Your Trademark Can Be Revoked If You Don’t Use It: A Lesson from the Copper Chimney Case

“Can I register someone else’s trademark and sell it back to them later?”

Throughout our years of practice in Intellectual Property, we occasionally receive enquiries from individuals who want to file a trademark application speculatively. Their hope is to register a brand name first, block competitors, and later demand payment from the real brand owner to release the trademark.

There is also another common misconception among entrepreneurs. Many believe that once a trademark Registration is granted, the brand will be protected forever.

Both assumptions are dangerously incomplete.

In reality, trademark law does not reward people for simply reserving brand names. It protects businesses that actually use their trademarks in the marketplace.

If we look at the structure of trademark law holistically, the law is designed to:

1. protect brands that have been put into genuine commercial use

2. prevent consumer confusion about the origin of goods and services

At the same time, the law discourages people from merely registering trademarks:

1. to reserve brand names indefinitely

2. or speculative purposes

3. without genuine business activity

A trademark is therefore not just a legal registration. It is a commercial identity that must be used in trade.

This principle is reflected in the Malaysian Trademarks Act 2019, which contains a specific mechanism allowing a trademark to be revoked if it has not been used.

Section 46 (1) of Trademarks Act provides that the registration of a trademark may be revoked by the Court on an application by an aggrieved person on any of the grounds as follows:

(a) where within a period of three years following the date of issuance of the notification of registration, the trademark has not been put to use in good faith in Malaysia, by the registered proprietor or with his consent, in relation to the goods or services for which the trademark is registered, and there are no proper reasons for non-use;

(b)  where the use of the goods or services under paragraph (a) has been suspended for an uninterrupted period of three years, and there are no proper reasons for non-use

How Long Can a Trademark Remain Unused Before It Is Revoked?

In simple terms, a registered trademark may be revoked if it has not been put into genuine use for a continuous period of three years.

This three-year period is actually shorter than the rules in many other jurisdictions. For example, in countries such as the United Kingdom and Singapore, a trademark may only be challenged for non-use after five years.

The shorter timeline under Malaysian law reflects a clear policy position. Malaysia expects a trademark owner to begin using the mark within a reasonable time after obtaining trademark Registration. A trademark should represent a brand that is actively used in the marketplace, not merely a name that is reserved on the register.

This principle was recently illustrated in the Malaysian High Court case Deluxe Caterers Private Ltd v Food Stack Concepts Pte Ltd [2024] 4 CLJ 414, commonly referred to as the Copper Chimney case.

The Copper Chimney Case: What Happened?

In this case, “Copper Chimney” is a restaurant brand that originated in India in 1972. Over the years, the brand expanded internationally and established restaurants in several countries.

When the Plaintiff, Deluxe Caterers Private Ltd, planned to enter the Malaysian market, it discovered that the trademark “Copper Chimney” had already been registered in Malaysia by the Defendant, Food Stack Concepts Pte Ltd, under Trademark Registration No. 2014007985.

Upon further investigation, Deluxe Caterers discovered something surprising. Despite owning the trademark Registration in Malaysia, Food Stack had never opened a single restaurant in Malaysia under the name “Copper Chimney.” There was also no evidence of actual commercial use of the trademark in Malaysia.

This created a practical problem.

Even though Food Stack had never used the trademark, the registration itself still gave it legal rights. If Deluxe Caterers simply entered the Malaysian market using the name “Copper Chimney”, it could potentially face a trademark infringement lawsuit.

To remove this obstacle, Deluxe Caterers filed a suit in the Malaysian High Court seeking to revoke the trademark Registration on the ground of non-use.

Who Can Challenge a Registered Trademark?

Not everyone can apply to revoke a trademark Registration. The law does not allow just any busybody to challenge a trademark.

Under Section 46 of the Trademarks Act 2019, the application must be filed by an “aggrieved person.” In simple terms, this refers to someone who has a real commercial interest that is affected by the existence of the registered trademark.

Interestingly, the law does not provide a strict definition of what an “aggrieved person” means. The court will assess this issue based on the facts of each case.

In practice, an aggrieved person may include:

• a business that plans to use a similar trademark in the same industry

• a competitor entering the same market

• a company whose own trademark Application is blocked by the existing registration

  
  

In the Copper Chimney case, the High Court accepted that Deluxe Caterers qualified as an aggrieved person. The reason was straightforward. The existing trademark Registration prevented Deluxe Caterers from entering the Malaysian market using the name “Copper Chimney,” even though the registered trademark had not been used locally.

This gave Deluxe Caterers a legitimate commercial interest to challenge the registration.

What Counts as Genuine Use of a Trademark?

Once the legal standing of the applicant is established, the next crucial question is whether the trademark has actually been put into genuine use.

In the Copper Chimney case, Food Stack argued that its restaurants in Singapore were popular and that many Malaysian customers frequently visited those outlets. However, the court did not accept this argument.

The court emphasised an important principle. For the purpose of Malaysian Intellectual Property law, the use of a trademark must occur in Malaysia itself, not merely overseas.

In other words, popularity in another country does not automatically amount to trademark use in Malaysia.

It is also worth noting that while the use requirement in Malaysia is strict, it is not overly demanding. The court acknowledged that even a single genuine act of use may be sufficient to defeat an application to revoke a trademark for non-use.

