JURISDICTION REPORT: MALAYSIA
‘SWISS’ CHOCOLATE BLISS IS DISMISSED
Lim Eng Leong Henry Goh & Co Sdn Bhd
Te High Court in Chocosuisse Union des Fabricants Suisses de Chocolat & Ors v. Maestro Swiss Chocolate Sdn Bhd & Ors was faced with two distinct issues. Te first plaintiff was a Swiss co-operative society formed to protect the worldwide reputation and goodwill of its members—chocolate manufacturers in Switzerland. Te second and third plaintiffs were Kraſt Foods Schweiz and Nestlé Suisse SA, manufacturers and exporters of Swiss chocolates worldwide, including Malaysia. Te dispute arose when the plaintiffs discovered that the defendants were printing ‘Maestro Swiss’ on their chocolate products.
Firstly, the court had to decide whether there was goodwill in the term ‘Swiss’, which could be protected by a passing-off action in its extended form.
Te plaintiffs’ case rested on their having an interest in the geographical indication ‘Swiss chocolate’. Tey claimed that it denotes chocolate made entirely in Switzerland and conveys that the chocolate is of premium quality. Swiss chocolate manufacturers have expended incalculable effort and money to promote and protect the associated goodwill. Tus, those who consume the defendant’s chocolate thinking that it is Swiss-made and find it unsatisfactory may associate such lack of quality with chocolate from Switzerland generally. Te defendant contended that the plaintiffs have no goodwill associated with their business in Malaysia and that the term ‘Swiss chocolate’ is generic and not a source indicator.
Te High Court referred to a range of English cases (including the Spanish Champagne, Advocaat and Scotch cases) that recognised the extended tort of passing-off: parties who are members of a class with the right to use a name are entitled to protect it by a passing-off action; and unlike classical passing-off, the misrepresentation in an extended passing-off is not that the defendant’s product is masquerading as the plaintiff’s, but that it is piggybacking on the goodwill attached to the plaintiff’s proprietary right. In Malaysia, this ratio decidendi was adopted in Wembley Gypsum Products Sdn Bhd v. MST Industrial Systems Sdn Bhd and Meidi (M) Sdn Bhd v. Meidi-Ya Co Ltd, Japan.
Unfortunately for the first plaintiff, the court held that it had no locus standi to sue, because it does not conduct business, so has no relevant goodwill. However, the second and third plaintiffs were recognised to have unchallenged evidence (including testimonies from chocolate retailers, Malaysian tour operators to Switzerland and consumer witnesses) showing the significance of ‘Swiss chocolate’ to the local public over the past 20 years. Te plaintiffs have sold Swiss-made chocolates in Malaysia for years. Terefore, they have succeeded in establishing that ‘Swiss chocolate’ could be protected by a passing-off action in the extended form.
Te second issue before the court was whether the use of Maestro Swiss on chocolate led the public to believe it to be Swiss-made.
Te judge agreed with the Court of Appeal in McCurry Restaurant (KL) Sdn Bhd v. McDonald’s Corporation that marks must be compared in their entireties and with respect to their use in trade when determining likelihood of confusion or deception. Justice Azahar Mohamed found that the words Swiss chocolate do not appear on the defendant’s product and that Maestro Swiss is given less prominence than the ‘Vochelle’ mark. Te court acknowledged the defendant’s argument that the packaging get-up has distinct elements in terms of graphics and labelling details, including the identity and address of the Malaysian source chocolate. Te positioning of the words in the corner of the packaging serves as a corporate image since Maestro Swiss is part of the defendant’s corporate name, and therefore does not improperly denote a geographical indication. Evidence indicated that the types of customers who purchase the defendant’s chocolates have comparatively lower incomes and do not generally purchase imported chocolate.
Whilst we agree with the court’s observation that the respective chocolates are differently priced, we do not assume that the classes of consumers will not overlap. We do not see the general public easily discerning the word Swiss to be a corporate name rather than a geographical indication, especially when the word is presented in red and white colours akin to the Swiss flag and popularly associated with many Swiss-made products. Te case is pending appeal and we wait for the decision with bated breath.
Lim Eng Leong is in-house legal counsel at Henry Goh & Co Sdn Bhd. He can be contacted at:
engleong@henrygoh.com
86 World Intellectual Property Review September/October 2010
www.worldipreview.com
“ THE JUDGE AGREED WITH THE COURT OF APPEAL IN MCCURRY RESTAURANT (KL) SDN BHD V. MCDONALD’S CORPORATION THAT MARKS MUST BE COMPARED IN THEIR ENTIRETIES AND WITH RESPECT TO THEIR USE IN TRADE WHEN DETERMINING LIKELIHOOD OF CONFUSION OR DECEPTION.”
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