Copper Chimney Trademark Dispute: Key Findings From Deluxe Caterers Pvt Ltd v Food Stack Pte Ltd

This is a non-use cancellation case involving the renowned restaurateur Deluxe Caterers Pvt Ltd (“Deluxe”) from India, known for its chain of restaurants across several countries. While planning to expand into Malaysia, Deluxe encountered a hurdle in using and registering the trademark "Copper Chimney" in Malaysia, as it was already registered by the defendant, Food Stack Concepts Pte Ltd.

During its investigation, Deluxe discovered that, despite registering the trademark, the defendant had neither opened nor operated any restaurants under the name "Copper Chimney" in Malaysia. Additionally, a search revealed that a company called Copper Chimney Sdn Bhd had been incorporated on 26 June 2019 but was listed as "Dissolved."

?In light of this, Deluxe filed an application with the High Court to revoke the trademark registration on the grounds of non-use under Section 46 of the Trademarks Act 2019 and to invalidate the trademark registration under Section 47 of the same Act.

?Although Deluxe's claim under Section 47 failed due to insufficient evidence to prove that its trade marks were well-known or that there was fraud or misrepresentation by the defendant in obtaining the registration, the plaintiff succeeded under Section 46 for non-use.

?Three key issues were considered in the plaintiff's application to revoke the registration of the defendant's mark were:

?1.???? Whether the plaintiff is an "aggrieved person" in relation to the defendant’s mark;

?2.???? If so, whether the plaintiff has established prima facie that the defendant did not use the defendant’s mark in Malaysia for goods in Class 43 for a period of three years immediately after the registration certificate was issued or for an uninterrupted period of three years, without proper reasons for non-use; and

?3.???? whether the defendant can show that it did use the defendant’s mark in Malaysia for the services claimed in Class 43 during any of those periods.

?On the issue of being an "aggrieved person", the plaintiff presented evidence of its trademarks used and registered in India, the UK, Kuwait, and the UAE, along with its plans to open restaurants in Malaysia. The plaintiff argued that, due to the defendant's mark being registered in Malaysia, it is unable to proceed with its plans, as this could constitute trademark infringement and expose it to legal proceedings.

?The court emphasized that an applicant seeking to revoke a registered trademark must demonstrate that it is using or intends to use an identical or similar mark (not necessarily in Malaysia) and has a genuine and present intention to use it in Malaysia. Based on this, the court found that the plaintiff is indeed an "aggrieved person" under Section 46(1) of the Act.

?To establish prima facie case for non-use, the plaintiff presented two key pieces of evidence, namely, Google search results for "Copper Chimney Malaysia" showed no evidence of the defendant’s mark or any restaurant named "Copper Chimney" operating in Malaysia. The second, was that the company “Copper Chimney Sdn Bhd”, incorporated on 26 June 2019, was found to have a status of "Dissolved."

?In contrast, the defendant only provided evidence of the use of its mark in Singapore, with no single evidence of use in Malaysia. Consequently, the court rejected the defendant's evidence, emphasizing that Section 46 requires the trademark in question to be put to actual use in Malaysia.

?The court's decision to revoke the defendant’s trademark registration under Section 46 highlights the importance of actual use in trademark law. This case serves as a reminder that a registered trademark must be actively used in the jurisdiction where it is registered. Without such use, a trademark is vulnerable to cancellation, as demonstrated in this case.

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Calcutta High Court Ruling: Associate Managers Lack Authority to Pass QuasiJudicial Orders

Case Overview:?

On 2 August 2024, the Calcutta High Court, led by Justice Krishna Rao, addressed a pivotal issue regarding the authority of Associate Managers in trademark disputes. This decision came in response to three appeals filed under Section 91 of the Trade Marks Act, 1999, challenging orders dated 16 September 2023 and 6 October 2023, passed by Associate Managers of the Trade Marks Registry.

Background:? The Court consolidated the three appeals due to the common question about the Associate Managers’ authority. The appeals questioned decisions made by Associate Managers in trademark opposition cases:

IPDTMA 82 of 2023 and IPDTMA 83 of 2023: Orders passed by Associate Manager 1.

IPDTMA 1 of 2024: Order passed by Associate Manager 2. The appellants argued that the Associate Managers were not authorised to issue the impugned orders:

Contractual Appointment: Evidence showed that Associate Manager 1's contractual period ended on 31 March 2023, but the orders were made post this date.

Lack of Assigned Powers: Documents indicated that the powers to adjudicate trademark matters were not assigned to Associate Managers by official orders.

Organisational Structure: Recruitment rules and notifications did not recognize the role of Associate Manager in handling quasi-judicial matters.

