World Taekwando Federation & Anor v Tuan Wing Keong & Anor (Pendaftar Cap Dagangan, Malaysia, interested party)
HIGH COURT (KUALA LUMPUR)
AZIZAH HAJI NAWAWI J
GUAMAN NO D - 22IP-16-03/2014
2 September 2016
Suaran Singh (Stephanie Abraham with him) (Azri, Lee Swee Seng & Co) for the plaintiffs.
David Soosay (R Vasanthi with him) (Vin Partnership) for the defendants.
Azizah Haji Nawawi J:
Grounds of Judgment
Introduction
[1]The summary of the Plaintiffs’ claims are as follows:
| (i) | that the Plaintiffs are claiming ownership of the following marks, either as a word or as a whole (“the WTF Marks”):
| ||||
| (ii) | That the Defendant is passing off the WTF Marks by using the said WTF Marks without the authorization or permission of the First Plaintiff and/or the Second Plaintiff ; and | ||||
| (iii) | That the Defendant is infringing the Plaintiffs’ Copyright as the First Plaintiff is the owner of the copyright in the logo of the WTF Marks. |
[2]In response to the Plaintiffs’ claim, in their Counterclaim, the Defendant seeks the following prayers:
| (i) | A declaration that the termination of the Defendant/MTA’s membership and/or affiliation with the First Plaintiff, WTF is unlawful; | |
| (ii) | A declaration that the WTF trade mark/copyright of the logo WTF is lawfully owned by the Defendant/MTA in Malaysia; or | |
| (iii) | Alternatively, a declaration that the MTA/WTF trade mark and/or copyright of the logo MTA/WTF is lawfully owned by the Defendant/MTA in Malaysia. |
[3]After a full trial, this Court has allowed the Plaintiffs’ claim and dismiss the Defendant’s Counterclaim.
The Salient Facts
[4]The First Plaintiff, World Taekwondo Federation or “WTF” is the International Federation that governs the sport of Taekwondo. WTF headquarters is based in South Korea.
[5]WTF also recognises national Taekwondo governing bodies in respective countries and these bodies become members of WTF through a formal appointment and thereafter become known as the WTF Member National Association.
[6]WTF is the owner of the trade name WTF, the WTF trade mark together with and in any manner including on any emblem, name, flag, motto, identifiers, or marks or symbols. The WTF Marks can only be used by each respective country’s WTF Member National Association upon express authorisation by WTF, in accordance with the WTF Statutes.
[7]The Second Plaintiff is the Deputy President of Taekwondo Malaysia (‘TM’) and is bringing this action in his capacity as the Deputy President of Taekwondo Malaysia and the members of Taekwondo Malaysia.
[8]TM was registered under the Sports Development Act 1997 on 18.2.2010 and is the national governing body of the sport of Taekwondo WTF in Malaysia using the methods and training for the Taekwondo WTF sport.
[9]To be a Member National Association of WTF, the local body must first be recognised by Olympic Council of Malaysia (“OCM”). TM was recognised by the Olympic Council of Malaysia in July 2010 for the sport of Taekwondo WTF, and WTF gave its full and formal recognition to TM in September 2010.
[10]The Defendant is the Secretary General of the Malaysia Taekwondo Association (‘MTA’). Before 2010, WTF had appointed MTA to be its Member National Association. MTA was also recognised by OCM, the Sports Commissioner and the Ministry of Youth and Sports to be the governing body of Taekwondo WTF in Malaysia.
[11]As the member national association of the WTF, MTA was authorised to use the WTF trademarks and had sent athletes to Taekwondo WTF competitions around the world. During its tenure as a member of WTF, MTA had registered the following marks in 2003:
| (i) | “TAEROBICS & MTA - WTF” trade marks in Class 41, 16 and 25 | |
| (ii) | “PERSATUAN TAEKWONDO MALAYSIA & MTA – WTF” in Class 25, 16 and 41;
and | |
| (iii) | “WORLD TAEKWONDO FEDERATION” trade mark in Class 25. |
[12]However due to internal problems within MTA, the Sports Commissioner de-registered MTA as a Sports Association (first de-registration) on 6.5.2005. The decision to de-register MTA was challenged by MTA, and the said decision was quashed by the High Court, which was affirmed by the Court of Appeal.
[13]Between 2005 to 2010 WTF did not recognise any body dealing with Taekwondo WTF in Malaysia. Because of this, Malaysia cannot send her players to compete at WTF competitions internationally. WTF only gave its full and formal recognition to TM in September 2010.
