale in China is different
from the goods bearing the “Eagle Coin” trade mark sold in Malaysia.
[146] Given the aforesaid, the sale and distribution of parallel imports of the
infringing products, which are materially different from the goods authorised
for sale within Malaysia, would create confusion amongst the consumers
and would constitute trade mark infringement. Therefore, the sale of parallel
imports in Malaysia can be prohibited if the goods intended to be resold are
Group Ltd & Ors v.
materially different from the goods that the trade mark owner has authorised to
be put on the market in Malaysia.
[147] Therefore, for question (b) we answer it in the affirmative.
Question (c)
Can The Quantity Of Goods/Merchandise Purchased Be Used To Determine

If There’s Implied Consent Given By The Manufacturer/Brand Proprietor/
Owner To Sell The Goods/Merchandise Purchased Outside Malaysia To Be
Resold In Malaysia?
[148] Bulk purchase of the goods cannot be taken as implied consent by

the manufacturer/brand proprietor/owner to sell the goods/merchandise
purchased outside Malaysia to be resold in Malaysia. We agree with the
submission by the plaintiffs that consent does not just extend to the act of
reselling but where the products can be resold.
[149] There is also the “territorial restriction” on the packaging of the goods
which were purchased by the defendant from China. Hence, we do not see on
what basis can bulk purchase by the defendant outside Malaysia, be used to
infer consent that the goods are to be sold in Malaysia.
[150] Due to the clear objection by virtue of the territorial restriction on the
packaging, it would be absurd to rely on the sheer quantity of the purchase to
imply consent to importing the goods into Malaysia for reselling. For consent
to be implied, it must be shown that there was an unequivocal renunciation of
rights by the manufacturer/brand proprietor/trade mark owner.
[151] Therefore, our answer to question (c) is in the negative.
Question (d)
In The Event The Answer To Question (c) Above Is “Yes”, Then Can
The Consent Be Valid If The Goods/Merchandise Purchased Were Put In
Market By The Manufacturer/Trade Mark Proprietor/Owner To Be Sold
Only In That Specific Country From Which The Goods/Merchandise Were
Purchased From?
[152] The facts show that the goods purchased by the defendant is only
restricted to be sold in China only. There is no consent for the infringing goods
to be sold outside China.
[153] As we have answered question (c) in the negative, and the question posed
is no longer relevant as it does not reflect the facts of the case, we decline to
answer question (d). This question presupposes that consent is valid when the
facts do not show consent was ever given by the registered owner or registered
user of the trade mark for the goods to be sold outside the restricted area.
[154] We, therefore, decline to answer question (d).

Group Ltd & Ors v.
Question (e)
Whether Goods/Merchandise When Purchased But Not Imported And/Or

Does Not Comply With Laws Concerning Importation Amount To Parallel
Importation?
Question (f)
Whether The Law In Malaysia Allows For Food Products To Be Sold Even
Though It Is Not Packaged According To The Food Regulations 1985 And/
Or Food Act 1983?
Question (g)
Whether The Implied Consent And/Or Express Consent Given By The

Trade Mark Proprietor/Owner Supersede The Laws Of Malaysia?
[155] We take questions (e), (f) and (g) together, as the issues raised in the three
questions were never raised before the High Court Judge.
[156] On the legal requirement that food products for export must be
accompanied by a sanitary certificate issued by the relevant governmental
authority, mentioned by the learned High Court Judge in his judgment, that
was in relation to the factor which His Lordship considered to be negating
the element of consent on the part of the plaintiffs. Nothing was addressed by
the learned High Court Judge on the requirements of the compliance of the
laws on foodstuff in relation to parallel imports. Hence, we decline to answer
questions (e), (f) and (g).
Conclusion
[157] In summary, our answers to the Questions posed are:
Question (a) - negative.
Question (b) - affirmative.
Question (c) - negative.
Question (d) - decline to answer.
Question (e) - decline to answer.
Question (f) - decline to answer.
Question (g) - decline to answer.
[158] For the foregoing reasons, we find the Court of Appeal erred in reversing
the decision of the High Court. The learned High Court Judge was right in
allowing the claim by the plaintiff, namely that:
Group Ltd & Ors v.
(i) The defence of parallel importation fails;
(ii) The trade mark rights of the plaintiff had been infringed by the
defendant; and
(iii) The defendant has misled the public into thinking that the fried
dace with the “Eagle Coin” trade mark was the same product
marketed by P3. In the premises, the reputation of P3 would
be damaged if Malaysian customers confused the source of the
defendant’s product because of the common identical trade mark.
Hence, the plaintiffs succeeded in establishing their claim under
the tort of passing off.
[159] We, therefore, allow the appeal by the plaintiffs and affirm the decision
of the High Court with costs of RM100,000.00 here and below to be paid by
the defendant to the plaintiffs subject to payment of allocatur fee. The Decision
of the Court of Appeal is set aside as we cannot see any reason to disturb the
decision of the learned High Court Judge.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.
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Group Ltd & Ors v.
Lintas Superstore Sdn Bhd
4
Group Ltd & Ors v.
Group Ltd & Ors v.
Group Ltd & Ors v.

