Introduction
 
In Skyworld Holdings Sdn Bhd & Ors v Skyworld Development Sdn Bhd & Anor [2022] 5 CLJ 74, the Federal Court considered issues relating to trade mark infringement by the use of a mark or sign in a company, corporate, trade or domain name of a non-proprietor of the trade mark as well as related issues on the law of passing off arising out of such use.
 
Brief Facts
 
The salient facts in the appeal may be stated briefly. The 1^st plaintiff (1^st respondent in the Federal Court) is the registered proprietor of a number of trade marks in class 37 (‘the 1^st plaintiff’s registered trade marks’) in relation, inter alia, to building construction, repair, and/or installation services. Together with the 2^nd plaintiff (2^nd respondent in the Federal Court), they are involved in the business of property development. The appellants in the Federal Court were the defendants in the High Court proceedings. The 1^st to 4^th defendants (‘corporate defendants’) are connected and affiliated companies, involved in businesses relating to real estate activities, project development, retail sale of construction materials and tourism. The 5^th and 6^th defendants are the only directors and shareholders of the corporate defendants.
 
The plaintiffs sued the defendants in the High Court alleging infringement of the 1^st plaintiff’s registered trade marks in respect of the use by the corporate defendants of the said trade marks in their company names, the domain name, http://skyworldcity.net, and the name of the purported development project in Karambunai, Sabah known as ‘Sky World City Sabah.’ In addition, the plaintiffs sued for the passing off of the defendants’ business and/or activities as that of the plaintiffs’ business and/or activities through the use of the company names, the domain name, and the name Sky World City Sabah for the project, as well as for unlawful interference with the plaintiffs’ trade.
 
The High Court & Court of Appeal Decisions
 
The High Court ruled in favour of the defendants, dismissing all of the plaintiffs’ claims.
 
The learned Judge was satisfied that plaintiff’s claim of trade mark infringement could not be sustained. First, there was no resemblance between the defendants’ marks and the 1^st plaintiff’s registered trade marks so as to deceive or confuse. Further there was a ‘stark difference’ in the business of the plaintiffs as property developers and the defendants who were in the tourism business.
 
The plaintiffs also failed in their passing off action as they had not established misrepresentation by the defendants. In this regard, the Judge was not satisfied that the plaintiffs had acquired such a ‘well known’ reputation or goodwill in connection with their property development business so as to make it likely that the use of the trade name by the defendants would be a misrepresentation to derive a benefit from the plaintiffs’ name. The High Court further observed that the relevant facts for misrepresentation under the tort of passing off were generally not different from that of the likelihood of causing deception or confusion in respect of trade mark infringement, and so adopted those findings. The High Court also found that unlawful interference with trade had not been made out by the plaintiffs owing to the dismissal of the plaintiffs’ claims for trade mark infringement and passing off.
 
On the other hand, the Court of Appeal found that the High Court had fallen into error in respect of all three claims and thus allowed the plaintiffs’ appeal and some of the plaintiffs’ claims as a result. In particular, the Court of Appeal noted that the High Court had erred in carrying out a microscopic comparison of the minute differences between the defendants’ marks and the 1^st plaintiff’s registered trade marks when deciding on the likelihood of confusion between the marks for the purposes of trade mark infringement. According to the Court of Appeal, the High Court had erred by embarking on a wrong inquiry of whether the plaintiffs and the defendants were engaged in the same business in determining trade mark infringement, instead of enquiring whether the use of the infringing names and marks come within the specifications covered by the 1^st plaintiff’s registered trade marks, i.e. ‘real estate development’, ‘property development’, 'building project management’ and ‘building and construction of real property.’
 
In respect of the tort of passing off, the Court of Appeal found that the plaintiffs possessed the requisite goodwill and reputation and that misrepresentation was established, albeit there was no evidence that the plaintiffs had suffered any loss as a result. On a separate note, the Court of Appeal held that unlawful interference with trade was necessarily made out upon the finding of trade mark infringement.
 