[14]MTA was deregistered for the second time on 3.2.2010 (second de-registration). An appeal to the Minister of Sports was rejected by way of a letter dated 28.10.2011. MTA then proceed to commence judicial proceedings in the High Court, inter alia, for the following prayers:
| (i) | a Certiorari Order to quash the decision of the Sports Commissioner to deregister the Defendant as a Sports Association; and | |||||||
| (ii) | a Certiorari Order to quash the decision of the Minister of Sports in rejecting the appeal by MTA; and | |||||||
| (iii) | a Mandamus directing the Sports Commissioner and the Minister to re-instate the Defendant:
|
[15]MTA’s application was allowed by the High Court whereby the Court had quashed the Sports Commissioner’s decision to de-register MTA. This decision was affirmed by the Court of Appeal. However, MTA’s specific prayer to be reinstated as the sole governing body of the sport of taekwondo was denied by both the High Court and the Court of Appeal.
[16]Currently MTA is a sports body under the Sports Development Act 1997, but it is not a body that is recognised by the OCM for the sport of Taekwondo WTF in Malaysia. Since it was not recognised by the OCM, WTF claims that MTA is also not recognised as its member national association for the sport of Taekwondo WTF in Malaysia. WTF has appointed TM as its member national association for Malaysia.
[17]Even though WTF claims that MTA is no longer affiliated with WTF, MTA continues to use the “WTF” Marks and copyright.
[18]Despite the issuance of two (2) cease and desist letters to MTA by WTF, in February 2013 and in September 2013 respectively, the Defendant MTA has failed, refused and/or neglected to cease or desist from the further use of the said WTF Marks.
[19]In March 2014, the Plaintiffs’ instituted this suit against MTA for the use of the WTF Marks and copyright. The Plaintiffs’ claims are for expungement of registered trademark bearing the WTF Marks, copyright infringement, the tort of passing off and injunctions.
Issues to be tried
[20]Having considered the pleadings and the submissions of the parties, I am of the considered opinion that the main issues in this case are as follows:
| (i) | Whether the rights and the goodwill in the trade name and trade mark of the WTF marks including on any emblem, name, flag, motto, identifiers or as any marks or symbols belong to WTF or MTA (“trademark issue”); | ||||||||||
| (ii) | Whether the following trademarks which were registered by the MTA should be expunged from the Trade Mark Register for being in contravention of Section 45 of the Trade Marks Act 1976 because MTA does not have the right and/or authority to use the Trade Mark which contains the word “WORLD TAEKWONDO FEDERATION” or “WTF” in its entirety or forming part of another mark:
| ||||||||||
| (iii) | Whether MTA has passed off the WTF Marks (“passing off issue”); and | ||||||||||
| (iv) | Whether MTA has infringed the copyright in the WTF Trade Marks in Malaysia (“copyright issue”). |
[21]In respect of the Defendant’s Counterclaim, the issues are:
| (i) | Whether the termination and/or cessation of MTA membership in WTF is legal; and | |
| (ii) | If the termination and/or cessation of MTA membership in WTF is not legal, whether WTF the appointment of WTF Malaysia as an affiliated member was wrongful. |
The Findings of the Court
(i) trademark issues
[22]The Plaintiffs are claiming ownership of the following marks, either as a word or as a whole (“the WTF Marks”):
| “WTF” | “World Taekwondo Federation” |
[23]The Plaintiffs claim that since they are the owners of the WTF Marks, then they are also seeking to expunge the registrations of the trademarks bearing the WTF Marks under section 45 of the Trade Marks Act 1976 (“TMA 1976” (see paragraphs 21 to 24 of the Amended Statement of Claim). The relevant trademarks registered by MTA which contain the word “WTF”, includes the followings:
| Application No: 03006172 under Class 41 | Application No: 03006176 |
[24]The Plaintiffs’ application is made pursuant to Section 45 (1) of the TMA 1976, which reads as follows:
“45. (1) Subject to the provisions of this Act—
(a) the Court may on the application in the prescribed manner of any person aggrieved by the non-insertion in or omission from the Register of any entry or by any entry made in the Register without sufficient cause or by any entry wrongfully remaining in the Register, or by any error or defect in any entry in the Register, make such order for making, expunging or varying such entry as if thinks fit;
[25]Under s. 45(1)(a) of the TMA 1976, the Plaintiffs must show that they are ‘person aggrieved’ in order to establish their locus standi. In McLaren International Ltd v Lim Yat Meen [2009] 5 MLJ 741 on the issue of whether the appellants were a person aggrieved under section 46(1) of the TMA 1976, the Federal Court held at page 750:
“[22] We understand that passage as laying down the principle that a person aggrieved is a person who has used his mark as a trademark – or who has genuine and present intention to use his mark as a trademark – in the course of a trade which is the same as or similar to the trade of the owner of the registered trademark that the person wants to have removed from the register.”
