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11TH LAWASIA INTERNATIONAL MOOT

KUALA LUMPUR REGIONAL CENTRE FOR ARBITRATION

COLOMBO, SRI LANKA

2016

ARBITRATION REGARDING THE SALE OF CEYLON TEA

BETWEEN

CHELSEA TEA COMPANY CLAIMANT

AND

ALMOND TEA COMPANY RESPONDENT

MEMORIAL FOR THE CLAIMANT

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TABLE OF CONTENTS

LIST OF ABBREVIATIONS…………………………………………………………5

INDEX OF AUTHORITIES ……………………………………………………….6-8

STATEMENT OF JURISDICTIONS………………………………...………..……..9

QUESTIONS PRESENTED ………………………………………………………..10

STATEMENT OF FACTS.………………………………………………………11-13

SUMMARY OF PLEADINGS …………………………………………………... 14

PLEADINGS ……………………………………………………………………….. 15

I. THE PROCEDURAL LAW OF THE ARBITRATION IS THE LAWS OF

MALAYSIA AND THE LAW GOVERNING THE SUBSTANTIVE

MATTERS OF THIS DISPUTE IS THE LAWS OF SRI LANKA…………15

A. THE LAWS OF MALAYSIA GOVERN THE PROCEDURES OF THIS

ARBITRATION………………………………………………………………15

(a) Kuala Lumpur, Malaysia is the seat of arbitration……………………………15

(b) As Malaysia is the seat of arbitration, the laws of Malaysia shall govern the

procedures of this arbitration…………………………………………………16

B. THE LAWS OF SRI LANKA GOVERN THE SUBSTANTIVE MATTERS OF

THIS ARBITRATION………………………………………………………..17

(a) The appropriate conflict of laws principles indicate the laws of Sri Lanka to be

the applicable law………………………………………………………………17

(b) The appropriate conflict of Laws principle indicate the Laws of Malaysia to be

the Applicable law regarding the word ‘Ceylon’………………………………19

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(c) The Laws of Sri Lanka are the applicable laws following the Lex Loci

Protectionis Rule……………………………………………………………….19

(d) The Laws of Sri Lanka are the applicable laws following Lex Loci Actus

Rule……………………………………………………………………………19

(e) The Laws of Sri Lanka are the applicable Laws following Lex Originis

Rule……………………………………………………………………………20

C. THUS THE ONLY JURISDICTIONAL RESULT IS TO APPLY SRI LANKA

LAW…………………………………………………………………………………20

II. ATC HAS BREACHED THE AGREEMENT BY DISTRIBUTING SAILOR’S

CEYLON AFFIXED WITH THE ATC’S MARK IN MALAYSIA…………..21

A. THE LAWS OF ENGLAND GOVERN THE SUBSTANTIVE MATTER OF

THE ALLEGED AGREEMENT BREACH…………………………………...21

B. ATC HAS BREACHED THE AGREEMENT………………………………...21

III. THE RESPONDENT, ALMOND TEA COMPANY, IS LIABLE TO STOP

THE USE OF THE WORD ‘CEYLON’ IN RESPECT OF ITS TEA

PRODUCT UNDER THE SRI LANKAN LAW………………………………23

A. ATC HAS UNLAWFULLY AND IN BAD FAITH BEEN USING THE WORD

CEYLON TO CREATE CONFUSION………………………………………23

B. GEOGRAPHICAL IDENTIFICATION………………………………………24

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IV. THE RESPONDENT, ALMOND TEA COMPANY, IS LIABLE TO STOP

THE USE OF THE ATC’S MARK AS ITS AMOUNTS TO TRADEMARK

INFRINGEMENT UNDER THE SRI LANKAN LAW………………………25

A. THE INTELLECTUAL PROPERTY ACT 2003 STIPULATES THAT THE

TRADEMARK INFRINGEMENT WILL BE FOUND IF A MARK IS

INCAPABLE OF BEING DISTINGUISHED FROM ANOTHER……………25

(a) ATC has unlawfully been using its trademark…………………………………25

(b) The trademark infringement amounts to an act of unfair competition…………26

B. ATC’S MARK AMOUNTS AS A TRADEMARK PASSING OFF AS IT

MISLEADS THE TEA CUSTOMERS UNDER THE INTELLECTUAL

PROPERTY ACT 2003………………………………………………………...28

(a) CTC has goodwill in relation to the product, CTC Ceylon…………………….28

(b) Both trademark are similar enough to mislead the members of the public..........29

V. EVEN ASSUMING THAT MALAYSIAN LAW IS APPLICABLE IN THIS

MATTER, ATC WILL STILL BE LIABLE FOR THE TRADEMARK

INFRINGEMENT………………………………………………………………31

PRAYER FOR RELIEF……………………………………………………………33

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LIST OF ABBREVIATIONS

1ST. CLF. Clarifications to the Moot Problem

2nd. CLF. Additional Clarifications to the Moot Problem

ATC Almond Tea Company

CLJ Malaysia Current Law Journal

CTC Chelsea Tea Company

KLRCA i-Arbitration Kuala Lumpur Regional Centre Rules for i-Arbitration

MAA Malaysian Arbitration Act 2005

Moot Problem 11th LawAsia International Moot Problem 2016

MLJ Malayan Law Journal

TM Trade Marks Act 1976 (Malaysia)