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JE28/2022 08 July 2022

Guangzhou Light Industry & Trade

GUANGZHOU LIGHT INDUSTRY & TRADE

Federal Court, Putrajaya

The appellants/plaintiffs appealed against the decision of the Court of Appeal

Held (allowing the appeal with costs):

Case(s) referred to:

Legislation referred to:

Other(s) referred to:

Zabariah Mohd Yusof FCJ:

[1] The appellants/plaintiffs appealed against the decision of the Court of

[2] The appellants/plaintiffs obtained leave to appeal to this Court on the

(a) Will a brand proprietor/owner’s trade mark rights be exhausted

(b) Whether the sale of parallel imports in Malaysia can be prohibited

(c) Can the quantity of goods/merchandise purchased be used to

(e) Whether goods/merchandise when purchased but not imported

[6] The 2nd plaintiff (P2) is a subsidiary of P1. It is involved in the

Proceedings In The High Court

(b) Whether there is merit in the defence of parallel importation

The defendant contended that parallel importation of goods is not illegal in

[30] Although there are no reasons proferred by the Court of Appeal as to

Proceedings In The Federal Court

Submission By The Plaintiffs

[33] Currently, there is no international treaty in the field of trade marks

[36] Another distinguishing factor is that in Winthrop, one of the defendants

[46] The International Trade Mark Association recommends some jurisdictions

[55] Hence, Question (c) ought to be answered in the negative.

i. Regulation 12(3) of the Customs Regulations 1977 (now embodied

ii. Section 30 of the Food Act 1983 provides that no manufacturer/

or any regulations thereunder. This includes specific requirements

[59] For Question (f) it ought to be answered in the negative.

[61] Consent of the trade mark proprietor/owner cannot be used to circumvent

Submissions By The Defendants

The Law On The Use Of A Registered Trade Mark

[76] Section 38(1) of the TMA 1976 provides that:

[79] In our case, it is undisputed that:

(i) P1 is the registered owner/proprietor of the “Eagle Coin” trade

(iii) P3, a company based in Sabah, is the sole authorised distributor of

The Law On “Parallel Import”

(1) Notwithstanding anything contained in this Act, the following acts do

(dd) the use by a person of a trade mark in relation to goods or services to

(i) in the United States of America (USA) is Sterling Drug Inc;

(ii) in the United Kingdom (UK), is Sterling Winthrop Group Ltd;

(iii) in Malaysia is Winthrop Products Inc, a company incorporated

[102] A significant factor present in Winthrop is that, there was norestriction

[105] Subsection 40(1)(d) is premised on a situation when “the registered

proprietor of the United Kingdom trade mark in question. There was a

[112] It therefore, follows that, in the absence of consent by the proprietor or

[113] Still on the issue of consent, Revlon was distinguished by Colgate-

Will A Brand Proprietor/Owner’s Trade Mark Rights Be Exhausted

[117] The defendant interpreted subsection 40(1)(d) to mean that since P2 is

consented to their importation, distribution and sale in Malaysia” (para 19 of

[123] In Winthrop referred to by the defendant, it was between two appointed

[127] Another distinguishing factor in Winthrop is that there was knowledge on

- In Lever Brothers Co v. United States of America, 981 F.2d 1330

[147] Therefore, for question (b) we answer it in the affirmative.

Can The Quantity Of Goods/Merchandise Purchased Be Used To Determine

[148] Bulk purchase of the goods cannot be taken as implied consent by

[151] Therefore, our answer to question (c) is in the negative.