Thailand Law Journal 2014 Spring Issue 1 Volume 17

The Civil and Commercial Code

Section 420: 'A person who, willfully or negligently, unlawfully injures the life, body, health, liberty, property or any right of another person, is said to commit a wrongful act, and is bound to make compensation therefore.'
There are some obstacles when applying tort law: Section 420 to dilution. The problem is the plaintiff must have the right in his trademark guaranteed by the Trademark Act or any other laws as an important prerequisite of the application of Section 420. However, the right to protect a trademark from being diluted has never been guaranteed by any Thai law. Another point is that actual injury is required and the plaintiff has a high burden of proof. A blurring situation was found in the Thai Supreme Court decision 234/2519 emphasizing the different types of businesses between the Sheraton Hotel and Sheraton Jewelry Limited Partnerships, and ruled that the obvious dissimilarity between a hotel and a jewelry shop did not cause public confusion, so damage under Section 420 was not found. The situation in this case represents the clear nature of dilution by blurring. If there had been anti-dilution provisions applicable at that time in Thailand, the defendant would have been liable for dilution by blurring. Thus, this decision demonstrates that Section 420 tends not to be an ideal solution for protection against dilution.
In conclusion, the application of existing laws does not seem to lead to a perfect scope of protection, because each law is not designed specifically to cover dilution. Expanding their applications might result in the uncertainty of applying dilution in practice. Furthermore, a clear scope and other important elements of dilution tend to be omitted. This could cause negative effects on business sectors, as no clear wording is provided in the law to be a bright light for traders in selecting their trademarks. Even the courts could be reluctant to stretch the application of existing provisions to cover dilution, because it is not explicitly outlawed in any level of legislation in Thailand. In addition, certainty in the context of the law is necessary for a civil law system. There is no 'judge-made' law, as in common law countries. Therefore, if Thailand wants to grant protection against dilution, the introduction of new specific provisions related to dilution under the TMA would be more appropriate than expanding the scope of existing provisions.

Dilution Under Malaysian Trade Marks Act 1976

Under the Malaysian Trade Marks Act 1976, there is no explicit provision on anti-dilution. The situation of dilution in Malaysia is similar to Thailand. Although Malaysian legal system gets some influence from English common law, there is no anti-dilution provisions like found in the UK Trademark Act. Dilution might be recognized in theory.

Nevertheless, there is a debatable case among trademark scholars that it is related to the emergence and the end of dilution concept in Malaysia. McCurry v McDonald's is one of the cases that attracts a lot of attention and comments after the long eight-year legal battle between the big international fast food company called McDonald's Corporation and Mr. Suppiah, who runs a roadside Malaysian and South 'Indian food in Kuala Lumpur called McCurry.

According to the fact of this case, McDonald's Corporation sued Mr. Suppiah for the passing off; English common law tort. McDonald's claimed that the use of the same prefix 'Me' by McCurry restaurant together with the combination of red and white colours on its signage, would misrepresent and confuse the public in the way that cause an association between McDonald's and McCurry. McCurry was the abbreviation of 'Malaysian Chicken Curry' is raised as a defence.  Mr. Suppiah also argued that 'Me' is a common surname. There are some distinction between food and drinks served in McDonald's and McCurry restaurants. The case went to the High Court in 2006 and the High Court held in favour of McDonald's with the creative decision; the passing off was found without the necessity to prove confusion. This new creative decision might be called 'the extended form of passing off^'55 Even though there is no exact wording of dilution in the High Court decision, dilution principle seems to be the implicit reason behind its conclusion. The High Court believed that McDonald's owned the goodwill and reputation by the use of 'Me' in a variety of its products. And the use of prefix 'Me' in the McCurry could destroy the unique branding of McDonald's. In the mind of the customers, when seeing McCurry, may associate McDonald's and McCurry or believe that McCurry might be a kind of McDonald's brand expansion. Thus, the conclusion was drawn that McCurry took an unfair advantage from the use of the prefix 'Me'. Then the passing off was found without the requirement to prove confusion.⁵⁶ At that time, this decision made people believe that this was the new development in the Malaysian trademark infringement.

However, McDonald's victory was not long last forever. The Court of Appeal overturned the High Court's decision in 2009. Justice of Appeal, Gopal Sri Ram, pointed out in his 18-pages judgment that there was 'a miscarriage of justice^'57 in this case. In order to successfully win a passing off case, misrepresentation needs to be established. He concluded that there was no proof of the tort of passing off in this case as well as no unfair advantage. The trial court's decision was reversed. The case was brought to the Federal Court, which is the highest court in Malaysia, and the decision of the Court of Appeal was affirmed. Therefore, Mr. Suppiah can continue using the prefix 'Me' in his McCurry restaurant.

The final result of this case leads to the discussion that whether this is the end of the attempt in expansion of dilution concept in Malaysia or not. The concept of dilution in the action of passing off seems to be denied by the Court of Appeal. Moreover, Gopal Sri Ram, who decided this case, is now elevated to the Federal Court now. Therefore, two interesting things that should be followed are the amendment of the Malaysian Trademark Act and the decision of the Federal Court related to the dilution concept in the future.