SLTB Sri Lankan Tea Board

UNCITRAL United Nations Commission on International Trade Law

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INDEX OF AUTHORITIES

Institutional Rules

Kuala Lumpur Regional Centre for Arbitration i-Arbitration Rules……………9,15,16

International Conventions And International Instruments

The Paris Convention for the Protection of Industrial Property (The “Paris

Convention” 1883)…………………………………………………………………..24

Worldwide Symposium on Geographical Indications organised by the World

Intellectual Property Organisation (WIPO) and the Department of Intellectual

Property (DIP) of Thailand…………………………………………………………30

Municipal Legislations

Intellectual Property Act 2003 (Sri Lanka)……………………………………25,27,29

Trade Marks Act 1976 (Malaysia)……………………………………………...……31

Arbitration Act of Malaysia 2005 (Malaysia)……………………………………17,18

Geographical Indications Act 2000 (Malaysia)………………………………………

Geographical Indications Regulations 2001 (Malaysia)………………………………

Cases decided in Malaysia

Danone Biscuits Manufacturing (M) Sdn Bhd V. Hwa Tai Industries Bhd [2010]…..31

Cases decided in Sri Lanka

MTN Networks (Pvt) Ltd v MCP Peiris (Commercial High Court)………………….30

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Cases decided in the UK

HP Bulmer Ltd v J Bollinger SA [1978] RPC 79…………………………………….27

Commissioner of Inland Revenue v Muller & Co’s Margarine Ltd [1901] AC

217...............................................................................................................................28

HFC Bank v. Midland Bank [2000] FSR 176………………………………………..28

Anheuser Busch Inc v Budejovicky Budar [1984] FSR 413………………………….28

Dubai Islamic Bank PJSC v. Paymentech Merchant Services Incorporated [2001] 1

Lloyd's Rep. 65………………………………………………………………………16

Raiffeisen Zentralbank Osterreich AG (RZB) v The Royal Bank of Scotland PLC

(RBS) [2010] EWHC 1392…………………………………………………………..18

Other Cases

Case -48/09P Lego Juris v OHIM [2010] ECR I-8403………………………………28

Textbooks

Lionel Bently and Brad Sherman, Intellectual Property Law (4th edn, Oxford

University Press, 2014)…………………………………………………………………

Tanya Aplin and Jennifer Davis, Intellectual Property Law: Text, Cases and

Materials (2nd edn, Oxford University Press 2013)……………………………………

W. Cornish, D. Llewelyn and T. Aplin, Intellectual Property: Patents, Copyrights,

Trade Marks and Allied Rights (8th edn, Sweet & Maxwell, 2013)…………………….

David I. Bainbridge, Intellectual Property (7th edn, Pearson Longman, 2009)………...

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Articles and Commentaries

Althaf Marsoof, 'The Registrability of Unconventional Trademarks in India and Sri

Lanka: A Comparative Analysis' [2007] 12 Journal of Intellectual Property Rights

497-506………………………………………………………………………………….

T.S.K Hemaratne, ‘Intellectual Property Law and E-Commerce in Sri Lanka: Towards

a Jurisprudence based on Constitution, Roman-Dutch Law and Buddhist Principle’

[2005] Thesis for the Degree of Doctor of Philosophy (Queen Mary, University of

London)…………………………………………………………………………………

Anomi Wanigasekera, ‘Trademark Usage, Infringement v Non use’ Sri Lanka

Group................................................................................................................................

J.M. Swaminathan, ‘The way forward for GIs in Sri Lanka’ [2014] World Intellectual

Property Review………………………………………………………………………...

Rosen,Jan(2012).IndividualismandCollectivenessinIntellectualPropertyLaw.

EdwardElgarPublishing.……………………………………………………………………………19

Case Studies

Southeast Asia IPR SME, ‘Case Study: Trademark infringement/ “passing off” case in

Malaysia’………………………………………………………………………………..

Other Authorities

Henry Goh & Co. Sdn. Bhd. ‘A Guide to the Malaysian IP System: Patent, Trademark

& Design Agents’ (1994)……………………………………………………………….

Alexander Bayntun-lees, 'South-East Asia IPR Basics Series: GIs in Malaysia' (Your

IP Insider, 18 April 2016) <http://www.youripinsider.eu/south-east-asia-ipr-basics-

series-gis-malaysia/>…………………………………………………………………23

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STATEMENT OF JURISDICTION

1. To ensure an expeditious resolution of the dispute, the Parties have agreed in

writing to submit this dispute to arbitration.