The use does not have to be extensive. What matters is that it involves real commercial activity directed at the Malaysian market, such as offering goods or services under the trademark.

Are Business Difficulties a Valid Reason for Trademark Non-Use?

In the Copper Chimney case, Food Stack attempted to justify its non-use of the trademark by relying on several reasons. These included unsuccessful franchise negotiations, difficulties in finding suitable business partners, and the impact of the COVID-19 pandemic.

However, these arguments were not accepted by the court.

The High Court took the view that delays caused by internal business decisions, speculative expansion plans, or unsuccessful negotiations are generally not sufficient reasons to justify the non-use of a trademark.

The purpose of a trademark Registration is to support actual commercial activity. Registering a trademark without putting it into use for years would defeat the fundamental objective of Intellectual Property protection, which is to identify the commercial origin of goods or services in the marketplace.

After considering the evidence and arguments from both sides, the court concluded that the “COPPER CHIMNEY” trademark had never been used by Food Stack in Malaysia. In addition, no proper justification for the prolonged non-use had been provided.

As a result, the court ordered that Food Stack’s “COPPER CHIMNEY” trademark Registration be revoked and removed from the Malaysian Register of Trademarks.

Does Revocation Mean the Trademark Is Automatically Transferred?

One important point clarified by the court is that revocation does not automatically transfer the trademark to the party who filed the challenge.

Even though Food Stack lost its trademark Registration, the court explained that the Trademarks Act 2019 does not give the court the power to transfer the revoked trademark to Deluxe Caterers.

In other words, the legal effect of revocation is simply this: the trademark Registration is removed from the register.

Once the mark is removed, the trademark is no longer protected under that registration. At that point, other parties may consider filing their own trademark Application if they wish to secure rights to the mark in Malaysia.

What to Do If Someone Has Already Registered Your Trademark? 3 Strategic Steps Before Giving Up

When entering a new market, it is not uncommon to discover that your preferred trademark has already been registered by someone else.

At first glance, this may feel like the end of the road for your brand. However, that is not always the case. There are still several strategic steps you can consider before giving up.

Below are three practical steps businesses often evaluate when facing this situation.

Step 1: Review the Existing Trademark and Evaluate Whether There Is a Real Conflict

The first step is to carefully review the details of the existing trademark Registration.

Even if someone has registered a trademark that appears identical or similar to yours, it does not automatically mean that your own trademark Application will be blocked.

Trademarks are registered in relation to specific goods and services. If the earlier trademark is registered for goods or services that are unrelated to your business, there may not be a direct conflict.

In practice, many trademarks with similar or even identical names can co-exist in the marketplace, as long as they do not cause confusion among consumers. The key question is whether the two businesses operate in areas that are likely to overlap.

A proper Intellectual Property assessment of the registered trademark is therefore the first step before making any business decision.

Step 2: Conduct a Market Investigation to Check for Trademark Use

Even if the existing trademark is registered for the same goods or services, it is still important not to panic.

One practical step is to conduct a market investigation to determine whether the registered trademark has actually been used.

As discussed earlier, Malaysian trademark law allows a trademark Registration to be revoked if there has been non-use for a continuous period of three years.

This means that if the registered trademark has not been actively used in the marketplace, it may be vulnerable to a non-use revocation action.

This was exactly what happened in the Copper Chimney case, where the court revoked the trademark because there was no evidence that the registered owner had used the mark in Malaysia.

A simple investigation may include checking:

• whether the business is actively operating

• whether the trademark appears in advertisements or marketing materials

• whether products or services are actually offered under the trademark

  
  

If there is strong evidence of non-use, a revocation action may become a viable legal strategy.

Step 3: Consider Filing Your Own Trademark Application

This step may sound counter-intuitive, but it can be an important strategic move.

Even if an earlier trademark exists, businesses sometimes proceed to file their own trademark Application while preparing to initiate a non-use revocation action.

The reason is simple. As the Copper Chimney case illustrates, a successful revocation does not automatically transfer the trademark to the party who challenged the registration.

The court can only remove the existing trademark from the register. It cannot award the trademark to the applicant.

Therefore, filing your own trademark Application early may help position your application to proceed to registration once the earlier mark is successfully revoked.

Of course, this strategy involves additional cost and risk. The Registrar may initially refuse the application because of the earlier trademark. However, if the revocation action has a strong prospect of success, the strategy may still be worth considering.

What This Means for Entrepreneurs

The Copper Chimney case highlights an important principle in Intellectual Property law. A trademark is not meant to sit idle on the register. It must represent a brand that is actively used in business.

For entrepreneurs, this means two things. First, registering a trademark without using it may expose the registration to revocation for non-use. Second, if you discover that your desired trademark has already been registered, it does not necessarily mean the opportunity is lost. With the right legal and commercial strategy, there may still be ways to secure your brand.

If you are considering how to protect or commercialise your brand, it is always advisable to obtain professional guidance and develop a proper trademark strategy before entering the market.

Looking for a strategy plan to protect or commercialise your brand? Contact us at LAWENCO today.

Written by,

Lawrence Tan 

Registered Trademark, Patent and Design Agent

LL.B (HONS), CLP

Advocate & Solicitor

Disclaimer

This article is provided for general information and educational purposes only. It does not constitute legal advice, and it should not be relied upon as a substitute for professional legal consultation.