It recently came to my attention when a well-known client from Thailand appointed us to file its trademark in Malaysia. What should ordinarily have been a straightforward brand-protection exercise turned into a more difficult question: the trademark had already been registered locally in the name of an individual. In commercial language, many would describe this as trademark squatting. The genuine brand owner is then placed in an awkward and costly position, because the registration is no longer just a paper entry. It becomes a legal and commercial block to market entry, product launch, distribution, licensing, franchising, and even brand negotiations. Each case will always turn on its evidence, but the situation raises a serious question under Malaysian trademark law: can that registration be challenged, and if so, on what basis?
In my view, the principal statutory route in a true trademark squatting case is usually section 47 of the Trademarks Act 2019. That is because section 47 deals with invalidation. It empowers the Court to declare a registration invalid where the mark was registered in breach of section 23, where there is an earlier trademark or earlier right under section 24, or where the registration was obtained by fraud or misrepresentation. Importantly, where invalidation succeeds, the registration is treated, to that extent, as if it had never been made. That is a fundamentally different remedy from merely complaining about later non-use.
Section 46 is concerned with revocation, principally where the registered mark has not been put to use in good faith in Malaysia within three years after registration, or where use has been suspended for an uninterrupted period of three years, or where the mark has become generic or misleading through the acts or inactivity of the proprietor. If revocation succeeds, the registered proprietor’s rights are deemed to have ceased from the application date or an earlier date the Court is satisfied about. That is not the same as saying the registration should never have stood in the first place. For that reason, section 46 may be useful in an alternative or additional way, but the real heart of a squatting complaint usually points back to section 47.
A proper section 47 challenge, however, is not automatic. In summary, certain conditions need to be satisfied before a trademark squatter’s registration can realistically be challenged in Malaysia. First, the claimant must be an “aggrieved person”, meaning the true proprietor or a party with a real legal or commercial interest in the mark, and not a mere busybody. Second, there must be a proper statutory basis under section 47, such as breach of section 23, the existence of an earlier trademark or earlier right under section 24, or fraud or misrepresentation in the registration. Third, where applicable, the claimant should also consider well-known mark protection and any Convention priority rights. Fourth, the challenge must be backed by evidence, including proof of ownership, prior use, reputation, market-entry plans, and facts pointing to bad faith or wrongful blocking.
Section 24 is especially important in this discussion. The Act requires refusal where a later mark is identical with an earlier trademark for identical goods or services, or where there is a likelihood of confusion because of identity or similarity with an earlier mark. It also protects well-known trademarks, including marks not registered in Malaysia, and recognises earlier rights under subsection 24(4). So where a foreign proprietor can show an earlier trademark, an earlier right, or a well-known mark position, the later local registration may be vulnerable.
For foreign brand owners, section 76 may be particularly significant. The Act expressly states that a well-known trademark is entitled to protection whether or not it has been registered in Malaysia and whether or not the proprietor carries on business or has any goodwill in Malaysia. The proprietor of a well-known trademark may also apply to the Court for a declaration of invalidation where the impugned mark is identical with or similar to the well-known mark in the circumstances set out by the Act, and may separately seek invalidation on the grounds of fraud or misrepresentation. The Act further states that, in deciding bad faith, it is relevant whether the user had knowledge of, or reason to know of, the proprietor’s well-known mark. That can be highly important in a squatting scenario involving a known foreign brand.
Timing also matters. Under section 26, a person who has duly filed a Convention application has a right to priority for six months from the date of filing of the first such application. The earlier foreign filing date becomes the relevant date in establishing which rights take precedence. In cross-border brand disputes, this may be critical, because it can strengthen the position of a foreign proprietor who moved promptly in its home or Convention jurisdiction before seeking protection in Malaysia.
There is also an important evidential and procedural warning. After the expiration of five years from registration, section 53 provides that the original registration is taken to be valid in all respects unless it is shown, among other things, that the original registration was obtained by fraud, that it offends certain absolute grounds, or that it was devoid of distinctiveness at the commencement of proceedings. This means older registrations are not untouchable, but the evidential burden becomes even more important. It also reinforces why proof of fraud, misrepresentation, earlier rights, or well-known mark status can become decisive.
One of the most important recent reminders on section 47 is the case of Qi Sheng Sdn Bhd & Ors v Foong Yit Meng & Anor (2021) 5 CLJ 377. That case makes it clear that before the Court even gets into the merits of invalidation, it must first decide whether the plaintiff is truly an aggrieved person. The High Court held that the plaintiffs there were not aggrieved persons because their complaint was based on alleged similarity to Camel Active and Converse, even though they themselves had no legal or commercial connection to those marks or their proprietors. The Court held that they lacked substantive locus standi and were, in effect, mere busybodies. The case is therefore a strong reminder that a section 47 claim must be brought by the real party in interest, not by a stranger relying on someone else’s grievance.
The same case is also useful for another reason. It restated the principle that a person aggrieved is generally someone who has used his own mark as a trademark, or has a genuine and present intention to use it as a trademark, in the course of a trade that is the same as or similar to the trade of the registered proprietor whose mark is sought to be removed. In other words, there must be a real legal nexus between the claimant and the impugned registration. That is precisely why, in a true trademark squatting case involving a foreign brand owner, the actual proprietor’s evidence becomes so important.
Qi Sheng also illustrates what not to do. The plaintiffs in that case failed not because section 47 is weak, but because they relied on alleged similarities to third-party brands and could not show that they themselves were the rightful complainants. That is very different from a case where the actual foreign proprietor comes forward with evidence of ownership, prior use, reputation, well-known mark status, or Convention priority. So Qi Sheng is best understood not as a barrier to all invalidation actions, but as a case on standing. It tells us that the right plaintiff must be before the Court.
Other cases to read on this issue of trademark squatting, section 46 (revocation) and 47 (invalidation) are Oatly AB v Pahang Pharmacy Sdn Bhd (2022) 1 LNS 2820, Edmark Industries Sdn Bhd v Zaghrat Moustapha (2022) 1 LNS 3253, China Green Food Development Center v Cheong Chong Fong (2023) 5 CLJ 719, Deluxe Caterers Private Ltd v Food Stack Concepts Pte Ltd (2024) 4 CLJ 414 and others
In practical terms, a claimant alleging trademark squatting should be prepared to show more than mere frustration. The Court will usually want to see a proper commercial and legal foundation: documents showing ownership of the mark, evidence of foreign registration or applications, proof of prior use, proof of reputation, evidence of intended or actual market entry into Malaysia, and facts from which bad faith, fraud, or misrepresentation may reasonably be inferred. The more entrenched the impugned registration, the more important the evidence becomes.
A trademark squatter may succeed in getting a mark onto the Register, but that does not necessarily mean the squatter has secured the better right. Malaysian law does provide a route to challenge such conduct. But it is not enough merely to say that the registration is unfair or inconvenient. The challenger must be the proper party, must rely on the proper statutory ground, and must come to court with proper evidence. In a squatting case, MY OPINION, the strongest route will be section 47, not section 46 OR at most as an alternative to section 47.
Section 46 asks whether the registrant has used the mark. Section 47 asks whether the registrant should have had the mark at all.
Note: Filing an invalidation would mean an Originating Summons supported by an affidavit listing the aggrieved nature of the complaint