2. The Parties have also agreed to resolve their dispute in accordance with the

Kuala Lumpur Regional Centre for Arbitration i-Arbitration Rules (“i-

Arbitration Rules”) under the auspices of the Kuala Lumpur Regional Centre

for Arbitration (“KLRCA”).

3. The Parties do not dispute the validity and enforceability of the arbitration

agreement, and any award rendered by the tribunal is acknowledged to be final

and binding upon the Parties as per Rule 12(7) of i-Arbitration Rules.

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QUESTIONS PRESENTED

I. What is the applicable law that should be referred to in this dispute;

II. Whether or not ATC has breached the Agreement by distributing Sailor’s

Ceylon affixed with the ATC’s Mark in Malaysia

III. Whether or not ATC’s use of the word ‘CEYLON’ in respect of its tea

products is misleading; and

IV. Whether or not ATC’s use of the ATC’s Mark amounts to trademark

infringement and/or passing off.

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STATEMENT OF FACTS

The Parties To The Dispute

The Claimant, Chelsea Tea Company, is the manufacturer (and supplier) of “Ceylon

Tea” under the brand name ‘CTC Ceylon’. The Respondent, Almond Tea Company,

is the (exclusive) distributor of CTC Ceylon in Malaysia (subject to the ‘Agreement’

– see Appendix A).

The Background

The Sri Lankan Tea Board (hereinafter referred to as “SLTB”) is the apex regulatory

and administrative body of the Sri Lankan tea industry. The Claimant is a company

incorporated in Sri Lanka and is the manufacturer of Ceylon Tea under the brand

name CTC Ceylon. Marvan Ranatunga (the Chairman of the Board of Directors of

CTC) and a committed tea enthusiast wishes to make CTC Ceylon a globally

renowned Ceylon tea brand.

CTC Ceylon teas bear the famous heraldic lion logo insignia (see para.3 of Moot

Problem for representation) and is affixed onto labels and packaging of tea grown and

manufactured entirely (emphasis added) in Sri Lanka. SLTB has obtained trademark

registrations for the Lion logo in many jurisdictions worldwide. SLTB is the

registered trademark proprietor of the Lion logo in Malaysia. A condition of the

registration of the Lion logo imposed by the Intellectual Property of Corporation of

Malaysia (hereinafter referred to as “MyIPO”) is such that SLTB has no exclusive

rights (emphasis added) over the words ‘CEYLON TEA’ and ‘SYMBOL OF

QUALITY’ contained in the Lion logo.

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Ranatunga recognised the potential of the Malaysia tea market, as such ensured that

CTC) obtained the permission of SLTB to use the Lion logo on CTC CEYLON tea

products in Malaysia, and is the registered user of the Lion logo in Malaysia. Philip

Chan (a former sea captain) has embarked into the tea manufacturing and distribution

in his home country (Singapore) and in Malaysia. He is the Managing Director of the

Almond Tea Company (the respondent), a company incorporated in Singapore.

The Facts

In 2008, during a leisure visit to Malaysia, Ranatunga met Philip Chan and decided he

wanted to appoint the respondent as the exclusive distributor of CTC Ceylon in

Malaysia. A condition of the offer to supply CTC Ceylon imposed by Ranatunga was

such that the respondent would be obliged to cease the sale of all other tea products in

Malaysia. Chan was not keen on the offer and Ranatunga failed to persuade Chan to

change his mind. The following month, a fungal disease decimated the tea plantations

from which the respondent sourced their tealeaves. Ranatunga took this opportunity to

contact Chan and after protracted negotiations, the claimant and the respondent agreed

(upon a nominal monetary consideration) and entered into a distribution agreement

(see Appendix A).

The agreement set out restrictions on respondent’s sale (manufacture and distribution)

of other tea products in Malaysia that compete with claimant’s product (for a term of

5 years and for a period 12 months after it), affixed with the Lion logo or any other

arguably similar mark in Malaysia. Utilising the respondents considerable marketing

and sales experience in Malaysia, CTC CEYLON established a strong consumer base

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in Malaysia. The total profits from the sale of CTC CEYLON increased year to year,

surpassing targets, and in four years constituted 35% of the global net revenue of the

claimant. The agreement was not renewed upon its expiry in 2013 as the claimant had

then set its Southeast Asian head office to promote and distribute CTC CEYLON in

the region.

In March 2015, the claimant learned that the respondent has been growing and

manufacturing tea in China, and distributing such tea products (under the brand name

‘SAILORS CEYLON’) in Malaysia since November 2012 (see para.14 of Moot

Problem for representation of the claimant mark).

The claimant then wrote to the respondent asking to pay damages for breach of the

agreement, demanded that the respondent cease using their mark on the packaging of

their tea products and not to use the word “Ceylon” to describe their product. The

respondent replied by denying that it had breached the agreement, would not accede

to the claimant demands. The respondent contends that it has the right to use the word

“Ceylon” on (or to describe) their tea products and that they in within their legal

rights to use their mark on their tea products and/or packaging.