The Decision of the Federal Court
 
The defendants appealed to the Federal Court. Three questions were posed for the Federal Court’s determination, which were as follows: 

The Federal Court opined that in the present appeal, the ‘purported infringement was not caused by the defendants’ use of the offending mark in their products or business; but instead in their corresponding names’. As such, the Federal Court considered whether the defendants’ corporate names and domain name are infringing the 1^st plaintiff’s registered trade marks.
 
However, the crux of the Federal Court’s decision turned on its ruling that the High Court’s finding that the defendants’ corporate names and domain name were not identical to or did not so nearly resemble the 1^st plaintiff’s registered trade marks were findings of fact by the High Court which were not plainly wrong or unjust because of serious procedural or other irregularities in the proceedings below. As such, the grounds for appellate intervention by the Court of Appeal were not satisfied and the Court of Appeal’s decision to substitute its own findings for that of the High Court was neither justified nor supported by adequate reasons. It was this finding, above any others, that was dispositive of the appeal. The same applied to the High Court’s finding that there was no deception or confusion in the course of trade in relation to goods and services in respect of the 1^st plaintiff’s registered trade marks by the defendants’ use.
 
While the Federal Court agreed that there may be trade mark infringement even if the business carried out by a defendant is not a related business to that in respect of which the 1^st plaintiff’s trade marks are registered, this did not alter the outcome in the light of the finding that the defendants’ marks were not identical or so nearly resembling the 1^st plaintiff’s registered trade marks so as to deceive or cause confusion.
 
On the subject of the tort of passing off, however, the Federal Court summarily dismissed the appeal on the basis that since the elements of confusion or deception were not established in respect of the trade mark infringement claim, there could be no misrepresentation. The Federal Court opined that ‘misrepresentation will definitely create confusion or deception.’
 
Unsurprisingly, the Federal Court answered Question 1 in the negative and allowed the defendants’ appeal and reinstated the High Court’s decision. However, the Federal Court, having found that Questions 2 and 3 were predicated upon the answer to Question 1 being in the affirmative, declined to answer Questions 2 and 3.

Commentary
 
At the outset, it is to be noted that Skyworld was ultimately one decided on its facts, in particular the factual findings of the High Court Judge in respect of the resemblance (or lack thereof) of the defendants’ marks and the 1^st plaintiff’s registered trade marks. The principal ground for the Federal Court’s reversal of the Court of Appeal’s decision was that there were no good grounds for appellate intervention by the Court of Appeal, and thus no basis for the setting aside of the High Court’s judgment and substituting the Court of Appeal’s own findings for those of the trial judge.
 
As a consequence of the above, the remainder of the findings are arguably obiter dicta (i.e. persuasive statements, but non-binding) in the light of the finding of the High Court (affirmed by the Federal Court) that the defendants’ marks were not identical or so nearly resembling the 1^st plaintiff’s registered trade marks so as to likely deceive or cause confusion.
 
It is therefore noteworthy that Question 1 before the Federal Court for determination had little connection with the ratio decidendi (i.e. the rationale for the decision) of the case as expressed above. Further, from the litany of cases cited before the Federal Court and the Courts below it would have been evident that the answer to Question 1 in the negative was a fait accompli. Whether the use of a registered trade mark in the company name etc. of a defendant would constitute trade mark infringement would depend on the circumstances of any given case. One should be careful not to conclude, from the Federal Court’s decision, that the use of an identical or nearly resembling mark in a company name etc. could never amount to trade mark infringement.
 
Instead, the better question would have been to ask whether, or under what circumstances, the (mere) use of the mark / sign in the corporate names or domain names etc. of the defendant could constitute “use in the course of trade in relation to goods or services in respect of which the trade mark is registered” such as to render the use of the mark / sign likely to be taken as falling within the circumstances stipulated in section 38(a)-(c) of the Trade Marks Act 1976.
 