[26]I am of the considered opinion that there is no issue with regards to locus standi of the Plaintiffs, as it is not in dispute that WTF is the owner of the WTF Marks. This is provided under Article 23 of the WTF Rules and Regulations, which reads:
“2. The WTF emblem, flag, motto, identifications (including but not limited to ‘WTF-promoted’ and ‘WTF-sanctioned’) as defined by the WTF shall be collectively referred to as ‘WTF properties’.
All rights to any and all WTF properties, as well as all rights to the use thereof, belong exclusively to the WTF, including but not limited to the use for any profit-making, commercial or advertising purposes. WTF may license all or part of its rights on terms and conditions set forth by the WTF.”
[27]This fact has been admitted by the Defendant MTA through the evidence of DW2, Eddie Tuan Wing Keong:
“SSS: So that being the case, as far as WTF logo is concerned, who owns that logo?
EDDIE: WTF
........
SSS: Mr. Eddie, as far as the name WTF is concerned, who owns that? Just tell me, WTF.
EDDIE: It just by itself WTF is owned by WTF.
SSS: And also the name World Taekwondo Federation would be owned by the First Plaintiff also, right?
EDDIE: Yes.”
[28]In the present case, as WTF is the owner of the WTF Marks, then WTF is aggrieved by the MTA’s registration of the relevant trademarks bearing the WTF Marks. MTA’s registration of the relevant trademark bearing the WTF Marks would have the effect of granting the MTA the exclusive right to the WTF Marks in Malaysia. As WTF has appointed TM as its Member National Association of WTF in Malaysia, the impugn registration will prevent TM from using the WTF Marks. In fact, MTA’s current registration will be denying TM’s application to register its WTF marks. As such, both WTF and TM are aggrieved parties within the meaning of section 45(1) of the TMA 1976.
[29]It is not in dispute that when MTA was the member national association of WTF, WTF had allowed MTA to register the trademarks bearing the WTF Marks. PW1, Corbin Kwan-Hong Min, who gave evidence on behalf of WTF, said that under the WTF Rules and Practice, MTA as a member national association that was recognised and endorsed by WTF was allowed to use the WTF brand/logo. He added that:
“But this permission or licence to WTF name will only last as long as the WTF organisation recognises a member national association for the country concerned.” (see Q/A 9 /WSPW1)
[30]However, it is now the contention of WTF that since MTA is no longer an affiliate of WTF, then the trademarks bearing WTF Marks are wrongfully remaining on the register.
“Therefore when the 1st Plaintiff stopped to recognise MTA as the governing body for taekwondo in Malaysia, MTA no longer has the licence to use the WTF name – be it in the official name or on any merchandise or publicity.” (see Q/A 14/WSPW1)
[31]PW1 added in Q/A 17/WSPW1:
“MTA’s right to apply for trade marks containing the WTF name and logo – by itself or in part – is dependent on the on the ongoing relationship with the 1st Plaintiff. Once the relationship comes to an end then all those trade marks ought to be transferred to TM or removed. The ongoing existence of these marks in the Malaysian IP registry is in breach of the WTF Rules by MTA.
TM is the rightful licensee for the use and exploitation of the WTF name and logo in Malaysia, thus they are permitted to apply for the relevant trade marks. I believe their marks are stuck due to the existence of MTA’s registered marks. This is not very proper of MTA to do so. MTA has not acquired any proprietary rights in the WTF name or logo – they were merely licensees before but not anymore.”
[32]Under cross examination, DW2 admitted that a member national association has the right to use the names WTF and World Taekwondo Federation so long as the member national association is a recognised member of WTF. DW2 gave the following evidence:
“SSS: Under the statutes of WTF, WTF gives a member country the right to use the names WTF and World taekwondo Federation and all the logos of WTF, correct?
EDDIE: Yes.
......
SSS: Yes. So it allows the member nations to use that name, to use WTF. So that right to use, would exist so long as a member national is the recognized member national of WTF. Correct?
EDDIE: Yes.
SSS: But the moment that affiliation is terminated, comes to an end, then so does the right to use WTF. Yes?
EDDIE: I suppose so.”
[33]Therefore, I find that WTF is the common law owner of the WTF Marks in Malaysia and that MTA was only permitted and/or licensed to use the WTF Marks by virtue of the consent given by WTF when MTA was an affiliated member national association that was recognised and endorsed by WTF. But once MTA is no longer the affiliated member national association that was recognised and endorsed by WTF, then MTA loses the right to use the WTF Marks. This can be seen from the cease and desist letters issued by WTF in February 2013 and September 2013.