As the parties could not come to an agreement, the claimant and respondent have

agreed to settle the matter by arbitration in accordance with clause 22 of the

Agreement.

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SUMMARY OF PLEADINGS

I. Malaysian law governs the procedural aspects of this arbitration and the

arbitration agreement, because the seat of arbitration is in Kuala Lumpur,

Malaysia.

II. The laws of Malaysia will govern the substantive aspects of this

dispute as the Malaysian conflict of laws principles of the lex loci

protectionis,lexlociactusindicateassuch.

III. The Respondent, Almond Tea Company (ATC), is liable to stop the use of

the word ‘Ceylon’ in respect of its tea product under the laws of Malaysia

as it would create confusion and would mislead the tea customers under

Malaysian law.

IV. Furthermore, the Claimant should succeed in its request to stop the use of

the ATC’s Mark as it amounts trademark infringement under Intellectual

Property Act 2003 (Sri Lanka).

V. Even assuming that Malaysian law is the applicable law, the Respondent,

ATC, will remain liable to stop the use of both the word ‘Ceylon’ and the

ATC’s Mark.

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PLEADINGS

I. THE PROCEDURAL LAW OF THE ARBITRATION IS THE LAWS

OF MALAYSIA AND THE LAW GOVERNING THE SUBSTANTIVE

MATTERS OF THIS DISPUTE IS THE LAWS OF SRI LANKA

1. In an international arbitration, multiple laws may govern different aspects of the

arbitration. Generally, the laws governing the procedural aspects and the substantive

merits of the dispute may be different.1

2. Although the Claimant and the Respondents (“Parties”) have not expressly chosen

an applicable law, they have agreed to use the KLRCA i-Arbitration Rules (“Rules”).

A. THE LAWS OF MALAYSIA GOVERN THE PROCEDURES OF THIS

ARBITRATION

3. The procedural aspects of an arbitral proceeding is regulated by the institutional

rules chosen by the parties and the laws of the seat of arbitration.

(a) Kuala Lumpur, Malaysia is the seat of arbitration

4. The importance of the seat of arbitration stems from the theory of the jurisdictional

nature of arbitration, where an arbitration operates within the framework of a national

legal order and never in a vacuum.

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In Dubai Islamic Bank PJSC v. Paymentech Merchant Services Incorporated,1 it was

held that where the parties have not designated a seat of arbitration, the arbitral panel

must consider all significant factors in determining an appropriate seat of arbitration.

5. These factors include the proposed procedure, the centrality of the dispute, the

subject matter in dispute, and the convenience of the parties. In the present dispute,

Malaysia is the most appropriate seat of arbitration for the following reasons:-

5.1. Pursuant to Rule 6(1) of the i-Arbitration rules, Malaysia shall be the seat of

arbitration, given that there is no other appropriate seat.6

5.2. Though the parties involved are from different States, the express choice of venue

is a strong indication of the parties’ intention as to the seat of arbitration.

5.3. The subject matter is currently located in Kuala Lumpur, Malaysia. As such, it is

expeditious and efficient to enforce the arbitral award within the jurisdiction of

Malaysia, in accordance with Malaysian rules of procedures.

(b) As Malaysia Is The Seat Of Arbitration, The Laws Of Malaysia Shall

Govern The Procedures Of This Arbitration

1Dubai Islamic Bank PJSC v. Paymentech Merchant Services Incorporated [2001] 1 Lloyd's Rep. 65

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6. It is trite that the laws of the seat of arbitration regulate the powers of an arbitral

tribunal and supervise the arbitral award of an arbitral proceeding.

7. Since the seat of arbitration of the present proceedings is in Malaysia, the laws of

Malaysia shall be the procedural law of this arbitration, and the determination of the

subsyantive applicable law (lex causae) shall primarily be governed by the 2005

Arbitration Act of Malaysia (“MAA 2005”).

B. THE LAWS OF SRI LANKA GOVERN THE SUBSTANTIVE

MATTERS OF THIS ARBITRATION

(a) The Appropriate Conflict Of Laws Principles Indicate The Laws Of Sri

Lanka To Be The Applicable Law and The Appropriate Conflict of Laws

Principles Indicate The Laws Of Malaysia To Be The Applicable Law

Regarding The Word ‘Ceylon’

8. S.30(4) of the MAA 2005 provides that where parties have failed to agree upon the

applicable law, “the arbitral tribunal shall apply the law determined by the conflict of

laws rules”.

9. Although the arbitral tribunal shall apply the conflict of law rules, this tribunal is

not expressly restricted to only apply the existing principles under the laws of

Malaysia.11

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10. In the present dispute, a rigid adherence to the conflict rules of the lex arbitri will

not provide a satisfactory solution pertaining to the objective of identifying the most

appropriate law. This is because a mechanistic application of conflict rules, without

regard to the consequences would conflict with the purpose for which they were

conceived.

