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“Maestro Swiss” Allowed for Malaysian-made Chocolates

Issued: August 01 2010

Maestro Swiss Chocolate (the Defendant) manufactures and sells various types of chocolates under the brand names ‘Vochelle’ and ‘Maestro Swiss’ in Malaysia. Chocosuisse–la Fédération des Fabricants Suisses de Chocolat (the first Plaintiff) is a cooperative society formed in Switzerland whose responsibility is to protect the worldwide reputation and goodwill of its members – chocolate manufacturers in Switzerland – which includes Kraft Food Schweiz (the second Plaintiff) and Nestlé Suisse (the third Plaintiff), who claim to have substantial goodwill and reputation in Malaysia in relation to their Swiss chocolates.


In a High Court case initiated in 2005, the Plaintiffs sued the Defendant, with the first Plaintiff claiming that the use of ‘SWISS’ as a mark by the Defendant was intended to deceive and/or mislead the public into thinking that the Defendant’s chocolates were produced in Switzerland so as to unfairly take advantage
of the reputation and goodwill enjoyed by the second and third Plaintiffs. The Plaintiffs further contended that the use of the mark ‘Maestro SWISS’ was unauthorized and damaging to their goodwill and reputation. Their claim on the Defendant’s ‘Maestro SWISS’ logo was also based on the Geographical Indications Act 2000 (GI Act) legislation, which provides that a geographical indication cannot be used as a trademark.

On the other hand, the Defendant submitted that it had never represented that its chocolates originated from Switzerland but had used the mark because it formed part of its company name. The defendant further argued that the words ‘Maestro SWISS’ were distinctive and thus could not be a misrepresentation.

Before moving on to the merits of the case, the Court first decided whether the Plaintiffs were qualified to sue the Defendant. The first Plaintiff testified that it had established goodwill and reputation in relation to the business. This Plaintiff, however, is a trade association of chocolate manufacturers. As it does not manufacture or sell chocolates and has no chocolate business, no goodwill could arise from it. As such, the first Plaintiff had no locus standi to sue. This meant that the claim of passing off did not apply.

The second and third Plaintiffs, in contrast, are manufacturers who sell Swiss chocolates and claimed that they were entitled to the goodwill attached to the term ‘Swiss chocolates.’ According to the Plaintiffs, they have been supplying and exporting chocolates to Malaysia for more than 10 years, which suggests that the demand of their chocolates is consistent. The second and third Plaintiffs managed to prove the significance of the term ‘Swiss chocolates’ through witnesses.
 
One of the witnesses, Low Mee Leng, who has worked in the chocolate business for more than 30 years, stated that there are customers “who would only buy chocolates from Switzerland” while another, Ong Choon Tuck, a tour manager who has led tours in Europe for many years, provided that “there usually will be requests to take [holiday-makers] to good places to buy Swiss chocolates.” In addition, a consumer witness, Lay Hoi Cheong, said she found that “chocolates from Switzerland [are] better” compared to those from other countries. Swiss chocolates are recognized for their high quality and are known to be distinctive in reputation. Thus, the Plaintiffs established substantial goodwill and reputation, and the Court accepted that they had locus standi for the claim of passing off (of the Malaysian-made chocolates as Swiss chocolates).

The Plaintiffs argued that the use of the mark was misleading or, in other words, a misrepresentation, which is an essential element in the tort of passing off. Without hesitation, the Defendant argued that ‘Maestro SWISS’ was not visually prominent and that the words did not overwhelm the front packaging. Instead, the word ‘Vochelle,’ which is the brand of the company, and the colours appeared to be more significant. The Defendant’s presentation of their product was characteristically different from that of the Plaintiffs because it had distinctive and individualistic elements in terms of the backdrop, graphics, and labelling design. It was also evident that the words ‘Swiss chocolate’ did not appear anywhere on the packaging.

Secondly, the Defendant added that the packaging of the product bore words that identified the origin of the product and the defendant as a Malaysian manufacturer. Hence, there was little possibility of causing deception and confusion. Additionally, the sales of the Defendant’s products were intended for consumers of a relatively lower income range, and essentially targeted to purchasers who were not so concerned with imported goods. This fact stressed that the Defendant’s product fell under a different category of pricing, so the effect of confusing or misleading a reasonable person was very unlikely.

As a result, the Court found in favour of the Defendant by rejecting the Plaintiffs’ claims of misrepresentation and rendered that the use of ‘Maestro SWISS’ did not indicate that their chocolates were from Switzerland. Hence, there was no act of passing off and the use was not contrary to the GI Act.

This decision is intriguing as it implies that traders can use geographical indications as part of their trademark on the condition that the consumers are not misled or deceived with regards to the country or place of origin of the products. Regardless of this, as our Trademark Office itself restricts registrations consisting of geographical locations, we advise that professional legal advice is obtained before proceeding with any usage or filing of marks with geographical indications in Malaysia.


KASS International Sdn Bhd
Suite 8-7-2 Menara Mutiara Bangsar
Jalan Liku Off Jalan Riong, Bangsar
59100, Kuala Lumpur, Malaysia
T: +603 2284 7872
F: +603 2284 1125
E: ipr@kass.com.my
W: www.kass.com.my

About the Author

Geetha K is director of the trademark and industrial designs division of KASS International, an established Malaysian intellectual property firm with offices in Malaysia, Singapore and Indonesia. She has extensive experience in handling all aspects of trademarks and designs in various industries, including the pharmaceuticals, foods & beverages, automotive and apparel industries, and manages local, regional and international portfolios. She can be reached at ipr@kass.com.my.

Tag:  KASS International  GI Act

 

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