Had the Federal Court been faced with the more appropriate question as formulated above, it would have been better placed to avoid the false dichotomy of the use of the purportedly infringing marks in the corporate defendants’ company names, but not in their products or business, made manifest in paragraph 36 of the Federal Court’s grounds of judgment. The true question for consideration on trade mark infringement is whether such use – it is submitted, whether in a company, domain or project name or otherwise – constitutes ‘use in the course of trade in relation to goods or services in respect of which the trade mark is registered’. Use in a company, domain or project name could not be said to necessarily preclude such use (within the meaning of section 38 of the Trade Marks Act 1976) without a further determination on the facts. To illustrate, as a matter of principle, a company name could be used in relation to goods and services, although not emplaced upon such goods or services.
 
Regrettably, Question 1 was arguably also an artificial one as there was no sense in which the Court of Appeal had in its grounds of decision expressly ‘deemed’ trade mark infringement to arise from such use (i.e. in the company names, domain name or in the name ‘Sky World City Sabah’) by the defendants.
 
Leaving aside the question of similarity of the 1^st plaintiff’s registered trade marks and the defendants’ marks (i.e. company,  domain names etc), had the revised question of infringing use been considered as set out above, it may be that the Federal Court would have been properly placed to find that there was use in trade in relation to goods and services, only that such goods and services were not the ones for which the 1^st plaintiff’s registered trade marks were registered. The Federal Court did not affirm the High Court’s pronouncement on the necessity for the plaintiffs’ and defendants’ business to be similar.
 
In any event, an interesting question which arises is whether the position would be any different if the proceedings were instituted under the Trademarks Act 2019 – in the instant case, proceedings were instituted prior to the promulgation of the Trademarks Act 2019. Notably, with the expansion for the scope of infringement under section 54 of the Trademarks Act 2019, the statutory strictures that the use in the course of trade by the defendant must be in relation to the goods and services in respect of which a plaintiff’s trademark is registered have been relaxed, and infringement may now be brought in respect goods and services that are identical with or similar to those for which the trademark is registered.
 
On that point, the High Court had found that the businesses of the plaintiffs and the defendants were different: the former were involved in the business of real estate property development in West Malaysia; the latter were involved in the business of tourism and presently embarking on a maiden Sky World City project in Karambunai, Sabah, East Malaysia. The latter project was found to be a tourism theme park project (albeit that there are residential accommodation buildings planned to be built, they were not to be for sale to the public but were instead hotels). It remains to be seen whether the two areas of business would be understood as being ‘similar’ for the purposes of section 54 of the Trademarks Act 2019.
 
Finally, turning to consider the issues before the Federal Court on the tort of passing off, it is respectfully submitted that the basis for the perfunctory treatment of the issue by the Federal Court (i.e. that ‘misrepresentation will definitely create confusion or deception’) is subject to challenge. As a matter of principle, the fields of inquiry in respect of likelihood of deception or confusion in trade mark infringement on the one hand and misrepresentation for the purposes of passing off on the other may overlap but they are not strictly identical. To illustrate, in the case of trade mark infringement, the Court looks into similarity as against the registered trade mark and to the use in the course of trade in relation to goods and services in respect of which the trade mark is registered. On the other hand, the cause of action in passing off is not confined to the incidences of registration but to the whole ‘get up’ associated with a plaintiff’s reputation and good will.
 
In summary, while the outcome of the Skyworld decision may be defensible on the facts, trademark proprietors and potential infringers alike would do well to recognise the questions left unresolved following Skyworld. A case-by-case analysis of the similarities in the marks as well as the use by the parties in their fields of business and activities remains a welcome necessity. Corporations using trademarks belonging to others in their corporate names ought not to take too much comfort from the decision, and rightly so. It is hoped that further decisions under the revised provisions in the Trademarks Act 2019 will shed light on the questions still in search of an answer. On this occasion, however, both the plaintiffs and defendants were permitted to live under the same sky.
 
Case commentary by Joshua Teng (Associate) of the Intellectual Property Litigation Practice of Skrine.