11. Thus, the arbitral tribunal is not bound by the conflict of laws principles of

Malaysia due to the following reasons:-

11.1. S.30(4) MAA, in making reference to “the conflict of laws rules”, does not

restrict the arbitral tribunal solely to the application of the conflict of laws principles

in Malaysia.

11.2. Conflict of Laws rules would characterise intellectual property as pure

intangible and movable.

11.3. As per the Raiffeisen Zentralbank case,2 conflict of laws rules determine that the

applicable law hinges not upon the application of rigid rules, but upon a search for

appropriate principles to meet particular situations.15 This is necessary to achieve the

overall aim of choosing the most appropriate law under Article 35 of the i-Arbitration

Rules.

2Raiffeisen Zentralbank Osterreich AG (RZB) v The Royal Bank of Scotland PLC (RBS) [2010] EWHC 1392

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(b) The Laws Of Sri Lanka Are The Applicable Laws Following The Lex

Loci Protectionis Rule

12. Lex Loci Protectionis - The Law of the place where the protection is claimed

resolves this conflicts of law issues given the trademark was registered in Sri Lanka,

under Sri Lankan Law. Thus Sri Lankan law must be applied as the lex arbitri.

12.2 Equally, the fact that profits are held at the headquarters in Sri Lanka strengthen

the Lex Loci Protectionis rule given an infringement against any intellectual property

would affect these profits.

13. Lex loci procectionis is accepted as the best choice of conflicts rule in the domain

of intellectual property disputes. Thus this rule must be accepted by the arbitration.3

(c) The Laws Of Sri Lanka Are The Applicable Laws Following Lex Loci

Actus Rule

14. The Lex loci actus rule resolves the conflict of laws issue in that it decides the

jurisdiction based upon the original location in which the product was made. The

original location is Sri Lanka, this Sri Lankan law must be held as the most

appropriate.

3Rosen,Jan(2012).IndividualismandCollectivenessinIntellectualPropertyLaw.EdwardElgarPublishing.p.57.

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(d) The Laws Of Sri Lanka Are The Applicable Laws Following Lex Originis

Rule

15. The Lex Originis rule dictates that in the situation of conflict of laws, the

applicable law is that of the nation of origin. Given the claimant is Sri Lanka, Sri

Lankan law must be held as the lex arbitri.

16. This rule must be upheld given it responds more appropriately to the cultural and

proprietary links between the subject matter (the tea) and its owner of origin (Sri

Lankan). Thus Sri Lankan law must be applied.

C. THUS THE ONLY JURISDICTIONAL RESULT IS TO APPLY SRI

LANKAN LAW

II. ATC HAS BREACHED THE AGREEMENT BY DISTRIBUTING

SAILOR’S CEYLON AFFIXED WITH THE ATC’S MARK IN

MALAYSIA

A. ENGLISH LAW WILL BE USED TO GOVERN THE

DECISION OF WHETHER THERE HAS BEEN A BREACH

OF AGREEMENT

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17. Sri Lankan4 and Malysian contract law are both based, and contemporarily

resemble English common law and more specifically English contract law. Thus it is

the legal system most connected to either legal system and under conflict of laws

principles must form the lex abitri vis-à-vis the contractual matter.

18. English law offers a neutral legal position thus it must be held as the lex arbitri.

B. ATC HAS BREACHED THE AGREEMENT

19. The scope of article 4.2 proves transparently that there has been a breach of

agreement.

20. The scope of article 4.2 is to forbid ATC, once having attained the knowledge and

skills through acting as the Distributor for CTC from simply setting up a dummy

competitor much to the likeness of CTC. The result of this would likely be ATC

reducing, unfairly and in an uncompetitive manner, the profits rightly earned through

CTC’s reputation and quality of product.

21. It is certain that the product offered by ATC is comparably similar to those of

CTC’s given ATC sources it seeds from Sri Lanka.5 The mere fact that they are grown

and produced in China is negligible.

22. Thus it must be seen that ATC is ‘concerning itself/ is interested […] in the

manufacture or distribution in Malaysia of any goods that compete with CTC’s 4https://www.casrilanka.com/casl/images/stories/EDBA/contract%20law.pdf5LawAsia2016Clarifications

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products’. They have sourced the same seeds, and alas it is only the place of

production and packaging, which is materially different.

23. This difference in packaging and geographical difference of production is not

enough to move pass the demarcation point of not being in breach of article 4.2. It is

simply not differentiated enough.

24. Equally, according to the timeline, ATC only started producing/growing their

seeds in China in 2009.

25. It is posited ATC began their production once they had harnessed the knowledge

and skills gained from being CTC’s Distributor. Thus they have unfairly gained

profited off the back of CTC.

26. What is more, the selling of ATC’s product in general goes directly against the

aim of article 4.2 in it being a non-compete clause. The reason for this is due to CTC

being willing to offer access of its knowledge and skills to ATC. CTC must feel safe

in passing on its knowledge that it would not be used against itself.