[34]In the premise, I find that the relevant marks registered by MTA which bears or uses the WTF Marks must be expunged from the Register as they are entries which are wrongfully remaining in the Register.
(ii) passing off
[35]As the Plaintiffs’ claim is also premised on the tort of passing – off, our Court of Appeal in the case of Ho Tack Sien & Ors v Rotta Research Laboratorium [2012] 8 CLJ 645 have applied the House of Lord decision in Reckitt & Colman Products v. Borden Inc [1990] 1 All ER 873, where it was held that in order to establish an action for passing-off, the Plaintiff must prove the following:
| (a) | That he has sufficient reputation or goodwill in the mark, trademark, get-up or other indicia in question under which his particular goods or services or offered to the public; | |
| (b) | He must demonstrate a misrepresentation by the Defendant to the public (whether or not intentional) leading or likely to lead the public to belief that goods or services offered by him are the goods services of the Plaintiff; and | |
| (c) | He must demonstrate that he suffers or had suffered or is likely to suffer damage or injury to his business or goodwill by reason of the erroneous belief and engendered by the Defendant’s misrepresentation that the source of the Defendant’s good or services is the same of the source offered by the Plaintiff. |
Plaintiff’s Goodwill
[36]The first element is for WTF to establish its goodwill. Goodwill is the property in the business and is likely to be injured by the misrepresentation. (AG Spalding & Bros v AW Gamage Ltd (1915) 32 RPC 273)
[37]In The Commissioner of Inland Revenue v Muller & Co’s Margarine Ltd [1901] AC 217, it was held by Lord Macnaghten at page 223 that ‘Goodwill’ may be defined as the “benefit and advantage of the good name, reputation and connection with a business, whether it is a business that provides services or manufactures and/or distributes certain products. In other words, goodwill is the attractive force that brings in custom.”
[38]In the present case, I find that WTF is well-known to the taekwondo fraternity as being the governing body for the sport of taekwondo in the world and if any national association in the world wishes to participate in the Olympics, they would need to be affiliated with WTF. This fact was admitted to by the witnesses for MTA. Therefore, the goodwill in the WTF Mark resides with WTF at all times.
[39]On MTA’s contention that they have built the reputation of the WTF Marks in Malaysia, I find that since the use of the WTF Marks by MTA was pursuant to the licence and/or consent granted by WTF, thus the goodwill accruing there from accrues to the WTF. In Lam Soon (M) Bhd v Forward Supreme Sdn Bhd & Ors [2001] 4 CLJ, at page 682, Justice Low Hop Bing held as follows:
“Since the Plaintiff was merely using the “Lam Soon Knife Label” under license or with the permission of Whang Tar Choung, I am of the view that the goodwill generated by the Plaintiff in relation to its use accrued for the benefit of Whang Tar Choung. My view is supported by Christopher Wadlow in The Law of Passing – Off 2nd edn at pp. 115 and 116 where the learned author clearly states the legal position on ownership of goodwill as follows:
If a valid licence of a name or mark is in operation in respect of the business so carried on accrues to the licensor rather than the licensee. The licence may be expressed or implied. The licence acquires no interest in the name or mark, and must cease using it on termination of the licence ... Provided the licence is a valid one, it does not matter that the licensee may be held out as the provider of the goods in question, and may in fact be primarily responsible for their character or quality.” (emphasis added)
Misrepresentation
[40]Misrepresentation is an essential element of passing off. In Reckitt & Colman Products v. Borden Inc [1990] 1 All ER 873, Lord Oliver held as follows:
“Secondly, he must demonstrate a misrepresentation by the defendant to the public (whether intentional or not) leading or likely to lead the public to believe that the goods or services offered by him are the goods or services of the claimant..”
[41]In Sinma Medical Products (M) Sdn Bhd v Yomeishu Seizo Co Ltd & Ors [2004] 3 CLJ 831, the Court of Appeal held as follows:
“...It is clear from the authorities that a case in passing off would be established if the likelihood of deception is proved. In other words, proving actual deception is not necessary... The question whether the matter complained of amounts to a misrepresentation is a matter for the judge to be decided not just by evidence of confusion but on the assessment of the totality of the evidence before the court.”