Court’s Analysis:?

The Court examined the statutory provisions under the Trade Marks Act:

Section 3(1) designates the Controller-General of Patents, Designs, and Trade Marks as the Registrar of Trade Marks.

Section 3(2) allows the Central Government to appoint other officers to perform Registrar functions but specifies these officers must act under the Registrar’s direction.

Key Findings:?

Authority of Associate Managers: The Court noted that Associate Managers were appointed under Section 3(2) for administrative purposes, not quasi-judicial functions.

Public Notices and Orders: Associate Managers were hired on a contractual basis as Hearing Officers, but their role was limited to administrative tasks, not adjudicative decisions.

Precedent: The Court referenced Intellectual Property Attorneys Association v. Union of India, establishing that quasi-judicial powers are vested in the Registrar and not delegated to lower-level officers.

Decision:?

The Court concluded:

Lack of Empowerment: Associate Managers, appointed under Section 3(2), were not authorised to pass quasi-judicial orders.

Quashing Orders: The orders issued by Associate Managers were quashed and set aside as they exceeded the authority granted by law.

Remand for Reconsideration: The Court remanded the cases to the Registrar of Trade Marks for fresh consideration by a competent officer, ensuring all parties are heard.

Conclusion:? This ruling clarifies that Associate Managers, appointed under Section 3(2) of the Trade Marks Act, do not possess the authority to make quasi-judicial decisions. The Court’s decision underscores the importance of adhering to statutory roles and delegations in trademark adjudication processes.

From Intangible Assets to Tangible Growth: Yoti’s ￡20M Funding Success through Strategic IP Valuation.

The Importance of IP Valuation:

Yoti's Success Story -Leveraging IP for Growth and Funding Intellectual Property (IP) valuation has become an indispensable tool for businesses aiming to leverage their intangible assets for financial growth. The recent success of UK-based tech company Yoti exemplifies the critical role of IP valuation.

Company Overview:

Yoti, a UK-based technology company, excels in providing digital identity solutions. Their services include identity verification, age assurance, authentication, and e-signatures. Yoti's technologies, such as in-house facial age estimation, liveness detection, and facial recognition AI, support millions of identity checks monthly. Their global client base spans financial services, government, gaming, social media, retail, and more.

Key Achievements:

Yoti has achieved remarkable milestones: Rapid Revenue Growth: With a 6,074% increase in revenues over four years, Yoti reached ￡6.25 million by March 2023. Prominent Clients and Partners: Esteemed clients include Meta, OnlyFans, Epic Games, Yubo, the Government of Jersey, and Lloyds Bank.

Financial Challenge:

Asset-light companies like Yoti often face significant challenges when seeking additional funding due to the lack of traditional hard assets. Traditionally, loans were secured against tangible assets visible on the balance sheet. Yoti's rapid growth necessitated securing essential capital to sustain its trajectory towards profitability.

Funding Solution:

Yoti overcame these hurdles by leveraging its IP assets, which played a crucial role in securing a ￡20 million funding package.

This included:

￡7.5 million in convertible debt funding from existing shareholders. ￡12.5 million in debt funding from HSBC’s Growth Lending proposition. This shift signifies a paradigm change in lending practices, where commercial bankers recognize the value of intangibles, even those not visible on the balance sheet. Traditionally, banks have relied on physical assets like property and equipment to secure loans. However, in today’s digital age, many companies, especially tech firms like Yoti, possess more intangible assets than tangible ones. These assets, such as IP, play a crucial role in a company's value and growth potential.

By recognizing the value of IP, banks like HSBC are adapting to the changing landscape. This approach acknowledges the significant role of innovation and technology in driving business success. For companies, this means that their valuable IP can now be leveraged to secure the funding needed for growth, even if they lack substantial physical assets.

Sollomon Cutting-Edge IP Valuation Software:

Yoti utilized Inngot's IP valuation tools, Goldseam and Sollomon, to identify and obtain an indicative valuation of their IP and other intangible assets. These tools provided a swift, easy, and cost-effective alternative to traditional valuation methods, fulfilling HSBC’s due diligence requirements.

By leveraging the value of their IP, Yoti secured ￡12.5 million in debt funding from HSBC. This significant funding will bolster Yoti’s ongoing growth and journey towards profitability.

The Role of Adastra Valuation:

Through our exclusive partnership with Inngot Ltd, a UK-based company specializing in bespoke IP services through their IP profiling, valuation, and management software, we are making their IP software solutions available with Adastra as the exclusive partner. At Adastra Valuation, our cross-functional team of finance, investment, legal, and technical experts is dedicated to supporting businesses in maximizing the value of their IP assets