27. In relation to the principle of remoteness, according to the case of Hadley v

Baxendale, House of Lords (1854)6 the point of demarcation, and therefore the point

whereby ATC is said to breach the agreement is in the fact that it knew by setting up

its own tea brand, that it would directly compete against those of CTC’s thus not only

breaching article 4.2 non-compete nature, but equally proving ATC was directly 6HadleyvBaxendale,HouseofLords(1854)

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aware of the fact that a reduction in profits would ‘naturally arise’. It is impossible to

think that creating a competing product could not ‘naturally arise’ a loss in profits.

28. Hence the principle of remoteness is satisfied, the only possible ruling is to find

that ATC has breached the agreement, and in particular article 4.2.

III. THE RESPONDENT, ALMOND TEA COMPANY, IS LIABLE

TO STOP THE USE OF THE WORD ‘CEYLON’ IN RESPECT

OF ITS TEA PRODUCT UNDER MALAYSIAN LAW

A. ATC HAS UNLAWFULLY AND IN BAD FAITH BEEN USING

THE WORD CEYLON TO CREATE CONFUSION

29. In this matter, the word ‘Ceylon’ does not amount to a part of the trademark but

rather a geographical indication (GI), as ‘Ceylon’ was the colonial name of Sri Lanka.

Under Malaysian law, a geographical indication can only be legitimately used when

the goods that are promoted meet the stringent requirements of the GI. If not, the

company that is using the geographical indication is misusing it and thus, amounts to

an infringement. This type of infringement misleads the public and hence creates

unfair competition.7

In this case, ATC does not meet the requirements imposed by the Sri Lankan Tea

Board to have a legitimate and legal right to use the word ‘Ceylon’ as a geographical

7AlexanderBayntun-Lees,South-EastAsiaIPRBasicSeries:GIsinMalaysia

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indication. In fact, the inclusion of the word ‘Ceylon’ in the name of the product is a

clear and expressed way to mislead the tea consumers in Malaysia.

B. GEOGRAPHICAL IDENTIFICATION

30. Malaysian laws permit any interested person to seek damages against unlawful

use of a Geographical indication.8 This includes the use of geographical indication

that would constitute an act of unfair competition within the meaning of Article 10bis

of the Paris Convention 1883.

Article 10bis (3)(i) of the Paris Convention states “all acts of such a nature as to

create confusion by any means whatever with the establishment, the goods, or the

industrial or commercial activities, of a competitor” shall be prohibited.9

Thus, as previously demonstrated, the use of the word ‘Ceylon’ by ATC has become a

trait that confuses the Ceylon tea consumers in Malaysia. In fact, the use of the word

‘Ceylon’ by two different tea brand that are distributed by the same company would

certainly create confusion in the tea consumers’ minds. Even though ATC is not

giving false or deceptive indications of source, it has been using the word ‘Ceylon’ as

a way to deceive the members of the public and thus compete against CTC Ceylon tea

in bad faith.

8AGuidetotheMalaysianIPSystem,pg419ParisConventionfortheProtectionofIndustrialProperty1883,Article10bis(3)(i)

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IV. THE RESPONDENT, ALMOND TEA COMPANY, IS LIABLE

TO STOP THE USE OF THE ATC’S MARK AS ITS AMOUNTS

TO TRADEMARK INFRINGEMENT/PASSING OFF UNDER

THE SRI LANKAN LAW

A. The Intellectual Property Act 2003 stipulates that the trademark

infringement will be found if a mark is incapable of being distinguished

from another

(a) ATC has unlawfully been using its trademark

31. Under section 103 (1)(d) of the Intellectual Property Act 2003 a mark “which is

incapable of distinguishing the goods or services of one enterprise from those of

another enterprise” shall not be registered.

In this matter, the two trademarks are highly similar as they both gather identical or

highly similar elements and are presented in a similar way and size. It is the argument

of the Claimant that ATC knew that Sailor’s Ceylon tea trademark was similar to

CTC’s Ceylon Tea in such a way that it would fail to be registered by the Sri Lankan

Tea Board under section 1043(1)(d).

Furthermore, the use of the ‘Lion’ within a brand’s trademark is a matter to be

approved by the Sri Lankan Tea Board (SLTB). It is done so when the tea products

are in accordance with the requirements set out by the SLTB. ATC has never

undertaken the registration process of the trademark because it clearly knew that the

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Sri Lankan Tea Board would reject it.10 Thus, ATC has been unlawfully using its

trademark in Malaysia.

(b) The trademark infringement amounts to an act of unfair competition

32. Under section 160(3)(a), “Any act or practice carried out or engaged in the

course of industrial or commercial activities, that damages, or is likely to damage, the

goodwill or reputation of another’s enterprise shall constitute an act of unfair

competition, whether or not such act or practice actually causes confusion.”

In this case, the use of the representation of the ‘Lion’ creates confusion between the

two different tea brands and therefore constitutes an act of unfair competition.

