KUALA LUMPUR (Jan 4): Power Root Bhd's subsidiaries have been served with a trademark infringement claim for damages totalling 74.5 billion rupiah (RM23 million) over the AH HUAT brand by its Indonesian distributor, CV Ego Sun Star Sukses Mandiri (CV Ego).

In a filing on Wednesday (Jan 3), Power Root said two of its subsidiaries — Power Root Manufacturing Sdn Bhd and Power Root Marketing Sdn Bhd — had received a letter earlier that day from the Central Jakarta Commercial Court, dated Jan 2, which notified them that a claim had been instituted by CV Ego against them in Indonesia for trademark infringement, and that the verdict was granted by the Commercial Court in favour of CV Ego on Nov 15, 2023. 

Power Root plans to appeal the matter and said it has strong grounds to do so, as a similar claim from CV Ego against Power Root's Indonesian subsidiary — PT Natbio Marketing Indonesia — was previously dismissed by the Indonesian Commercial Court on Aug 3, 2023. 

It also said procedural requirements were not fulfilled, as neither Power Root Manufacturing nor Power Root Marketing had received any written notification or court documents about the claim prior to this, so they did not have the opportunity to attend to, and were not represented, at court proceedings.
 
According to Power Root, the case started in January last year, when its wholly owned Power Root (M) Sdn Bhd commenced legal action against CV Ego and Lim Kok Kiong, an Indonesian citizen, to cancel the AH HUAT trademark that Lim had registered with the Indonesian Director-General of Intellectual Property on Feb 21, 2013 — just a day prior to CV Ego's official appointment as Power Root's distributor for Indonesia. This trademark registration was subsequently transferred to CV Ego on April 4, 2022.

Power Root claimed that the registration and transfer of the HUAT trademark was made without its knowledge and consent. As such, the group claimed that the registration was done in bad faith by Lim and CV Ego, as CV Ego was fully aware that the AH HUAT brand is owned internationally by the Power Root group.

In response to the trademark cancellation action, CV Ego filed the first RM23 million trademark infringement lawsuit on Jan 27 against PT Natbio Marketing Indonesia. This lawsuit was dismissed in August by the Indonesian Commercial Court on grounds that the Power Root group had first filed the AH HUAT trademark in Malaysia on April 25, 2012, and well as in several other countries such as Taiwan, Australia and Japan. 

The court also decided at the time that CV Ego had no legal standing to commence the claim against Power Root as its ownership of the AH HUAT trademark was being contested, and that CV Ego's suit was premature as Power Root's application to cancel CV Ego's trademark registration was ongoing.

But some two months later on Oct 31, the Commercial Court dismissed Power Root's trademark cancellation bid on a technicality — that Lim was no longer a relevant party to the action as the AH HUAT trademark was held under CV Ego. 

Power Root has filed an appeal to overturn the dismissal on Nov 13, based on its solicitors' advice that it has strong grounds to overturn it, as the Indonesian courts previously allowed claims where previous trademark owners were included as a party.

"The Power Root group will rigorously contest any and all claims to protect its trademarks and trade names," the group added.

Power Root‘s shares closed three sen or 1.69% lower at RM1.74 on Wednesday, bringing the group a market capitalisation of RM846 million.