[42]In respect of misrepresentation, I find that the continued use of the WTF Marks by MTA after WTF had ceased to recognise MTA as its affiliate member national association, amounts to a misrepresentation that it is still affiliated with WTF. The evidence of misrepresentations is as follows:
| (i) | from the evidence of PW4, Tan Check Joon, the Technical Chairman in Persatuan Taekwondo Negeri Sarawak. PW4 gave evidence that the state affiliate of the Defendant/MTA had been sending letters out to schools in the district promoting themselves and making promises that they would make the students who join them as “Olympic Champions.” This is a misrepresentation made MTA as MTA does not have the necessary qualification to make students an Olympic Champion because MTA are not affiliated with WTF and such students cannot enter any international competition under the WTF Banner, including the Olympic Games. | |
| (ii) | Added to that PW4 had also adduced a letter written by the parents of concerned students in Sarawak requesting an explanation as to why there are 2 associations which are claiming that they are affiliated with WTF. | |
| (iii) | Another instance of misrepresentation by MTA is when MTA had widely advertised itself as being affiliated with them. MTA’s officers have been making press statements that they have been reinstated as the sole governing body for taekwondo in Malaysia. Besides the press statements made, MTA had also posted up many pictures on their official Facebook page which showed the WTF Mark appearing on the banners at the events hosted by the MTA. |
[43]Next, the Plaintiff must also show confusion, as a result of the misrepresentation. The confusion must arise because of an association with the Plaintiff’s business and there is likely damage to the Plaintiff’s goodwill. As Chadwick LJ said in Premier Luggage and bag Ltd v Premier Co (UK) Ltd [2002] EWCA Civ 387:
“The relevant question, in the context of a passing off action, is not whether there is a risk of confusion because of the defendant’s name is similar to the plaintiff’s name; the relevant question is whether the defendant’s use of his name in connection with his goods or his business are, or have some connection with, the goods or the business of the plaintiff – so giving rise to harm, or the risk of harm, to the goodwill and reputation which the plaintiff is entitled to protect....”
[44]In the present case, both parties share the same taekwondo sports and target the same customers/students. They are therefore in direct competition with each other. In Leo Pharmaceutical Products Ltd A/S v Kontra Pharma (M) Sdn Bhd [2009] 5 MLJ 703, the Court held that:
“Where the parties’ goods or service are in direct competition with each other, only a small degree of similarity is required to establish the likelihood of confusion.”
[45]In the present case, I accept the evidence of PW7 and PW9 who gave evidence that there were parents who were confused with the existence of two (2) associations using the WTF Marks. Therefore, MTA’s continued use of the WTF mark and/or logo for its business is damaging the Plaintiffs’ goodwill and reputation. Members of the public who were to see MTA using the WTF mark and/or logo on its emblem and/or on any advertising material would think that MTA is still affiliated with WTF and hence would send their children to train with MTA hoping to be trained according to the WTF rules and regulations.
Damage
[46]The last element in the tort of passing off is damages. In Reckitt & Coleman v Borden [1990] WLR 491, Lord Olliver held that:
“ He must demonstrate that he suffers or, in a quia timet action, that he is likely to suffer damages by reason of the erroneous belief engendered by the defendant’s misrepresentation that the source of the defendant’s goods or services is the same as the source of those offered by the plaintiff.”
[47]In Seet Chuan Seng & anor v Tee Yih Jia Manufacturing Pte Ltd (1994) 3 CLJ 7, the Supreme Court held that:
“In an action for passing off, damage is also an essential element of the tort and it is necessary for the plaintiff to establish that he has suffered damage. However, if the goods in question, as in this case, are in direct competition with one another, the Court will readily infer the likelihood of damage to the plaintiff’s goodwill through loss of sales and loss of exclusive use of the name.” (emphasis added)
[48]Similarly in the case of Sinma Medical Products (supra), the Court of Appeal held that:
“It is also a prerequisite that the said misrepresentation had deceived or is likely to deceive and that the respondents are likely to suffer damage by such deception (The Law of Passing – Off Unfair Competition by Misrepresentation by Christopher Wadlow, 3rd edn, p 294). But where the products are the same or similar, as in this case, damage is readily inferred (see Chuan Seng & Anor, Supra; J.C Eno, Ltd, supra)” (emphasis added)
[49]In the present case, it is not in dispute that the parties are involved in the same sports, taekwondo. Therefore the parties are in direct competition with each other to attract their customers in the sports of taekwondo. As such, premised on the case of Seet Chuan Seng (supra) and Sinma Medical Products (supra), damages are readily inferred in this case.
[50]Therefore, premised on the reasons enumerated above, I am of the considered opinion that the Plaintiffs has established their claim on passing off against the Defendant MTA on the balance of probabilities.
(iii) copyright
[51]I also find that WTF is the owner of the copyright in the logo of the WTF Marks. PW1, Corbin Min, who is the Deputy Secretary General of Legal Affairs at WTF, gave evidence that WTF had spent a lot of money, time and effort in the creation of the WTF Mark and logo. WTF also spends close to USD1.2 million for the purposes of the advertising of the WTF logo.