In fact, CTC’s sales have been affected by this confusion as the sales of CTC's Ceylon

tea have considerably decreased as from November 2012. In 2013, its sales fell by

30% and a further 15% in 2014. The confusion between the two brands has affected

the profits that were made by CTC and amounts therefore to an unfair competition

between the 2 brands.11

33. Under section 160(2)(a), “[a]ny act or practice carried out or engaged in, in the

course of industrial or commercial activities, that causes, or is likely to cause,

confusion with respect to another’s enterprise or its activities, in particular, the 10FurtherClarificationstotheMootProblem2016,pg411Clarificationstothemootproblem,pg.2,question10

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products or services offered by such enterprise, shall constitute an act of unfair

competition.”

The aspect of similarity between these two brands is key in this matter. The two

brands are both distributing a sort of tea coming from Sri Lanka, using a similar logo

and the same words to promote it, that is ‘Ceylon’ and ‘Symbol of quality’.

Furthermore ATC’s mark of tea is likely to cause confusion, as ATC is involved in

both the distribution of ATC’s Sailor’s Ceylon Tea and CTC’s Ceylon Tea.

The confusion may be caused with respect to the mark, the trade name or any other

business identifier.12 In this case, the word ‘Ceylon’, which forms part of ATC’s

Trade name, in addition to the ‘Lion’ logo clearly inserts some confusion as it imitates

the traits by which CTC Ceylon Tea had been recognised in Malaysia.

B. ATC’s mark amounts to a trademark passing off as it misleads the tea

consumers under the Intellectual Property Act 2003

(a) CTC has goodwill in relation to the product, CTC Ceylon

34. The owner of the goodwill in regard to trademark has a property right that is

protected by an action of passing off.13 Buckley LJ has held that the law sees the

reputation of a company that deals with the goods of a business as an entity as “an

incorporeal piece of property, the integrity of which the owner is entitles to protect”.14

He added that the property right resided in the reputation or goodwill itself rather than

the name or mark.

12S.120(2)(a)IntellectualPropertyAct2003(No.36)13David I. Bainbridge, Intellectual Property (7th edn, Pearson Longman, 2009)14 HP Bulmer Ltd v J Bollinger SA [1978] RPC 79 at 93

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In order to successfully claim for an act of passing off, the party seeking for damages

needs to prove the existence of reputation as well as goodwill.15 The confusion about

the source of the product is not enough for a company to bring a successful passing

off action against another company with whom their product is being confused.16

According to Lord Macnaghten, “goodwill” is “the benefit and advantage of a good

name, reputation and connection of a business”.17 It is “a power of attraction

sufficient to bring customers home to the source from which it emanates”.18

In this case, the profits made by CTC Ceylon show that CTC has developed a strong

tea consumer base in Malaysia during the four years.19 CTC is a well-known brand all

around the world and the company has established its headquarter in Kuala Lumpur

after 5 years. This shows that CTC has had the goodwill from being popular amongst

the Malaysian people and succeeding in having an increase in the profit made, which

reflects the increase of the interest amongst the Malaysian people.

(b) Both trademark are similar enough to mislead the members of the

public

35. The essential characteristics of a trademark are the elements that define whether the

trademark can be distinguished from another. The essential characteristics of a trademark are

the ‘most important elements of the sign’.20 In this matter, the essential characteristics of the

trademark in dispute are the ‘Lion’ and the ‘Symbol of Quality’. Even though the Sri Lanka

Tea Board has given up the exclusive rights on ‘Symbol of Quality’ within Malaysia, it still

15 Anheuser Busch Inc v Budejovicky Budar [1984] FSR 413 16 HFC Bank v. Midland Bank [2000] FSR 176 at 182-3 17 Commissioner of Inland Revenue v Muller & Co’s Margarine Ltd [1901] AC 217 18 Ibid.19 Moot Problem, pg 3 20 Case -48/09P Lego Juris v OHIM [2010] ECR I-8403

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appears as an element that would mislead the tea consumers that would be used to CTC

Ceylon because of the likeness of the whole trademark.

The main characteristic in this trademark is the ‘Lion’ that still belongs to the Sri Lanka Tea

Board. The two trademarks represent a lion, standing on three paws. These are highly similar

and they are likely to create confusion in the tea consumers’ mind. The Lion is one of the

most important sign of the Sri Lanka Tea Board. ATC is therefore misleading the members of

the public as it is imitating the symbol of CTC Ceylon’s trademark.