[52]In fact, MTA’s witnesses had conceded and admitted that the WTF mark and/or logo belong to WTF. This can be seen from the evidence of DW1:
“SSS: Now, the logo I’m referring to is at the bottom there. The ‘w’ seems to be a bit faded, but I think you know what I’m referring to, right? That logo at the bottom. Yes, that’s the one?
RAJA: Yes.
SSS: Now, is this the logo that you claim in your Counterclaim, belongs to MTA?
RAJA: No.
SSS: So, who owns this logo?
RAJA: This logo owned by WTF.”
[53]The WTF mark and/or logo is protected as an artistic work in the form of a graphic work and/or logo under Section 7(1)(c) of the Copyright Act 1987. Logos which are used as Trade Marks have been held to be artistic works which fall within the same meaning of ‘graphic works’. In the case of Dabur India Ltd v Nagasegi Sdn Bhd & Ors [2011] 7 MLJ 522, the Plaintiff, a company based in India and selling toothpaste under the trade marks ‘Promise’ and ‘Miswak’ claimed that it had copyright in the labels of its products as artistic works in Malaysia. The Court held that the logos of the product were artistic works which could be protected by copyright.
[54]It is also not in dispute that WTF is an entity based in Seoul Korea and the WTF mark and/or logo have been created there. Since Korea is a member of the Berne Convention, therefore WTF’s works is entitled to copyright protection in Malaysia.
[55]In Dabur India Ltd (supra), the Court held the following:
“By virtue of Malaysia’s accession to the Berne Convention for the Protection of Literary and Artistic Works 1886, works published in the state parties to the Convention may enjoy copyright protection in Malaysia even if there has been no first publication in Malaysia. For that reason, the plaintiff being an entity incorporated in India, which was a contracting party to the Berne Convention, was entitled to copyright protection in Malaysia”
[56]In respect of copyright infringement, the Court in Megnaway Enterprise Sdn Bhd v Soon Lian Hock [2009] 3 MLJ 525 held that the for purposes of direct infringement, it must be established that:
| (i) | There is sufficient objective similarity between the original work or a substantial part thereof, and the infringing copy; | |
| (ii) | There is a causal connection between the original work and the infringing copy, that is, the infringing copy must have been copied from the original work, whether directly or indirectly; and | |
| (iii) | What has been infringed must constitute a substantial part of the original work.” |
[57]In the present case, there is no dispute with regards to the use of the word WTF by MTA. Added to that there was a causal connection as MTA was a former affiliate of WTF. In the premise, I find that the Plaintiffs have established copyright infringement against the Defendant.
The Counterclaim
(i) whether the termination and/or cessation of MTA membership in WTF is legal
[58]MTA takes the position that the relationship between WTF and MTA was not formally terminated and therefore, the action against MTA is unsustainable. As for passing off the WTF trade mark and copyright infringement, MTA contends that the mark belongs to them. Alternatively, MTA also contends that the MTA-WTF trade mark and copyright belong to them.
[59]Therefore, the crucial issue here is whether the termination and/or cessation of MTA membership in WTF are legal.
[60]It is submission of MTA that the due process for a valid termination of MTA’s membership with WTF was not followed as no notice was issued to MTA and the procedures prescribed under the WTF Statutes were not followed. Learned Counsel for MTA referred to the case of Lee Mew Kwan v Royal Lake Club (through Jasmin bt Mohd Sharif as Secretary and Officer to Kelab Taman Perdana DiRaja Kuala Lumpur) [2013] 1 MLJ 583, where the Court held that:
“Held (1) Although a member like the plaintiff is bound by the constitution and by the laws of the club as they are matters of contract that binds the plaintiff, the implementation of these rules, must be done fairly or seen to be done fairly, and where there is a failure to do so, the court must intervene.”
[61]Bearing in mind that since it is MTA’s Counterclaim that it is still an affiliate of WTF, and that the termination was not legal, the onus is on them to prove the same. In this case, it is the contention of MTA that there was no valid termination as the procedures in WTF Statutes have not been followed by WTF. It is not in dispute that MTA’s membership document with WTF is not before this Court. But it is also not in dispute that MTA was a member of WTF since 1970’s.
[62]However, the terms of MTA’s membership with WTF in the 1970’s are not before this Court as the WTF Rules and Regulations before this Court is dated 2009, not 1970’s. From the Statute itself, WTF has amended the Rules and Regulations seventeen (17) times. When PW1 gave evidence, he was directed to the Rules and Regulation dated 2009, not the Rules that was enacted in 1973.
[63]Therefore, I find that MTA cannot rely on the Rules and Regulations as at 2009 because MTA has ceased to pay the membership dues since about 2005. MTA cannot now complain about non compliance of the rules by WTF when it has failed to conform to the same rules and regulations in the first place. MTA’s explanation (see DW2 evidence) the reason why they were not paying the fees, attendance of meetings and participating in WTF events is because “we were still in court” during the period of de- registration. But these grounds are MTA’s own internal problems, not WTF. In the premise, I am of the considered opinion that MTA has failed to establish that it is still an affiliate of WTF on the basis that WTF has failed to follow the rules on the termination, and therefore the termination is invalid.
[64]If I am wrong on the issue of termination, I am of the considered opinion that there was a cessation of MTA membership with WTF based on the non payment of subscription fees, the non participation in WTF events and the non participation in WTF meetings. This happened since the first de-registration in 2005. MTA’s explanation that it was involved in court proceedings are its own internal problems, not WTF.
[65]WTF is an outsider to MTA’s internal problems. The role of WTF is to provide the platform for one association in Malaysia to participate in international competitions for the sports of taekwondo. WTF is not expected to know all the details of the internal squabbling and bickering happening in Malaysia from 2005 to 2010 which led to MTA to be de-registered, not once but twice. As such, I do not find it unreasonable for WTF to conclude that MTA was no longer a legal entity in Malaysia. PW1, who gave evidence on behalf of WTF added:
“As far as the 1st Plaintiff could see, the entire taekwondo fraternity in Malaysia was split into various factions. These factions were at one point part of MTA but over the years, they left MTA and started their own associations – such as MTF and MTCA.” (see Q&A 15)
“Regarding MTA, we could not sort out who was legitimate anymore, and who would be relied on to advance taekwondo in Malaysia” (Q&A 16)
[66]In his evidence, PW1 also said that MTA was recognised by WTF before its de-registration. However, following the problems faced by MTA, WTF no longer has any dealings with MTA after the second de-registration in 2010. In Q&A 16, PW1 added:
“When the OCM recognise TM as the new governing body of taekwondo as early as 2010 and under the WTF rules and practices, WTF will endorse the body that is recognised by OCM.
This happened when the Olympic Council of Malaysia recognise TM or the 2nd Plaintiff to be the sole governing body for taekwondo in Malaysia. With this recognition, the 1st Plaintiff duly endorsed TM/2nd Plaintiff as a WTF endorsed body.”
[67]As such, I find that with the internal problems plaguing MTA, WTF no longer deals with MTA. So when OCM recognizes TM as the sole governing body for taekwondo in Malaysia, WTF then endorsed TM as its member national association. In such circumstances, MTA ceased to be the member national association of WTF for Malaysia as it is clearly provided under Article 4(5) of the Rules and Regulations of WTF that WTF shall approve only one member national association for each country.
[68]Added to that, I also agree with the Plaintiffs that from the non payment of subscription fees, the non participation in WTF events and non participation in WTF meetings, MTA knew that they are no longer the member national association of WTF.
[69]In the event that I am wrong with regards to the cessation issue, I will also not grant the declaration sought by MTA that the termination its membership and/or affiliation with WTF is unlawful.
[70]It is trite law that declaration is a discretionary power of the court. In Mohamed Noor bin Othman & Ors v Haji Mohamed Ismail bin Haji Ibrahim & Ors [1988] 3 MLJ 82, the Supreme Court held at p 84:
“It is also an established principle consistently followed by our courts that the issuing of a declaration is discretionary. The power to issue a declaration should be exercised with circumspection with a proper sense of responsibility and ought not to be exercised unless the circumstances justify it.”
[71]In Datuk Syed Kechik v Government of Malaysia [1979] 2 MLJ 101, at page 107 Justice Lee Hun Hoe CJSS said this:
“In granting a declaration, the court has to consider the utility of the declaration claimed and the usefulness of the declaration on the one hand as against the inconvenience and embarrassment that may result on the other hand.”
[72]In is also trite law that before granting a declaration, the court must consider all relevant factors, including national interest before granting the declaration sought. In the case of Ketua Pengarah Jabatan Alam Sekitar & Anor v. Kajing Tubek & Ors & other Appeals [1997] 4 CLJ 253, the Court of Appeal held that:
“Even if a particular issue may be litigated because it is justiciable, a court may be entitled, in the exercise of its discretion, to refuse discretionary relief after taking into account all the circumstances of the case. The grounds upon which declaratory relief may be refused are fairly well-settled, and include such matters as public interest. The following passage from the second edition of Zamir on “The Declaratory Judgment “, read by Datuk Fong during argument, which deals with the relevance of public interest in the context of an action for a declaration is, in my judgment, of particular assistance in the present case:
In public law proceedings this factor (meaning public interest) is likely to prove of particular importance in determining how discretion should be exercised because where the action challenged by the applicant is that of a public authority the action can affect a large number of individuals.