36. Under section 103(1)(f) a mark “which is likely to mislead trade circles or the

public as to the nature, the source, geographical indication the manufacturing process,

the characteristics, or the suitability for their purposes, of the goods or services

concerned” shall not be registered.21

Because the authority regarding intellectual property is given to the Commercial High

Court, which is not a court of record, there are no recorded cases available. However,

there are several case studies and case settlements have demonstrated the application

of the Sri Lankan legislation in regards to the trademark infringement/passing off of a

company. 22

One of these includes a trademark infringement resulting in counterfeit regarding

Ceylon tea occurred in Sri Lanka. A company called Dorra Al-Otuor created a logo

that was highly similar to the logo of another company, Al-Otuor, and used the word

Ceylon without being allowed to, to promote a same kind of tea. The packs of the two

21s.103(1)(f)IntellectualPropertyAct2003(No36)22IntellectualPropertyLawandE-commerceinSriLanka:TowardsaJurisprudencebasedonConstitution,pg152

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brands looked very similar and were bound to deceive the end-consumer. As a result,

the cargo that was carrying the tea to Libya was confiscated.23

36. In practice, the unfair competition resulting from a trademark

infringement/passing off is an issue that is dealt at several occasions in Sri Lanka. In

MTN Networks (Pvt) Ltd v MCP Peiris, the two parties had a dispute regarding the

infringement of the trademark of Mobile phones. Even though the case was settled

before getting a judgment from the court, the settlement has appeared to be in favour

of the Claimant and in accordance with the statutory legislation. In fact, the

Respondent was asked to stop the use of trademark that looked similar in a way that

confused the consumers. They settled the case as the Respondent agreed not to use

words or design that would be misleading.24

V. EVEN ASSUMING THAT MALAYSIAN LAW IS APPLICABLE

REGARDING THE QUESTION OF TRADEMARK INFRINGEMENT,

ATC WILL STILL BE LIABLE FOR INFRINGING/PASSING OFF ITS

TRADEMARK

37. Malaysian law recognises trademark infringement as “the unauthorized use of a

mark, which is identical and/or highly similar to the registered mark in respect of the

same goods or services such that it will likely deceive and/or confuse the public”. As

previously established, the logos from the two different brands are highly similar as

they both include the ‘Lion’ as well as the ‘Symbol of Quality’ label and they have a

23WorldwideSymposiumonGeographicalIndications,pg524MTNNetworks(Pvt)LtdvMCPPeiris(CommercialHighCourt)

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similar shape.

38. The Malaysian Court has, in Danone Biscuits Manufacturing (M) Sdn Bhd V. Hwa

Tai Industries Bhd, ruled on the meaning of the phrase “likely to deceive or cause

confusion” in section 38 of the Trade Marks Act 1976. The issue, as in the meaning of

the word ‘likely’, was interpreted to mean “only probability or possibility of confusion

needed to be established.”

In this matter, the trademarks from CTC and ATC gather several similar elements as

well as presenting themselves in a similar manner. Therefore, it is very likely that

there is a probability that an average customer would confuse both of these tea brands.

40. The case also refers to the question of passing off. The court has in fact held that

for a passing off action, it is required that the mark has acquired substantial goodwill,

that means that the mark had been recognised and gain a certain reputation in the

country where the trademark infringement had occured. 25 In Danone Biscuits

Manufacturing (M) Sdn Bhd V. Hwa Tai Industries Bhd, the packaging of

“Chipsmore” had become a well-known brand and therefore a very similar packaging

to the “Chipsmore” one would have potentially create confusion.

In this matter, both ATC’s and CTC’s trademarks are affixed onto their own tea

packaging. As previously established, both trademarks are very similar and likely to

create confusion. However, for ATC to be liable fors a passing off action, CTC

Ceylon must be a well-known brand within Malaysia.

CTC Ceylon Tea has been established in Malaysia since 2008. Therefore, when ATC

unlawfully distributed its Sailor’s tea within Malaysia, CTC Ceylon had been on the

25DanoneBiscuitsManufacturing(M)SdnBhdV.HwaTaiIndustriesBhd[2010]

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market for four years. In four years, CTC Ceylon became really popular in Malaysia.

They have in fact developed a strong consumer base under the distributorship of ATC

in Malaysia.26 This can be seen through the numbers of sales as well as the increase of

profit made by CTC from 2008 to 2012.27 Thus, because CTC Ceylon had developed

a solid consumer base within Malaysia, one can argue that by the time ATC

introduced its Sailor’s Ceylon, CTC Ceylon was a well-known brand. Accordingly,

CTC Ceylon should be successful in bringing an action of passing off against ATC

because its Sailor’s Ceylon was likely to mislead and confuse the consumers.

26MootProblem,pg327Ibid

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PRAYER FOR RELIEF

The Claimant request this arbitral tribunal to make the following orders:

I. The law governing the procedures of this arbitration shall be the laws of

Malaysia.

II. That the laws of Sri Lanka are the appropriate applicable laws to deal with

the question of trademark infringement/passing off of this arbitration.

III. That the laws of Malaysia are the appropriate applicable laws to resolve

the issue surrounding the use of the word ‘Ceylon’.

IV. That the Respondent has no right into using its ATC mark to promote its

tea brand in accordance with both Sri Lankan and Malaysian laws.

V. That the Respondent has no right to use the word ‘Ceylon’ to describe its

tea brand under both Sri Lankan and Malaysian laws.

Respectfully submitted,

Counsel for the Claimant.