To grant the applicant relief could therefore, while benefiting him, prejudice the public as a whole, and the court is entitled to have regard to the wider consequences when deciding whether or not to grant relief.”
There is no dispute that declaratory judgments are in the discretion of the court. Although a plaintiff may establish facts which prima facie entitle him to relief, declaration may nevertheless be refused in the exercise of discretion. It is not a discretion exercisable at the mere whim and fancy of an individual judge. It is a discretion that is to be exercised in accordance with settled practice and well-established principles that regulate the grant of the remedy. It is a discretion that is capable of correction by an appellate court.”
(emphasis added)
[73]In the case of Kajing Tubek (supra) itself, the Court of Appeal found that the trial judge failed to take into consideration public interest before granting the declaratory orders. The Court added:
“Now, there are passages in the judgment of the learned judge which show that he was conscious that the case involved questions of public and national interest. Yet, it does not appear that he took these matters into consideration. In particular, he failed to ask himself the vital question: are public and national interest served better by the grant or the refusal of the declarations sought by the respondents? In this context, I recall to mind the passage from the textbook by Zamir earlier quoted which highlights the importance of public interest in such matters as the present instance.
The affidavit evidence filed on the respondents’ behalf reveals that they were not against development in the national interest. They were merely concerned that, in respect of the project, there should be compliance of written law. In the present instance, there was such compliance because Ekran, in relation to the project, did observe and act in accordance with the provisions of the Ordinance, which we hold to be the written law that is applicable to the facts of this case.
It is also to be noted that the learned judge merely found that the justice of the case would be served by the grant of declaratory relief. But he did not, in the process of making such a finding, carry out any balancing exercise which is essential in cases that concern discretionary relief. He certainly took into account the interests of justice from the respondents’ point of view. However he does not appear to have taken into account the interests of justice from the appellants’ point of view as well. This omission fatally flaws the exercise of discretion. Justice is not meant only for the respondents. The appellants are equally entitled to have their share of it.
There was, in the circumstances of the present case, a failure on the part of the learned judge to take into account considerations that were highly relevant to the exercise of discretion. The present case is accordingly one that squarely falls within the category of cases in which this court may intervene and exercise a discretion of its own.
Taking into account all the relevant facts and circumstances of the case, including the public and national interest, and the fact that the remedy, if granted would cause greater harm than if denied, it is the considered view of this court that the declarations sought should be refused. The learned judge was clearly in error when he decided to grant them.” (emphasis added)
[74]The national interest here is that there must be continuity in the membership of WTF to enable the Malaysian athletes to participate in international games and/or competition involving the sports of taekwondo. This includes the Olympic Games, the Asian Games, the SEA Games, the ASEAN Games and the Universiade.
[75]MTA has undergone internal problems which led to its first de-registration in 2005, and its second de-registration in 2010, which were subsequently quashed by the courts. But with the passage of time, TM has gained the recognition of both the OCM and WTF. Added to that, WTF only recognise one member national association for each country. This is provided under Article 4(5) of the Rules and Regulations of WTF.
[76]Therefore, to allow MTA’s declaration would only complicate matters and lead to uncertainty, again. This happen during the time when MTA was de-registered and Malaysia was not able to send her athletes to participate in WTF international competitions. PW1 gave evidence that following MTA first de-registration in 2005, there was no official participants from Malaysia in the international competitions for the years 2005, 2006 and 2007. PW1 added:
“...Regrettably there were participants who were all set to take part, there was even a contingent that had gone to Kazakhstan, but they had to sit out their turn and return home without ever having had the chance to participate. For instance in 2005, MCTA wanted to send participants for the 3rd Asian Junior Taekwondo Championship, but MTCA was not recognised by WTF, therefore the participants from MCTA were not allowed to participate in that event. Regrettably, MTA itself had also failed to send any participants or allowed MTCA athletes to go under the banner of MTA.”
[77]I am therefore of the considered opinion that the overriding factor must be the national interest of this country to participate in WTF international events, including the Olympics, through one body, TM which has already been accepted and recognised by both OCM and WTF.
[78]With regard to the issues on trademark and copyright, I am of the considered opinion that the Defendant has no legal right to the marks as it was using the WTF Marks under license only.
Conclusions
[79]Premised on the reasons enumerated above, I am of the considered opinion that the Plaintiffs have established their case on the balance of probability and the Plaintiffs’ claim is allowed with costs. At the same time, I find that the Defendant has failed to establish its Counterclaim on the balance of probability and the same is dismissed with costs.